1999-06-243913SENATE625101999-06-24The PRESIDENT(Senator the Hon. Margaret Reid) took the chair at 9.30 a.m., and read prayers.Bills6252r703Billsr667Billsr666Billsr702Billsr699Billsr698Billsr664Billsr660Billsr658Billsr657Billsr701Billsr663Billsr659Billsr700Billsr661Billsr754Billsr755Billsr761Billsr765Billsr763Billsr764Billsr757Billsr760Billsr758Billsr759Billsr756Billsr7626252A NEW TAX SYSTEM (GOODS AND SERVICES TAX) BILL 1998Consideration resumed from 23 June.10000CHAIRMANThe CHAIRMAN—Before we proceed, I have a statement to make about requests and amendments. Some of the further government amendments to these bills have been drafted in the form of requests. The government drafters have indicated that this is because they may make legally possible increased expenditure under appropriations in other bills or may broaden the tax base, or they are associated with other requests. As I have indicated in statements to the Senate in the past, these grounds do not accord with the practice of the Senate in determining when amendments should be moved in the form of requests. Those amendments will therefore be treated as amendments. There remain other amendments which must be requests.The committee is considering government amendments 25 to 27 on sheet FA210 relating to the A New Tax System (Goods and Services Tax) Bill 1998 and Democrat amendment 1 to government amendment 27. The question is that the Democrat amendment be agreed to.09:32:006252Murray, Sen AndrewSenator MURRAY3M6WAAD00—I wish to withdraw amendment No. 1.Amendment—by leave—withdrawn.09:32:006252Cook, Sen PeterSenator COOKRF4WAALP00—Madam Chair, this is what I was complaining about yesterday. We know there has been an unholy alliance between the Australian Democrats and the government on the GST. After we started yesterday, we were given a running sheet and, before we had a chance to understand what was going to be changed, we got 119 amendments, mostly dribbled out during the course of the day, and the explanatory memoranda were not available until quite late. By any test, insufficient notice has been given for this debate. We come into the chamber this morning working from revised running sheet No. 8, which was given to us yesterday, and we find revised running sheet No. 9. So the program for this debate has changed yet again. Now we have amendments on running sheet No. 9 being withdrawn.If this government does not want the whole debate to descend into pure farce, it would be very useful to hear a clear statement of what it wants this chamber to debate. If there are other Democrat amendments which the Australian Democrats want to withdraw, it would be useful to hear what they are. If they are given leave to withdraw, we can strike them out and work out—on running sheet No. 23 or whatever it is we finally get to, at the rate we are producing these running sheets—what the Australian Democrats want us to consider as a chamber. If there are government amendments which the government wants to remove or alter, perhaps it could explain which ones they are so that the chamber knows what it is debating.Otherwise, there is not only the crime of insufficient notice and inappropriate advice, but there is the additional crime of confusion, particularly on the part of the main conspirators here, the Democrats and the government, as to what it is that the chamber is supposed to debate. It makes a joke of these proceedings if the government and the Democrats are not properly organised to bring on their deal which they want to shove down the throats of this chamber and we do not even know the parameters of this deal.If we get a clear statement of what is to be removed and what is to be kept, we can then direct our attention to what is to be debated. That would be helpful. I suspect that there has been the big lie practised out there in the community by a spokesman from the government telling people what is in this package. I suspect when we look at the black letter of the package and at what the Democrats have been telling people is in the package, it will be a lot less than they ever said it was.Madam Chairman, I know this is as much a problem for you as for me, and I am sure for every other senator, but it would be very useful to get this debate, now that we are going to have it, on some reasonable parameter so that it is containable and manageable.09:36:006252Lees, Sen MegSenator LEES8U4SAAD00— Madam Chairman, I need to respond to comments from Senator Cook. There are no other amendments, other than what is on the running sheet. There is no conspiracy. We are not clouding the issue. All the other amendments have gone. It is very clear; it is what is on the running sheet in front of you.09:36:006253Brown, Sen BobSenator BROWNQD4TASAG00—While we are making it clear, I cannot find the relevant amendment in the wad of amendments I have here. Senator Murray is offering to be of assistance. Firstly, could we hear what the amendment that has been withdrawn is. Secondly, if he does not want to deal with it now, I would like to put on notice the question: what is the situation as far as the contentious wine equalisation tax is concerned with the Democrats? There is a lot of contention in South Australia and confusion about the government-Democrat arrangement on that issue.10000CHAIRMANThe CHAIRMAN—On the first point of clarification, I am working off running sheet revised 9, issued 24 June at 9.09 a.m.09:37:006253Murray, Sen AndrewSenator MURRAY3M6WAAD00—That was one aspect of the clarification that I was going to give to Senator Brown. Where are we on the running sheet on page 3?10000CHAIRMANThe CHAIRMAN—We are on page 3, clause 38-25, government amendment 25-27, on sheet FA210.3M6Murray, Sen AndrewSenator MURRAY—That is what I thought. Because the amendment was before the chamber, we had to leave it on the running sheet. If you refer to pages 4-12, you will notice that there are no further Democrat amendments. They were withdrawn last night, so it is quite clear where we stand on that. The amendment—which I have now withdrawn—was left on the running sheet because it was being debated. So that is why that happened this morning. As regards the wine matter, Senator Brown, I think I will deal with that when we come to those bills later in the debate.09:38:006253Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I think, Senator Cook, that the best way to proceed is in the way that we always do with bills and that is to go through the running sheet, which lists the amendments that the government is moving and any that the Labor Party and other senators are moving. I do not think there is any confusion, so we will proceed on course. I made a statement yesterday which generally outlined the government's position following the negotiations with the Democrats. The amendments have now been out for well over 24 hours—this is the usual procedure; I do not know what the big deal is. On the question of whether all the amendments are out, I have been advised that there is one more amendment to come on a transitional issue which is not technically part of this bill. We will make sure that that is given to you as soon as practicable.09:40:006253Cook, Sen PeterSenator COOKRF4WAALP00—You will recall, Minister, that when we got into the committee stage I asked you, first of all, how many amendments there would be. I asked you that question several times and every time you ducked it. You did not answer it directly, and now we find there are 119 more amendments. It would serve the purposes of this chamber if you would actually play it straight with us and give an indication of whether or not there is anything else out there. If this is the lot and there is nothing else, save the one that you have given notice of, that is interesting because it does raise the question of whether the government is being honest with Australia, whether the Prime Minister has in fact told the truth.When we were last debating this matter, Minister, you will recall that Senator Harradine made his speech and shortly after that we adjourned, and that was the end of it until now. At the time, you will also recall that the Prime Minister, given that the propositions that had been put to Senator Harradine to entice him to support your original package were in the public domain, gave an undertaking that all the changes he had proposed to Senator Harradine would be enacted, despite the fact that Senator Harradine was not going to support them. That was a clear undertaking given at the time by the Prime Minister to Australia. It is an undertaking that has never been withdrawn and so it is an undertaking that must still stand. If this is all the amendments, then the Prime Minister has misled the country as to what his intentions are because there are significant omissions now.Yesterday, you made what passed laughingly for an explanation. It was the most flimsy piece of garbage that I have ever heard in this chamber. To qualify for that title it has to beat some terrible shockers, I have to say, but this was the worst that I had heard. Will you fess up now and tell us that the Prime Minister has changed his mind and that he is not going to now enact all the changes that he proposed to Senator Harradine, because you have not even got amendments for them? Here we were believing the Prime Minister and expecting these matters would be debated and you are not even proposing to bring them forward. What is the government's intention with respect to the provisions that the Prime Minister announced were the changes that he had proposed to Senator Harradine? Are you or are you not going to proceed with them?09:43:006254Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Senator Cook has raised a number of issues. As usual, he has started off this rather prolonged debate that we will be having over the next couple of days on a rather sour and bitter note. Indeed, I can understand why the Labor Party is sour and bitter. It is because the Labor Party is completely irrelevant to the tax debate. Senator Cook and his colleagues had plenty of chances to be at the table and take part in the great project of tax reform, but they went missing in action. Senator Cook is therefore, unfortunately, quite irrelevant to this debate. To get up, Senator Cook, after your very bad start last night to this debate and start off on the same note of feigned fury and passion adds nothing to the debate. The amendments that the government proposes to move, with the exception that I have mentioned, are the amendments which are before this chamber and they are the ones that the government now intends to proceed with.09:44:006254Cook, Sen PeterSenator COOKRF4WAALP00—Regrettably it was not feigned last night; it was genuine fury.WW4KEMPSenator Kemp—That is what we were worried about actually. It genuinely worried us over here.RF4Cook, Sen PeterSenator COOK—Well, yes. But I asked you a direct question, Minister. This is not question time; you cannot just avoid it. Will you please now answer the question. Do you propose or do you not propose to bring forward, as amendments to this legislation, the promises made by the Prime Minister to Senator Harradine which have been put in the public domain by the government? If you do not, when is the Prime Minister going to tell the rest of Australia that he has yet again done a backflip and has changed his position?09:45:006254Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I have directly answered your question. These are the amendments the government intends to proceed with.09:45:006254Cook, Sen PeterSenator COOKRF4WAALP00—That is not an answer; that is a smart sort of rejoinder. You might consider that an appropriate answer. What is means, Minister, is that the Prime Minister has lied to Australia yet again—10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Watson)—Order!RF4Cook, Sen PeterSenator COOK—I withdraw. The Prime Minister has misled yet again, and you are prepared to be complicit in this. We will pursue you on this, Minister. This is a government without honour that is prepared to say anything about this legislation just as long as it gets the votes at the end of the day. It is a terrible start for this debate, I know, but if you treat this chamber with contempt you can expect contempt back.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—I remind the committee that some of the statements that have been made today are very marginal in terms of having to be withdrawn, so I ask senators on both sides to take care.09:46:006254Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Senator Cook, I think it would be a great help to this debate if you would take a few deep breaths and calm down. We can have a constructive debate on the legislation before us, Senator Cook, or we can have a political debate in which, as always, you go off the deep end. That causes great embarrassment to your colleagues and concern over this side of the chamber. I think, Senator Cook, it would be great if you would restrain your remarks.09:46:006255Cook, Sen PeterSenator COOKRF4WAALP00—I thank the minister for instruction in private behaviour and proper decorum in the chamber. I take his remarks to heart. They are indeed very obliging and I acknowledge that. But it would help if this government would be honest with this chamber. I take it that your answer—which takes the form of a debating point rather than an answer but which you care to style as an answer—is that the government will not be proposing to move all of those changes it offered to Senator Harradine, despite the fact it said it would. If you can answer that question yes or no, we can get on with the debate. If you choose to avoid it, then let the record speak that you were not prepared to even have the courage to front up and say what your position was on that issue.09:47:006255Brown, Sen BobSenator BROWNQD4TASAG00—While the minister is getting advice, I want to return to the wine equalisation tax, if I may, for one minute.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—We are not on wine equalisation. We are dealing with amendments Nos 25 to 27 of the first bill.QD4Brown, Sen BobSenator BROWN—I am aware of that.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—It is a question of relevance.QD4Brown, Sen BobSenator BROWN—Yes, but there is furore over that matter this morning. I am just asking if as a matter of public largesse Senator Murray or Senator Lees might make just a brief statement to clear the air as to what is happening there. Because of the guillotine, we have only two days to debate this legislation and it may well be that we will not even get to debate this matter. But there is a lot of turmoil out in the electorate about it.8U4LEESSenator Lees—There is not!QD4Brown, Sen BobSenator BROWN—You have not heard AM then, Senator Lees, if that is the case. I would suggest that the air be cleared for the Democrats' own good. It would take one minute—60 seconds. Then we can rest easy until the matter comes up for full debate in due course.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—I remind the committee that we are debating amendments Nos 25 to 27. I have raised the question of relevance.09:48:006255Lees, Sen MegSenator LEES8U4SAAD00—I will follow the chair's ruling. Could I just respond to some questions from Senator Cook. I presume you are referring to the youth allowance measures that Senator Harradine had locked in, dependent upon the passage of this bill. Could you just answer that for us?09:49:006255Cook, Sen PeterSenator COOKRF4WAALP00—A series of changes were announced by the government. I am referring to all of those changes. If you want me to read the full list out, I will. Youth allowance was just one of those. This is surely not an unreasonable request and, given the pompous way in which the Democrats have addressed high principle in the past, it would surely be reasonable for them to try to have some semblance of living up to their words. This chamber is entitled to know what it is that is being put before it.The Prime Minister said he was going to do these things. They are not in the bills here. There is no record of intention being pursued here. We were told by the minister a moment ago that all the amendments to all this legislation are now before us, save one which we may see later today—but it does not go to this area and it does not go to the bill before the chair. Maybe, Senator Lees, you are now the spokesman for the government and will have to bail out the minister in the course of this debate on more than one occasion. But maybe you can answer on behalf of the government: is it the intention of the government to bring forward all of those changes or not?09:50:006255Lees, Sen MegSenator LEES8U4SAAD00—I think I am getting a slightly clearer picture amidst all the rhetoric. I understand, Senator Cook, that you are now talking about the offer that was suggested to Senator Harradine if he would support the GST legislation. So you are now talking about the four per cent lock-in for pensioners above what they would normally receive, the four per cent lock-in for unemployment benefits, and the changes bringing down to age 55 the eligibility for those who are getting the bonus for self-funded retirees. Are they the issues you are now talking about? Is it the offer? No promises were made to Senator Harradine, unless he decided to support the bill. This was a package on offer. Is that what you are talking about?09:51:006256Cook, Sen PeterSenator COOKRF4WAALP00—I am talking about those and all of the other offers to Senator Harradine, which the Prime Minister has said—and I remind you of this—he will legislate. That is what I am talking about. I am talking about those things that you have mentioned and all of the other things too.09:51:006256Lees, Sen MegSenator LEES8U4SAAD00—Those items were not on the table unless the government was working with Senator Harradine. I am not going to answer for the government as to what they said about those publicly, privately or whatever. But it was made very clear to us that we started with a clear slate. We had to renegotiate back onto the table a lot of what Senator Harradine wanted and we were not able to negotiate all of it back, to be perfectly frank. We were able to get back onto the table—Opposition senators interjecting—8U4Lees, Sen MegSenator LEES—We have a considerably improved package, but not to the tune of about $1 billion: I think we were over $4 billion by the end of the day. Can I begin with where we started, which was with an empty table. Step by step, more issues were put onto that table. We made sure that Senator Harradine's offer was bit by bit considered and we were able to negotiate a number—indeed, most of it—back onto the table.Firstly, there was the four per cent increase for pensioners above the normal increase in male average weekly earnings—the 25 per cent of male average weekly earnings that they are locked into. Not only were we able to negotiate that four per cent but we were able to keep it out of the hands of the state housing ministers, so that they will not lose that automatic percentage of that four per cent. If inflation and male average weekly earnings both jumped, say, two or three per cent after this, the pension and the unemployment benefits will also jump.The unemployment benefits are linked to the CPI and the pension is linked to MATAWE. Yes, the state housing ministers can get their hands on that normal jump. But they cannot get their hands on the four per cent that is locked in permanently now. It is not going to be whittled away in two or three years. Whenever MATAWE goes up, four per cent above that is where the pension goes up to. If the CPI goes up maybe one or two per cent, the unemployment benefit and other benefits will be locked in above that.So I can say to you that for us it was a clean slate onto which we put all of our proposals, partly out of the documents we released before the election and also from the full document that we released after the committee process—because in a number of areas our concerns were either allayed by the committee process or were changed as a result of the evidence that was presented before committee. Not only did we go in and discuss with the government our concerns but we brought back those of Senator Harradine in that area, and they fulfilled our concerns as well, particularly for low income earners. So, through the offer that was made to him, we could actually meet some of our concerns that were raised as a result of that Senate committee hearing process.Senator Cook, I say to you that the issues that you are discussing come in later bills. We are not dealing today with pensions and benefits. We will have to wait until we come through to later bills. Indeed, I think that this one is due on Monday, and that is where you will find the pensions and benefits.As well as that deal for low income earners, we were able to get food out: 80 per cent of what low income earners and average income earners spend at the supermarket by way of buying food is now GST free. That will see the cost of food for them fall by about two per cent. Add that to the increase in pensions and benefits, and we got an excellent package. Add in again the increase in rent assistance for those in private rental, and remember that we fixed public rental by keeping the hands of the states out of that four per cent. For private rental we negotiated not a four per cent increase but a seven per cent increase in rent assistance.We also have a bonus payment—I guess you would call it a fall-back payment—for those who have missed out on either tax cuts or social security, the mechanisms of which will be released shortly. Was that the amendment you were discussing earlier, Senator? That one is yet to come. So we can look at a mechanism for all Australians; in other words, everybody is now going to be in the system. That is yet to come.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Thank you, Senator Lees. I again remind the committee of relevance. We are debating amendments 25 to 27, and I hope that explanation will not lead to a further debate in relation to matters outside those that we are looking at at the moment.09:56:006257Cook, Sen PeterSenator COOKRF4WAALP00—My questions were about the amendments to the whole package, and why they are relevant to these amendments is that we have to see all the amendments to the package in context. I appreciate the scope that you have given us to pursue those matters. I do not have much further to go, and I wonder if I can complete the exercise by asking the minister now if he would table the proposals that the Prime Minister put to Senator Harradine. That would be very useful in helping proceed with the debate on the whole package. I ask Senator Lees if, given her public remarks that material that ought to have been provided to the Senate inquiry was not provided by the government but was provided to her in private, she would be prepared to table the material that ought to have been provided to the Senate inquiry for the chamber's information as well.I conclude by saying that I notice that you have taken the opportunity to explain why you think the package that you have reached with the government is a good package. Well, I will deal with the sell-out of middle and low income earners later in this debate, because we do not think it is a good package at all. We think that it actually sells them down the river. That is what we think. Demonstrably, it does. It does not sell them as far down the river as the original package did, and so you have got some marks in your corner. You have clawed back some of the points but you have certainly not clawed back all of them. Middle and low income earners are still worse off if this new reworked package goes through.Mr Chairman, they are my questions. Is the minister now prepared to table, for the examination of the Senate, the proposals that the Prime Minister put to Senator Harradine? Is Senator Lees prepared to table the material that has been supplied to her and that should have been supplied, on her own public admission, to the Senate inquiry?09:57:006257Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Senator you have ranged pretty far and wide there. Of course the package is good for low and middle income earners. Senator Lees in her remarks referred to the pension changes which will provide real rises in pensions and benefits. I would have thought that that was a very big plus. That compensation element has been further improved through the negotiations with the Democrats. As far as the negotiations with Senator Harradine are concerned, they are a matter of public record. I do not propose to table any papers in relation to that. As you would be aware, the PM and Senator Harradine entered into some negotiations on the package. In the end, the offer that was made was not sufficient as far as the senator was concerned, and the government then proceeded to negotiations with the Australian Democrats.I do not propose to table any further papers on that, but clearly the emphasis to the negotiations which was given by the Australian Democrats was somewhat different. But, as Senator Lees, the Treasurer and the Prime Minister all said, this is a very good package. This is major tax reform for the country, and it delivers very substantial benefits to low and middle income earners.10:00:006258Lees, Sen MegSenator LEES8U4SAAD00—I want to respond to Senator Cook regarding information that we received. A lot of it was from officials who were called to give us the information we were requesting. In some cases we went out to get that. I personally went to the health department, for example. They had not been able—certainly from my looking through the committee process—to be actively involved in the committee process. We were now basically being given access to people who previously had not even been able to, I think, answer questions. In Health, I simply sat and listened to evidence and that is what brought us to change some of our amendments in respect of health and to refocus some of what we were looking for and some of the issues we were concerned about.I can go on a paperchase but there was nothing written—indeed, it was all verbal. It was going through details, it was lists of numbers which we took away with those on our side of the table to check. Some of the answers that came back were, `Yes, I think the department is pretty close to right,' or `Yes, I think the minister's comments are pretty accurate.' The cost of one of our health amendments, as far as complementary medicines were concerned, was many times what we had thought it would be but, more than that, there was a problem with the way the Therapeutic Goods Act is written, which we were directed to. We went away and got the Therapeutic Goods Act and we sought advice from others. The answer that came back was yes, and we decided not to pursue that amendment.Virtually all of it was a verbal exchange, getting information, getting details, and going away and checking it. I can go on a paper chase but I am pretty sure we will run into a blank wall until the time we thought we were at the point of bothering to put anything in writing. When you sit and discuss issues with people and they say, `No, no' there is no point in putting anything in writing. You keep talking until you think you are getting close to something that is going to be worth while putting in writing. I will head off on the paper chase and check with my staff but I think the meetings, particular those held with the health department, were all done verbally. I was in attendance.10:03:006258Cook, Sen PeterSenator COOKRF4WAALP00—The reason I asked the question is that on 20 April Senator Lees made a speech to the National Press Club in which she said:At this point, Senator Harradine's position is not so clear, although I think all reasonable Australians, including Senator Harradine, would expect this package to be dealt with above the negotiating table and not below it. I do not rule out the possibility—and it goes on about Senator Harradine. Then further down she says:Shortly I will outline our definition of food and then the last piece of the Democrat negotiating position will be firmly in place—up-front, in public and above the table.Since then you have made a remark publicly that the negotiations were an enervating time for you and that the government came forward with information that it ought to have provided to the Senate inquiry; and this raises questions as to whether the Senate inquiry was properly dealt with by the government, whether all of the working documents that we need for a proper and considered debate are in the public domain and whether the right information has been delivered.If there were a Hansard of your negotiations we would have a record of them. If there is no record of them and it is all in the ether, in the memory of the participants and not in writing, that is a pity but at least it ought to be above the table, if your test as to fairness in proper negotiation is to be met. All I am doing is asking you to meet the standards you have set.10:04:006258Lees, Sen MegSenator LEES8U4SAAD00—Going back to what you just asked about Senator Harradine, everything that was offered to Senator Harradine was on the table. As soon as we had an offer, and it was not just discussions, it was put on the table—indeed, it was released. Are you seriously suggesting that when you are in government and you start discussing any issue with any member of the opposition or with any member of another party you get in Hansard to take a record? I think that is quite extraordinary. Obviously, unless there is any sort of formal agreement, it is just that; it is discussions.I have made it very clear that there was not so much as one scrap of paper on the table offering anything for day after day; it was discussions. It was a long process of getting some of the answers and, as I said to you, some proper costings in the health area. One of the rough costings we had on health was not accurate. It was not until the department got involved that I felt we were getting close to what we should have had in the first place. If you are asking, `Was the Senate process taken seriously by government?' I would have to say, `No, I don't think it was.' If it had been, a number of our amendments would have been different from day one.If you look through the amendments we have before the chamber now and compare them with the amendments that we moved originally, you will see where some of the problem areas were. We were only too happy to keep talking through the in-principle agreement, where there were points we still had to clarify, to work through to where we are now. Food is a good example, and hopefully at some time today will get to this bill and we can talk about that. We really are still straying over to the compensation bills, which is what I think is at the heart of some of what you are asking. To question what we have done for low income earners must mean you are talking about the compensation bills as well as food. I say to Senator Cook that all written material is in the public domain. I will go back and chase maybe the odd question that went to a department in writing but most of it was done in a very short space of time and it was done by staff verbally.10:06:006259Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I support Senator Lees's comments. It is an odd thing that Senator Cook believes that every bit of paper and every bit of discussion with other parties should now become matters of public record. I do not think this has ever happened before, no such claim has ever been made—and not, I might say, that it would alter your views one iota. It would not matter at all; whatever information was produced on these bills, it would not change the Labor Party's position. The Labor Party has made it very clear that it is opposed to all tax reform. It is opposed to these bills and will fight them to the very last. You can go around seeking all the information you want, but I make the point to the Senate and to the wider public that, no matter what information was given to Senator Cook, it would not change the Labor Party's position.10:07:006259Harradine, Sen BrianSenator HARRADINE6H4TASIND00—I want to ask the minister a question in regard to the A New Tax System (Goods and Services Tax) Bill 1998, which we are currently considering. The matters that were quite legitimately raised by Senator Cook are, as he would know, matters to do with the compensation aspect. I guess, as Senator Lees is inferring, that what is to be compensated in the package that the Democrats have got is quite clearly different from the original legislation.I know what the government and the Prime Minister did with the undertakings that were given, and I know where the cut-off point was, that is to say, some undertakings were quite clearly given and, as I see it, are included in the legislation coming before us, including the Social Security (Family Allowance and Related Matters) Legislation Amendment Bill 1999 , and others are not. I suppose the government has taken the view that, because I said that I could not vote for goods and services tax legislation, that cleared the table in respect of some of the other negotiations and some of the other offers that were made at a particular stage. I do not propose to go into detail about this, but I do, at the beginning of today, want the minister to answer the question: is the goods and services tax contained in the measures that are now before us able to be considered as an excise tax?10:11:006259Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—The answer to the question Senator Harradine asked me is that some of the GST is an excise—that is why there is an A New Tax System (Goods and Services Tax Imposition—Excise) Bill 1998 . There are two other imposition bills as well, Senator.10:12:006260Cook, Sen PeterSenator COOKRF4WAALP00—I want to move on to dealing with the amendments now. Through you, Mr Temporary Chairman, to the minister, I want to correct the record in the sense that it was not my test; it was Senator Lees's test about being above or below the table. I was asking Senator Lees, since she made those remarks of Senator Harradine at the Press Club, whether she was prepared to live by the same standard. That was the point I was making. I understand that she has undertaken to go back through her material, and if she has any notes that are germane to the debate she will provide them to us. That is my understanding of what the answer was. I note, and I emphasise this point for the record, that Senator Lees seemingly just nodded in the affirmative. Perhaps she could indicate that she did.Senator Lees interjecting—RF4Cook, Sen PeterSenator COOK—I understand from the interjection that she will check and, if she has material, she will make it available to us. That concludes that line of inquiry. The government has frankly said no, it will not, but Senator Lees has also said in this debate that the government did not treat the Senate inquiry properly.I have never put a question to Senator Harradine about what the government put to him, because he has acted honourably in this. He said publicly, as I recall, that he would not release the details of what the government put to him, and that is quite appropriate. But the government did say—and it is therefore to the government that I have directed the inquiry—that it would legislate all of the changes it put to Senator Harradine. That is why my questions are to the government. The government now says it will not produce the material, and we will have to draw our own conclusions about that.This is a government amendment. This is one of 218 government amendments to its original set of bills that it rushed through the House of Representatives urgently and now wishes to amend in the Senate. By our count, there are another 119 amendments that the government wants to make following its talks with the Democrats and the deal they have done to foist a GST on an unwilling Australia. This is the first occasion since that deal has been struck that we have a government amendment before us. On behalf of the opposition, I should state our voting intentions with respect to this amendment and with respect to other government and Democrat amendments. I did this when we had the original government bill. That has now changed quite considerably, and it is appropriate that it be now stated again.We will be voting for government amendments of a technical nature which will clean up the drafting irregularities and make the bill sensible, because the admission in having 218 such amendments is that the bills that they put to the House of Representatives were not technically appropriate and needed tinkering with to ensure that, if enacted into law, they would in fact work. We will attend to our responsibilities as an opposition. We want laws on the books for taxation that do work. Even if we disapprove heartily of these laws—as we do of these—it is appropriate, though, that they still be able to work. For that reason, we will vote for these amendments.There are a number of other amendments which obviously reflect the negotiations between the government and the Democrats. These are new. These were not before us last time, and it requires us to take a position on those. We will consider each one of those and decide what our voting intention will be with respect to each one of them. But if they are government amendments in principle we will be supporting them. However, we will be opposing some of the others, and I will state at the time which ones they will be.Finally, there are some Democrat amendments which are still on the Notice Paper and which may not be proceeded with by the Democrats because they are redundant by virtue of the deal. We will reserve our position on those. But, for the moment, Mr Temporary Chairman, the issue before us is one that the government has put forward to amend its own legislation. In a technical sense, to make it more effective, we will be voting for these amendments.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Watson)—The question is that government amendments Nos 25 to 27 be agreed to.Question resolved in the affirmative.10:17:006261Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—by leave—I move government amendments Nos 1 and 14 on sheet EF238 together and amendments Nos 7, 8, 9, 12, 14, 22 and 28 on sheet EF239 together:(1) Page 78 (after line 4), after clause 38-1, insert:Subdivision 38-AA—Food38-2 Food A supply of *food is GST-free .38-3 Food that is not GST-free (1) A supply is not GST-free under section 38-2 if it is a supply of: (a) *food for consumption on the *premises from which it is supplied; or (b) hot food for consumption away from those premises; or (c) food of a kind specified in the third column of the table in clause 1 of Schedule 1A, or food that is a combination of one or more foods at least one of which is food of such a kind; or (d) a *beverage (or an ingredient for a beverage), other than a beverage (or ingredient) of a kind specified in the third column of the table in clause 1 of Schedule 1B; or (e) food of a kind specified in regulations made for the purposes of this subsection. (2) However, this section does not apply to a supply of *food of a kind specified in regulations made for the purposes of this subsection. (3) The items in the table in clause 1 of Schedule 1A or 1B are to be interpreted subject to the other clauses of Schedule 1A or 1B, as the case requires.38-4 Meaning of food (1) Food means any of these, or any combination of any of these: (a) food for human consumption (whether or not requiring processing or treatment); (b) ingredients for food for human consumption; (c) *beverages; (d) ingredients for beverages; (e) goods to be mixed with or added to food for human consumption (including condiments, spices, seasonings, sweetening agents or flavourings); (f) fats and oils marketed for culinary purposes; but does not include: (g) live animals (other than crustaceans or molluscs); or (h) any grain, cereal or sugar cane that has not been subject to any process or treatment resulting in an alteration of its form, nature or condition; or (i) plants under cultivation that can be consumed (without being subject to further process or treatment) as food for human consumption. (2) Beverage includes water.38-4A Premises used in supplying food Premises , in relation to a supply of *food, includes: (a) the place where the supply takes place; or (b) the grounds surrounding a cafe or public house, or other outlet for the supply; or (c) the whole of any enclosed space such as a football ground, garden, showground, amusement park or similar area where there is a clear boundary or limit; but does not include any part of a public thoroughfare unless it is an area designated for use in connection with supplies of food from an outlet for the supply of food.38-4B Packaging of food (1) A supply of the packaging in which *food is supplied is GST-free if the supply of the food is GST-free. (2) However, the supply of the packaging is GST-free under this section only to the extent that the packaging: (a) is necessary for the supply of the food; and (b) is packaging of a kind in which food of that kind is normally supplied. (14) Page 276 (after line 25), after Chapter 6, insert:Schedule 1A—Food that is not GST-freeNote 1: See section 38-3.Note 2: The second column of the table is not operative (see section 182-15).1 Food that is not GST-free *Food specified in the third column of the table is not GST-free.Food that is not GST-free ItemCategoryFood1Prepared foodquiches2sandwiches (using any type of bread or roll)3pizzas, pizza subs, pizza pockets and similar *food4*food marketed as a prepared meal, but not including soup5platters etc. of cheese, cold cuts, fruit or vegetables and other arrangements of *food6hamburgers, chicken burgers and similar *food7hot dogs8Confectioneryconfectionery, *food marketed as confectionery, food marketed as ingredients for confectionery or food consisting principally of confectionery9popcorn10confectionery novelties11*food known as muesli bars or health food bars, and similar foodstuffs12crystallised fruit, glace fruit and drained fruit13crystallised ginger and preserved ginger14edible cake decorations15Savoury snackspotato crisps, sticks or straws, corn crisps or chips, bacon or pork crackling or prawn chips16seeds or nuts that have been processed or treated by salting, spicing, smoking or roasting, or in any other similar way17caviar and similar fish roe18*food similar to that covered by item 15 or 16, whether or not it consists wholly or partly of any vegetable, herb, fruit, meat, seafood or dairy product or extract and whether or not it is artificially flavoured19*food consisting principally of food covered by items 15 to 1820Bakery productscakes, slices, cheesecakes, pancakes, waffles, crepes, muffins and puddings21pavlova and meringues22pies (meat, vegetable or fruit), pasties and sausage rolls23tarts and pastries24doughnuts and croissants25pastizzi, calzoni and brioche26scones and scrolls27bread (including buns) with a sweet filling or coating28Ice-cream foodice-cream, ice cream cakes, ice creams and ice-cream substitutes29frozen confectionery, frozen yoghurt and frozen fruit products (but not frozen whole fruit)30flavoured iceblocks (whether or not marketed in a frozen state) 31any *food similar to food listed in items 28 to 3032Biscuit goods*food that is, or consists principally of, biscuits, cookies, crackers, pretzels, cones or wafers2 Prepared food, bakery products and biscuit goods For the purpose of determining whether particular *food is covered by any of the items in the table relating to the category of prepared food, bakery products or biscuit goods, it does not matter whether it is supplied hot or cold, or requires cooking, heating, thawing or chilling prior to consumption.3 Prepared meals Item 4 in the table only applies to *food that requires refrigeration or freezing for its storage.4 Candied peel None of the items in the table relating to the category of confectionery include candied peel.5 Goods that are not biscuit goods None of the items in the table relating to the category of biscuit goods 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.Schedule 1B—Beverages that are GST-freeNote 1: See section 38-3.Note 2: The second column of the table is not operative (see section 182-15).1 Beverages that are GST-free *Beverages specified in the third column of the table are GST-free.Beverages that are GST-free ItemCategoryBeverages1Milk productsany of the following products: (a)milk, skim milk or buttermilk (whether liquid, powdered, concentrated or condensed); (b)casein; (c)whey, whey powder or whey paste2*beverages consisting of products referred to in item 1 (or a combination of those products), to the extent of at least 95%, but not including flavoured beverages3lactose4Soy milk and rice milk*beverages consisting principally of soy milk or rice milk, but not including flavoured beverages5Tea, coffee etc.tea (including herbal tea, fruit tea, ginseng tea and other similar *beverage preparations), coffee and coffee essence, chicory and chicory essence, and malt6malt extract, if it is marketed principally for drinking purposes7preparations for drinking purposes that are marketed principally as tea preparations, coffee preparations, or preparations for malted *beverages8preparations marketed principally as substitutes for preparations covered by item 6 or 79dry preparations marketed for the purpose of flavouring milk10Fruit and vegetable juicesconcentrates for making non-alcoholic *beverages, if the concentrates consist of at least 90% by volume of juices of fruits 11non-alcoholic carbonated *beverages, if they consist wholly of juices of fruits or vegetables12non-alcoholic non-carbonated *beverages, if they consist of at least 90% by volume of juices of fruits or vegetables13Beverages for infants or invalids*beverages, and ingredients for beverages, of a kind marketed principally as *food for infants or invalids14Waterbottled natural water, non-carbonated and without any other additives2 Tea, coffee etc. None of the items in the table relating to the category of tea, coffee etc. include any *beverage that is marketed in a ready-to-drink form.3 Fruit and vegetable juices For the purposes of items 11 and 12 in the table, herbage is treated as vegetables.(7) Clause 38-90, page 85 (lines 5 and 6), omit paragraph (b), substitute: (b) in any case—any supply of *food as part of the excursion or field trip is not GST-free under this section.(8) Clause 38-105, page 86 (line 8), omit "food", substitute "*food".(9) Clause 38-285, page 93 (line 7), after "GST-free", insert "under this section".(12) Page 240 (after line 27), at the end of Division 182, add:182-15 Schedules 1A and 1B The second columns of the tables in Schedules 1A and 1B are not operative. In interpreting an item in those tables, or any other operative provision, those columns may only be considered for a purpose for which an *explanatory section may be considered under subsection 182-10(2).(14) Clause 195-1, page 253 (after line 5), after the definition of batch repair process , insert: beverage has the meaning given by subsection 38-4(2).(22) Clause 195-1, page 260 (after line 2), after the definition of floating home , insert: food has the meaning given by section 38-4.(28) Clause 195-1, page 269 (after line 6), after the definition of pre-establishment importation , insert: premises , in relation to a supply of *food, has the meaning given by section 38-4A. The government and the Australian Democrats have agreed on the treatment of food and beverages under the goods and services tax. The government considers this position is an acceptable compromise. After much discussion and consultation, we believe the result minimises the compliance costs for businesses selling food and, importantly, will result in most food falling in price.The structure of the legislation is that food will be GST free unless it falls within a taxable category specifically listed in the legislation. Taxable food will be limited to: food for consumption on the premises where it is supplied—for example, restaurants and cafes; hot food for consumption away from those premises; prepared food; confectionery; savoury snacks; bakery products—but not including bread; ice-cream and similar goods; and biscuit goods. Beverages will be taxable unless specified as being GST free. The bill specifies as being GST free: milk; soy and rice milk; tea; coffee; fruit and vegetable juices that consist of at least 90 per cent by volume of juice; beverages for infants or invalids; and bottled natural mineral water. Cordials, soft drinks and flavoured milk will be taxable. I commend the amendments to the Senate.10:19:006264Murray, Sen AndrewSenator MURRAY3M6WAAD00—It may pay, Mr Chair, if Senator Cook wishes, for Senator Cook to express his opinions so that I can respond to them. He knows well my views and the Democrats' views on food. Senator Cook, would you prefer to express your opinion and have me respond, or do you want me just to say a few words anyway?10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Senator Cook, do you wish the call?10:20:006265Cook, Sen PeterSenator COOKRF4WAALP00—In many respects it seems to me that this is a co-sponsored motion. It reflects the government and Democrat arrangement. It is, I think, reasonable to hear the proponents first as to the alleged merits of their case before we respond to it. So I am happy to listen to what Senator Murray has to say.10:20:006265Murray, Sen AndrewSenator MURRAY3M6WAAD00—Thank you, Senator Cook. I think your approach is probably right. The Australian people know that we went to the election saying—and indeed put out a 40-page document in September prior to that election which said—that we would approve the tax package if a number of things were changed. Core to that approach was the issue of food. Most of the media in the end saw the entire tax package as being about a GST and, within the GST, the issue being food, but those in this chamber certainly know it is far broader than that. However, food is what we are on, and that is what I will speak to.Our approach at that time—and we said this very clearly both in Senator Lees's Press Club speech at the time and in our various documents—was that restaurants and takeaways should be taxed but all other foods should be not. To put that into a monetary perspective, the various modellers who looked at it advised us that that would be somewhere around a cost of $4½ billion to $5 billion.If you look at the government's further supplementary explanatory memorandum that has been circulated, on page 1 you can see that they indicate what the financial impact of the food exemption is, and over the years it is between $3 billion and $4 billion. That is less than we originally asked for. The reason it is less is that, as a result of the Senate inquiry system—which, if I may compliment you again, Senator Cook, I thought was well chaired and, as you know, I have made those remarks before—it became apparent to us that we needed to weigh up the issue of jobs versus a wider definition of food. The prime issue related to the prospect that, if you had the supermarkets competing with the takeaway chains, the takeaways would lose massive amounts of business, with a consequent loss of jobs and market share and, indeed, the closure of businesses. That weighed on us and, as a result, we decided to go for a narrower definition.The Canadian experience was particularly apposite, and I seem to recall that the figures in Canada had been very extensive. I quote from page 373 of the main report of the committee, where they outline the problem. It says:McDonalds Australia argued that the option would have a considerably negative effect on employment in their industry, pointing to the evidence of job losses in the Canadian fast food industry after the GST was introduced and arguing that up to 23,000 jobs could be lost in the fast food service industry. Whether the job losses in Canada were due to the GST or the severe recession caused by inappropriate monetary policy in Canada in the early 1990s is however, unclear.We felt there was a sufficient risk that this wider definition of ours would create a problem that we needed to be cognisant of—the job side—and, as a consequence, we went for the narrower definition. The next assault we faced was from those who believe that the simplicity and efficiency criteria overcame the equity criteria. On the efficiency side, it was established through modelling that making food partially GST free, or in the main GST free, would result in positive economic effects. So the efficiency side was dealt with.On the simplicity side, we were subjected to an assault from all sides. That assault assumed that the consequence of differential tax rates on food would be very negative for the business sector. We have continually identified the fact that, if the government costing in the ANTS package of $1.9 billion for the implementation of the GST was an accurate figure, our food variation proposition would mean between $40 million and $100 million extra in compliance costs for the business sector—based on our estimate of $40 million and on the ASCPA's estimate of $100 million—in other words, between two and five per cent.Whilst nobody in this chamber would consider that $40 million to $100 million is a small amount of money, nevertheless, we believed that that additional compliance cost was justifiable in terms of the equity consequences of making most food GST free. I say `most food' because our analysis of the package indicates that about 80 per cent of household foods, particularly those which apply to low and middle income households, will be GST free. In fact, the price of food to those households will fall. It will fall on average by about two per cent.There is some talk of poverty in this country. I must say that, compared with the worst aspects of poverty in, say, Sudan or in parts of India, Australia has been well served by the governments and the economy that we have had and that we have at present. Nevertheless, there are people who do it hard in Australia and making as much food as possible GST free was very strongly supported by all those institutions and churches that have a great deal to do with that sector. The kind of attack that has been launched on us by people such as the Liberal Premier, Jeff Kennett—I think he is one of your mates, Senator Conroy—3L6CONROYSenator Conroy—One of Senator Kemp's mates.3M6Murray, Sen AndrewSenator MURRAY—I have heard you speak in warm and loving tones about him! The kind of attack that Premier Kennett has launched on this proposition, I think, is influenced by the prospects of an upcoming election. But it is also influenced by a view that equity is subordinate to simplicity. The Labor Party had always taxed food but on a limited basis. The wholesale sales tax did not go across all foods.Senator Conroy interjecting—3M6Murray, Sen AndrewSenator MURRAY—I will repeat that because I do not think Senator Conroy heard it. The Labor Party had always taxed food under a wholesale sales tax, but it did not go across all foods. There were large sections of food which were left untaxed. I had hoped that the Labor Party would stick to that view. It was not until we had the debate in this chamber that I discovered that the economic rationalist side of the Labor Party had triumphed and they in fact wanted to tax all food. I am looking forward to Mr Beazley going to the next election and saying to the Australian people, `My platform is to tax all food.' I would be quite astonished if he did that. I was surprised that you did vote for all food to be taxed. That is on the record. At least the coalition have the virtue of always being honest about it. They did want all food to be taxed. But from your side I was left guessing until the last minute. I really was surprised, I must say, given some very fine members of your party, that you did want food to be taxed. But let me not provoke you, because I am sure you will have an opportunity to provoke me in return, and that will happen.I have dealt before with the issue of a large proportion of food not being taxed. It is one that has been grappled with by almost every country which is involved in the GST-VAT system. In our responses to the business lobbying group, who naturally have a fear about a new system coming through and a fear that this new process will cause them more grief than it is worth, our consistent response has been, `Look, there are 105 countries in the world with a GST-VAT system, many of them introduced by socialist and left governments.' There are countries such as the United Kingdom which have had such a system for 25 years. I always thought that if Mr Beazley was very concerned about thermometers and lettuces and tins of soup, he should have rung up his and Geoff Gallop's old mate Mr Blair and said, `How are you coping with it? You in the Labour Party are going to keep it there and you seem all right with it.' They are keeping it.I have gone through with you before how it is coped with in Belgium, Germany, Greece, Spain, France, Ireland and Italy, and I can go on through lists of these countries. My response always has been that, whilst the Australian Democrats do accept that our proposition to have 80 per cent of household food made GST free does introduce some additional complexity into business lives, billions of people and tens of millions of businesses worldwide have accepted that and deal with it very capably. I for one am not of the school that thinks that our businesspeople are less capable and less able to deal with this issue than others elsewhere in the world. I think that whole issue has been beaten up, and I would be very disappointed if the Labor Party were again to vote for food to be taxed. I would hope that you would support this proposition, which really does improve the entire package.NB5CAMPBELLSenator George Campbell—We oppose the whole tax, not just food.3M6Murray, Sen AndrewSenator MURRAY—I know you have been consistent in the matter. What you did in the last debate was support every single government amendment.3L6CONROYSenator Conroy—Don't stretch the truth.3M6Murray, Sen AndrewSenator MURRAY—It is true. You supported every single government amendment. This is a government amendment which is not taxing food. I do hope that you will be able to support this amendment. I would not want to see you be inconsistent in your tactics on this one. It is an issue of equity: it does deliver a better outcome for ordinary people; there is an economic effect. It makes the economic prospects for the agricultural industry better and it makes job prospects better. Making food GST free reduces the price effect of the GST from two per cent to one per cent, although the retention of state taxes adds about 0.5 per cent back into this, with the impost of the state taxes obviously falling heaviest on high income earners. There is lots more I can say on food, but I am sure you will have lots of questions. We can carry on this debate as we proceed.10:34:006267Conroy, Sen StephenSenator CONROY3L6VICALP00—I appreciate Senator Kemp's comments that we have had a massive amount of time, at least a whole 24 hours, to try and go through it all. I am hoping that you will be able to point me in the right direction on a couple of issues. I have got the Prime Minister's letter to you, Senator Lees, regarding the final commitments to the outcomes. It is dated 22 June. Under a subsection headed `Food' it says `muesli bars but not breakfast bars'. Can I get the definitions of a muesli bar and a breakfast bar so that I know the difference? I have got a couple of examples here and I want to know which one falls into which category. One is a sort of muesli apricot slice and one is an almond and apricot natural bar. I am just looking for some explanation of the difference between them so that small businesses can have some way of knowing what constitutes either category.10:36:006267Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I can suggest that the senator read his own wholesale sales tax legislation. That defines a muesli bar, I am advised, and similar things. It is actually defined under the wholesale sales tax laws.ZW4SHERRYSenator Sherry—Mr Temporary Chairman, I raise a point of order. It goes to relevance. Senator Conroy's question goes to the impact of this tax bill we are considering, that is, a GST. It does not go to the wholesale sales tax. We want answers on this tax that you are introducing. That is the relevant issue before us.Senator O'Chee interjecting—10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Murphy)—I am not sure that there is a point of order, Senator O'Chee.EU4O'CHEESenator O'Chee—That is what I was going to suggest.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—In fact, I do not think there is a point of order. I am sure the minister is aware of the question that was raised. He is entitled to respond to it as he sees fit, whether he answers the question or not.10:37:006267Lees, Sen MegSenator LEES8U4SAAD00—This discussion is irrelevant to us in here. It is defined under the wholesale sales tax act, and I refer you back to your own legislation. I want to make a couple of comments on food. I have not done anything in detail since I spoke to the original amendments which the Labor Party helped to defeat. If the GST had gone through we would have had food fully taxed. What a month in politics can do! What a difference it makes.Let us look at what taking most food out of the GST will mean. According to Treasury, it reduces GST revenue by some $3.6 billion. I need to respond to those critics who say, `You are helping people on higher incomes more,' because we are not. Food makes up 24 per cent of the spending of those in the lowest quintile of households and only 12 per cent of the spending of those on the highest quintile. This is further compounded by the fact that, if we tax takeaways and restaurants, which we have done and which most other countries do, a much lower proportion of the food consumed by high income earners will be GST free compared with the proportion eaten by those at the bottom—they eat less of those types of meals, particularly restaurant meals but also takeaways.Using HES data we estimate that, overall, 80 per cent of food groceries will be GST free. That makes up 70 per cent of the food purchased by low income earners but only 50 per cent of the food purchased by high income earners. This is why, in terms of value for money, the food model we have adopted actually delivers: it delivers to those people for whom we have been most concerned. It does not deliver anything like the same results for high income earners—particularly when you consider that they are effectively paying for this in part with their reduced tax cuts.The dramatic impact is best demonstrated in the independent modelling by Professor Anne Harding and Professor Neil Warren, published in last Saturday's Australian. When they, the modellers of choice of the Senate committee, modelled for the Senate committee process they ignored tobacco and housing. Around 75 to 80 per cent of Australians do not smoke—I wish it was a higher percentage—and they certainly do not buy new houses, or will not when we begin this system in July next year. If we remove them and some of the pessimistic estimates that have been made about appreciation, we find that the price effect for pensioners of the impact of the GST is reduced from three per cent to 1.8 per cent, and for disability support pensioners it is reduced from 2.1 per cent to only one per cent. For a single income family with two school age children the effect falls from 1.9 per cent to 1.2 per cent. For dual income families with two school age children it falls from two per cent down to 1.4 per cent.These are all increases greater than the average reduction in the CPI, which falls from two per cent down to 1½ per cent. In other words, we are supporting and assisting those at the bottom far more than those on average earnings, whichever year we look at or however we describe it. In short, as we and ACOSS have always argued, making food GST free reduces the regressiveness of the GST, leaving all households facing very similar price effects. We have basically levelled the playing field. It certainly was not that way before. It was very heavily skewed.The Warren-Harding analysis shows that ours is a job well done. Taking it further and looking at the social security compensation, and that is about $800 million annually in extra pensions and allowance payments, it just shows how much better off low income earners are over high income earners. I want to go through a few examples. I am looking at the worst case scenario and the best case scenario. Looking at single pensioners, under the worst case scenario they are $2.61 a week better off; under the best case scenario they are $5.10 a week better off. Remember that this is after all the other impacts of the GST have been considered. This is in addition; this is from now, from ground zero.Looking at an age pensioner couple, they are $4.39 better off in the worst case and $8.50 better off in the best case. Students who do not have a private income are $2.57 better off than now and $3.92 better off in the best case. People like sole parent pensioners with one child are $27 a week better off than they are now in the worst case and $31 better off in the best case. A disability pensioner couple are $5.11 better off than they are now in the worst case and $9.41 a week better off in the best case. You can see that there is a large buffer there now, regardless of all these additional concerns. No doubt the Labor Party are going to think up 3,701 reasons why the modellers that they chose for the Senate committee are wrong, but these are the facts; this is what the modelling is very clearly showing us.Once we start looking at a single income couple earning up to $35,000 with a child over five, we see that they are $11.94 a week better off than they are now in the worst case—this is rolling in all that is going to happen with the GST—and in the best case scenario they are $18.50 better off. Using the system for food that we have—and this is based, as my colleague Senator Murray has said, on what is used in 17 of the 23 OECD countries—and adding on the additional compensation, there is absolutely no doubt that those at the bottom are going to be better off than they are now. And this modelling does not even show the additional rent assistance, which goes up from four per cent to seven per cent.As Senator Murray has said, this is a system that Tony Blair is happy with in the UK. He collects his VAT on what is described as takeaway and junk food.ZW4SHERRYSenator Sherry—It is not his system; he inherited it.NB5CAMPBELLSenator George Campbell—He inherited the system.8U4Lees, Sen MegSenator LEES—It is the way the Irish Labour Party designed the system in 1973. The Irish Labour Party did not inherit the system, they actually designed it this way. They learnt from the mistakes that were evident in Britain, and that is why we are looking at basically an Irish model that we have evolved into an Australian model. It is how social democratic governments in Spain, Belgium, Austria, et cetera run their affairs.In voting against this and indeed battling as they did initially to keep food in the GST, the Labor Party are placing themselves at odds with most social democratic governments and most social democratic parties across the world. If you go back in history it has generally been social democratic governments that have chosen to go for a GST because it broadens the tax base and gives us a better opportunity to pay for services. To put it mildly, the Labor Party are looking every day more and more isolated—not just here in Australia but internationally.10:44:006269Murray, Sen AndrewSenator MURRAY3M6WAAD00—I will just give you a little bit of historical assistance, through the chair: the VAT was introduced in Great Britain by Ted Heath of the Conservatives in 1973. Harold Wilson of the Labour Party became Prime Minister in 1974, and he did not take the VAT away. He did not reject it. In fact, the whole system grew and Mr Callaghan followed on with it. That is just to let you know that there is a long history of Labour and socialist support for this system.10:45:006269Conroy, Sen StephenSenator CONROY3L6VICALP00—Unfortunately, Senator Lees has now left the chamber, but I just want to take up a couple of the points that she has just made, some of them quite bizarre and some of them bordering on being—as Dr Hewson once described government mantras—Goebbels-like. The Democrats want to hide from the simple fact that they are putting new taxes on and increasing taxes on more foods than are now currently taxed. They want, and this government wants, the ordinary Australian to believe that basic food is now GST free. What they are not telling the ordinary Australian is that this package is reaching into taxing more food than ever before—getting more revenue than ever before—and that is the truth of this package. What we are seeing is restaurant food being taxed for the first time and takeaway food being taxed for the first time.TH4KNOWLESSenator Knowles—Food is taxed now, you fool.3L6Conroy, Sen StephenSenator CONROY—Unfortunately, notwithstanding the moronic interjection from the other side of the chamber, that is what this government is trying to hide; that is what the Democrats are trying to hide. We have already had Mitch Hooke from the food council making it quite clear: even the foods that are, in the bill, to be GST free are going to have to go up in price. Why is that? Because of compliance costs—that is right. There are massive compliance costs involved in this bill and the manufacturers, the retailers and the wholesalers are all saying they are up for increased compliance costs. You may think, if you are listening to this debate, `Well, that's okay. The ACCC are going to be onto these blokes. They are not going to get away with this.' But the ACCC have made it perfectly clear that an increase in costs on basic food due to compliance costs is perfectly acceptable as a reason to increase the cost of all food. Basic foods—fruit, vegetables, bread—are all going up in price. This is in actual fact the quote from Mr Mitch Hooke from the Australian Food and Grocery Council, from the Sun-Herald of 30 May:. . . prices will shift to recover greatly increased administrative costs in food and grocery businesses. . . That is right: `greatly increased administrative costs'. So for people like Senator Murray, Senator Knowles or Senator Kemp to come into this chamber and try and pull the con on ordinary Australians that what we have before us today is a package that takes taxes off food, that makes sure that there are no taxes on food—TH4KNOWLESSenator Knowles—You are sillier than we thought you were.3L6Conroy, Sen StephenSenator CONROY—You should stick to playing with former Senator Durack. This is a con. That is the truth in this debate. It is no wonder Senator Lees has fled the chamber—she wanted to talk about how increasingly isolated the Labor Party is. This has been one of the furphies that the Democrats have been using to steel themselves, when they come into the chamber, to actually face what they are doing to ordinary Australians by increasing the cost of food to them through these measures. What they are telling themselves is that this is just the Labor Party telephone tree out there that is making sure that all those phone calls and letters are coming into the Democrats' offices. That is what they are telling themselves. That is the game they have played inside the party.It does not matter—as it has been mentioned—that they have a bushfire in their own party. It does not matter that the Newspoll, and any other poll you take at the moment, says ordinary Australians do not want a GST—they do not want a GST on food. And they do not actually want a GST—that is what they are saying absolutely clearly. Maybe Newspoll have got confused. Maybe Newspoll have borrowed the Australian Labor Party membership list and they have only telephone polled the Australian Labor Party membership list. Maybe that is what has happened: those 2,000-odd phone calls that they made must have been just to the Labor Party to get those sorts of results. But you can go on conning yourselves, because the wave of appreciation that swept over this country when Senator Harradine said, `I cannot,' was genuine. It was from ordinary Australians. They had become resigned; they had almost given up hope that there was a chance that this Senate would reject the GST.Senator Murray and the Democrats have pulled a con on their membership and on ordinary Australians. They want them to believe that they are taking taxes off food whereas this package puts more taxes on food. It sees price increases because of the taxes, and the Democrats and the government do not want to face up to it. We have had extraordinary comments by some of the Democrat senators so far in the last few weeks and by some of the Democrat officials. We have had the extraordinary statement by the President of the Democrats, Mr John McLaren, who—in arguing against the plebiscite requested by some state branches about this issue—said:It calls for a ballot which is nothing to do with either the leadership or with revisiting policy, so it is not on solid ground there.So I am interested that Senator Murray came in here and supported a resolution to allow them to recontest issues that have already been decided. But in the Democrats, those who are proponents of the package were using Democrat rules to say, `You can't revisit issues that we have already dealt with. You have got to wait some time.' But they come into the chamber and support an amendment that says we can revisit. It is good for the goose but not good for the membership of the Democrats—they cannot revisit.Fortunately the Democrats were too shamed on the weekend to actually totally and utterly rort the democratic processes inside their own party. Mr McLaren went on to make the following observation about the request for a plebiscite:It is framed in such a way as to make it really quite difficult for members to answer with a simple yes or no. The motion actually calls for members to look at the whole tax package and match that up with all Democrat policies relating to that policy. So we are looking at thousands of members across Australia having great sheafs of paper in order to make sense of this ballot.What an indictment. He is their national president. Their own members are too stupid to be able to work out whether or not the Democrats' policies at the last election are the same as the compromise. But Mr McLaren, the President of the Democrats, was not content to finish there. He goes on to talk about why you should not disagree with the Democrats' cave-in. He says:One would always like to see the Kerry Packers of the world openly pay their fair share of tax. But it is a foolish response to say that, when the rich pay their fair share, that will be the time to introduce a GST. It is really quite impractical.How far the Democrats have fallen. The Democrats officials keep saying that the party is different. It believes in grassroots democracy. What does Senator Lyn Allison think of grassroots democracy in the Democrats? On Monday, 21 June, she criticised the Victorian State Council over its call on Friday night to reopen negotiations on the GST.WW4KEMPSenator Kemp—Mr Temporary Chairman, I raise a point of order. I am always in favour of a wide-ranging debate but, even as someone who supports wide-ranging debates, this is extending far and wide beyond the amendments which are before the chair. I am sure that Senator Murray is more than capable of defending himself and will undoubtedly wish to respond with vigour to the allegations that have been made by Senator Conroy. We are addressing some specific amendments which are before the chair. I know that when the final amendments are put there will be screams of rage because people have not had enough time to debate the amendments. It seems to me that Senator Conroy should be brought back to the amendments.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Murphy)—I assume, Minister, that you are endeavouring to raise a point of order about relevance. I am sure Senator Conroy, in addressing his remarks, is aware of the amendments before him.WW4KEMPSenator Kemp—He should direct his remarks to them. I am sure he is aware of them.3L6Conroy, Sen StephenSenator CONROY—I am certainly aware of them. The key here is that the Democrats and the government are involved in a cover-up on the food amendments. This is all part of refusing to admit to ordinary Australians that they are being—ZW4SHERRYSenator Sherry—Dudded.3L6Conroy, Sen StephenSenator CONROY—dudded by the food amendments. The pretence is that food is GST free and that there will be no cost or price increases. It is all about that pretence.I would like to finish with Senator Allison's comments about rank and file democracy and party activity in the Democrats. She says:It is unrealistic for anyone to expect us not to respect an agreement reached by the elected representatives of the party which goes before parliament in a couple of days.It is the death of democracy in the Democrats.ZS6QUIRKESenator Quirke—Where was she at the party conference? That is what I want to know.3L6Conroy, Sen StephenSenator CONROY—That is right. We know better than the ordinary rank and file membership that it is about food—EU4O'CHEESenator O'Chee—Mr Temporary Chairman, I raise a point of order. It is quite obvious that this is not actually leading to an argument about the amendments before the chair, because Senator Conroy just said that he was going to conclude by addressing the issue of Senator Lees and the Democrats' internal arrangements. He has quite clearly ended his argument about the amendment. He is now flouting your ruling and he is out of order.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Senator O'Chee, I assume your point of order is also about relevance. As I said before, it is the nature of the debate. I am sure Senator Conroy is aware of the amendments before the chair and I would ask him to continue.3L6Conroy, Sen StephenSenator CONROY—I thank the Temporary Chairman for that. I did notice that Senator Lees seemed to range `far and wide' in her justification. I am responding to Senator Lees's comments.ZS6QUIRKESenator Quirke—Only from the Prime Minister's office to the Senate.3L6Conroy, Sen StephenSenator CONROY—That is right. I am disappointed that the government seemed not to mind the Democrats ranging far and wide. You did not seem to want to call a point of order on Senator Lees—neither of you.WW4KEMPSenator Kemp—Are you feeling a bit persecuted, Steve?3L6Conroy, Sen StephenSenator CONROY—I always feel persecuted by the conservatives. The only good news is that Senator O'Chee is not coming back on Thursday next week. That is because of the GST and the tax on food. I am actually coming back on Thursday.Senator Kemp interjecting—EP5FERGUSONSenator Ferguson—Not on Thursday you're not.3L6Conroy, Sen StephenSenator CONROY—I am getting paid on Thursday, but Senator O'Chee is not—not by the parliament. That is because you wanted a tax on food and you wanted to support these amendments. I am going to look forward to Senator Murray's response about the death of democracy in the Democrats.EP5FERGUSONSenator Ferguson—We are not debating that.3L6Conroy, Sen StephenSenator CONROY—Senator Lees was. Senator Lees raised it. I do have one question in terms of a definitional issue, which I would like some explanation of. In the explanatory memorandum it says, `What is food?' and `Food is defined to mean . . . '. It includes flavourings. It goes on to say what is not food and talks about including an item that is not a GST attracting food with one that is. If you combine them, then you do pay the GST. I think that is consistent. If milk is a GST-free food and flavourings are GST-free food, why is flavoured milk not exempt? Why is it taxable? They are saying that flavourings are GST free, so why is combining two GST-free products in this particular instance GSTable?10:59:006272Murray, Sen AndrewSenator MURRAY3M6WAAD00—My apologies. I think you put a question to both the government and myself. Unfortunately, I was on the phone and I missed it. Perhaps you could repeat it.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Senator Conroy, would you repeat your question?10:59:006272Conroy, Sen StephenSenator CONROY3L6VICALP00—I understand the definitional issue that if you take a GST-free item and combine it with a GST-free item, they remain GST free. But with flavourings, which are defined as GST-free, and milk, which is defined as GST-free, I am interested to know why, if you combine those two GST-free products, you are suddenly paying GST?11:00:006272Murray, Sen AndrewSenator MURRAY3M6WAAD00—I will leave the technical aspect of that to the government, but I need to respond to some of Senator Conroy's remarks. I will not dwell on them at length. The primary proposition which Senator Conroy puts quite legitimately is that, if you increase compliance costs as a result of making a definition more complex, then that compliance cost will run into the price of products. On the face of it, that would seem to be sensible, but bear in mind that the top figure for the extra compliance cost of making 80 per cent of all food GST-free is $100 million—we think it is $40 million.My memory—perhaps your memory is better than mine, Senator Conroy—is that the Australian Food and Grocery Council said that the total value of their industry is $42 billion. As an example, if we used $100 million as a proportion of $42 billion, it would be a 0.0001 per cent increase in price. That may not be the easiest or the best way to resolve that issue, but the point I am making, which you would clearly understand as somebody who understands economics, is that the figure washes over a very broad and extensive market—$100 million on billions and billions. Whilst on the surface that price increase looks a possibility, in fact it is likely to have very little effect.This is the argument used by all the economic rationalists who want food taxed. I have never heard from any of the leaders in the debate—from you, from Mr Beazley, Senator Cook or Senator Sherry—if there is to be a GST or VAT system, whether you want food taxed. I know you do not want a GST. You have made that very plain.3L6CONROYSenator Conroy—We are going to get a new tax system.3M6Murray, Sen AndrewSenator MURRAY—I understand that—you know we are. So the question that is going to be asked of you when we come to the end of the debate is: are you, for the first time in this debate, going to vote against a government amendment? Last time you voted for every government amendment and voted against every crossbench amendment, whether it was from the Greens, from us or from anybody else—it did not matter. If it was to improve the bill, you voted against it. If you are voting against it simply to prevent the GST being improved, I do not think much of that as a tactic, but it is understandable. But if you voted in favour of food being taxed because you believe it should be taxed—which is what I think Mr Beazley believes, until he says otherwise—I think you should fess up. Come out of the closet and say, `We want food taxed,' as did Jeff Kennett.That is what I want to know, because that is the policy you should take to the people at the next election. That is my question to you. Fundamentally, at the end of the day, I will ask you: now that you know there is going to be a GST—because you do not have the numbers—do you want food taxed? Will you vote for or against this amendment? That is an important question.The next thing concerns Mitch Hooke. Unlike Senator Brown, Senator Conroy went to every single hearing.3L6CONROYSenator Conroy—I think I missed Kalgoorlie.3M6Murray, Sen AndrewSenator MURRAY—Yes. You might even have gone to a couple more hearings than I—I missed two or three. I know Senator Brown did not go to one, so that was interesting. I should not distract myself. Mitch Hooke, the Executive Director of the Australian Food and Grocery Council, made it very clear right from the start that he wanted all food taxed. He also said, `All in or all out.' That was his approach and he has stuck to that. But having heard the result of the deal in the media release, Mitch Hooke put out a press release on 23 June which said the following:The AFGC encourages parliament to support the passage of this legislation as the first tranche in tax reform. It will pave the way for consideration of the second tranche of tax reform.He now supports the final outcome; he accepts it.3L6CONROYSenator Conroy—I think you have verballed him there.3M6Murray, Sen AndrewSenator MURRAY—He has verballed me a bit, so here is my opportunity. We then move to your real proposition. You would rather food is taxed because you say that adding the compliance cost of not making food taxed will make food more expensive than if all foods were taxed. Is that what you said?3L6CONROYSenator Conroy—I do not think so. I think moving from 70,000 collectors to 1.5 million adds its own compliance costs.3M6Murray, Sen AndrewSenator MURRAY—So you would rather put a 10 per cent GST on all food than have a $100 million compensation cost for differentially taxing food. I really do not understand that.The other thing I should bring your attention to is Access Economics. As you know, they advised a number of people who made submissions to us. They are advisers to the AFGC and do not support our position of food not being taxed. However, they produced a remodelling of the new revised package and came out with a view that the food price will fall two to three per cent. So you are wrong.3L6CONROYSenator Conroy—What do they say about the inflation rate?3M6Murray, Sen AndrewSenator MURRAY—They have said that the overall price of food will fall by two to three per cent. So your proposition is wrong.With the indulgence of the Temporary Chairman, I should respond to the repartee on democracy and the Democrats. What we should establish here is that I cannot find anywhere one Democrat party member who wants food taxed; not one.Senator Conroy interjecting—3M6Murray, Sen AndrewSenator MURRAY—Let me respond because I heard you in silence, although we did exchange some laughter. Let me put it to you this way: it is true that there are Democrat party members who oppose a GST. It is also true that there are Labor Party members and senators who support the GST.ZW4SHERRYSenator Sherry—Not too many.3M6Murray, Sen AndrewSenator MURRAY—But it is true that they exist. Even the polls that are quoted show, I think, that 20 per cent of Labor supporters and voters support a GST. It is true that there are members of the Liberal and National parties, including members and senators, who do not support the GST—I am sure of that. The fact is that our party is out in the open about it. You talk about what is the popular support. You can quote polls and so can I. The polls show that a GST with food out is acceptable to the Australia people.3L6CONROYSenator Conroy—It does not.3M6Murray, Sen AndrewSenator MURRAY—Yes it does. We can produce the results of those polls in due course. Then, Senator Conroy, you made some remarks about Democrat party members and I really do not think we should describe them as stupid, but perhaps that was just a slip of the tongue. The Democrat party members who are opposed to this agreement wanted to put a stop-work order on the senators. Not only is that against the law—it is against the Parliamentary Privileges Act 1987 and other things—but it does not make much sense. We have got some 20 bills to deal with today. Imagine us trotting back to all the members and saying, `Hi members, tell us what you think about each of these bills'! No party member out there can say that we did not have an 18-month tax ballot, that we did not put out a 40-page tax policy in September 1998, that we did not go to the election with this policy and that we did not produce all our amendments based on it.The problem is that a lot of the people involved in this have other agendas. Some of them are the usual suspects, whatever the issue—you know the kind—but others are genuinely dedicated to the cause of opposing a GST. Frankly, Senator Conroy, coming from a division in Victoria—I mean I know your hands are absolutely clean—which was criticised for exercising democracy through the practice of branch stacking, I do think that you should not start pointing fingers. The Democrats are more than happy for dissent to be public. We are convinced that we have the numbers in the party room, which is seven to nine; we have got three-quarters of the vote in the national executive; and we will have the numbers in the members.3L6CONROYSenator Conroy—I thought it was two-thirds; it keeps going up.3M6Murray, Sen AndrewSenator MURRAY—It is dependent on the motion. It was between 65 per cent and 75 per cent. The point is that we knew we had the numbers and our process has always been—and, as you know, the Democrats have a history of senators voting independently—to allow for—ZW4SHERRYSenator Sherry—Once in nine years!3M6Murray, Sen AndrewSenator MURRAY—I cannot speak for them, but I can certainly speak all the way back through to Chipp. I may be in the minority in this chamber, but I am one of those who have an exceptionally high regard for many members of the opposition in this chamber. I think there are some astonishingly capable people, but I cannot imagine one of them actually crossing the floor on a point of principle because you have iron discipline when it comes to voting. That is one of the virtues of your system. One of the virtues of our system is that we allow a dissenting vote.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Murphy)—I call Senator Conroy.11:12:006274Conroy, Sen StephenSenator CONROY3L6VICALP00—Thank you—EP5FERGUSONSenator Ferguson—Mr Temporary Chairman, I raise a point of order. I am suggesting that it is normal practice in this chamber that, when you have taken a number of speakers from the opposition side of the chamber, you give the call to someone on this side of the chamber.3L6Conroy, Sen StephenSenator CONROY—I think it was understood at the beginning, and the question was specifically asked and agreed, that for the purposes of this particular debate the Democrats and the government are arguing the same position. Therefore, even on your own arguments, the call returns to us. But this is the committee stage which, on my understanding, does not quite operate on the same basis.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—I have called Senator Conroy and, on the basis of the amendments that we have before us, the question was asked of and partly responded to by Senator Murray. On the basis of that, I have called Senator Conroy.3L6Conroy, Sen StephenSenator CONROY—I am happy to cede the floor in a moment to you, Senator Ferguson, but I have to respond to a number of Senator Murray's comments. I think you said, `Dissent in the Democrats is okay'—we are proud of it; we allow it to happen; and we will give Natasha her staffer back. Why then have you taken Natasha's staff from her? Why has the Deputy Leader's staffing allocation been withdrawn? Dissent is okay in the Democrats except in this particular case. Give her her staffer back, Senator Murray. You know it is true. You can play semantics, but her staffing allocation has been withdrawn.3M6MURRAYSenator Murray—She is in her office now.3L6Conroy, Sen StephenSenator CONROY—That stands on the public record. It was on the Sunday program. And dissent is okay in the Democrats? The question of amendments is interesting, Senator Murray, because I have a question I am hoping you are going to answer. You challenged us about some amendments. Are you voting for the high roller amendment?WW4KEMPSenator Kemp—I raise a point of order, Mr Temporary Chairman. We have amendments before us which we would like to vote on. He has now asked questions about other amendments—ZW4SHERRYSenator Sherry—Chips are in this somewhere.WW4KEMPSenator Kemp—Senator Sherry, that is about the level of the debate, I have to say. I think it is important that the debate be fairly relevant to what is before the chair, or the whole debate will be totally out of control.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Murphy)—There is no point of order, but I draw your attention to the amendments before the chair.3L6Conroy, Sen StephenSenator CONROY—I respond briefly to Senator Kemp's comments. Senator Murray actually challenged us that we were going to support all 128 of your amendments in the last debate. He actually raised that himself. I am simply responding to misleading comments by Senator Murray, who well knows that we were absolutely not intending to support that amendment. The question that I have now put back to Senator Murray is: where are you at?3M6MURRAYSenator Murray—I'll give you the answer.3L6Conroy, Sen StephenSenator CONROY—I will cede the floor to you in just a moment, Senator Murray. I am still hoping for some clarification.I have been trying to read the explanatory memorandums. I am hoping you can give some explanation on the flavoured milk issue, Senator Kemp. Perhaps while you are consulting you could clarify the Prime Minister's letter that says that products consisting of milk not less than 95 per cent by volume will be GST free. So if flavoured milk is 96 per cent, what happens there? Could I have some clarification on those points? I cannot work it out by reading all the different bits of legislation. I am a bit slow; I know that. You have said that before—WW4KEMPSenator Kemp—You are a bit slow.3L6Conroy, Sen StephenSenator CONROY—You are on the record as having said that before, so maybe you are right.11:17:006275Ferguson, Sen AlanSenator FERGUSONEP5SALP10—I know there are issues that Senator Murray will probably respond to Senator Conroy on directly, but there are a couple of issues which I think are important to the debate that I would like to raise as well. Before I ask that question of Senator Murray, I would like to comment on the brief response that Senator Murray gave to Senator Conroy when he was talking about democracy in his party and democracy within the Democrats. I presume this is the same Senator Conroy who is the runner-up in the Victorian ALP branch stacking competition, who then proceeds to lecture the Democrats about democracy within their own party. For Senator Conroy to even give a hint of democracy in the Labor Party would be a revelation to all of us, because we all know the iron control he has over preselections.You are the strong man in the ALP, Senator Conroy. When Senator Ray goes to New York at the end of the year, we will see just how strong you are, because I presume that at that stage Senator Faulkner is going to have to walk to you to find out what the riding instructions will be for the day in the same manner that he now has to walk to Senator Ray to find out just what you should be doing next. For three months we are going to have a rudderless Labor Party with Senator Ray in New York.I would like to see Senator Conroy apply to the Victorian ALP the new-found democracy that Senator Conroy has found that he thinks should apply to the Democrats in every decision that they make. I am sure Dr Theophanous, Kim Carr, Martin Ferguson and the leaders of all of the other factions in Victoria would be interested—I think you have more factions than members in Victoria actually. There is no doubt that, when it comes to branch stacking, as the runner-up in the competition that you have had down there in the past few years, you should not be lecturing the Democrats on democracy within a party.Senator Conroy's comments in relation to the amendments show just how far wide of the mark the Labor Party have been ever since this debate started. They never wanted to be a part of the debate. They never wanted to try to understand tax reform. They attended the select committee hearings with the express purpose of trying to derail any process of information coming before that committee which would make the Senate better informed when it comes to making a decision on tax reform. Right from the very start, only the Democrats were interested in trying to support a package and in making a package which they believed would be fairer for the Australian people when eventually it was put in place.The only questions that were asked to try to make amendments which would improve the legislation were asked by Senator Murray on that committee. Right from the outset, Senator Murray made his position quite clear. He said, `We support tax reform. We support the tax reform proposals that are put forward by the government, but with some exceptions.' They insisted on dealing with those exceptions. We knew right from the start that if the Democrats were going to support the amendments that are brought forward in this place there would have to be some changes to the initial legislation.A lot of water has passed under the bridge from the conclusion of that committee's hearings until we reached the stage we are at today. But the government has always been concerned that there should be a drastic change in the taxation system. I even remember Senator Murray saying at a press conference—I would not want to quote him out of context, and he can correct me if I do not get it quite right—that this is the first government that has ever attempted to address the issue of poverty traps in any significant way. We have had a Labor Party who were determined to oppose what was being proposed. They were determined to keep those poverty traps in the existing taxation arrangements, because they were not prepared to look at any of the issues that were raised.Their objective at that stage was to oppose the bills in toto. There was to be no consultation, no negotiation, no trying to improve the tax system, no policy of their own. Senator Sherry says they may have a policy in a couple of years time. We are not quite sure, because there are so many differing points of view in the Labor Party at present that I am doubtful that they will ever reach a consensus which enables them to come forward with a policy that is any different from the existing tax structure, because the existing tax structure is theirs and they live or die by it. Well, they are going to die by it, because we are going to have a change to our taxation system. If they wanted to have some input into the way the future taxation system is going to affect all Australians, they would have looked carefully at amendments and would have voted for some on their merits. But not the Labor Party. The Labor Party were determined to oppose everything the government tried to do.As far as the Democrats are concerned, they have been willing to constructively negotiate with the government right from the start. They made that offer in February. I distinctly remember that offer being made. The government chose not to take up the offer in the early stages, for obvious reasons. So important was tax reform to the Australian landscape and so important was it that we have some form of taxation reform that in fact the government, when it knew it could not get the bills through in the Senate in their original form, chose to negotiate with the Democrats to make sure that this landmark change in taxation eventually took place.So there were lengthy negotiations to come up with the amendments that we see before the chamber today—amendments that have been agreed on. There will always be people in either party who do not think they are perfect. That is the nature of consultations. I do not think they are perfect but I will say this: they are a lot better than the existing taxation system. It is so important to change the taxation system that we must move ahead, even with those amendments that we do not feel are the best possible outcome. I am sure that Senator Murray feels that some of the amendments that we have are not the best possible outcome that he would like to have seen either, but there has to be some agreement and some give and take if you are going to come up with a suitable group of amendments that can be voted on in this chamber.The Labor Party are not in that position. They never want to consult. They never want to join the discussion on major pieces of legislation. As I have heard said before, they will often consult on amendments or minor things but, when it comes to major pieces of legislation, the Labor Party simply will not be involved. The principle is there, and nothing will ever be done and they will never be part of helping to improve major pieces of legislation in the interests of the Australian people.I do not want to take up the time of the chamber by restating things that have been said before; unlike Senator Conroy, who has come into this chamber probably on 20 or 30 occasions and given us the same speech in relation to the GST—one of opposition. But then again, he is getting a bit of help at present and so he will probably come up with something new in a little while. He comes in with his total opposition to the GST or to tax reform in total. He does not like tax reform, and not just the GST. He opposes tax reform because the Labor Party have no tax reform proposals. They have no tax reform proposals whatsoever on the table. Senator Sherry said—as I said before—that they might have some in a couple of years time or they might have some next year or the year after—who knows? Currently, they have no proposals to reform the Australian taxation system.With those brief opening remarks, I would also like to ask Senator Murray, if he intends to respond to Senator Conroy's questions, to please outline what the advantages are as he sees them for low and middle income earn ers—they are very important in this equation and always have been—as the result of the changes in the package, particularly those changes which relate to the exemption of food.11:26:006277Murray, Sen AndrewSenator MURRAY3M6WAAD00—There are three questions to deal with before us. The first is the tax mix question, if I can call it that; and I think it is appropriate that the government do that because you have to have the tax advice as to exactly how that will happen. So we will ask the government to answer that.Your second question concerned the high roller matter. What I should advise you is this: on the record, both publicly and within this chamber, the Democrats—and I, in particular—have constantly said that we want to hear the government's explanations for it and that we would respond once we had heard them. As you know, there are two sets of high-roller amendments, one of which has gone through and one of which is still to come on. On the first set, there was a very lively and entertaining debate and, having heard it, both you and we decided to give the government the benefit of the doubt and so we voted with them. So, on the first set of high-roller amendments, you and we voted with the government. For the second set, we will wait to hear what their response is. Turning to the question put to me by Senator Ferguson, the Australian Democrats—3L6CONROYSenator Conroy—That was not the highroller amendment, but go on.3M6Murray, Sen AndrewSenator MURRAY—This is really germane to the amendment before us. Senator Ferguson has asked what the effect is on low income persons.3L6CONROYSenator Conroy—Are you voting for it or not?3M6Murray, Sen AndrewSenator MURRAY—I have answered the question. The question from Senator Ferguson was what the effect was on low income earners. As everyone in the chamber knows, we have been arguing for 10 months that on equity grounds we believed that it was appropriate for 80 per cent of the food basket to be tax free. We have argued that on the basis that 24 per cent of low income expenditure is on food.The Access Economics group—who are advisers to the Australian Food and Grocery Council, amongst others—published a modelling exercise that they did on the new package in the Sydney Morning Herald, and this is what they have said. On the expenditure group `farm produce'—which includes, for example, eggs, fresh fruit and vegetables—the percentage change in price to consumers will be minus 1.5 per cent. That is the final price to consumers. As for all this stuff about compliance costs adding to price, Access Economics took that into account and it is just not true.On the expenditure group fish, which includes fresh fish and seafood, Access Economics modelling says that the percentage change in price to consumers will be minus 1.4 per cent. On the meat products expenditure group, which includes meat, poultry and ham, the percentage change in price to consumers is minus 1.3 per cent. On the dairy products expenditure group, which includes milk, cream, butter and ice-cream, the percentage change in price to consumers is minus 2.6 per cent. The fruit and vegetable products group, which includes things like canned, bottled and frozen fruit and vegetables, will be minus 2.6 per cent. Even with the soft drinks, cordials and syrups expenditure group, which are going to be taxed, the effect of the tax package on soft drinks, mineral water and diluted fruit juices is minus 0.4 per cent.This is what we have consistently been saying: that the consequence of taking out wholesale sales taxes from food and replacing it with a GST on some food, in terms of our package, will result in a price drop of between two and three per cent. That is what Access Economics say. So we are actually delivering lower prices, particularly, because 24 per cent of low income expenditure is on food, to low income households. Whether—and this is for Senator Ferguson—they are in the social security net or the income tax net or whether they fall outside of them, whoever they are out there, because of the Democrats insistence on this on grounds of equity, we will deliver lower food prices to Australia. I do not know of one Australian anywhere in that group who will not say, `Thank you for giving us lower food prices.'11:31:006278Sherry, Sen NickSenator SHERRYZW4TASALP00—In relation to the points that Senator Murray has raised with respect to his belief that food prices will go down in some areas—and he has outlined some categories of food prices—I make this offer to Senator Murray: if this legislation goes through with the deal that you have concocted with the government, you and I should tour a couple of supermarkets and small food stores, maybe six months after the legislation goes down, to see whether the projection you have made that food prices will go down by the quantums you have indicated has happened. I would be happy to take Senator Murray up on that because I do not believe it will happen to the extent that he has outlined, because there are a couple of critical points relating to that, particularly where small business is concerned: the additional compliance costs and whether the savings from the removal of the wholesale sales tax will be passed on in full. There are a whole range of other matters that you, Senator Murray, certainly know are pertinent to the debate.Senator Ferguson has left the chamber, and I am not meaning to be critical of him for leaving the chamber, but I am glad he has made a contribution to this debate. I will come to some quotes from Senator Ferguson in a short time. I am disappointed that Senator Lees is not in the chamber because it is Senator Lees and Senator Murray who have concocted this deal with the Liberals with respect to the food amendments we are currently considering. In my comments, which will be pertinent to the issue of food and the amendments before the Senate chamber, I obviously make it very clear that Labor has opposed the GST for a range of issues.I do not want to continue at any length on the internal processes of the decision making of the Democrats with respect to policy. However, the Democrats do hold themselves out as a party that is different from other political parties in a number of respects. They hold themselves out as having a democratic rank and file balloting process to determine policy, and Senator Murray spent some time on that. They also hold themselves out as a party of free conscience, whereby their senators come into the Senate and exercise that free conscience. On the first issue, it is clear that the Democrats have not followed their party policy as determined by their process, and I will come to some detail on that in a moment. In my nine years in the Senate, I can recall one occasion when a Democrat has departed from the party position. I do not think that is an example of Democrat free-thinking. I am not the harshest critic of the Democrats on this matter. I can recall harsher comments being made by Liberal senators on this matter. All I suggest to the Democrats is: do not be hypocritical; do not hold yourselves out as the party of free thinkers when in fact the facts show otherwise.I now want to come to the Democrat position with respect to food. I am going to quote from a document and I will come to the source of this document a little later. I think there are some very incisive and pertinent criticisms of the exemption of food in the way it has been presented to this chamber in the Liberal and Democrat deal. The document that I am looking at refers to the `irresponsibility' of the Democrats' position with respect to food. It says:One disappointing aspect of the debate has been the propensity of the Democrats to claim the support of people whose views do not actually support them. For example, they attempt to conscript the modellers Peter Dixon and Chris Murphy to their side, as evidenced in the Press Release, "Economists agree—GST-free food won't hurt the economy". In actual fact, Dixon and Murphy agreed on exactly the opposite (to different extents), and both support food being included in the base.This same document says:The Democrats themselves are divided over the crucial question of how much food should be exempt. Leader Senator Meg Lees supports a narrow definition which excludes restaurants, but this is contradicted by the Economics Spokesperson Senator Andrew Murray, who favours a wide definition, including restaurants because "if you make it to narrow you make it too complex."This document goes on and on with quotes from the National Farmers Federation, the Australian Food and Grocery Council, the Australian Small Business Association, the Australian Taxation Office and the Australian Society of Certified Practising Accountants. Tax Commissioner, Michael Carmody, said:The critical point I want to inject into the public debate is that any attempt to draw a line around food will lead to costly disputation and greatly increased costs for the community in administering the GST.It is quite a comprehensive bagging of the exemption of food and the potential problems.On this particular page it says, `Why a recipe for disaster'. It is a reference to the Australian Tax Commissioner declaring that exempting food would be a recipe for disaster. This document does not pull any punches; it comprehensively bags the proposal to exclude food, and it rightly draws attention to the contradictory position of Senator Murray and Senator Lees.I said earlier that I was glad Senator Ferguson was in the chamber. I recall Senator Ferguson's comments a little earlier about his support for amendments that would improve the legislation. He acknowledged the Democrats were willing to be constructive right from the start. The document that I am quoting from is Senator Ferguson's and the Liberal government senators' report from the Senate Select Committee on A New Tax System. If you want a half-decent critique of the exclusion of food, it is the government's position, as presented by Senator Ferguson and undoubtedly written by quite a number of the advisers that are in the Senate at the moment. It is the Liberals' position that I have been quoting from, and yet today Senator Kemp, Senator Ferguson and others, including the advisers, are presenting a case that they comprehensively bagged four or five weeks ago.The Liberal government's position does not stop there. The Prime Minister, Mr Howard, was interviewed on 3AW by Neil Mitchell. Mr Howard said:. . . our position on the GST is we want to get it through. We're not going to alter its essential thrust. We've always said that we would agree to some fine-tuning of it and I've never sought to define what that fine-tuning would be, nor has the Treasurer, and I don't intend to do that now. We do know from that now famous `nightmare on main street' comment what the Treasurer, Mr Costello, thinks of excluding food. Mr Howard went on:If you're talking about a minor adjustment then you always make minor adjustments, you always fine-tune something like this. But if you're talking about a big issue like taking food out of the GST, that's an entirely different matter. I mean, our argument on that is, and it remains, that if you take food out you don't help the poor—you don't help the poor—but you immediately undermine the overall package. You create pressure for other things to be exempted, such as clothing, and where do you stop, do you have fresh food, do you have take-away foods, do you have restaurant meals.I would be interested to see Senator Kemp reconcile the comments of Mr Costello with the comments a few weeks ago—and these are direct quotes—of the Prime Minister and the comprehensive bagging by Senator Ferguson, amongst others, of the irresponsibility of the Democrats' position.Senator Murray, as the Liberals pointed out and as I would point out to you, you have failed to deliver on the position you took to the election.Senator Murray interjecting—ZW4Sherry, Sen NickSenator SHERRY—I will take that interjection. You are wrong. Go back and look at the policy on food you took to the election. You failed to deliver your policy with respect to food in this package. If you look at the overall monetary implications of this, you probably delivered slightly less than five-sevenths of the commitment you took to the election—in more ways than one; you will know what else that is a reference to.The Democrats have claimed purity with respect to their policy position, but they have not delivered it. That criticism comes not just from me but from Senator Ferguson and others with respect to this food issue. Senator Murray referred to Mr Mitch Hooke from the Australian Food and Grocery Council, who presented evidence to the committee. It was interesting to read the Financial Review of today. I think it would be correct to describe Mr Hooke as being not happy with the outcome. He accepts it but he is not happy; there is a distinct difference. Senator Murray and Senator Kemp, this is what Mr Hooke had to say:The Government had effectively developed a wholesale/retail sales tax for the food industry.I think, on observation, that is correct with respect to the food industry. If we look at the explanatory memorandum, we have ended up with the worst of all worlds with food. We have ended up with a mishmash wholesale-retail sales tax, so instead of simplifying the Australian tax system and a GST with respect to food, we have ended up with a wholesale sales tax and a retail sales tax outcome. We have ended up with the worst of all worlds with respect to the implications of food exemption.There are quite a number of issues in the amendments that we are looking at here—for example, the definition of hot food. What is `hot'? Is `hot' the temperature on the premises in Hobart in the middle of winter or in Alice Springs in the middle of summer?WH4McGAURANSenator McGauran—Come on, Nick; you're filibustering.ZW4Sherry, Sen NickSenator SHERRY—It is quite a pertinent question. The definition of `hot' is quite a critical issue.HX5WOODLEYSenator Woodley—Senator Sherry, it is also very cold in Alice Springs in the middle of winter.ZW4Sherry, Sen NickSenator SHERRY—I just used a couple of examples, but that is exactly my point, Senator Woodley. The definition of `hot' in the legislation that you are supporting varies according to the time of the year and the geographical location you are in. That will certainly create some particular problems with respect to the way in which this definition applies. There are quite a number of issues, but time is going to run out shortly. But if the food is not hot, what is to stop—and I think Senator Lees has acknowledged this—microwaves being installed on some food premises in order to take advantage of a potential loophole in these definitions?I am also particularly interested in premises used in supplying food. There is a definition of `premises' in the legislation, Senator Murray and Senator Kemp. At subclause (c) in a reference to a football ground, a garden or a showground, it talks about `a clear boundary or limit'. I would think that, in at least some of those areas, you would have to drag out a map to find where there is a clear boundary. (Time expired)11:46:006281Knowles, Sen SusanSenator KNOWLESTH4WALP10—I am just absolutely fascinated to listen to this debate here today coming from the Labor Party benches. It is a total and utter misrepresentation of the current system. It shows a lack of awareness of, or an unwillingness to recognise, the effects of the cascading wholesale sales tax through to food at present, or it is a total misrepresentation—and I have to say that I think it is probably the latter, sadly. To have the Labor Party come in here and just consume hour after hour in petty nitpicking of a system that desperately needs to be revamped, of a system of wholesale sales tax which—as has been said so often before—is only in common with countries like Botswana and Swaziland now, is pretty breathtaking.I do not know why Senator Sherry and his mates in the Labor Party would actually want to come in here and totally and utterly misrepresent the current system and to pretend that some arrangement that has been arrived at with the Democrats and the government to try to get a new system that is beneficial to Australians is somehow a crook system when, over 13 years of government, they consistently sought to increase the wholesale sales taxes. But, worse than that, they have consistently sought to hide them. They have known that the wholesale sales tax system is a hidden tax, and yet they still talk in here and in the community about foods being tax free. And you take food being supposedly tax free.One of the things that they refer to all the time is something like milk being tax free. What a whole lot of nonsense! If they were to be honest about the cascading effect of wholesale sales taxes, they would know that milk is not tax free; they would know that there is no food currently available anywhere that is tax free. The reason for that is that the producers, the transport companies, the manufacturers and the retailers of food are not benevolent societies that will somehow consume Labor's hidden wholesale sales taxes and not pass them on to the consumer. Let us take milk for an example. Labor are surely not suggesting that everything that a farmer buys—all the equipment, the fuel, the transport and everything else that a farmer has on that land to produce the milk—is somehow free of tax. Surely they are not suggesting that the farmer does not include the costs of those taxes in their running costs.The same applies to the transport companies. Surely they are not suggesting that somehow the transport company is a benevolent society, and that the taxes that the transport companies pay on their trucks, stationery, fuel, spare parts—all of those things—are somehow not going to be passed on to the consumer when they buy the milk. Surely they are not suggesting that the equipment that the dairy has to buy and all the input costs that they have and the office equipment and everything else will somehow be absorbed by the dairy and not passed on to the consumer. Then, if you take it logically, that milk has to get from the dairy to the retailer. So you have another transport company involved or the dairy transporting it. Once again, are they suggesting that those taxes are not going to be passed on?We are talking about big taxes here. We are not talking about tiddly little taxes. We are talking about huge taxes that are not absorbed by these companies. They are passed on to the person who buys the carton of milk at the supermarket. It is purely and simply dishonest to suggest otherwise. But then you get to the retailer. Are they suggesting that the retailer does not pay tax on the shelving, on the printing or on all the other things that go into running a supermarket—on their cash registers, on the rolls that go into a cash register and on all of those sorts of things? Or are they simply suggesting that the retailer is so nice to their customers that they will not pass it on in their costs? It is simply outrageous to think that Labor can not only go on supporting a tax system that is outdated by donkey's years but, worse than that, pretend that it is not a hidden tax, that it does not cascade through the system and, most importantly, that it does not impact on the final price of a product on a shelf.The longer they go on with this misrepresentation, the less seriously one can treat them, because there is no honesty in the debate coming from Labor. It is purely and simply unadulterated and consistent misrepresentation. Because if we have all those cascading taxes currently flowing through the system on a product that they say is supposedly now untaxed, imagine what it adds to a product that Labor taxes. Take something like flavoured milk or biscuits—they would have Australians believe that there is no tax on any food at all, or any grocery item at all for that matter. But, no, you add the taxes all the way through and then, under their system that they preciously want to keep, they put another hidden tax on the top.Of course, what most Australians do not recognise is that there are varying levels of tax that they then quietly slipped on. Over the 13 years that Labor were in government, they quietly increased most of those taxes. It was interesting to note in the Senate hearings that the Australian Council of Social Service actually gave evidence that, thanks to Labor's quiet, hidden tax increases in wholesale sales taxes, the cost of living for a lot of people actually went up by 24 per cent. Most people do not know that the cost living for a lot of people went up by 24 per cent but, worse than that, at no stage did the Labor Party ever give a brass razoo of compensation for those increases. Prices going up by 23 per cent or 24 per cent under Labor, with their hidden tax increases, are not my figures; they are coming from ACOSS. It is a total and utter statement of fact that there was no compensation at all.The senators opposite, who actually claim to represent the low end, should be absolutely ashamed of themselves because they supported without hesitation continued tax increases—silent, scurrilous tax increases—to a huge proportion, like a 23 to 24 per cent impact, and not one of them ever spoke up and said, `To compensate people, we should be able to increase their pensions or we should be able to increase the amount of their disposable cash.' Not one of them ever spoke up about that. Here we have this little exercise that is just going on and on—after the equivalent of 75 weeks or whatever it is of Senate hearings—continuing to misrepresent the current system. It is not good enough because, at some stage, I believe that Her Majesty's opposition should actually start telling the truth. Yet they will not come in here and tell the truth. This debate is galling in the extreme—to have to come in here and listen day in, day out and find that the misrepresentation continues.We saw misrepresentation in halogen lights in 1993 by the former Prime Minister, Mr Keating. Yet we are now seeing it repeated time and time again. They should just simply hang their heads in shame. They should simply come in here and say, `We know the system as it is. We know that it is wrong and we know that there are cascading taxes. We know that our tax system'—the Labor Party tax system—`impacts very heavily on people at the supermarket.' Yet they come in here for days on end and berate the Australian Democrats for coming to a solution whereby, as Senator Murray has just said, the prices of many products will go down. How on earth can Senator Sherry come in here and say in all seriousness that they oppose prices going down? They sure as heck did not oppose prices going up, so I suppose there is a bit of logic that could be extended to that. But here we go, with them now just letting loose with a tirade of abuse at the Australian Democrats, purely and simply—ZW4SHERRYSenator Sherry—I did not think I was very abusive; I was very restrained.TH4Knowles, Sen SusanSenator KNOWLES—You might have been fairly restrained, Senator Sherry, but I can tell you that Senator Cook was not particularly restrained by 7.20 last night, and I can tell you that the record will show exactly how restrained Senator Cook was last night. But I think we need to focus on the truth of this package, the effect of this package and the true effects of the negotiations undertaken between the government and the Australian Democrats.The Labor opposition dealt themselves out of this equation long ago. For the political purpose of trying to win an election, they dealt themselves out of it. They did not even have the moral honesty to do what former Prime Minister Keating at least conceded prior to the 1993 election—that is, if the coalition won the election, they would support the introduction of a goods and services tax. Oh no! It is `oppose, oppose, oppose, for any reason' now. Here we have this continued misrepresentation and dishonesty going on here. All I can say is, `Thank heavens it has now been restricted in time,' otherwise this debate, because of Labor's attitude, would go on for many more months to come.11:59:006283Campbell, Sen GeorgeSenator GEORGE CAMPBELLNB5NSWALP00—I find Senator Knowles's contribution quite extraordinary.WH4McGAURANSenator McGauran—It was a good one, wasn't it?NB5Campbell, Sen GeorgeSenator GEORGE CAMPBELL—It was a good one, but it was extraordinary for its omission. What Senator Knowles did not tell the Senate was what ACOSS' position is on this package that is currently before the Senate for debate. Senator Knowles knows that ACOSS is opposed to this package and has ridiculed the package publicly. It has said that the package is inequitable and unfair. But Senator Knowles ignored that totally and did some selective quoting from ACOSS submissions to the inquiry. That is what we can expect from the other side. I actually find it quite amazing that Senator Kemp is under such pressure to try and deal with the issues raised in this chamber that they are having to wheel the troops in. They wheeled in Senator Ferguson to give us a bit of a spiel and to take up a bit of time. They wheeled in Senator Knowles to try and take the stress off in terms of this debate.I have got a couple of detailed questions on food. Unfortunately, Senator Murray is not here, so my chances of actually getting an answer are going to be pretty remote. But I will go to the questions anyway, because I think they are important. They demonstrate how confusing and difficult this package is and how it is going to be seen by people out there in the community in how they going to cope with it. The first question I want to ask the minister is this: if I go into a butcher's shop and buy a T-bone steak, presumably that is GST free. If I go into the local hotel down the street and buy a T-bone steak uncooked—WH4McGAURANSenator McGauran—No hotel is going to sell it to you raw.NB5Campbell, Sen GeorgeSenator GEORGE CAMPBELL—This is how dopey that clown sitting in the whip's seat is. If he had been anywhere around this country, he would know that there are many hotels in this country, particularly in regional and rural Australia—which you do not get to very often, despite the fact that you purport to represent that part of the community—which will actually sell you a raw piece of meat and you have to go and cook it yourself. It is very common in many hotels around the country. So, if you go into a hotel and you buy a raw T-bone steak, do you then have to pay GST on it, or do you pay the GST on the component of cooking it?WW4KEMPSenator Kemp—George, you have got to do better than this.NB5Campbell, Sen GeorgeSenator GEORGE CAMPBELL—I have got several questions. Don't worry, I will give you a couple more to deal with. If you consume it on the premises—I assume this is what your adviser just told you—that would make it GSTable. What happens if you take the raw meat outside and cook it on the barbecue outside, or cook it on the barbecue across the road in the local park? Is it still GSTable? If it is still GSTable because you buy it from the hotel, what is the difference between buying a raw T-bone steak in a hotel, in a public house, and buying a raw T-bone steak in a butcher's shop? Why should one attract the GST and one not attract the GST? That is the first question I would like the minister to give some consideration to.I want to come to the definition of what is not food. It says in 1.10 of the explanatory memorandum that live crustaceans and molluscs—it gives the example of lobsters, oysters and crabs—will be GST free where they are sold as food for human consumption. I notice that the definition does not contain live fish. I understand why fish have been excluded from the definition, but perhaps the minister can enlighten us when it comes to providing the answer. If I go into a Chinese restaurant in Chinatown in Sydney and buy a live King Island crab that is sitting in water, order some live abalone that are sitting in the tank or order a Queensland crab that is sitting live in the tank, is that GST free? I have purchased live crustaceans, which, according to this definition, are GST free. If they are cooked on the premises and served up, do they then become GSTable? Does the whole of the package become GSTable, including the crab or the abalone, or is the only part that is GSTable the cost of providing the service of cooking and providing that meal?The second part of this question that I would like the minister to contemplate is that I notice that fish have been excluded from the definition altogether. They are not included under what is not food. The other question I want to ask is in relation to crustaceans. I will include live fish in it, but it particularly relates to lobsters and crayfish. What happens if I walk into a Japanese restaurant and purchase a live fish or lobster and have it uncooked? What if I consume it raw? Is it GSTable? It is consistently consumed raw in those restaurants. Is that GSTable or is it only the service component of eating in that restaurant which is GSTable?The third issue I want to raise in relation to food is in respect to 1.14 of the explanatory memorandum. It says that food that is unfit for human consumption is not considered food for human consumption under this definition and is therefore GSTable. It gives the example of rotten meat or vegetables. Minister, what is the definition of rotten? How do you define what is rotten meat or what are rotten vegetables? Who is going to provide the definition of those products? Who is going to draw the line and say at what stage in the process of decomposing rotten is determine to be? When do you actually reach what is defined as being rotten? You may smile at that, but it is a very important issue.WW4KEMPSenator Kemp—My stomach usually tells me when something is rotten.NB5Campbell, Sen GeorgeSenator GEORGE CAMPBELL—Your stomach would not actually have to face up to it. But let me tell you, there are thousands and thousands of pensioners and unemployed people in this country who go around the supermarkets every Saturday and Sunday buying up goods—vegetables, meat and other products—which have exceeded their shelf life or which are no longer presentable for consumption. The definition of when it reaches rotten is going to be very important for those individuals—the very people that people in this place argue they have been trying to protect in this whole process. It is very important from their point of view for us to understand that. They are likely to be confronted with having to pay a GST on what they used to be able to purchase as cheap products at the end of the week. I would like your response on that, Minister.I also want to come to the issue of bread. Bagels are not mentioned in this list of breads, but I assume they would be GST free. I suppose it does not matter whether you hear the questions or not, Minister, we will get a silly answer from you anyway. Are bagels which have blueberries in them GST free? I note in the definition that it says that bread that has ingredients in a dough before baking will be GST free. This includes fruit loaves without a coating. However, I draw your attention to a letter of 22 June from the Prime Minister to Senator Lees. I notice it is addressed to `Dear Meg', not `Dear Senator Lees'. Under the heading `Food' it says that salads and savoury bread will be GST free. I find it hard to reconcile how a fruit loaf would be defined as savoury bread. Perhaps you can provide us with an answer to that, Minister. What breads with what mixed in the dough are actually GST free? Do they have to be savoury or does that include sweet breads as well? Is the definition of fruit loaf in the explanatory memorandum correct?There is also a reference in here to the exclusion of unprocessed grains—in other words, grains which have not had any activity carried out upon them. They are GSTable. What impact will that have on the health food industry? Anyone who has been in a health food shop knows that they sell a lot of unprocessed grains and cereals. In fact that is a substantial part of the products that those particular outlets carry. Will they be GSTable or will they be GST free? Will carob, for example, be classified in the same definition as chocolate?Minister, there is probably sufficient there to occupy a little of your time in trying to answer some of those questions. Hopefully you will actually endeavour to answer some of the questions that have been put before you.12:14:006285Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Thank you, Senator Campbell, I am always happy to assist the Labor Party in any way I can. I am pleased that we have finally got to an attempt to get onto something serious although, frankly, I doubted when I listened to you that you were all that serious, given the administrative mess which we have to administer in the current tax system at the moment. Let me just go through some of the issues which have been raised in this debate to date. The issue was raised by Senator Sherry whether muesli bars, breakfast bars and cereal bars were taxed or not, and how they were defined.Let me indicate that under the Sales Tax (Exemptions and Classifications) Act 1992—an act which was administered by the Labor Party; they did not seem to find it too much trouble actually working out a distinction between a muesli bar and a breakfast bar—confectionery includes, among other things, goods known as muesli bars or health food bars and similar foodstuffs. The ATO has ruled that breakfast or cereal bars do not fall within that particular definition—breakfast bars are based on breakfast cereals. That issue was raised with a degree of drama by Senator Conroy, but the issue actually happens to be currently dealt with satisfactorily, I understand, under the current tax system. There was no huge fuss or bother about that; no questions have ever been raised—as I understand and at least as I can recall—in the Senate by the Labor Party about that particular issue.Senator Campbell, you raised the issues of the hotel and the Japanese restaurant. Senator, the truth of the matter is that there is the on-premises factor which overrides everything else. The on-premises factor ensures that goods sold in a restaurant or a hotel will be taxable. As for the idea that somehow you can buy the raw steak at the hotel and go out and cook it on the hotel barbecue, well, that does occur, but that is taxable—the food is consumed on the premises. Equally, if you consume your raw fish or whatever in a restaurant or in the restaurant surrounds, that is taxable. So I do not think there is all that much confusion there, Senator; I would have thought that was quite straightforward.The issue was raised about how we define rotten food. Senator, I am surprised this particular issue has been raised but, frankly, if there is a dispute on what is rotten and what is not, the ATO will make an assessment on the basis of the factual information available. It may well be subject to a ruling if it were to become an issue, but it is most unlikely that it would ever become an issue, to be quite frank.NB5CAMPBELLSenator George Campbell—So the ATO will define what is rotten?WW4Kemp, Sen RodSenator KEMP—There are certain health rules and regulations which govern the sale of food. The regulations govern food sales so I would think, unless someone can argue to the contrary, that it is illegal to sell food which contravenes proper health standards. There are health standards in force that cover the rotten food issue, and the legislation itself does not need to measure when the food becomes rotten.In relation to a number of other matters you raised about bakery products, including—as you raised this particular issue—blueberry bread, bakery products that are subject to the GST are listed in the legislation. For example, the legislation indicates that cakes, slices, muffins, pies and other goods are subject to the GST. Bread or buns that have a sweet filling or coating will also be subject to the GST. For example, finger buns and cream buns are subject to the GST. Examples of bakery products that are not taxable under this item and which will be GST free include plain bread rolls, cheese topped roles, fruit loaves, sesame or poppyseed rolls, focaccia, hamburger buns and pitta—and the list goes on. The legislation is quite clear on that particular matter, Senator. Another issue was raised which I need to cover. The issue of strawberry milk was raised—was it?—by Senator Sherry.ZW4SHERRYSenator Sherry—No, I didn't.WW4Kemp, Sen RodSenator KEMP—Was it the issue of flavoured milk? Well, there is a problem at the moment, as senators would be aware, that chocolate flavoured milk is wholesale sales tax free, whereas strawberry flavoured milk has a wholesale sales tax. This is one of the anomalies I am happy to say that this legislation resolves in a very satisfactory manner—and, of course, both are subject to the GST.12:21:006286Cook, Sen PeterSenator COOKRF4WAALP00—I would like to join the debate at this stage, now that Senator Lees is back in the chamber, and in my remarks today I will be referring to the Australian Democrats. I want to note for the record that in the press I read that Senator Stott Despoja and Senator Andrew Bartlett are going to break with the Australian Democrats, cross the floor and vote against this package—I hope that other Australian Democrats are going to do the same—and my remarks about the Democrats will not involve those who are going to vote down this package. I commend them for the moral courage they display in doing so.The second point I want to make as a threshold point, before I begin my remarks proper, is that in an earlier contribution I thought I heard Senator Lees—or maybe it was Senator Murray—say that the ALP voted against taking food out of the GST when this matter was last before the chamber. That is true, we did. But we did it on the basis of opposing a GST at all. I want to recount this matter in case people want to go out of here and slur the reputation of the ALP on this basis. You will recall—even you, Minister, may recall—that when this matter was before us I asked, through the chair, a question of Senator Lees, which was: `If we defeat your amendment on food, will you vote down the whole package?' The answer Senator Lees gave back was yes.That is our objective—to vote down the whole package—so we defeated the Democrats on food. We then believed that the whole package would be defeated as well. The only question then in the chamber was: where does Senator Harradine stand? He made that very clear by saying that he would not support the package either. So yes, it is true, if we want to make this point, that we voted the Democrats amendment down; but we voted it down in order to defeat the entire GST package. That is the point. If there is, out of this chamber, in terms of public campaigning, an allegation made that somehow or other the ALP wants a GST on food, then it is a foul lie. Our position is no GST at all, and we have made that clear from day one. That is what we campaigned against in the last election, that is what we are campaigning against still and that is what we stand for now: we oppose this legislation. Let me make that point very clear. I hope it does not arise again in public debate.I also thought I heard a lecture being delivered to the Labor Party by the Democrats on what other Labour parties around the world, or social democratic parties, have done. I thank those who have deigned to be up on the literature of this for their comments, but we are the Australian Labor Party and we did consider the issue of a GST. We considered it in 1985 prior to the tax summit. We published a paper for public debate in which there were several options. A GST was option C in that public debate. What did we do? We rejected it. Yes, we considered it; yes, we examined it; yes, we had a tax summit to try and unite Australia behind tax reform, unlike this government who ambushed Australia before the last election—WW4KEMPSenator Kemp—Ambushed Australia? We had an election on it.RF4Cook, Sen PeterSenator COOK—Yes, and you lied to them in your publicity.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Watson)—No, I think—RF4Cook, Sen PeterSenator COOK—If I cannot say that, Mr Temporary Chairman—10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Not at this stage. Would you withdraw, please?RF4Cook, Sen PeterSenator COOK—The ANTS package did not tell the truth about what the real impact of this tax was.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Senator, I think you had better withdraw or rephrase it.RF4Cook, Sen PeterSenator COOK—That the Liberal Party lied?10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Yes.RF4Cook, Sen PeterSenator COOK—Well, the Liberal Party lied. The Liberal Party is not a parliamentarian in this place.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—I think you used the word `you' originally.RF4Cook, Sen PeterSenator COOK—I withdraw the word `you', because I want to be consistent with the standing orders. It seems under the standing orders that, even if someone lies, I cannot say they did. In order to be consistent with the standing orders, Mr Temporary Chairman, I withdraw. The Liberal Party lied.WW4KEMPSenator Kemp—Mr Temporary Chairman, I raise a point of order. I think that we are well used to fairly extreme and extravagant language from Senator Cook—10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Senator, I have dealt with that in my ruling.RF4Cook, Sen PeterSenator COOK—We will get off the subject. It is very sensitive, whether you tell the truth or not. The question of what you told the electorate before the election and what was revealed by the Senate inquiry into the GST are two different things. We now have a different view of the GST than what was believed before the election, and that is my point. That is the only point I want to make. I make it as a side point.Labor had considered a GST. Labor thought through the implications and rejected it. In the 1993 election we campaigned against the Fightback package. We opposed it then and we oppose it now. I cite these references in order to make it clear that we are still opposed to it, and we are consistent in our opposition. We as a Labor Party have the right to regard that we are right and that some other Labour parties, if they have been associated with it, the Irish Labour Party for example, are wrong. It may have been right for Ireland—I do not make a judgment about them—but it is wrong for Australia. It was wrong in 1985, it was wrong in 1993, it was wrong in 1998 and it is wrong now. We are opposed to it. Let us get rid of all of this argument. Where does Labor stand? In opposition to the GST. I thought I had said that until I was hoarse, but let me just restate that for the record.I also note that, while the comments were made about what some European social democratic parties may have done, no comment was made in this context about what is happening in Europe now. We know the European Commission is recommending to its member states, most of which are Labour or social democrat governed states, that the VAT or the GST be reduced in specific areas. Why are they proposing that? Because it has increased unemployment in those countries as a tax on jobs.A GST works in exactly the same way as a payroll tax in this context: it is a tax on employing people in the services sector. The European Commission has recommended that it be taken off in order to establish that there will be more jobs in the market without a GST. That is a relevant consideration for Australia because unemployment is still unacceptably high in this nation. Because this is a flat tax, the poor, the medium income earners and the wealthy pay the same rate for everything. Therefore, the proportion of tax paid by the poor and the medium income earners is the same as is paid by the rich. As the amount of tax is the same, the proportion of income spent by the poor and the middle income earners is much higher. For that reason, it is an unfair tax. It is the reason why economists describe it—to use their technical description—as a regressive tax. It is a flat tax. It does not go to the capacity to pay; it hits everyone the same, irrespective of their income level. As a consequence, there has to be compensation.The issue we are debating on food is: is the best way of providing compensation for an unfair, flat tax, a regressive tax—let me stick to the technical jargon—to take food out or not? We have had this debate. The Democrats say if you take food out it will be structurally altered. Senator Harradine seemed to be saying before that if you compensate for the regressive nature of the tax, that will make it fair. When he did his final exploration, he discovered that you could not make it fair, no matter what you did, and declared that he will vote against it.Given this amendment on taking food out, the issue before us now is: will this make it fair? It will not make it fair. All you need to do is look at the speech of Senator Harradine when he declared, `I cannot.' Senator Harradine hit the nail on the head in that speech. He said that admittedly food is a major component of consumption for middle and low income Australians, but you have to consider clothing, shelter, transport and a myriad of other expenses. To remove food leaves the others and, while you reduce the amount of unfairness, you still leave an unfair tax in place.The problem with the Democrat amendment is that it goes part of the way but does not go all the way. The net effect of enacting these laws will be to make the situation in Australia unfairer and the people who will shoulder the weight of that will be poor and middle income Australians. Once you cross this threshold, you make it unfairer. Even if you take food out—it sounds good, might even look nice—you still make it unfairer. It is a question of degree. The degree of unfairness is still heavy and heavily felt by those who cannot afford to pay it. The evidence we have is that—in the jargon—low income earners are dissavers, that is, they spend every cent they have and borrow to try to meet their household expenditure. They have no scope to spend a bit more, to wear a slightly higher burden, no scope at all. It is these people who will suffer.How do I know that so confidently? You just have to look at the economic model to know that. You also have to read what the St Vincent de Paul Society says about the deal between the government and the Democrats. In their letter to Senator Lees on 25 May they said:Our concerns about the concentration on food as the central plank of any compensation package, particularly since there is a narrow definition of `food' under the considerations, remain. We repeat the same conclusion we have outlined previously and it is this. Excluding food as the dominant concession to the unfairness of the GST package without similar consideration of the other 73 per cent of expenditure by the poor may be politically expedient but it would prove to be a cruel hoax on the 40 per cent of those Australians who earn less than $540 a week. They go on:There are other essentials on which low income earners must spend their money such as clothing 3 per cent, utilities 10 per cent, transport 8 per cent, services 5 per cent and rental housing 30 per cent plus, to name a few. Unlike the wealthy, the poor have no option but to spend all their income on essentials, each of which will attract, under current proposals, a new 10 per cent tax.Is someone going to say that the St Vincent de Paul Society do not know what they are talking about? They are the people who actually deal with poor Australians. Is someone going to say that ACOSS, which represents all the welfare organisations, does not know what they are talking about? On 3 June, ACOSS issued a press release with the headline `Tax package will widen inequality and is still not acceptable.' In that press release they said:After careful analysis, the Australian Council of Social Service has concluded the new Government-Democrat tax package is still fundamentally unfair and is unacceptable.They say in their fourth paragraph:The Senate should not pass this package in its current form.Is someone going to say that ACOSS do not know what they are talking about when they are referring to Australians who are not in a position to defend themselves and require an organisation like ACOSS to speak up for them? Just this week we had a paper by Professor Peter Dixon, Director of the Centre of Policy Studies at Monash University. What did he say in his most recent study of the Democrat-government deal? He said that, taking into account the references that have examined how the GST experience has worked in Canada and New Zealand and given what has been proposed to us in respect of the definition of food, there will be an extra burden of compliance costs of $1 billion a year in simply collecting it. Then referring directly to the package that is now before us with the food-out option, he said:As with the original ANTS package, the Democrats' changes now being hastily adopted by the government have not been subject to rigorous economic analysis. Preliminary work at the Centre of Policy Studies using the Monash model suggests that these changes will not generate jobs in the long run and will leave a significant risk of employment reduction in the short run—`Employment reduction' being unemployment—Nor will they help Australia's service exports or improve the terms of trade. They are likely to increase compliance costs substantially. Even ignoring compliance costs, the Monash results indicate that the Democrats' changes will reduce Australia's overall economic welfare by 0.3 per cent, approximately $1 billion a year.That is, the gross national product will decline. So not only will it not help those whom the Democrats argue it is aimed to help—poor and low income earners, middle income earners—but it will have an adverse effect on the national economy, according to one of Australia's most distinguished economists. So why would we vote for it? On that evidence, why would anyone vote for it? If this is compassionate conservatism—the new rubric of the Howard government—why would they support it or indeed propose it? More importantly, why would the Democrats also vote for it? The Democrats have argued that they are a party of compassion. Earlier, they based themselves on what ACOSS said. They now ignore the ACOSS advice. Earlier they based themselves on what the St Vincent de Paul Society had as a view. They now ignore that advice. (Time expired)12:37:006289Murray, Sen AndrewSenator MURRAY3M6WAAD00—There is quite a lot to respond to there, but I thank Senator Cook for bringing up matters of substance which therefore deserve a considered response. First, I need to deal with the Labor Party's position on food. Nobody but those people who are severely handicapped would not be aware that the Labor Party oppose a GST; I think that message is well established and we understand that. What has not been clear to us, though, has been your position on food. Should you now be moving to a public statement that you do not support a tax on food, if there is to be a GST or a VAT? I would be pleased to know that, and I am still not certain of that from your response.The problem for all of us is that, long before Senator Harradine made his dramatic speech—and it was dramatic; these moments are milestones in parliamentary experience— we had the food debate and the food vote. Up to that time, my party and your party were believers, or at least suspicious, that the government had the numbers, with Senator Harradine, to pass its tax package. Therefore, at the time you voted on the basis of food you voted on what was regarded by some as a probability and by others as a possibility that the government's tax package would get through intact, and so you voted for food to be taxed. You voted against our amendment that large portions of the food classification should not be taxed.The difficulty I have faced since Senator Harradine's amendment is that, with all the theatrics—some immensely amusing and others with a serious content—in the House of Representatives on the food matter, I have never known whether the Labor Party approach is a question of concern about definitions and the breadth of the food exemption or whether it is actually a campaign for all food to be taxed. The very clear and well expounded argument that I heard from Senator Sherry earlier, like many of the arguments I have heard in this debate today, was a restatement of the essential argument by those who support all foods being taxed. The government have made their position clear. They would also rather have had all food taxed, but they have agreed with the Democrats to make about 80 per cent of the food that is bought by households GST free.Is the Labor Party saying that they want all food taxed if there is to be a GST or are they saying that they do not like the definitions and would like them narrowed or are they saying that they do not like the definitions and would like them broadened? By the end of the debate perhaps we will know that because attached to that question of mine is also the understanding that your leader—I think it was in Brisbane—said that it was the intention of the Labor Party to go to the next election and roll back some parts of the GST. I think there have also been statements made that perhaps you should be going to the next election saying that you will take the GST off—which none of your Labour Party colleagues overseas did, but maybe you would want to do that.If you were to roll it back in regard to the food area, we would like to know where and in what instances. Where in the definitions do you have a problem? In our belief, having gone through this negotiation with the government and the government having then revised our amendment, is that their final version is better than the one we put up; it has been improved—it lessens some of the definitional problems that were there. We all know that there will continue to be definitional problems—there always are in taxation matters and there probably would be even if all food was not taxed; it would still be at the margins of dispute.The question on the food issue which matters so much to Australians is where you stand—all taxed, none taxed, a different definition or what? I do not know that. Senator Sherry also rightly said that we had changed from the wider definition that we took to the election. At the beginning of my remarks in this debate I explained why that was so, but perhaps he was not in the chamber and so did not hear it.I stressed that the reason why we had changed was that, having gone through the Senate committee review process, we realised that our wider definition would have had an adverse jobs effect. We therefore narrowed the definition to ensure that the takeaway industry was not detrimentally exposed. I will read from a press release by Tricon Restaurants International, the KFC people, dated 23 June:KFC today welcomed the decision by the Federal Government and the Australian Democrats to treat all hot food the same.Chief Executive of KFC and Pizza Hut, Mr Bob Nilsen, said the Democrats and the Federal Government were to be applauded for the decision which would help level the playing field and make the GST fairer.`Our great concern was the negative impact on jobs and investment and we feel this decision will go a long way to protecting jobs and future investment,' Mr Nilsen said.Quite rightly, the Labor Party raised the issue of the chook definition because it is a difficult matter and our proposal on the chook definition has been changed by the government, with our agreement, to make sure that the adverse impact on jobs is avoided. There is also a press release from McDonald's Australia, dated 24 June, stating:McDonald's Australia today congratulated the Government and the Democrats for reaching a compromise on the issue of the GST on food that avoids major job losses.So that is the reason for ignoring ACOSS's view that they would have liked the wider definition, as we had originally proposed, and for moving back from our position. We simply could not stomach the potential loss of jobs. I know that that is a balancing thing, but we had to balance out the issues of equity and jobs, and we decided on this definition.We then need to look at some of the very serious and substantial points you made about some of the people who are criticising the package. I draw particular attention to ACOSS as the peak body. We retain a great respect for that body. They do a great deal in advocacy terms for Australia. ACOSS wanted a much better agreement. They wanted base broadening of a very considerable amount. We wanted base broadening of a very considerable amount. Those base broadening measures that we wanted in addition have been referred to the Ralph business tax review and will return to us for decision in the next tranche of business tax reform.ACOSS wanted a wider definition of food. I have explained the reasons why we have not gone down that route. ACOSS wanted to do away with the indirect taxes that are to be retained. The indirect taxes that are staying have had to stay because of the costs of the adjustments we have made to the package. ACOSS wanted more tax cuts to pay for those indirect taxes to be taken off. The government's position on income tax cuts was our food. For them, income tax cuts at the level they wanted was the same as our food; it was a non-negotiable area. Frankly, when you are in an agreement and when you are discussing matters you have to make a judgment as to what you will accept and what you will not accept. So ACOSS did not get what they wanted, we did not get what we wanted, the government did not get what they wanted but, between us, we came to an agreement with the government and we are satisfied that the agreement both meets our broader objectives and will be to the benefit of Australia as a whole.Then we come to the very important remarks you made concerning the assessment of the package by those who are professional and who are capable of assessing this package appropriately. There are a number of first-rate modellers, as you know. I think we have a regard for all of them. I certainly would not regard any of them as lacking professionalism, ability or merit. Amongst the leaders are Mr Murphy and Mr Carmody—not the tax Carmody, the Access Economics Carmody—who are probably, in my view, the prime modellers on the economic area. Both those individuals and their organisations believe that the package originally put by the government and the agreement put by the Democrats are in the interests of Australia as a whole. Unfortunately I did not bring the newspaper with me, but my memory of the very large Australian review of this entire matter had a quote from Mr Carmody which described the new package as more complex, less efficient, but fairer and better for Australia as a package as a whole. It is the package we are looking at.To Warren and Harding I am going to give top ranking, I am afraid. I do think they are the top social modellers in this country. They ticked it off. They gave us a very good overall tick on the package. Senator Cook, you will recall that the modelling assessment of Professor Dixon, who I also have respect for, was biased towards the negative on the package originally anyway. Essentially, he has retained that view. I think that there we have a dispute between experts. But my view is that the experts that have pronounced on this have overall ticked it off as a very good package.I want to give you some results, if I may, from the Access Economics modelling of the new tax package. On the category of aged pensioner, Access Economics found that those on private income would be $3.30 better off and those on a $5,000 income would be $4.44 a week better off with the new package. A pensioner couple with no private income would be $7.06 a week better off and those on a $5,000 income would be $9.41 a week better off. An unemployed single person would be $2.82 a week or more better off and someone on $40,000 would be $13.62 a week better off. A sole parent with one child under five years has the largest gains of any household: $7.01 for a sole parent pensioner. Somebody on $20,000 private income would be $28.55 a week better off.Much of this debate has been about how we compare the new package the government and the Democrats have agreed on with the ANTS package. But we should really be comparing the new package the government and the Democrats have agreed on with the existing state of our country, with the way our tax system and our social security system and everything else interact. Our strong belief and the reason we have held to this in a very fierce political debate is that this new package makes Australians fundamentally better off in every sense of that word over the whole economy than they are at present. I really do not expect that after the 1 July in the year 2000 Australians will say, `Oh gee; we are so sorry we got $12 billion income tax cuts' or `Wow, we are very upset we have got billions and billions of dollars of social security benefits and allowances.' I am sure I am going to hear all that, as well as `Please tax food.'Harding and Warren said that the worst case for a single pensioner would be that they would be $2.61 better off; the best case was that they would be $5.20 a week better off. They said that the worst case for students with no private income would be $2.57 a week better off; the best case would be $3.92 a week better off. For unemployed the worst case would be $2.52 a week; best case $3.89. I can go on and on through this, but the net benefit of these people's modelling is that people are going to be better off. In none of these lists can I find anyone who is worse off. That is the effect of the Democrats' changes to the government's package. We have fixed, as far as we can, most of the problems that we believe were identified in the committee process. Really, whilst I continue to respect your resistance to the GST, that is our reason for supporting it. (Time expired)12:52:006292Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—There was quite a contrast between the very moderate response that Senator Murray gave and, frankly, the somewhat emotional and highly selective contribution and intervention that Senator Cook made. I want to re-emphasise what we see as the extraordinary intellectual position that the Labor Party has adopted. The big attack on the Democrats was that somehow they had not kept their promises. Of course, the Labor Party are very determined to make sure that the government breaks its promises.The whole thrust of Labor, in coming back into opposition, has been to attempt to make sure that the government cannot keep the promises it made at the election. They then purport to lecture the Democrats that somehow they have broken their promises. Of course, the Democrats always supported tax reform. The Democrats went very clearly to the election supporting a broad based consumption tax. The Democrat position differed from our position but nonetheless, as the history record shows, we were able to come together and negotiate a package which met the strict criteria of the government and met the commitments that the Democrats had made.It is extraordinary that the Labor Party can come in here and attempt to argue that somehow people are breaking their election promises, when the sole purpose of the Labor Party, the sole policy that we can ascertain at this stage, is to attempt to make the government break its promises to the people on every conceivable occasion. It is an astonishing record. I doubt that we have ever seen a more negative opposition than the Labor Party today. The policies which they supported when they were in government they have now backflipped on, and we have innumerable examples of that. Senator Cook, I do not believe that you come to this debate, in raising issues like broken promises, with clean hands at all—particularly in the light of the way that the Labor Party has behaved since the election.The other issue that I thought Senator Murray spoke very well about was what the Labor Party would do. Senator Murray is absolutely correct: all we have is the slightest hint, from the odd speech that perhaps Mr Beazley makes on some occasion and Mr Crean makes on another, that the Labor Party may do something and may attempt to wind back here or wind back there. But nothing is ever specific, because the Labor Party still refuses, in my view, to do the work which is required.Senator Murray posed an interesting question: if the Labor Party wishes to roll back some of the changes in the area of food, what specifically do they have in mind? The truth of the matter is, Senator Murray, that we have no idea. There is nothing in Senator Cook's contributions to this debate, and nothing in Senator Sherry's or Senator Conroy's contributions, which in any way provides an indication to the Australian public of what the Australian Labor Party have in mind.It is clear that we are going to have major tax reform. It is clear that this is a good thing for the country. Not least, as Senator Murray said, we looked at all the categories of people, and there are no losers. Yet the Labor Party stands up and continues to argue that this is a bad thing. Is it a bad thing to give a real rise in pensions and benefits? Is it a bad thing to give major tax cuts to low and middle income families? Is it a bad thing to have a major family package? It is an astonishing thing to get up and purport to argue that, when your own position that you went to the election on was defeated and when nothing has been produced since.You were welcome to join the project of tax reform. The Labor Party had the opportunity to work with the government—as indeed the minor parties had the opportunity to do—and you chose not to. You chose not to take part in tax reform. Nothing constructive has been said: it is negative, negative, negative, the whole time—and often misquoting and misleading this chamber. For example, on the use of Professor Dixon's model, I am not quite as kind as Senator Murray is. The fact of the matter is that the results model that Professor Dixon produced recently is, frankly, just an update on the discredited results that he had produced for the Senate committee. It is, in my view, a case of garbage in, garbage out.His modelling—and let me make this quite clear, since Senator Cook has relied on it—still includes the assumption that wages fully respond to the price effects of the tax package, completely ignoring the benefits of the tax cuts and other compensation. I believe it greatly overstates the compliance costs associated with the revised tax package. Frankly, by relying on that he has not done a great deal of credit to himself. Certainly it is, as I said, a case of GIGO: garbage in, garbage out. No-one accepts those assumptions. To give massive tax cuts, totalling up to some $12 billion, and to take no proper regard for those in your modelling is, to me, absurd. It is no wonder that he can then purport to produce results—results which absolutely fly in the face of commonsense. We simply do not accept the remarks of Senator Cook. We do not accept their highly selective nature.When Senator Sherry flashed in and out of the debate he spoke about Mr Hooke and the Australian Food and Grocery Council. Having heard what Senator Sherry said, you would not believe that what the Australian Food and Grocery Council concluded was this. Let me just read the council's media release to you:`The AFGC encourages Parliament to support the passage of this legislation as the first tranche in tax reform. It will pave the way for the consideration of the second tranche of tax reform—direct business tax reform and outcomes to the Ralph Review,' said Mr Hooke.The Australian Food and Grocery Council supports the passage of this bill. I suggest that anyone reading the Hansard or listening to the debate would not have appreciated that from the comments of Senator Sherry.I think, frankly, as this debate rolls on and as tax reform goes from being a matter of debate in this parliament and becomes a reality for the public—the very significant tax cuts that we have offered, the assistance to families, the very real rise in pensions and benefits—the Labor Party will become increasingly isolated. They have been incredibly negative on the whole issue of tax reform. You go out and you explain to the pensioners why they should not have a real rise in their pensions and benefits, even after taking into account the effects of the goods and services tax. You explain to low and middle income Australia why they should not enjoy major tax cuts and major rises in family assistance. The Labor Party position is simply not credible and, frankly, the discussions in the serious media on the Labor Party's policy confusions are, in my view, extremely soundly based.Let me just briefly respond to a couple of other issues which have been in front of the chamber. I think that Senator George Campbell did ask me about a bagel. In my response to him I omitted to advise him that of course a bagel with blueberries in it will be GST free. There was another issue that was raised and I shall respond to it when I rise again to reply to the remarks of Senator Cook.13:03:006293Cook, Sen PeterSenator COOKRF4WAALP00—I hardly know where to start because both Senator Murray and now the minister have roundly criticised the Labor Party. If the core criticism is that we are not part of the government's view of tax reform, then that is right—we are not, and we do not want to be, because we have repudiated GST. We do not want a GST in this country and we are opposed to it. But you happen to call the GST tax reform and pretend that it is some sort of idealistic objective that will benefit the country, when it is not. It is a regressive tax. You use this language to blind and confuse, but let us get the terms right.GST is a regressive tax and we are opposed to it. We are not going to be involved in the argument of how you make it better because you cannot make it better. No matter what you do about a GST, it still taxes the wealthy at the same level as the poor and therefore it is not fair. You talk about compensation measures. Let me just set aside the compensation measures for a moment because I want to deal with them in considerable detail on their own. They deserve that attention.But let me just make this remark about compensation. It erodes, and the GST goes on for ever, and that is the problem that the government has in explaining this tax. I am pretty sure the Australian Democrats would not have welcomed the minister defending them. It is an odd sight that a Liberal Party minister would defend the Australian Democrats, but we just witnessed it.WW4KEMPSenator Kemp—They don't need to be defended. They can defend themselves.RF4Cook, Sen PeterSenator COOK—You did. You defended them on the basis of their consistency with their election promises. I never raised this matter but since you raised it, Minister, let me go to that subject right now.The Democrats prior to the election on 18 September 1998 put out a paper, `A Fairer Tax System—More Jobs: The Australian Democrats Taxation Policy Response'. What did they say in that paper? I am quoting from page 14 of it, under the heading `Response to the Coalition Tax Package'. They said:The coalition's tax package is unacceptable in its present form and unless it is substantially amended the Democrats will not support it.We know that bit. But then they said, and let me quote these words:The Democrats believe that the coalition tax package can and must be significantly amended to be made fairer. The following amendments will be non-negotiable: Taking the GST off food; taking the GST off books; restructuring the tax cuts to reduce the benefits for higher income earners. . . And so they go through a long list of things. In the interests of political honesty, I just want to refer to the fact that `taking the GST off food' was `non-negotiable'—the words that the Democrats used themselves. After the election they called it `basic food', and in April they called it `the Irish model'. When your Prime Minister said `I want an Australian model', they rejected him. Now they are both saying `We want an Australian model and this is it'.What the Democrats went to the election about was taking the GST off food, and now we know—given the amendments before us in this chamber—that it is only some food; it is not all food. On the question of electoral honesty, does that meet the test? I think not. You go to the second thing, taking the GST off books. We have yet to deal with this—there is no amendment before us—because in the package struck the GST remains on books. Is that what they promised? No, it is not.Since you raised the question of electoral honesty and defended the Democrats, Minister, I thought I should just take a minute or two to get the record straight. If you go to restructuring the tax cuts to take benefits off higher income earners, there is some change at the higher level but the substantial evening out of the tax scales that they talked about prior to the election is different from what they are putting their name to after the election, after their negotiations with the government. These are matters of unexceptional fact and I am surprised that you should have raised them and given me the opportunity just to correct the record in the way in which I have.Bear this in mind: the explanation made by Senator Murray supports exactly what I have said. He said before the election that the Democrats and ACOSS had a view about the wider definition of food. They have since modified that view to a narrow definition of food. I would say that that is confirmation of the fact that what they promised to do before the election, they are not trying to deliver now—game, set and match on that point, and this is the fundamental point.Let me go to the debate—which I thought was the more elevating debate—we were engaged in before you hunted the low road on election promises. It is not something that I would do if I were you, Senator. Remember, Prime Minister John Howard is the guy who will go down in history in this nation as inventing core and non-core promises. He does not tell you which ones are core and which are non-core, but of course the non-core promises are the ones you do not keep after the election. However, let me go to the issue of the modelling, because that is an issue that we spent some time debating, and it is an important issue.A number of modellers have said various things, and I do agree with the minister on this point: garbage in, garbage out. It depends on what assumptions you base your modelling upon and what data you feed into your model as to what outcome you get. That is an unexceptional argument that most people agree with. The interesting thing about economic modellers is not how eminent they are or which universities they come from but what assumptions they work from and what data they put into their models.On the subject that the Chris Murphy model has been relied on by the government—he is the government's preferred modeller—let me go to a comment by another economist which lifts the lid off the Murphy model. The Director of the Centre of Policy Studies at Monash University, Professor Peter Dixon, states in his paper published this week:Murphy, in common with other model builders, ignored compliance costs. Once compliance costs are taken into account, the government's package produces a long run loss in economic welfare even under the most optimistic assumptions.Here is the government telling us that no-one loses, but an economist who understands how these models work identified that what Mr Murphy neglected to do was to include the costs of compliance in his model, and we know that under the new package that is at least an extra $1 billion surcharge on Australian business. So garbage in, garbage out: if you neglect to include some of the assumptions, you will get an answer that you like.Let me go to the other criticism that is made of Professor Dixon's work. He did not do just one model—as the minister seems to have implied in his speech to the chamber—he did a series of models based on a series of assumptions, and it was for us, Joe Public, to judge which were the most plausible and likely assumptions in the community. He did us the service of taking a group of assumptions and modelling that and then taking a different group and modelling that so we could all see what happened.One of the assumptions he relied on was that if you increase inflation to a higher level than you have told wage and salary earners it will go to, then wage and salary earners will negotiate with their employers to recover the same value of the wage they had before you introduced the new tax. So he modelled the assumption that they would do that—a perfectly reasonable idea. If a wage earner has copped the slug and he is now poorer because there is a bigger tax rake-off, will he ask for more wages to compensate? Most wage and salary earners will, and he modelled that as an assumption.I think that is an unexceptional assumption. But what the minister says is that they are going to get a tax cut, and that should offset it. Why don't we take the discussion to its true length and go to all of the detail? The 1.9 per cent inflation boost that the government told the Australian community before the election would be the cost of introducing the tax package was not the first year impact, which was a lot higher; it was the second year impact. They did not tell this to anyone in Australia.We had to winkle out of Treasury the fact that the impact in terms of inflation in the first year is 2.3 per cent—or was it 3.2 per cent; none of my advisers are here to correct me, but I think it is 2.3 per cent—and that is excluding a number of other assumptions on housing and a few other things. So if you exclude those assumptions, you do not tell anyone about the first year effect and how it will then knock over into the second year effect, and you pick the figure that you want and model that figure, of course you can get an outcome, Minister. I am surprised you do not seem to know that or, if you do know that, you are not prepared to say so in this debate.I have to be honest and say that I have not gone through the Harding and Warren analysis that has been published in excruciating detail, but I do know what the basis of the Harding and Warren analysis was when they came and gave evidence to the Senate committee examining the distributional impact of the government's original goods and services tax package. That was a model which assumed, as I recall, that housing and cigarettes were out. It assumed that if people did not have expenditure in those two areas, you would get these results. I am not in a position of being informed as to whether they have continued those exemptions.3M6MURRAYSenator Murray—They included them.RF4Cook, Sen PeterSenator COOK—If they included them, that is a step forward. They defended stoutly their decision to exclude them when they did the modelling work for the Senate chamber, but I will have to go to all those changes they have included and look at their model again. I am happy to come back to the chamber and say honestly what my evaluation of their findings is. This debate is slated to go for a few more days, so I guess I will get an opportunity to do that, and I will not fail to do it.Can I say this about the modelling: the modelling assumes things are fixed. We know from the government that the tax rate of 10 per cent will be fixed. I do not believe it will remain at 10 per cent forever and a day, but let us assume that they are right. They will not put it up in the near term—it will at least remain at 10 per cent for a few years—and it is fixed. Let us assume that the tax cuts which have now been modified and are less than what was originally promised will go forward. What we do know now—or have always known; it is not a new idea—is that, with inflation, people get pushed into higher tax brackets and bracket creep occurs.As the ACTU pointed out, if you took bracket creep out of these tax cuts and then you looked at the percentage of compensation, the real value of these tax cuts would be seen not to compensate wage and salary earners. Not to take account of bracket creep allows inflation to push up the level of tax paid by wage and salary earners. Those revenue gains are harvested and some—not all—is handed back. The government may make itself out to be a big fellow but the net effect on wage and salary earners is that they are worse off.Let us assume that the Harding-Warren analysis is right. It does not take account of bracket creep, however, and therefore it does not take account of the erosion over time of the tax cuts. It does not take account either of where government commitments have been made about compensation in other areas which require future government decisions to be made. I am very pleased that Senator Murray is in the chamber because during the inquiry he strenuously raised this point, and I commend him for his persistence in doing so. He started by asking most witnesses before us in the inquiry—he will correct me if I have got this wrong, I hope—something like, `Do you trust politicians?' That opening question led to a series of questions such as, `You might believe what they say now, but will what they say now last forever? If they say they will give you compensation, can you be sure that after two or three years they will remain constant on that point? When governments change and new governments come in, will the new governments, or the new politicians, honour those agreements?' That was the point.I think the point was also to create an image that the Democrats are not politicians like the rest of us. I have to say that the deal the Democrats have done with the government now means that for ever and a day they have lost the moral high ground and they are politicians like the rest of us, playing the game of politics for all they are worth.Assurances about who will be worse off can apply only if we assume that over time the values of compensation and governments remain constant and do not erode or decline, and that governments do not change their minds. Let us look at an example. When New Zealand introduced the GST, within two years the government cut the compensation bill dramatically. I know that the comebacks will be, `This is food,' but it ain't all food and it ain't all the costs. I go back to the letter I was quoting from, from the St Vincent de Paul Society. (Time expired)13:18:006296Murray, Sen AndrewSenator MURRAY3M6WAAD00—I must say that yet again Senator Cook has raised some issues of real substance. I will start with the last, because it is a fundamental issue. All politicians of character and integrity regret that our profession is looked down upon by so many people in Australia. The issue of trust does loom large, not only in this debate but in everything we do.Attached to my earlier questions of the Labor Party about its views on tax, hidden behind them, was the trust issue. If there is a weakness in our agreement, it is that, if the Labor Party combined with a future coalition to tax food, we could not stop it. That is why the attitude of Senator Cook's party to the food issue is germane. I have not been rounding on the senator but that is why I have wanted to know what his real position on food is, whether he wants it all taxed or not taxed, or where the definition should be. Frankly, if the Labor Party went to the next election saying that it would tax food and the coalition said the same thing, we would be up the creek. We could not stop it. So an issue of trust is important there.The second issue of trust relates to the remainder of the package, as to whether compensation can be withdrawn. I must say that the committee process really did reinforce, yet again, the value of the Senate and the way it operates. Whoever you were, from whatever side of the argument, it really did flesh out and flush out the issues in a very commendable manner. One of the things the process did was to result in some people who were very ardent supporters of the government's ANTS package actually highlighting some of the weaknesses. One of the best examples of that was Geoff Carmody, from Access Economics, who said, in conjunction with the Australian Food and Grocery Council, `Look, if you continue with the compensation package as it is, it will be eroded.' That issue was then taken up by a number of people and political parties, not least our own, and the consequence of our agreement is that it will not be eroded.How could compensation, allowances or anything else of that sort be taken away in future? It is very difficult, because to do that not only does the government have to break an agreement, not only does the government have to go back on its word, not only does it have to change laws, not only does it have to introduce new budgets, but it has to get it all through the Senate. So in all this—particularly since in the next parliament the non-government parties will be principally Labor and the Democrats—the attitude of the Labor Party is critical. The question to Senator Cook is, `Would you let it happen?' My assumption, knowing him to the extent that I do, is that he would not. But he needs to say that to us. That is an important starting point.The next area in my notes—and I will wander my way through your contribution, if you do not mind, probably not in a sequential way—is some elements you read out of our policy that we put to the Australian people in September 1998. I freely admit that some of those things in there either changed or were not achieved. The principal one not achieved, as you know, was our commitment to take GST off books. It is a failure we regret, but we were unable to achieve it in agreement. You know what we got in return, which was the $240 million worth of grants, bounties and so on for the book industry. That, we know, is something that we have been criticised for.The second one you mentioned was the non-negotiability of food. I think you ought to be fair to us and acknowledge that, within that document, we actually did spell out the kind of food that we believed should be defined as GST free. We specifically said that restaurants and takeaway food should be taxed.I want to turn to pages 372 and 373 of the main report of the Senate select committee because that outlined that matter. What we said in that report was that Treasury costed our option of food, other than restaurants and takeaway food, which we described as the British option, as costing $4.45 billion in 2000-01 and $5.24 billion in 2001-02. It has been the definition used in most modelling of this committee and the one on the table for debate by witnesses. This is the definition that the Democrats proposed during the election campaign. We based our position broadly on the UK and Canadian situations, where restaurants and takeaway foods and some snack foods are taxed. Our principal reason for moving to not include restaurants and takeaways in the food definition was that the taxation of meals out is strongly progressive. Meals out make up six per cent of the total expenditure of the top 20 per cent of households but just 3.6 per cent of the spending of the bottom 20 per cent of households. Further, meals out make up 18 per cent of the food bill of low income earners but 35 per cent of the spending of the high income earners' food bills.I have read that to you at some length to confirm what our position was. I freely admit we have changed our position as a result of the Senate committee and I have outlined for you the reasons for doing so: that we believe that the jobs and equity issues balanced out. But I will also say to you that consistently the media, in the shorthand version of our view, did keep saying, `No GST on food.' If some people thought that that meant no GST on restaurant food, it is certainly not what we said.Another point I noted was your remarks about the regressivity of the GST. `Regressive'—I keep seeing in letters, emails and whatever else I get—is a word that those who want to participate in this debate have latched on to with alacrity. But we all know who are informed on this matter—and everybody in this chamber is—we all know that every indirect tax is regressive because that is the nature of a flat tax. I think you expressed it very well, Senator Cook, when you said the nature of a regressive tax is that the poor pay the same as the rich. That is so, whether it is a goods and services tax, whether it is a wholesale sales tax, whether it is a financial institutions duty, whether it is a bank account debit, or whether it is an excise. You name it, any indirect tax is regressive. The issue is not whether an indirect tax is regressive but whether it is more or less regressive.I have consistently said to people who argue to me about indirect taxes, `Look, if you hold to economic and taxation theory that there should be no indirect taxes at all and that only surpluses and profits should be taxed, I understand that. That has coherence and consistency. But if you hold to the view that there should be indirect taxes, then the question is simply which taxes and what limits should there be on them. If you hold to the view that there should be indirect taxes on goods, I want you to explain to me which goods, which limits, what limits should there be on them and whether you believe there should be no taxes on services, and why.'There are Labor governments in this country that do believe in taxes on services. The New South Wales government, for instance, taxes beds, which is a service. I agree with that policy. I probably do not agree with the way it was done, but I think it is appropriate to tax services.The government has taken the view that services should be taxed. The Australian Democrats agree with them. The government has taken the view that not all services should be taxed, and the Australian Democrats agree with them. We do not think that health and education services should be taxed. We are in agreement on that basis. The government took the view that most goods should be taxed, and we agree with them. But there were many goods that they agreed should not be taxed—for instance, health goods. Lots of health goods the government agreed should not be taxed. We have extended that to food goods.So I think the issue of regressivity and the use of the word `regressive' is somewhat of a call sign, somewhat of a slogan, in this whole debate because the question is whether something is more or less regressive than it could otherwise be and whether there are means of making sure that those who have the lowest income and who are poor are least affected by it. That is why a great deal of attention has been paid to social security benefits and to compensation, improving allowances, improving rent assistance, improving homeless allowances—all the attention to the props and the assistance that we give those in our society who are worst off. And, of course, from our point of view, making food GST free is also of assistance in that area.The last area I want to cover in responding to Senator Cook is the issue of compliance costs. You very clearly made the point, Senator Cook, that compliance costs have not been properly factored into modelling and analysis of the entire package. I would suggest to you that in our Senate committee inquiries that might have been one of the weakest areas, that we just did not get enough material on that area. But when we talk about compliance costs we need to make some points. If it is in relation to food, it seems to make relatively little difference to the cost to business. I want to quote to you what the UK National Audit Office, which is the equivalent of our ANAO, stated in their report on VAT compliance costs in 1994. They said:The incidence of compliance costs in relation to trader turnover is broadly consistent between the United Kingdom, which is zero rated, Germany and The Netherlands, which concessionally tax food, Canada, which zero rates food, and New Zealand, which taxes food. In other words, it does not vary much. That is because the nature of the problem is similar, regardless of the system. And when people talk about compliance costs, if you are going to start factoring that into your debate and your modelling, you had better start factoring in compliance benefits because one of the benefits of forcing through major tax change is that new systems, new hardware, new software and a new ability to analyse and assess businesses are introduced. And there are some positive consequences to that.I think—and Senator Ferguson is in the chamber to remind me—we did get some evidence to the effect that there were benefits as well as costs in the issue of compliance; that new accounting systems resulted in businesses being able to analyse and understand their management accounts and their operation far better. Of course, that is so, particularly at the small business and medium business end. I am quite prepared to debate with you, Senator Cook, the effect of compliance costs, but I also say that in any cost analysis you have to have benefit analysis of whatever size you might compute that to be.ZW4SHERRYSenator Sherry—Sounds like chopping your hand off to me.3M6Murray, Sen AndrewSenator MURRAY—Don't make me laugh, Senator Sherry. The compliance cost issue has been costed at $1.9 billion across the entire economy. To that, we concede, you can add between $40 million and $100 million for the business of excising food. But the overall benefits to the economy are agreed by us and the government, but not by the Labor Party, to accrue to Australia as a whole; and those cost benefits will result in a positive side to the ledger, not a negative side to the ledger.13:32:006299Cook, Sen PeterSenator COOKRF4WAALP00—A series of points were raised by Senator Murray in replying to my earlier comments and he took some of mine out of sequence, which is no great crime. He dealt with most of them, so it is fair enough. But I would like to take some of his out of sequence, too, because similar to you, Senator Murray, I wrote them down in a slightly different order.The first of these points concerns the question of what the Democrats promised before the election and whether they have honoured their promise. I thought that, with some beguiling candour, you indicated that they had not and that was to be regretted. But then you sought to ameliorate the argument by referring to offsetting issues.Let me put it directly: in your pre-election paper, `The Australia Democrats Taxation Policy Response, 18 September 1998', which you put out before the election—and I have quoted these words before but just let me do it again—you said:The Democrats believe that the coalition's tax package can and must be significantly amended and be made fairer. The following amendments will be non-negotiable: taking the GST off food; taking the GST off books—and on it goes. My emphasis here is that what you promised Australia was that these are not negotiable. What you have admitted to now, and what is plain for everyone to see because we can see the amendments before us, is that you did not honour that as far as the GST on books is concerned, and what you say is, `That's regrettable.' Having made that point let me go to the more substantive one—and I do not want to diminish the importance of books because I have got a lot to say about that later. You then said—and rightly—that I should have some consideration for you because you actually define food on page 17 in your document as `not including fast food and restaurants'. But if you want to make this argument, let me bring up a couple of relevant facts which, I think, make it extremely uncomfortable for you to sustain the argument.The first thing is that you said that the media looked for a simple line and therefore media simplicity brushes across the complexity of your position and does not explain it very well. I think the media are guilty of a lot of things, but I do not think they are guilty of that on this occasion.On page 17, your headline is `Democrats will not support a GST on food'. That is the headline, bold print. In the small print, you talk about restaurants and fast food outlets. But if you read only the headlines and did not read the fine print and get the whole of the context, you could be mistaken for thinking that restaurants and fast food outlets were in. But I have never been mistaken about that because I have known your position is that they are out. Nonetheless, I do not think it is fair to blame the media for misrepresenting your position when your headline is, `Democrats will not support a GST on food' and when you say that is not negotiable.The other point is that, if then you accepted GST not to be on all food, the cost to the revenue—that is the amount of tax raised by GST being on all food—would have been $6 billion; but the value of the amendments before the chamber now is $3 billion. So you said, `Okay. You've got me wrong. We excluded fast foods and restaurants.' Well, I have excluded that. But you have narrowed the definition of food to basic food, which is now the jargon—it was not food, it was basic food—and the cost saving to the government is $3 billion. In other words, had you kept your election promise, there would be $6 billion less tax levied than there is now; and now that you have partially kept your promise there is $3 billion worth of tax levied. I do not think that constitutes compliance with a not-negotiable position. And I am sorry to have to say it to you, but I just do not believe it. I think that you are caught in the spotlight of not being truthful with the electorate in terms of your election promises. I just adduced that evidence to bolster my point and justify my assertion that that is the case.If I wanted to go further and make the case perfectly, I would go to some of the media releases that have been issued by your leader and by yourself. For example, on 14 February this year, Senator Lees said in the Seven Network's Face to Face—and she said it because she put out her own press release saying she said it:Speaking on the Seven Network's Face to Face program—this is what the Lees press release says—this morning on the eve of the resumption of the Senate, Senator Lees pointed to the position on tax reform that the Democrats took to the election reiterating the Democrats preference for the widest possible definition of food. That is the $6 billion option. What we are looking at now is the $3 billion one, so $3 billion went astray.It is interesting to see the political-speak here, the `preference' the Democrats took to the electorate, when what you say is that it is not negotiable. That was not a preference. It was not negotiable. The press release says it is a preference. That is a slight watering down of your position.Then on 22 September last year, that is, before the election—this is to have it clear on the record—in a press release of your own you said:The Democrats believe the coalition's tax package can and must be significantly amended to be made fairer. The following amendments are non-negotiable: food, books—and on it goes. You just quoted from your own policy document. But then you put in quotes, which is the way politicians put in their press releases `This is what I am saying so you can quote me directly':We have six commonsense non-negotiable points on tax reform—with `non-negotiable' raised to bold print. You were making it very clear, and I am sorry to be exhaustive to the point of being boring, but you were making it very clear—WW4KEMPSenator Kemp—You said it, Senator Cook!RF4Cook, Sen PeterSenator COOK—Well, I mean, that is right, but you actually have to be complete in this. You actually have to go through all the documents because people do say things that change the emphasis here and skew it here and undercut it there to arrive at a different conclusion. When you get all the documents out and you boringly go through them, the conclusions is, I have to say, Senator Murray, that you misled the electorate before the last election; and that is inescapable. And now rather than the $6 billion option, we have got the $3 billion option and books have hit the fence. We are not going to see them. So that is why I said what I said, and that is the evidence to justify why I said what I said.Can I just go to some of the other points that we were talking about. Compliance costs was one of those points. I have here a list of worthy organisations that gave evidence to the Senate inquiry: the Australian Food and Grocery Council, which has been quoted; the Australian Society of Certified Practising Accountants; the Taxation Institute of Australia; the Institute of Chartered Accountants; the National Association of Retail Grocers of Australia; the Council of Small Business Organisations in Australia; the Australian Supermarket Institute; and a series of other people. Then there are quotes from Jeff Kennett, who is someone you may know, the Australian Chamber of Commerce and Industry, and the Business Council of Australia. I will not read all of these because I have had my 15 minutes of being boring, but I will return to being interesting. I will not read all of them.WW4KEMPSenator Kemp—We have noted that.RF4Cook, Sen PeterSenator COOK—I must be hungry; it is near lunchtime. What they say is that compliance costs will increase dramatically under the food-out option. That is common between the government benches and this bench, because that is what the government said, too. So to pretend now, since the deal is done, that what you said then and what all these worthy organisations said to us in the inquiry is somehow not true, I think is a bit of a big hurdle for us to clear.Of course it is true, and of course compliance costs are greater, and of course compliance costs stagger small business. Of course the small business organisations themselves are out there complaining about it. I could give you some personal anecdotes which I have encountered where small business people have complained to me and asked me to ensure that the GST does not pass. Well, I am trying as hard as I can, and that is what I told them. But they do not want this tax because they are turned into tax collectors. They do not want to be that. They actually want to make a quid conducting their small business.But you asked me, and it is a reasonable request, not to just emphasise the compliance costs, which are $1.9 billion on your figures, and an extra $1 billion of that, by the way, is because of the food-out option—3M6MURRAYSenator Murray—A billion? One hundred million at the most, tops.RF4Cook, Sen PeterSenator COOK—One hundred million, tops. I have got the statement—Senator Ferris interjecting—RF4Cook, Sen PeterSenator COOK—It is all right to make jibes like that, Senator, but I have got in front of me here Professor Dixon's comment that the cost of compliance all up is $1 billion a year and you are saying $1.9 billion. All right, I will go to the higher figure if you insist, $1.9 billion, but there are compliance advantages, you say. It is pretty hard to quantify what they are. How many billions of dollars of compliance advantage would you say there are if the costs are $1.9 billion? You did not give us a balance sheet. You said, `Remember, there are advantages. We admit the cost is $1.9 billion but what is the figure for the advantage, so alleged, so we can see what the net effect is?' There is a bit of a deafening silence about that, for the reason we don't know. We absolutely don't know. We assert there is a compliance advantage but we can't put a figure on it. We know there is a cost and we can put a figure on that. Okay, let us say it is only $1.3 billion. That is still a huge cost for this community to bear.But the other thing about compliance advantages is: who gets it? Who gets the advantage? And is the compliance benefit equitably shared? Because we cannot quantify it, we cannot actually answer the questions about who gets it and whether it is fairly shared throughout the community, but I am here to say it won't be, and it isn't, and it is not fairly shared. So the people we are concerned about in this debate—middle and low income earners—are not the ones that are going to get the compliance advantage, and the trickle down effect of that compared to the costs is not going to be worth even concerning oneself with.The other matter that I wanted to deal with was the remarks about the Ralph review, because in your election comments you also put great store—and we applauded you at the time, and we shared common ground on this at the time—on the fact that one of the big problems about the Australian taxation system is that many people avoid paying their fair share of tax, which means that those of us that do pay our fair share probably pay more than we have to in order to compensate for those who are milking the system. This is supposed to be the tax revolution. This is the big adventure the Prime Minister promised us and this was going to be not a new tax, but `a new tax system', to use the government's own words.What have you done with respect to compliance with the tax system and stamping out avoidance? The answer is that it has been punted off to the Ralph inquiry, because it has been admitted here that the agreement between the government and the Democrats does not address those issues. They were too hard. They were too hard because the government said they would not do it, which says a lot about the government's position on tax avoidance. They were too hard because the Democrats did not make them do it.That is the big problem which I see that the Democrats have in terms of credibility. You stump the country before the election, saying, `Big issue, this.' And it certainly is. But when it came to the point, and you had the leverage, I would have thought you would have got a better deal than you achieved here. The government said to you, going into your negotiations, `We'll have to do a deal with the Australian Democrats.' All you needed to do was to drop your election promises on the counter and say to Mr Howard and Mr Costello, `Ring us when you will meet those agreements, because if you don't, you won't get a bill.' You had maximum leverage.I would have loved to have been in such a bargaining situation in my life; very rarely have I ever been. When you have got it, you use it, and you win for what you stand for. The trouble is here, that did not occur. I think it is a failure of negotiation, because all of us are concerned—and should be—about the high level of tax avoidance that goes on.We are changing the tax system, not because we want it but because the government and the Democrats want it. We have not overcome the avoidance problems, and GST will not do that, either. The black economy is bigger in OECD GST economies than it is in Australia without a GST.EP5FERGUSONSenator Ferguson—You can't back that up. RF4Cook, Sen PeterSenator COOK—You dispute that?EP5FERGUSONSenator Ferguson—Yes.RF4Cook, Sen PeterSenator COOK—Okay, I will bring back after lunch an excerpt from an international business magazine, the Economist , in which the OECD ranks economies in terms of how large their black economy is. Australia is in the bottom quartile with the United States, which does not have a GST. All the economies above us have bigger black economies than we do and they have a GST. So let us dispense with this fiction that, somehow or other, the GST is a panacea for the black economy; it is not. The central question about tax is that it is the level of tax that determines the size of the black economy, not the way you levy it. (Time expired)13:47:006302Ferguson, Sen AlanSenator FERGUSONEP5SALP10—I want to raise a few points before posing a question to Senator Murray in relation to the amendments on food. We have just heard Senator Cook talk at length about why we did not do something about tax avoidance in changing the system. My question to Senator Cook is: why, in 13 years, didn't Senator Cook and his government alter the arrangements that currently exist in order to try to do something about tax avoidance? For 13 years, they just stood still. It was not until this government came to power that something comprehensive was done about overhauling an old taxation system—an old taxation system which Senator Cook and Senator Sherry continue to maintain is the panacea for Australia's economic ills. This is the tax system that we must continue with into the future, into the next century.Senator Cook, in criticising the Democrats' position, says, `This is what you went to the election with and somehow since then you have changed some of those views.' I say: good on them, because with respect to the evidence given to the Senate select committee and the other committees that were put in place, if there were not some matters that were brought forward that we took notice of, what a waste of time it would have been. If nothing that was brought forward to us by way of evidence had been acted on, it would have been a waste of time. We heard Senator Murray say that they had changed their position on a couple of issues because of the evidence that was received during those Senate inquiries. In fact, it bolstered their views in some areas and changed their views in others.The government also changed its view. The government took note of some of the evidence that was given to us during those inquiries. Prior to the agreement that has now been reached and is being put in place, we made some changes, because of evidence that was put to us and because of industry groups who made representations directly to the Treasury. Some made representations to the Senate select committee. We took note of what they requested—not of every request that was made, but there were some that we felt we could deal with.The Democrats were prepared to listen and change their position on the weight of evidence that was presented to the inquiry. The government was prepared to listen and change its position on some issues on the weight of evidence presented before either the Treasury or the inquiry. But who has not changed its position at all? The Labor Party. The Labor Party has not changed its position at all. If we read the Hansard record, when all of those witnesses came before us, Senator Cook, as chairman, just before every witness was about to leave, would say to them, whoever it might be, `We on this committee are in a very delicate position. We have to make up our minds on the basis of the evidence that has been presented to us as to how we are going to vote on this issue. We have to make a determination on how we are going to vote on this issue.'He accuses the Democrats of misleading people in their election promises. Nobody got more misled than some of those witnesses, because they actually believed Senator Cook when he said, `How would you like us to vote if in fact the goods and services tax comes in and food is included or is not included? How would you like me to vote, because we have to determine how we are going to vote?' They actually thought that Senator Cook might change his mind, or that his party might change its mind, on the basis of their submis sion or their evidence. It just simply is not the case.The Democrats misled nobody, because Senator Murray was quite clear. Every time somebody came before the committee, he said, `You know our position on food, you know our position on a variety of things, but I'm prepared to listen to your evidence and I may change my mind, or we may change our view because of it.' And they did. But Senator Cook gave these people some hint that perhaps their evidence was so good or so strong that it might change their view; that it might change their mind on how they were going to vote when these matters came before the parliament.We know for a fact that Senator Cook never intended changing his mind, nor did any of his party intend changing their minds on the basis of evidence that was presented before the committee. So those people were being misled into thinking that their evidence and the arguments they put forward, if they were forceful enough, might just have the Labor Party members of the committee changing their minds and their party's mind as to how they would vote in relation to many of the issues that came before us.I know that time is short. I know that, as far as the Democrats are concerned, their position has been quite solid in relation to food. Their position has not varied. I have spoken to Senator Murray at length about his position on food. We had a different opinion at one time. Senator Murray could perhaps give the committee some information on the experience of other countries which either exempt food or have a differential rate and how it may be that the proposal that has been put forward as part of the agreement between the government and the Democrats is better than some of the existing cases having regard to the treatment of food—whether it is exempt or whether it is taxed at a lower rate in other countries throughout the world.13:53:006303Murray, Sen AndrewSenator MURRAY3M6WAAD00—I will respond to that question because at the heart of a sometimes lonely struggle to get our view up has been our belief that it is the international precedent which makes our position legitimate. What interested us most in the whole issue of food and food definitions was that in nearly every country the government in the parliament had the power to do exactly what they wanted. In Australia, it is quite different. In Australia, we do have the Senate, in which the government does not have a majority, and the government has had to come to an agreement with another party to get its package through.In most of these other countries, the position is very interesting. When they introduced their VAT, GST or whatever system it was, the government had the majority, yet they still chose, by and large, to differentially rate food. The reason they did so—it goes all the way back to when they started VATs and GSTs in 1967—was primarily on equity grounds. Once they discovered that the compliance cost area was overstated, it has continued as a trend. There is no-one, including me, who does not accept that if you want to talk purely on economic grounds it is most efficient to have the same tax right across the board. Everybody knows that, but it is on equity and fairness grounds that those countries varied their food definition.The other interesting point, Senator Ferguson, is the point you might not have realised you were making but which you were alluding to—that is, the second thing they were influenced most by was jobs. The very adjustment we have made in our approach to this was influenced by jobs—employment. If you see our main planks as equity and jobs and your main planks as jobs and simplicity, you can see where the meeting point was possible.With regard to the treatment of food under GST-VAT systems in the OECD, I was interested to speak to some Greek ethnic people with an interest in this area. They had forgotten that Greece has eight per cent on basic food and 18 per cent for restaurants. That is the standard rate. If I can select another country from which we have lots of people in this country—Ireland—everyone knows now about the Irish option.NB5CAMPBELLSenator George Campbell—One in four.3M6Murray, Sen AndrewSenator MURRAY—One in four, says Senator Campbell, who has an interest in these matters. Basic food in Ireland is zero rated, which is what we have chosen here. Other food products and restaurants have a 12½ per cent rate and their standard rate is 21 per cent, so they have a three-step situation. Let us pick another one with large numbers of people in Australia—Great Britain. They, too, zero rate basic food, then there are restaurants and their standard rate is 17½ per cent. There are lots of Dutch people here. Their basic food rate is six per cent and their standard rate is 17½ per cent. These countries I am talking about are like us—they are developed, they have a relatively homogenous population, highly educated people and advanced economies, yet they have chosen a system for differentially rating food.We know that the government's original preference was for the New Zealand model. And we know why—because it is more efficient, it is simpler, to have one rate across the entire range of goods. But with the exception of New Zealand and one or two other countries, most of these countries have taken a different route, and they have taken a different route deliberately. Earlier, Senator Cook suggested that there was a review of the VAT systems in Europe. Naturally, that is the case. Any country that does not periodically review its tax system is a bit dim. We must also recognise that the rates to which they have pushed VAT in those countries are about as high as they can get, and some of them may need to be wound back. That is apparent there.With respect to countries which are also very advanced, such as Germany, they have basic food at seven per cent and their restaurant rate and the standard rate is at 15 per cent. I have consistently responded to all small business people who have concerns in this area by saying that if 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 and Korea—all those billions of people and tens of millions of businesses—can cope with it, we can as well. I remind you of the quote I gave earlier which indicated that the British equivalent of our ANAO—the UK National Audit Office—said that the instance of compliance costs in relation to trader turnover is broadly consistent between the United Kingdom, which is zero rated, Germany and the Netherlands, which concessionally tax food, Canada, which zero rates food, and New Zealand, which taxes food. In other words, the VAT systems do not vary a great deal if you exempt areas like health, education and food.Progress reported.Questions Without Notice630563056305Campbell, Sen GeorgeSenator GEORGE CAMPBELLNB5NSWALP00—My question is to Senator Kemp, the Assistant Treasurer. Does the minister recall the original ANTS proposal to abolish 10 state taxes which the government has described as inefficient? Given that the government has allowed the states to keep six of those taxes as part of their deal with the Democrats, can the minister inform the Senate when in fact these inefficient taxes will be abolished? Isn't it the case that these taxes will never be abolished, because to do so would be to create a shortfall in state budgets that the federal government will never be able to fund due to the government's GST deal with the Democrats?6305Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—This is not only a good deal for Australia, for low and middle income earners and for pensioners but, equally, it is a very good deal for the states. If Senator George Campbell had been at the Senate estimates hearings—I think he flashed in and flashed out—UI4RAYSenator Robert Ray—You didn't flash at them at all.WW4Senator KEMP—I said, he flashed in and flashed out.UI4RAYSenator Robert Ray—You didn't flash outside the off stump once.WW4Senator KEMP—As you have correctly said, Senator Ray, I stayed there for all of the 22 hours. I was there from go to whoa. All major elements of the tax reform plan have been kept. We have preserved much of the intergovernmental agreement on the reform of Commonwealth and state financial relations which was agreed at the 9 April Premiers Conference. However, it is quite clear that changes to the GST base have required some adjustments and some changes. It is now proposed that the abolition of financial institutions duty be deferred by six months, from 1 January 2001 to 1 July 2001. The abolition of accommodation taxes and stamp duty on marketable securities remains at 1 July 2000 and 1 July 2001, respectively. The debits tax is to be removed by the states by 1 July 2005. The states deferred the abolition of remaining business stamp duties. This includes stamp duties on business conveyances, leases, mortgages, debentures, bonds and other loan securities, credit arrangements, instalment purchase arrangements and rental arrangements, and cheques, bills of exchange and promissory notes.States will receive all of the revenue from the GST, thereby providing them with a growth tax. Senator George Campbell is wrong: we are providing the states with a growth tax which will facilitate the future abolition of these state taxes which I mentioned. The Commonwealth also propose to retain responsibility for the payment of financial assistance grants to local government. As a result of these changes, the Commonwealth agreed to provide increased assistance to the states to cover—and this is a very important in the light of Senator George Campbell's question—any temporary shortfall in their budgets resulting from the implementation of tax reform.6305Campbell, Sen GeorgeSenator GEORGE CAMPBELLNB5NSWALP00—Madam President, I ask a supplementary question. Minister, given your answer that the bank account debits tax will not be abolished until 1 July 2005, yet stamp duty on share trades will be abolished on 1 July 2001, why is it more important to give a tax break to share traders as opposed to removing the debits tax from the accounts of low income earners? Isn't this symbolic of the fact this tax package is a bonanza for the rich paid for by the poor?6305Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I cannot believe what I have just heard. Senator George Campbell is opposing real rises in pensions and benefits. He is opposing cuts in income tax to low and middle income earners. He is opposing a major family assistance package and major initiatives to help self-funded retirees. Senator George Campbell is one of this whole group of incredibly negative Labor Party senators who are opposed to all change. Senator, we are out there helping people that you should show some concern for. For Senator George Campbell to find himself in the company of people who oppose real rises in pensions and benefits shows how far, in my view, the Labor Party has sunk.63066306Payne, Sen MariseSenator PAYNEM56NSWLP10—My question is to the Minister for the Environment and Heritage and Leader of the Government in the Senate, Senator Hill. Minister, what benefits will the government's new environment laws deliver to the environment, to the industry and the Australian community?6306Hill, Sen RobertSenator HILLBH4SALPEnvironment and Heritage10—I did not get all the time I would have liked to make this point yesterday. As is well-known the coalition government is committed to a balanced approach in promoting economic, social and environmental issues. Australia's existing environmental legislation is 25 years old and clearly past its use-by date. The existing laws do not adequately protect the environment and they also act as an impediment to sustainable development. The Howard government has taken positive steps to bring about this change after the ALP left it in the too-hard basket for 13 years. We undertook an extensive consultation process lasting more than 2½ years in which we sought the views of industry groups, the farming community, environmental groups and others. We worked with the states. This new bill implements a COAG agreement which was endorsed by all state premiers. The result is a dynamic new regime that enhances protection for the environment, promotes certainty for industry and reduces intergovernmental duplication.Already the results are being applauded, Senator Bolkus, by groups such as ATSIC; the Humane Society International; the World Wide Fund for Nature; the Queensland Conservation Council; and, Senator Brown, the Tasmanian Nature Conservation Trust. In particular, I note the comments of the Tasmanian Nature Conservation Trust, which described the laws as `a great step forward for environmental legislation' and went on to say, `The bill was something conservation groups have been asking for for some years now, and we thank the government for it.' That is the Tasmanian Nature Conservation Trust saying that. One wonders what Senator Brown is doing in this place.The new law brings about benefits for industry and the environment. The new law delivers greater up-front certainty for industry. Industry will now know which level of government is required to provide approval. If Commonwealth approval is required, industry will know that a decision must be delivered within a specific statutory time frame. There will also be consistency in the treatment of projects under this change, and the Commonwealth will be able to accredit state processes where they meet best practice standards. The new law also delivers more effective Commonwealth protection for environmental issues of national significance.For the first time, it delivers a truly national scheme of environmental protection and biodiversity conservation. There will be stronger protection for the matters of national environmental significance, such as our world heritage areas, our internationally recognised wetlands and our nationally endangered species. The new law represents a win-win situation—a better outcome for industry and better protection for our environment. That is what this government is all about: achieving economic growth and helping to build a competitive economy within Australia but doing so according to the highest environmental standards. Yesterday was a great day for the Australian economy, for jobs and for all benefits that can flow from it, but it was also a great day for the Australian environment.63066306Sherry, Sen NickSenator SHERRYZW4TASALP00—My question is to Senator Kemp, the Assistant Treasurer. Is the minister aware of reports that most general insurers are expected to increase insurance premiums by at least five per cent from August this year in order to begin recouping the $2 billion `inadvertent' cost the GST will impose on the insurance industry? How is it possible for insurance premiums to be going up by five per cent before the GST is even operational, when the government's own tax package states that the price effect for insurance is meant to be 0.8 per cent? Does this five per cent increase have ACCC approval in light of the government's estimate of only a 0.8 per cent rise?KI4PARERSenator Parer—Madam President, I rise on a point of order. This is the second question we have had on the same issue. I question whether it is out of order, in accordance with standing order 73(k), which quite clearly states that questions shall not refer to debates in the current session, or 73(l), which states that questions shall not refer to proceedings in committee not reported to the Senate.10000PRESIDENTThe PRESIDENT—We have given fairly generous latitude in relation to questions not only on this matter but on others; otherwise, there would probably be no questions that could be asked. Questions may not be asked on the detail of the bill or the debate, but otherwise the topic is not barred from questioning. Senator Kemp may have something he wishes to say on this.6307Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Senator Sherry, the government believes that the average price increase for insurance services delivered after the start-up date of the GST should be only 0.8 per cent, for the following reasons. While particular insurance policies will change in price by differing amounts, some policies will receive significant cost falls in the price of their inputs. For example, a component of the cost of motor vehicle insurance is the price of replacement motor vehicles. The government's reforms will see motor vehicles and parts prices fall by around 8.3 per cent. The cost to insurers of providing insurance is further reduced by the ability to claim input tax credits on any payout under an insurance policy on which GST has been paid.I think Senator Sherry may have been referring to an article published in the Financial Review on 21 June in which a number of issues were canvassed, and was referring to `some companies that expected to build a GST charge of at least five per cent into policies from August to avoid a shortfall at a later date'. I can say that there were some aspects of that article which concerned the government, and my understanding is that these matters will be referred to the ACCC. The ACCC is also concerned by the potential for the Trade Practices Act to be breached and, I understand, is actively pursuing the matter with the Insurance Council of Australia.6307Sherry, Sen NickSenator SHERRYZW4TASALP00—Madam President, I ask a supplementary question. One of the points of the question is that the bulk of the price increases as a result of the GST is happening before the GST comes in. Are you aware, Minister, of the statement by Mr Grant of the ACCC, when he appeared before the recent Senate Economics Legislation Committee considering estimates, that `we are talking to the insurance companies as well as their counsel'? Was the issue of insurance premium increases discussed? If so, what did the ACCC acknowledge was an acceptable pre-GST insurance premium increase in light of your government's estimate of only a 0.8 per cent price increase post-GST?6307Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—For the average insurance service paid for now, the government expects the price rise to be even less than 0.8 per cent, since the GST would apply to only that portion of the policy delivered after 1 July 2000. I do not know whether I would wish to add any more to that in light of the matter I raised earlier in my remarks about the reference to the ACCC.63076307Tierney, Sen JohnSenator TIERNEYO15NSWLP10—My question is to the Minister for Communications, Information Technology and the Arts, Senator Alston. Will the minister explain to the Senate the benefits to the nation that will result from the social bonus associated with the sale of a further 16.6 per cent of Telstra? How does the Howard government's success in obtaining maximum social benefits from the government's stake in Telstra compare to other policy approaches which have been suggested?6307Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—There are enormous benefits flowing from the capacity of the government to sell another 16.6 per cent of Telstra, particularly in regional and rural Australia, where, for the first time, they will have access to advanced telecommunications systems. The information revolution will be out there in all its force. There will be a number of very important initiatives. Building advanced communications networks in rural Australia is something the Labor Party totally neglected for 13 years, but our BITS, BARN and TIGER programs will be delivering the goods. Not only that, Madam President—that was only the top-up announcement—but also in the first phase we had $36 million for a continuous rollout of Internet points of presence, $25 million for continuous mobile phone coverage on 11 major national highways, $120 million for a black spots and SBS rollout program, $250 million for a further contribution to the Natural Heritage Fund, and on it goes. It is an extraordinarily good package for all Australia. Certainly if we want to be an intelligent country, this is a unique opportunity.If we look at the alternatives, we see a very sorry story. Long before the pie landed, the Leader of the Opposition was in very big trouble. You only have to look at what Laurie Oakes has to say when he says, `It is becoming increasingly difficult to take Beazley seriously as an alternative Prime Minister.' I say to the Labor Party: you do have one chance. You have another couple of years to get this right. If you are smart, then you will take the advice of people like Della Bosca, Gary Johns, Bob Hogg and all those other people who recommend that you should support the further privatisation of Telstra, because it is a critically important initiative.10000PRESIDENTThe PRESIDENT—You should direct your remarks to the chair, Senator, not across the chamber.LD4Senator ALSTON—You find that, when these Labor hacks get out of the sandpit—or the cesspit, in Senator Faulkner's case—and get out and play on the street, they understand that the facts of life are entirely different; that this sort of thing does make huge economic sense. So there is a big opportunity there for Mr Beazley to grasp the nettle, show a bit of leadership and put aside things like what Laurie Oakes is saying about needing someone to whip him into shape and make him lead. He can actually do a bit of leading for himself. That is something that I think the shadow minister is already grappling with because, clearly, he recognises that there is a need for a policy review in this area.We have had Lindsay Tanner saying that `part private ownership of Telstra creates internal tensions and contradictions and inhibits the extent to which social value can be obtained from a huge investment of public capital'. But, of course, you have Mr Ferguson saying—and he is the stalking-horse for Mr Crean—that this is an appalling proposition and bagging Mr Tanner. I hope that the Labor Party will hang in on this, but the problem is the five options they are canvassing. There is the buy-back option—in other words, fully nationalise Telstra—which is the `Tomato Left-Lundy' option, and I do not suppose that will get up. Then there is the Keating option, which is `go the whole hog'. Of course Stephen Smith, being a closet Keating supporter, would no doubt prefer to do that but, having been rolled on the Internet content, he probably will not. You then have the George Campbell option of just keeping the parts that the unions are interested in. Then you have the `do nothing' option, which is no doubt what Mr Beazley's inclination is. Then, finally, you have the option of moving the debate away from ownership towards a better competitive regime—in other words, the `change the subject' option.None of those are going to get you across the line. If you are fair dinkum about it, you will recognise that everyone around the world is going down this path, you will take the advice of all the serious commentators, you will recognise that they are dead right when they write editorials about hybrid mongrels and the like and, for once, you will take the opportunity to reshape yourselves. (Time expired)63086308Bolkus, Sen NickSenator BOLKUSXE4SAALP00—My question is to the Minister for the Environment and Heritage, Senator Hill. Minister, can you confirm that, under the unamended Environment Protection and Biodiversity Conservation Bill 1998 [1999] , Commonwealth approval would have been required for construction of a nuclear reactor for power generation? Is it also a fact, Minister, that after your secret discussions with the Australian Democrats the amendments that you hatched together will now allow for the construction of a nuclear reactor without such approval?6309Hill, Sen RobertSenator HILLBH4SALPEnvironment and Heritage10—If you are talking about a scientific reactor, which I presume you are—4J4SCHACHTSenator Schacht—There is no difference; they're all nuclear.BH4Senator HILL—For a start, there is a difference in size, Senator Schacht. I thought there might be an implication in the question that we were moving into the nuclear power industry. Yes, there is a requirement for Commonwealth assessment, and the recent one—Lucas Heights—has had a comprehensive assessment process.6309Bolkus, Sen NickSenator BOLKUSXE4SAALP00—Madam President, I ask a supplementary question. Minister, under the legislation, was there not a reference to a nuclear reactor, including critical and subcritical assemblies? Under the legislation passed, that reference does not appear. I ask the minister again: is it true that, under your legislation, nuclear power plants could be built in Australia without the need for any Commonwealth government environmental assessment or approval? Minister, from your reaction to date, isn't this loophole just one of the many that will inevitably come to light as a consequence of the way in which you and the Democrats negotiated over some 900 amendments in secret, withheld their release until hours before the debate in this place and then gagged the debate in the Senate?6309Hill, Sen RobertSenator HILLBH4SALPEnvironment and Heritage10—If there is one day in the future a replacement reactor for the replacement at Lucas Heights which is about to take place, then there will be Commonwealth assessment. Of course there will be Commonwealth assessment for such an approval.63096309Lees, Sen MegSenator LEES8U4SAAD00—My question is also to Senator Hill. I refer to the Newcrest Mining decision in the High Court, which reactivates the Coronation Hill mining leases within Kakadu National Park. Minister, as a result of this decision, doesn't the map of Kakadu now look much like a piece of Swiss cheese, with no fewer than 29 active mining leases? Have you told the World Heritage Committee in Paris of this news, as they are about to consider whether or not Kakadu should be put on the endangered list? If you have told them, when did you do that?6309Hill, Sen RobertSenator HILLBH4SALPEnvironment and Heritage10—It is true that the High Court in 1997 found that the attempt by the last Labor government to incorporate certain leases within the park was invalid.XE4BOLKUSSenator Bolkus—Coronation Hill.BH4Senator HILL—Unfortunately, Labor got it wrong again. The result was—and Senator Bolkus would know—that they attempted to incorporate the leases without meeting the just terms provisions of the Constitution.Senator Bolkus interjecting—10000PRESIDENTThe PRESIDENT—Senator Bolkus, you are persistently interjecting.BH4Senator HILL—That is fairly elementary, I would have thought, Senator Bolkus. But, for some reason or other, it is just another error by the previous Labor government. It is true that those leases need to be re-incorporated within the park and that the Howard government has to address this issue of just terms compensation. That, Madam President, is exactly what it has been doing. It has not been an easy task, firstly, to determine exactly what leases are covered by the 1997 decision and then attempt to value the leases in terms of their asset value, if any. That process has been ongoing. In conjunction with that process, there have been some discussions with Newcrest Mining and others who claim an interest in relation to those leases. So we hope that process will be brought to a conclusion in the not too distant future but, as I said, it has been complex and difficult. As to whether the World Heritage Committee know about it, the case has been public knowledge since 1997. The World Heritage Committee are well informed on matters that affect world heritage properties, and I would be confident that they would be well aware of these matters.6309Lees, Sen MegSenator LEES8U4SAAD00—Madam President, I ask a supplementary question. My question, Minister, relates to what is happening now in Paris; the World Heritage Committee are about to make the decision. Have you made sure that they are aware of these reactivated mining leases within Kakadu—some 29, I understand? Isn't it the case that, in arguing that Kakadu really is not in danger, you have consistently relied upon one fact—that is, that Jabiluka is technically in that exclusion zone within the park? These 29 leases do not have any exclusion zones around them, so surely it is important that the world heritage body understands this and is informed of it. I ask you again: have you explained it to them and told them exactly what the problems are?6310Hill, Sen RobertSenator HILLBH4SALPEnvironment and Heritage10—I think there has been some misunderstanding. There is no proposal to mine in these 29 leases. It is intended that they be re-incorporated in the park. There is no proposal to mine, and there will not be mining in these leases, but we have to go through the process of determining the value of any assets because the taxpayer of Australia is going to have to foot that bill because Labor messed it up some years ago. It does not relate to the Jabiluka matter at all. That is a mine in development and the question is whether Jabiluka threatens. A small footprint of Jabiluka—about 1½ square kilometres, from memory—threatens the 20,000 square kilometre park which, of course, is a nonsense.XE4BOLKUSSenator Bolkus—Slap bang in the middle, right across the escarpment.BH4Senator HILL—And Senator Bolkus, who for 13 years sat by and did not once argue that the Ranger mine put the Kakadu National Park in danger, goes about overseas trying to undermine Australia's position on this matter—the greatest display of hypocrisy from any frontbencher, I would suggest, in the history of this parliament. (Time expired)XE4BOLKUSSenator Bolkus—I've never been overseas!10000PRESIDENTThe PRESIDENT—Senator Bolkus, you are disrupting question time.63106310Evans, Sen ChrisSenator CHRIS EVANSAX5WAALP00—My question is directed to Senator Herron, in his capacity representing the Minister for Aged Care. Is the minister aware that, on 1 July, aged care residents in Tasmania and Victoria will not receive full indexation to their care subsidies? Can the minister confirm that this real cut in aged care funding in Victoria and Tasmania flows from the government's policy of coalescence? Why is the government continuing with this policy when the Productivity Commission inquiry that the government initiated recommended against it proceeding, finding that it would leave the quality of care as the balancing item in the funding arrangements? Why has the government refused to respond to the Productivity Commission's report, handed to the Treasurer on 13 January this year? Will the minister now give an assurance that the 21,000 residents of nursing homes in Tasmania and Victoria will not have their care subsidies cut in real terms from 1 July?6310Herron, Sen JohnSenator HERRONVW4QLDLPAboriginal and Torres Strait Islander Affairs10—I have been in this portfolio long enough to take with a grain of salt questions of that nature from Senator Evans. They are trying to beat-up once again the issue of aged care and hostel and nursing home care, and in this case in relation to Tasmania. I have found that previous questions asked on this matter have been a beat-up out of proportion and, in fact, that they are not a true indication of what is occurring. So, with that in mind, I will take that on notice and question the minister. I do not have a brief in relation to that in my folder, but I certainly do not accept that proposition. I think it is important to put on the record that in Australia there are 2.3 million people over the age of 65 and that, within that 2.3 million, there are only 135,000 people who are in aged care of one kind or another, in either hostels or nursing homes. Senator Evans comes in here and asks a question intimating that there is a major crisis occurring within aged care in this country. As I mentioned, there are 135,000 people in any form of residential care, out of the 2.3 million people over the age of 65—that is the first point I would like to make.The second point is that we are putting more money into aged care. Projected over the next 10 years, it will be 10 times more than the Labor Party put in in the 10 years that they had control of this particular issue, when they left us the legacy that we are now trying to correct. The Labor Party within that period of time neglected the provision of aged care, residential care, and we are going to fix it within that period of time. Of course there is a backlog; there are differentials that occur across the country. I am happy to come back to Senator Evans to respond to the proposal he has put to us this afternoon, because I do not accept that there is any validity in the statement that he has made.6311Evans, Sen ChrisSenator CHRIS EVANSAX5WAALP00—Madam President, I ask a supplementary question. Contrary to the gratuitous abuse the minister provided in answer to the question, this is a very real issue. The Productivity Commission reported to the government on 13 January and recommended that they drop the coalescence proposal. It was an inquiry that the government initiated and that resulted from serious concerns in the community. What I want to know, Minister, and I would appreciate it if you would take it on notice and give a proper answer, is why you have not responded to that report and why the government has not done anything to address the Productivity Commission's concern that the standard of care in Victoria and Tasmania will drop under your proposal—1 July is next week, and we still not do not know what you are going to do and whether or not you intend responding. I think it is important that the Senate and the community get an answer.6311Herron, Sen JohnSenator HERRONVW4QLDLPAboriginal and Torres Strait Islander Affairs10—As I said, I will take that on notice and take it up with the minister. The Labor government in 1995-96 spent $2.5 billion on residential aged care across Australia, and the outlay that we have budgeted this year is $3.5 billion—a $1 billion increase.5K4FAULKNER Senator Faulkner—Madam President, I raise a point of order. Senator Herron indicated that he does not know the answer to the supplementary question asked by Senator Evans. He has taken it on notice. He has indicated that he will get a response from the minister and come back to the Senate. Now he is answering some other question, and I really do think you should sit him down. He has taken the supplementary question on notice. 10000PRESIDENTThe PRESIDENT—The minister has taken the supplementary question on notice, but the material he is giving seems relevant to the issue that has been raised and there is no reason for him not to be able to add to his answer if he wishes.VW4Senator HERRON—They do not like hearing these facts, Madam President. We have increased the budget by 43 per cent in the three years that we have been in power, and we will continue to address that backlog. I will respond further when I get an answer from the minister after question time.63116311Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—My question is to the Minister representing the Minister for Employment, Workplace Relations and Small Business, Senator Alston. I refer the minister to the recently passed Queensland Industrial Relations Act 1999, and in particular to the provisions granting same sex couples equal rights with respect to spousal provisions such as family leave, parental leave, carers leave and bereavement leave. Is the Commonwealth government giving consideration to enacting similar provisions in the Workplace Relations Act? If so, when can we expect to see such changes take place? If such changes are not proposed, why is the Commonwealth prepared to accept the continuation of this grossly discriminatory situation?6311Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—The advice available to the government is that the Queensland act's parental leave provisions are similar to the provisions of the federal act. The preliminary examination that has been conducted of the Queensland act indicates that it does not explicitly deal with carers leave or other leave for same sex partners; rather, it uses the same approach as the AIRC by referring to households. In those circumstances, it is the advice available to the government that it is not necessary for the provision of carers leave to be included in legislation. It is an allowable award matter and a matter that can be included in agreements.There is a test case standard which was established by the AIRC in November 1995 which includes the entitlement and the conditions under which it can be accessed. This decision established an entitlement to leave to provide care and support for members of the carer's family or household who are sick and in need of care. This standard has been adopted in a range of awards, and as awards are being simplified many more are dealing with the issue. A number of agreements also contain carers leave provisions, some of which vary from the test case provisions to suit the individual needs of the employer and their employees. Discrimination in awards or agreements on the basis of sexual preference is generally proscribed.6312Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I thank the minister for his answer as far as it went. I would like to ask a supplementary question. The minister has indicated that this can be negotiated as part of the allowable matters that can be negotiated as part of awards. This means that they have to be taken separately and that the companies themselves and the people negotiating have to be amenable to that. Minister, is the government actually going to look seriously at the recommendations of the recently released HREOC report Superannuation entitlements of same sex couples , in which they say in particular that gender specific terms such as `husband', `wife' and `spouse' which are used to determine eligibility for a spouse benefit should be replaced with gender neutral terminology so that the benefits apply equally to opposite sex and same sex partners? Minister, if it is possible to do that and if it is being recommended, why do people have to negotiate this as a specific element of their award?6312Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—As I understand Senator Margetts's principal concern, it is that the Commonwealth should emulate the state approach. The state approach is in these respects very similar to the federal approach, and the awards themselves, and indeed I think the Queensland act, do not use gender specific terminology but rather refer to households. In that sense I would have thought that is a sufficiently wide term to cover a wide range of arrangements. I will obviously ensure that the HREOC report is further examined, but at this point in time there does not seem to be any significant distinction between the state act, which you are advocating that the Commonwealth follow, and the federal legislation.63126312Cook, Sen PeterSenator COOKRF4WAALP00—My question is to Senator Kemp, the Assistant Treasurer. Is the minister aware that W.P. Heffernan Nominees Pty Ltd, as trustee for no less than three Heffernan family trusts, holds 100 per cent of the issued ordinary capital in W.P. and B. Heffernan Company Pty Ltd, 96 per cent of Kamerooka Pty Ltd and 96 per cent of Wantiool Pty Ltd? Isn't it a fact that, by maximising the number of trusts and therefore the number of beneficiaries who are able to receive dividend distributions via these shareholdings, Senator Heffernan has put in place a tax structure that maximises income splitting and therefore tax avoidance? Doesn't this explain why the National Party have engaged Senator Heffernan as their hired gun to destroy the government's taxation of trusts proposal?Honourable senators interjecting—10000PRESIDENTThe PRESIDENT—The Senate will come to order. Senator Cook has asked a question and Senator Kemp has been called to answer it.6312Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—It was very hard to hear the question not only because of the noise but also because quite clearly Senator Cook was highly embarrassed to ask such a sleazy question, in my view. I do not know anything about the financial affairs of Senator Heffernan and I do not intend to inquire.6312Cook, Sen PeterSenator COOKRF4WAALP00—Madam President, I ask a supplementary question. Can the minister confirm that each of the beneficiaries of the Heffernan family trusts is entitled to a tax free threshold of $5,400?YW4MACDONALDSenator Ian Macdonald—Madam President, I raise a point of order. The minister clearly said that he knows nothing about Senator Heffernan's financial arrangements and does not intend to know, yet Senator Cook is continuing to ask questions along those lines. He should be ruled out of order.Opposition senators interjecting—YW4MACDONALDSenator Ian Macdonald—It is completely out of order. There can be no supplementary when the minister has already answered it previously. Madam President, I ask that you rule that the question cannot be asked.5K4FAULKNER Senator Faulkner—On the point of order, Madam President, it seems to be rather a spurious point of order to take to say that the minister cannot be expected to provide information to the Senate because he is ignorant. Normally in that circumstance a minister would take a question on notice. As we saw earlier in question time today you have allowed questions under those circumstances where matters have been taken on notice. It has been a long-standing procedure for supplementary questions to be asked. If the minister does not know he ought to take it on notice and provide those answers.LD4ALSTONSenator Alston—Madam President, on the point of order, there is no obligation on any minister to take a question on notice when it is made blindingly apparent that the minister has no knowledge of the question. How can any supplementary take the matter any further? By definition there is nothing more that the supplementary could seek to elicit other than to put some more grubby sleaze on the public record. That is the real purpose of that supplementary question. Senator Cook knows he cannot expect an answer in view of the first answer he got. He is simply using this vehicle to retail the sort of stuff he would never be prepared to say outside the chamber. That is the place it ought to be dealt with, not in question time.AW5CARRSenator Carr—On the point of order, Madam President, what we have here today is a question being asked of a minister representing the minister responsible for corporate affairs. The opposition are entitled to ask questions and we are entitled to expect an answer. We have for many years had a situation where ministers unable to answer questions have taken matters on notice and further information has been sought in a supplementary. I suggest to you, Madam President, that this question and supplementary are entirely within order.10000PRESIDENTThe PRESIDENT—The senator is entitled to ask his supplementary question. He may get the same answer he got the first time. There may be something more that he concludes with that the minister would want to respond to. I will listen to the rest of the question.RF4Senator COOK—Thank you, Madam President. Doesn't this mean that if there are 10 individual beneficiaries between the three family trusts then Senator Heffernan can distribute $54,000 tax free whereas an Australian worker would pay $15,984 in tax on that same amount? Minister, if this is not tax avoidance, what is?Honourable senators interjecting—10000PRESIDENTThe PRESIDENT—Order! We are in question time. Senator Cook has asked a supplementary question and I wish to call the minister in response. Senators will cease shrieking at each other across the chamber and carrying on in breach of the standing orders.6313Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—In the old days, when Senator Ray had some principles, one of his principles was `10 yards to courage'—if you want to attack somebody, you walk out of this chamber and you attack that person. Senator Cook, my answer to your question and your attack on my colleague is `10 yards to courage.'63136313Chapman, Sen GrantSenator CHAPMANFF4SALP10—My question is directed to the Assistant Treasurer representing the Minister for Finance and Administration. Will the minister advise the Senate of the Howard government's record of strong financial management? Will he also advise the Senate of our commitment to repaying debt and improving the economy for all Australians?WW4KEMPSenator Kemp—I think the person who represents the Minister for Finance in this chamber actually is my colleague, Senator Ellison. I will leave it to Senator Ellison to answer.AX5EVANSSenator Chris Evans—Did he bugger up a dorothy dixer?10000PRESIDENTThe PRESIDENT—The mistake may have been mine in terms of what I thought Senator Chapman had said. There was so much noise in the chamber it is surprising anybody knows what is going on.Honourable senators interjecting—10000PRESIDENTThe PRESIDENT—Order! The behaviour in the chamber is absolutely outrageous and unacceptable and in breach of the standing orders. I remind senators that behaving in a way that is persistently and wilfully in breach of the standing orders may be reported to the Senate.Senator Schacht interjecting—10000PRESIDENTThe PRESIDENT—Talking across the chamber when I am speaking is also disorderly.6314Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—Thank you, Madam President, and can I say what a good question this is. Senator Chapman has had a longstanding interest in matters financial and of course heads up the corporations and securities committee, and has contributed greatly to this subject over the years in the Senate. The running of the nation's finances is the responsibility of the federal government and taxpayers expect their federal government to apply their taxes wisely and for the benefit of all Australians. It is therefore fitting that this government do that and also plan for the future and take advantage of the good economic climate that we are experiencing at the moment. This is what we are doing, in stark contrast to Labor at the beginning of this decade when it ran up debt, ran up a deficit and incurred heavy borrowings. At the end of this decade Australians are enjoying prosperity and optimism which has not been seen in a generation. In fact, the Prime Minister has said that now is the time to take the opportunities which are being offered to us by the next millennium and use them.FX5MURPHYSenator Murphy—You tell the press gallery!9X5Senator ELLISON—We have cause for optimism, and there are a number of reasons, I might say to Senator Murphy: the growth rate of over four per cent a year, six consecutive quarters of over one per cent in growth—a historical record in this nation's history.5K4FAULKNER Senator Faulkner—Don't look up there. They're leaving; they're on their bike.4J4SCHACHTSenator Schacht—They're clearing the room.10000PRESIDENTThe PRESIDENT—Order! An intelligent interjection that relates to the topic can be tolerated; the sort of sledging that has been going on today is absolutely intolerable.9X5Senator ELLISON—What the opposition does not want to hear is what Westpac is saying about the growth rate of this country. It says:Overall, the Leading Index for Australia continues to signal that Australia's growth will be maintained at a very healthy pace, certainly much faster than predicted by both the government in their recent Budget papers, and the Reserve Bank.That is a great commendation of the government's economic policy, but there is more. Prices: inflation exceptionally low, as recognised by the Reserve Bank. Wages: real wages have been rising, primarily due to rising productivity. Now the opposition does not want to hear this because it is embarrassing, because of their record earlier on in this decade when they mismanaged this country's finances. Interest rates: six times since July 1996 we have seen interest rates cut. Credit rating: we have now had a credit rating of AA-plus restored; it is an international recognition of this country's economy policy and the right decisions that this government is making on the financial scene.But what about employment? Unemployment is a continual problem and we are committed to fighting it. We are committed to lowering the unemployment rate—7.5 per cent seasonally adjusted, the lowest rate we have had in years. Again, that is further cause for optimism and Australians are beginning to realise that this country is at the dawn of a new era, a great era of economic prosperity and opportunity. Now is the time that we should be paying off our debts, and it stands to reason: when you run your own finances and you are enjoying an income, you put something away for a rainy day. You pay off your debts and you save money, and that is what we should be doing as a government for future generations of Australians. But of course the opposition do not want to listen to this because what they did at the beginning of this decade was run up a huge debt; they had $96 billion worth of debt. In fact, in the four or five years prior to them losing government, they ran up in excess of $58 billion of debt. You would not run your household finances that way at all and the Australian people recognised this in October last year when they rejected their economic policies. Why doesn't the opposition join us—get on that bandwagon of tax reform, turning around the economy and taking up those opportunities for all Australians. (Time expired)6315Chapman, Sen GrantSenator CHAPMANFF4SALP10—Madam President, I ask a supplementary question. Would the minister please give further advice to the Senate on the very great importance that this government places on repaying debt and the benefit that the Australian economy will derive from that.6315Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—The paying off of debt is a crucial part of this question, and it was Senator Peter Walsh, as he then was in 1985—a member of the Labor government then—who said that `paying interest on public debt obviously gives governments a good deal less flexibility than they would have otherwise in making their expenditure decision.' It was recognised by members of the opposition that paying off debt was very important. We recognise this in the way that we are looking at handling the proceeds of the sale of Telstra part 2. What we are going to do is apply that to paying off debt, so that we will not have to pay $8 billion a year interest on debt. That money, if we had no debt, could go to providing more services to Australians—and that is good management.63156315Conroy, Sen StephenSenator CONROY3L6VICALP00—My question is to Senator Kemp, the Assistant Treasurer. Is the minister aware that Senator Heffernan, the Parliamentary Secretary to Cabinet, has stated that the use of trusts by farmers to reduce tax is `essential to keep family farms operating and enable farmers to pass their properties on to their children'? That is from the Herald and Weekly Times of 11 March 1998. How many trusts does the Assistant Treasurer believe a farmer needs to achieve these objectives? Isn't it the case that a network of trusts such as that which Senator Heffernan has constructed has everything to do with tax avoidance and nothing to do with succession planning?6315Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—If Senator Conroy really is prepared to stand behind what he said and the accusation that he has made against a colleague in this chamber on tax avoidance, I suggest he follow the Robert Ray principle—very simple, just walk out the door and make the accusations. We will see then, Senator, whether you are prepared to stand behind them or not. If you are not prepared to stand behind them, Senator, I do not propose to answer that question.6315Conroy, Sen StephenSenator CONROY3L6VICALP00—Madam President, I ask a supplementary question. Does the minister agree that it is not the role of the tax system, nor is it the duty of taxpayers, to subsidise tax avoiders like Senator Heffernan? Maybe, Senator Heffernan, you want to break your duck and stand up, after 12 minutes of speaking since you became a frontbencher. On your feet, Senator Heffernan!YW4MACDONALDSenator Ian Macdonald—I rise on a point of order. Madam President, you cannot possibly allow those imputations to go unchallenged. Senator Conroy should have been stopped before he started. That is outrageous and it is an abuse of the parliamentary system and, Madam President, I urge you to consider your options with this sort of thing.10000PRESIDENTThe PRESIDENT—The imputations against the senator must be withdrawn, Senator.3L6Senator CONROY—Which imputations? Tax avoidance does not have to be withdrawn. Tax evasion would, but tax avoidance does not.10000PRESIDENTThe PRESIDENT—Senator Conroy, I ask you to withdraw.5K4FAULKNER Senator Faulkner—If there's any imputation, you can withdraw it.3L6Senator CONROY—If there is any imputation, I withdraw.10000PRESIDENTThe PRESIDENT—Unconditionally withdraw, Senator.6315Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Madam President, if he has withdrawn the question that he asked, there is no question to answer. I would urge Senator Conroy, before he joins his colleagues in the gutter, to recall the old Robert Ray principle. Remember that? Ten yards to courage.63166316Woodley, Sen JohnSenator WOODLEYHX5QLDAD00—Madam President, my question is addressed to the Minister representing the Minister for Agriculture, Fisheries and Forestry, Senator Alston.UNKNOWNSenator Ian CampbellSenator Ian Campbell—Where's your tax policy?UI4RAYSenator Robert Ray—Well, you don't have one anymore.10000PRESIDENTThe PRESIDENT—Senators will cease talking to each other across the chamber. It is disorderly. I am attempting to hear what Senator Woodley has to say.HX5Senator WOODLEY—I ask the minister: is he aware that the latest OECD survey, Agricultural protection in OECD countries 1999 , shows that Australia has the second lowest percentage of government support for farmers in any of the Western countries, at seven per cent? Does the minister agree that this lack of government support for agriculture is a significant factor in the decline in rural population and rural incomes? When the USA decides in the near future to restrict sheep meat imports from Australia and New Zealand, will this government invoke the WTO options available to it?6316Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—Madam President, I do not think that is a proper construction to place on the OECD report. What it tells you is that Australian farmers are amongst the most efficient in the world and that they do not need that level of subsidy and protection. That is usually a dead end because it promotes inefficiency; all of a sudden you would find the WTO telling you to pull out the rug and then you would not cope.There are very complex reasons why people move from rural areas and why standards of living in some areas are declining. A large part of the problem of course was total neglect over a 13-year period. We are doing our best to redress that problem. Certainly, the latest package of announcements following on from the latest privatisation of Telstra will enable us to ensure that people do not have to move to urban areas to be able to get high speed access to the Internet, for example. A lot of small businesses will be able to get the latest information from around the world in order to run their farms, and get commodity prices, weather reports and the like. In other words, very sophisticated businesses can be run from very remote areas. That is simply one example of how we are trying to pick up the pieces from what the Labor Party managed to inflict upon the rural sector.Rather than trying to pretend that somehow protection is the answer to their problems—which people in the bush generally do not espouse anymore, Senator Woodley, and nor does the NFF—you ought to be much more interested in trying to explore further opportunities for people in rural areas and identifying those businesses that can prosper, even though they might be exposed to competition, as long as that competition is fair. I think that remains our challenge. We do not want to see unfair competition. We do not want to see the Americans making a discriminatory announcement in relation to lamb any more than we wanted one on steel. We welcome the recent decision in relation to steel by the United States administration. We hope that we are all moving in the right direction. The right direction is not more protection; the right direction is to be very competitive and to concentrate on those skills and resources in which we have a comparative advantage.6316Woodley, Sen JohnSenator WOODLEYHX5QLDAD00—Madam President, I ask a supplementary question which does come out of the minister's answer. Minister, you did not answer the question, which is really the critical part, about whether or not the government will invoke WTO options available to it. The Deputy Prime Minister almost said he would the other night at an Australian Meat and Livestock Corporation function that I attended. Is the minister aware of Mr Tim Fischer's comments that a worst case scenario would result in a 25 per cent reduction in the export of Australian lamb to the US? I ask again, in that event, will the government invoke those WTO options? Whether or not they are protection, I do not care, but I ask you: will the government invoke them?6317Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—I do not recall Senator Woodley including any reference to the WTO in his first question, but it is a legitimate proposition—Opposition senators interjecting—LD4Senator ALSTON—I am simply saying I do not recall it; I did not deny that he did.Opposition senators interjecting—10000PRESIDENTThe PRESIDENT—Order! There are far too many interjections and there is far too much noise in the chamber.LD4Senator ALSTON—It is certainly a valid question, but I think we ought to wait and see what the response of the US administration is. Certainly we were heartened by the vote in relation to steel. I think we ought to simply wait and see. Once we get a decision, if it is an adverse one, then we will clearly consider all of our options. Clearly we have rights and entitlements under the WTO and we will obviously examine those closely if the need arises.63176317Hogg, Sen JohnSenator HOGG7L6QLDALP00—Madam President, my question without notice is directed to the Special Minister of State, Senator Ellison. In the light of yesterday's High Court decision in relation to former senator-elect Heather Hill, has the government considered amending section 170 of the Commonwealth Electoral Act? Specifically, has the government considered the possibility of requiring candidates born overseas or who have been citizens of other countries to declare on the nomination form that they have taken steps to renounce that citizenship? While accepting that such a declaration would have no legal effect, is it not a fact that it would at least remind and prompt candidates to consider their obligations under the act, thus diminishing the likelihood of experiencing legal action in the future?6317Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—Can I say to Senator Hogg that that is a very good question. This matter is still before the court; the High Court adjourned the matter until Tuesday next week. I do not want to touch on anything the High Court has said, but Senator Hogg has raised an issue which—5K4FAULKNER Senator Faulkner—We're talking about the nomination form.9X5Senator ELLISON—If Senator Faulkner would just keep quiet for a while, I will take this matter on board. This is a very good question and one which the government will take on board and give consideration to. This is an issue which is in the community and one which needs to be addressed.63176317Calvert, Sen PaulSenator CALVERT5F4TASLP10—My question is to the Minister for Regional Services, Territories and Local Government, Senator Ian Macdonald. Will the minister outline to the Senate the excellent benefits to local government, particularly councils in rural areas, which will flow from the government's revised tax reform plan?6317Macdonald, Sen IanSenator IAN MACDONALDYW4QLDLPRegional Services, Territories and Local Government10—I thank Senator Calvert—a distinguished member of a local authority before he came here—for his question. I appreciate Senator Calvert asking me a question about local government because, regrettably, no-one from the Labor Party will. I do not know what has happened to my shadow. Apparently she has no interest in local government.Local government does very well out of the tax reform package. In regional Australia, local government has done particularly well. The new tax system will remove many embedded costs that currently impinge upon local government and will allow them to operate with lower costs and with assured funding. As senators well know, general rates will be GST free, charges for water and sewerage will be GST free, regulatory and licensing charges will be GST free and fines and penalties will be GST free. The new tax system will allow councils, like businesses, to claim a full refund of all GST payable on their purchases.The new tax system will also save all councils money on the operation of their vehicle fleets from the reduced petrol and diesel excise. This will particularly benefit councils in rural and regional, non-metropolitan Australia who will also get a diesel fuel excise cut of around 23c a litre for vehicles over 20 tonnes GVM and for passenger or goods vehicles servicing regional Australia with a GVM between 4.5 tonnes and 20 tonnes.In addition, all councils have benefited from the reduction in interest rates over the time the Howard government has been in power. When I was last on a local authority, about nine years ago, under the Labor regime councils were paying 13, 14, 15, 16 and 17 per cent interest on their borrowings which usually are quite substantial. Nowadays, because of what the Howard government has done, councils are paying in the range of six to seven per cent. That is a huge saving for councils which is passed on to ratepayers. In addition, the good news from the sale of Telstra—which was opposed from the Labor Party—is that we have been able to make major benefits for country Australia and particularly for country councils. We have provided some $45 million for councils in rural and regional Australia to help them get online. I cannot understand why the shadow for local government, Senator Sue Mackay, actually voted against that. Why did she vote against giving an additional $45 million to councils to get online? Why did the shadow for regional services, Mrs Kernot, vote against legislation that had an enormous number of benefits particularly for people in regional Australia? It allows them to get online in telecommunications. It gives them the access to benefits that people in the Labor Party who live in the capital cities take for granted. They are not available in the country at the moment, but we intend to do something about it; we intend to provide it.Why the shadow minister for regional services and the shadow minister for local government would oppose these sorts of things I simply cannot understand. It is beyond me that those benefits for regional Australia and for places like Tasmania are opposed by the Labor Party. (Time expired)BH4HILLSenator Hill—Madam President, I ask that further questions be placed on the Notice Paper . Miscellaneous6318631810000PRESIDENTThe PRESIDENT—I present the orders of the High Court sitting as the Court of Disputed Returns in the matter of the qualifications of Mrs Heather Hill for election to the Senate and the reasons for judgment of the court.Miscellaneous6318631815:04:006318Hill, Sen RobertSenator HILLBH4SALPEnvironment and Heritage10—I want to add to two answers which I gave today. The first one was to Senator Lees. I am advised that, when the World Heritage Committee's mission visited Australia to look at the issue of Jabiluka they were given a copy of the most recent plan of management for Kakadu National Park, which specifically referred to the Newcrest mining case and the implications of that case. So they were clearly aware of it. My recollection is that back in 1997 the government also brought that case and the consequences of it to the attention of the World Heritage Committee. I am having the record searched to confirm my memory, but I do not think there is any doubt at all that they know the full details of that matter.I also wish to clarify my answer to the obscure question by Senator Bolkus in relation to nuclear reactors. The explanation is that the definition of nuclear installation in the bill as introduced was the same as the definition in the ARPANSA legislation as amended in this chamber with the agreement of the ALP. We then amended the Environment Protection and Biodiversity Conservation Bill 1998 [1999] to incorporate the corresponding amendments to the ARPANSA legislation. Therefore, the nuclear reactor is clearly within the definition of nuclear installation, would clearly require consent and therefore appropriate assessments.Personal Explanations631915:06:006319Heffernan, Sen BillSenator HEFFERNANC16NSWLP10—I seek leave to make a personal explanation.10000PRESIDENTThe PRESIDENT—Is leave granted?5K4FAULKNER Senator Faulkner—No, Madam President.Government senators interjecting—5K4FAULKNER Senator Faulkner—Leave will be granted after taking note, as it always is for personal explanations. It will be granted as it always is at that time.Miscellaneous6319631915:07:006319Vanstone, Sen AmandaSenator VANSTONE7E4SALPJustice and Customs10—Yesterday, Senator Harradine asked me a question and I said I would try to get him an answer yesterday. I was unable to do so and I now seek leave to incorporate the answer in Hansard .Leave granted.The answer read as follows—CONFIDENTIALBrief Number 7.7MARRIAGE EDUCATION AND DISTRIBUTION OF NATIONAL FAMILIES STRATEGYISSUE: in terms of the Government's announced intention to draw up a National Family Strategy, what action is proposed for marriage education in schools, and how will funding under the Strategy be distributed in respect of the various states and territories?RESPONSE:. The important issue of marriage and relationship education in schools will be addressed as part of the consultative process for the National Family Strategy.. It should be noted that many marriage and relationship educators already undertake a range of activities that promote relationship education in schools. The Commonwealth's education and family services portfolios will be looking to encourage further partnerships between community organisations and schools, building on existing good work already happening in this area.. If additional Commonwealth funding for relationship support services becomes available, tenders for funding for community-based delivery organisations will be called in areas identified as being most in need of service commencement or extension.631915:08:006319Herron, Sen JohnSenator HERRONVW4QLDLPAboriginal and Torres Strait Islander Affairs10—Senator Evans asked me a question during question time. I said that I would get back to him after question time. I have been in touch with the minister's office and an answer will be provided by Monday.631915:08:006319Bolkus, Sen NickSenator BOLKUSXE4SAALP00—I move:That the Senate take note of the answer given by the Minister for the Environment and Heritage (Senator Hill) to a question without notice asked by Senator Bolkus today, relating to nuclear installations.It is less the 24 hours since the environment legislation passed this place and already it is unravelling. This camel of a bill, designed by Howard's Liberals and put together by the Democrats and National Party, has already struck a fundamental flaw. The answer that Senator Hill gave straight after question time is just not good enough. With a bill of 500 clauses with 900 amendments, of which we had some four hours notice of the 500 government amendments, it is no wonder that we have already struck a loophole in the legislation. Last night and this morning, Western Australian resources minister, Colin Barnett, said that rushed legislation invariably ends up in poor legislation, and that is what we have here.Under the previous legislation, the previous environment regime, the Environment Protection (Impact of Proposals) Act—the EPIP act—would have come into play. Under that act, there would have been a national inquiry into matters such as we have raised today. But we are now in the era of the brave new environmental deregulation laws of Senator Hill and Senator Lees and because of that the EPIP legislation no longer continues to apply. That is why the opposition, in addressing the legislation before the parliament yesterday, decided to accept the new definition proposed by the government, and not only did we accept it but we also tried to amend it to expand its operation. That is why we did not try to wind it back to the definition in the ARPANSA legislation.Let us look at the legislation that passed through the parliament yesterday. The Environment Protection and Biodiversity Conservation Bill 1998 [1999] , as introduced, provided for the control of nuclear reactions. Section 21, in conjunction with the provisions of chapter 4, required assessment and approval of nuclear reactions. Nuclear reaction was defined to include `establishing or significantly modifying a nuclear installation or a facility for storing spent nuclear fuel.' The amended legislation drops the reference to `a facility for storing spent nuclear fuel.' There will no longer have to be an environmental assessment in respect of that. Nuclear installation was also defined in the primary legislation and it was amended after the deal with the Democrats. In that amendment, we have the deletion of `nuclear reactor, including critical and sub-critical assemblies', and also of `nuclear power plants'.When we talk about `nuclear reactor', we talk about a nuclear reactor for nuclear power. That has now been excised from the legislation as well. They have also removed some of the most important civil and criminal penalties attaching to these sorts of constructions. So now have new legislation, amended after a secret deal, allowing for the construction of a nuclear power plant in this country without an environmental assessment. Let me stress that point. Under the previous regime, there would have to have been an environmental assessment under the EPIP act. Under this regime, there is no such control because Senator Hill and Senator Lees got together in a secret meeting to delete it.In their new definition of a nuclear installation, we also have a note that says, `a nuclear waste or disposal facility could include a facility for the storing of spent nuclear fuel depending on the regulations.' We can now set up a nuclear storage plant, a nuclear waste plant. We can set that up depending on regulations. Not only have we have a wind-back but we have had a secret wind-back, one with monumental implications. As I have said before, we had a definition in the ARPANSA legislation, but that was in the context of the EPIP act applying and environmental assessment being almost inevitable under that act. We now have a situation where the minister can set up a waste dump by regulation. The minister has no power to control, through national environmental assessment, the construction of a nuclear power plant or nuclear reactor.The minister says, `Oh, well, this is a definition that was used before.' But this is not a regime that applied before. Under this new system put in place by the Australian Democrats and the government, for instance, we can even see a devolution of authority here to state governments. Under section 25 of the legislation, where the federal minister has to consult and is to take all reasonable steps to come to an agreement with appropriate ministers in the states and territories, we could have Richard Court or Denis Burke dictating the terms of construction. This is not national leadership because we have failed in our national responsibility over the last few days. We have failed because we had 500 amendments brought in here at the last moment without adequate scrutiny—we had four hours notice! That is why we now have this vacuum.Senator Tambling in the previous debate said, in respect of the ARPANSA legislation, that:This legislation is not the place to try to change the ways in which proposals are assessed and proceed. The Environment Protection (Impact of Proposals) Act still applies.That, Senator Hill, is a fundamental point and Senator Tambling put it on the record. (Time expired)15:13:006320Hill, Sen RobertSenator HILLBH4SALPEnvironment and Heritage10—The problem with Senator Bolkus's speech was that he wrote it before he listened to the answer and, unfortunately, if he had listened to the answer first, he would not have given it. Having listened to the answer, he did not have the creativity to write a new one and therefore he blurted out that which he assumed would meet the answer that would be given by me. He is embarrassed because the government had in fact amended its bill to reflect the amendment previously in the ARPANSA legislation, that is, the licensing authority legislation for nuclear installations. So now we have a clear complementary passage of the licensing authority, subject to the assessment under the new Commonwealth legislation that we passed in this place yesterday. So it really is difficult to understand Senator Bolkus's argument.Rising to my feet on this subject does give me the opportunity to thank a number of conservation groups in Australia for the support they have given for the new legislation. Apart from conservation groups, I wanted to thank ATSIC as the leading indigenous group in Australia for its support, which is appreciated. We look forward to working with indigenous Australia in the implementation of the legislation.What did the World Wide Fund for Nature say? They said that for WWF this agreement now passed in this chamber:. . . is the successful culmination of a decade of working for better legislation to protect threatened species and ecological communities, and four years of advocacy for better national environmental legislation.The Humane Society International said:We now consider this to be a piece of legislation that will deliver a greater degree of protection for Australia's precious biodiversity and fragile environments than existing legislation.I move on to the Queensland Conservation Council. They said yesterday:The Queensland Conservation Council today welcomed the agreement between the Federal Government and the Democrats to considerably strengthen the Environment Protection and Biodiversity Conservation Bill .The Tasmanian Conservation Trust said:The Tasmanian Conservation Trust today congratulated the Howard government on taking a great step forward for environmental legislation in Australia . . . They further said the bill was:. . . something conservation groups have been asking for for years now and we thank the government for it.These are the conservation groups that were traditionally the supporters of the ALP, but of course the ALP sat on its hands for 13 years and was not prepared to give this country contemporary environmental law. It is interesting that, when questioned yesterday, Michael Lynch from the Tasmanian Conservation Trust said that `the responsibility of conservation groups was to work to improve legislation, not just to spend their time criticising.'These are the groups that were once the supporters of Senator Bob Brown, who thought Senator Bob Brown would come into this place and deliver better environmental outcomes for them. They have obviously abandoned him as a failure, which is not surprising. We learnt yesterday that his total achievement in this place is that he succeeded in getting one amendment in one bill passed—not bad for three years work, I would have thought. When you think of the power that he has in this place, he has not saved a single tree. What a legacy of three years work. It is not surprising that the conservation groups have abandoned him as they have abandoned the ALP.The last point I wanted to make, which I did not have the chance to make yesterday—but I sort of said it in the answer today—is that this bill is not just about the environment; it is about adopting high environmental standards but as part of sustainable development. This government wants to see our economy grow. It wants to see more jobs and better opportunities for people. It knows that, to do that, the Australian economy has to be internationally competitive. It will make its judgments under this legislation pursuant to those goals. This legislation says the environment minister must take into account economic and social consequences. We will make our decisions to the background of wanting to maintain a strong Australian economy, but we will do so whilst at the same time demanding high environmental standards. After passage of this bill in this place, after it becomes law, we will have the legal framework within which we can achieve those dual goals—something long overdue in this country. Now we have the capacity to do it we will be able to deliver the goods.15:18:006322Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—This issue of nuclear installations will be just the first of a very significant number of examples of where inadequacies, major holes and problems are found with the government's environmental legislation. The government-Democrat environmental legislation is starting to unravel already. This is riddled with holes. This environment legislation is legislative Swiss cheese. The haste of this exercise, the secret talks, the failure to let the environmental lawyers of the three major environmental organisations into the talks—that is, the Australian Conservation Foundation, the Wilderness Society and Greenpeace—and the failure to allow those organisations and their lawyers to have a look at the amendments is a good example, but not the only one, of why this bill is going to be an environmental disaster. It is not just the conservation organisations; it is the industry, it is the states, it is all of the interest groups we ought to take account of in this.The Democrat-sponsored guillotine to allow 105 pages of government and Democrat amendments to be dealt with in a single day has led to this situation where we have legislative Swiss cheese. This is hopeless policy making. This is negligence on the part of the Democrats particularly—negligence and stupidity writ large. The Democrats are always beating their chests about parliamentary scrutiny, but when it comes down to tintacks, when it comes down to scrutinising their own nasty little backdoor deals with the government, where are they? They turn their back on accountability.This legislation is a reality now. The deal is done, the fix is in. But the Democrats have fouled it up—there is no doubt about that. Their constituency is outraged about the scam, the deal, with the government. They will be outraged about this nuclear installation loophole. But it is just the first of many; there will be more to come. Just wait for it, Senator Bartlett. It is going to wash right over the top of you. We do not know how many loopholes there will be in this legislation, but we intend to use the forums this parliament provides to expose them.You have got the environmental and conservation constituency deserting Senator Lees and the Democrats. You have got the small business constituency that they care about being hit with the compliance costs of the GST and the ramshackle Democrat Irish model. At the next election, you are going to have the Democrats scrabbling around at the bottom of the barrel, looking for votes. This is the consequence of the Democrats, led by the Madame Defarge of the Senate, Senator Lees, imposing a guillotine and not allowing proper parliamentary scrutiny of an exceptionally important piece of legislation before this chamber.10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—I call Senator Crane.UW4CRANESenator Crane—I defer to Senator Bartlett.5K4FAULKNER Senator Faulkner—On a point of order, Madam Deputy President: that is fine, but the preferred call of the opposition should be the next speaker.10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—That is what I intend to do. I call Senator Bartlett.15:23:006322Bartlett, Sen AndrewSenator BARTLETTDT6QLDAD00—We have heard just now lots of comments about Swiss cheese. The main holes and problems are not with the legislation but are obviously with Senator Bolkus's and Senator Faulkner's understanding of it. That is probably understandable, because the ALP have not shown much interest or commitment to the environment for some time now, and so they have not really made much of an attempt or effort to try to keep abreast of the very complex and important issues that are involved in environmental legislation.It is good to see them come on board now, at this late stage. Sure, they are driven by political opportunity rather than commitment to the issue, but at least the political opportunity has given them the impetus to think, `We had better look at this environment thing again; we might have a bit of a wedge that we can drive here.' They are probably in a situation where they can now spell `environment' again, which is a good start. Perhaps, as part of this process and their efforts to scrutinise what the Democrats have achieved with this, they will possibly even now give some policy commitments as well—some actual indications of what they would do in government. That would be welcome. It would be yet one more positive thing to come out of the agreement that the Democrats have managed to reach.I am certainly quite happy for the Democrats to beat their chests about this. I have spent a lot of time over many years trying to promote advancing the environment. I am very keen to have the opportunity to be part of advancing environmental protection.Senator Brown interjecting—DT6Bartlett, Sen AndrewSenator BARTLETT—Senator Brown once again is accusing the Tasmanian Conservation Trust of staffing the chainsaws along with the Democrats, and I guess that is for them to answer, if he wants to continue to abuse the conservation groups of his own home state. He quite often likes to call the Democrats `poodles'—and it does not worry me; I am quite fond of animals, as people know, and so I have no problem being called a poodle or a puppy; I prefer rottweilers to poodles, but any animal is nice. But he certainly does a lot of yapping for somebody who likes to call other people poodles.What is most important, obvious and blatant about the lack of understanding behind the abuse that the ALP has put forward in relation to this legislation and in response to issues that were raised in question time is the need to once again look at what the situation is now, under existing law. The Democrats, as I have said repeatedly and will continue to say, do not in any way suggest that the environment legislation that was passed in this chamber is the perfect environment legislation. We have quite clearly pointed out that there are still many areas where work needs to be done, and we will be fighting hard to ensure that there is future effort. With the new-found interest of the Labor Party and Senator Conroy, that well-known greenie in environmental issues, I am sure they will join us in improving this legislation even further.But Senator Bolkus has missed the key point of what this legislation does. He goes on about the problem of things being in regulations. On top of the expansion of Commonwealth powers that we have achieved in this legislation, we have now enabled a mechanism for Commonwealth powers to be expanded further in the future through regulation. Wherever an issue of importance arises the government can in a simple way act quickly at federal level to expand its powers. Certainly, the parliament cannot force the government to act other than through political pressure, but it gives an extra mechanism for that power to be broadened even more widely than is currently the case under the new legislation that was passed yesterday.If the ALP want to resort to the complete misinformation, misrepresentation and total fabrication that Senator Brown continues to go on with in the media and in this place, that somehow or other this bill—Senator Brown interjecting—DT6Bartlett, Sen AndrewSenator BARTLETT—He is again accusing the Tasmanian conservation movement of selling out on Tasmania's forests.QD4BROWNSenator Brown—I rise on a point of order, Madam Deputy President. I do not mind how much there is of this misrepresentation, but I ask people to read the Hansard . I am accusing the Democrats of selling out on the Tasmanian forests—which of course they are.10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—There is no point of order. It is purely a debating point.DT6Bartlett, Sen AndrewSenator BARTLETT—Senator Brown continues to make the accusations that, with this bill, Fraser Island would be mined and the Franklin flooded. Of course, this bill actually expands Commonwealth powers and expands protection under world heritage. The only environmental issue that the Labor Party has joined the Democrats on is in relation to Jabiluka. That that is happening now, in a world heritage area under existing legislation, shows how little protection there is for world heritage areas under the law as it stands now. This is why it is so important that what the Democrats have achieved has expanded world heritage protection and expanded the ability not just for the government to protect the environment but for the parliament and other people in the Australian community to protect the environment. And that is why it is so significant. (Time expired)15:28:006324Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—In the less than two minutes that are left, I want to emphasise that Senator Tambling, the minister involved in the ARPANSA legislation, said that the ARPANSA legislation was not the place to deal with the issue of the form of environmental assessments in relation to nuclear facilities. The Environment Protection (Impact of Proposals) Act still applies, and it can be expected that any substantial proposal will invoke the procedures under this act. We asked for a needs assessment. The Democrats supported us in that motion and that was denied, 33 votes to 32. Basically, we said it was needed, it was voted down by the government, and what we have now is a situation where we do not have it.We assumed that it would be included in the environmental impact assessment act. We assumed that we might have the numbers to make sure that it was included in that act. It was not, and now we have the potential of a Democrats nuclear installation. I am sure the people at Lucas Heights or anywhere else in Australia will remember what the Democrats have done. We tried, the motion was lost, and the minister said, `Don't worry; put it in the environmental impact assessment bill.' It did not happen. It has not happened and, as Senator Faulkner says, from now on we are going to find more and more of these slips, because it was pushed through with such undue haste.There is a huge amount of concern in the community about the details and about the ramifications of this bill. Some might be better than we expect. However, unfortunately, I expect that the slips are going to be worse than any benefits and that, in time, we will find out the costs of the unnecessarily undue haste with which this most important bill was dealt.10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—Order! The time for the debate has expired.Question resolved in the affirmative.Personal Explanations6324Senator HEFFERNAN (New South Wales—Parliamentary Secretary to Cabinet) (3.30 p.m.)—I seek leave to make a personal explanation.Leave granted.C16HEFFERNANSenator HEFFERNAN—Yesterday I was accused of not declaring a $2 million property, Cooba. Cooba Pty Ltd is a property of my cousin Celsa Cusack. It is her family property at Junee. Even though Labor, who assume that every farmer that has a family trust is a crook, will not understand, people in the bush pride themselves on being good neighbours. The only benefit I have received from the Cusack's property is the pleasure of doing something for nothing—of assisting a family whose grandfather was crippled when a load of bagged oats fell on him and broke his back and both hips; a family whose mother was widowed and left with six children under the age of 15; a family whose sister was murdered in March of 1995.In 1970, I was proud and delighted when asked by my uncle, Joe Paslow, the crippled father of Celsa Cusack, to be a director of his company. He died in August 1977. Following the tragic death of Mrs Cusack's husband, John, in October 1977, when he had a young family of six, I did assist her. In the 22 years since, her children have long grown up and taken full responsibility and control of their family farming interests.I did not disclose a directorship or interest in these companies because it was my understanding that I had ceased to be a director or shareholder well before entering the Senate. It was only yesterday afternoon that Mrs Celsa Cusack advised that I was still a director and shareholder. Perhaps only the grubby operatives of the Labor Party will not understand why Mrs Cusack, whose four-year nightmare following the brutal murder of her daughter in 1995—a family tragedy not lessened by the gaoling for life of the murderer in February of this year—might have overlooked her accountant's advice to tell me when I entered the Senate that my understanding that I had ceased to be a director and shareholder was inaccurate. Yesterday, I resigned as a director and gave instructions that my few shares be disposed of forthwith by gifting them to her family. At no stage have I ever received a benefit from the Cooba Pastoral Company Pty Ltd. I apologise to the Senate for not disclosing my directorship of Mrs Cusack's family company and my one share, valued at $1, in Sestial Pty Ltd—the trustee company that runs my family farm.I think Mr Beazley, who seeks to be seen by Australians as a universally nice bloke, should write an apology to the Cusack family for dredging up all of these traumatic memories because Senator Robert Ray and Senator Faulkner, whom nobody would describe as nice, will not.Labor made three other allegations yesterday. With respect to the allegation that I did not declare land at Balranald, that is simply untrue. There is one holding covering both parts of the Shire of Hay and Shire of Balranald called Little Lake. With respect to Sestial Pty Ltd, I advised the Register of Senators' Interests on 15 January 1999 that I was a director. In addition, I disclosed my directorship and shareholding in Sestial to the Prime Minister following my appointment as parliamentary secretary. Lest there be any misunderstanding, I again point out that Sestial Pty Ltd is the trustee company that controls the family trust that runs my farm. I have at all times disclosed the existence of the family trust. The fact that I am a farmer and my family owns various properties is a matter of public record.Lastly, Labor has questioned whether my duties as Parliamentary Secretary to the Cabinet were inconsistent with or have been compromised in some way by my directorships or interests in various private family companies. I have been scrupulous in ensuring that, where any matters such as taxation law or a similar issue have been in the process of being dealt with by cabinet, I have declared an interest.At no stage have I ever sought to improperly use my position for personal advantage. I did not enter the Senate to make money. My family and I have always conducted our affairs in an ethical manner. There is not the slightest substance to any suggestion that I have misused my position for personal gain. I feel very sorry for the people who voted Labor at the last election. They are represented in this place by people who have nothing to offer as an alternative government, no plan for their future other than personal vilification—10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—Senator Heffernan, this is getting into debating points.5K4FAULKNER Senator Faulkner—Madam Deputy President, I rise on a point of order. We have listened to a great deal of Senator Heffernan and his personal explanation, but whether he feels sorry or not for people and how they voted at the last election that, as you know, Madam Deputy President, is not a matter that is relevant to any personal explanation. If that is all he has to say, he should be sat down.10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—Senator Heffernan, if you have further points you wish to make, keep the politics out.C16HEFFERNANSenator HEFFERNAN—The Cusack family is a great example of a gritty farming family. Their two sons, John and Richard, still continue to carry on the tradition on the family farm through the entire trauma I have disclosed. I am proud to have been associated with them and I am ashamed of some of the people who sit opposite. In relation to the three companies raised by Senator Cook this afternoon, these are companies that are asset holding and do not trade.Bills6326r703Billsr667Billsr666Billsr702Billsr699Billsr698Bills6326r664Billsr660Billsr658Billsr657Billsr701Billsr663Billsr659Billsr700Billsr661Billsr754Billsr755Billsr761Billsr765Billsr763Billsr764Billsr757Billsr760Billsr758Billsr759Billsr756Billsr7626326A NEW TAX SYSTEM (GOODS AND SERVICES TAX) BILL 1998Consideration resumed.10000CHAIRMANThe CHAIRMAN—The committee is considering government amendments Nos 1 to 14 on sheet 238, and government amendments 7, 8, 9, 12, 14 and 22 on sheet EF239. The question is that the amendments be agreed to.15:38:006326Conroy, Sen StephenSenator CONROY3L6VICALP00—I was hoping that possibly the minister might have an answer to some of the questions I asked a little earlier about flavoured milk and additives.Senator Kemp interjecting—3L6Conroy, Sen StephenSenator CONROY—No, you might have given them an apology. I had other business.15:38:006326Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—In other words, you are waiting for Senator Cook again. Thanks for the filler, Senator Conroy.Senator Murphy interjecting—WW4Kemp, Sen RodSenator KEMP—I have been fairly busy today, Senator Murphy. The point I was making is that under the wholesale sales tax system, chocolate Qik is exempt and strawberry Qik cops 12 per cent.FX5MURPHYSenator Murphy—Is that just to do with the price of strawberries?WW4Kemp, Sen RodSenator KEMP—This is the question I was asked by your colleague.UI4RAYSenator Robert Ray—Would we assist you by leaving, Senator?WW4Kemp, Sen RodSenator KEMP—Yes, you would, actually. Murphy, too, please, Robert. Get him out as well.10000CHAIRMANThe CHAIRMAN—Order, Minister!WW4Kemp, Sen RodSenator KEMP—He broke the deal. He's still here. Robert Ray always claims that the one thing you can rely on is that he sticks to a deal. He asked, `Would we assist by leaving?' He left, and he does not ever refer to himself in the third person plural.10000CHAIRMANThe CHAIRMAN—Minister, this has no relevance to the question asked.WW4Kemp, Sen RodSenator KEMP—I went on to say that, under the GST, chocolate Qik and strawberry Qik are GST free. The government has removed the anomaly. Flavoured milk of all flavours will be taxable, Senator. Find another filler for him.15:40:006327Conroy, Sen StephenSenator CONROY3L6VICALP00—My question was to do with the fact that you have defined flavourings as GST free and milk as GST free. I understand that in other cases where you combine a GST item and a non-GST item it attracts GST. I am trying to gain an understanding why two non-GST items can be combined and end up with GST.15:40:006327Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—It is quite common, Senator. I think you are confusing the original rule of a GST free product combined with a product subject to GST, but there is not a rule of the nature that you then adduced.3L6CONROYSenator Conroy—So it's whatever you and the Democrats say?WW4Kemp, Sen RodSenator KEMP—Essentially, it is whatever the Senate decides. If you want to go back to the old Labor position of having strawberry Qik at 12 per cent and chocolate Qik exempt, you do that, but I do not think people think it is sensible. The community out there thinks we have removed an anomaly and will prob ably welcome this. I think that covers the GST Qik flavouring issue. I see Senator George Campbell has come back to provide some further fillers.15:41:006327Conroy, Sen StephenSenator CONROY3L6VICALP00—I want to make it absolutely clear that there is no rationale—it is just whatever has been decided between the Democrats and you. When the court challenges start flowing about what is in and what is not, the Taxation Office and the judges will look to the debate in the chamber for some guidance as to what it is that constitutes the reasoning behind the tax law. I know it was probably a mistake, but I was hoping that you might be able to clarify it.I refer to the Prime Minister's letter about the 96 per cent issue, which says that `products consisting of milk not less than 95 per cent by volume will be GST free'. I want to make sure there is not a contradictory situation with flavoured milk. I presume that a product consisting of milk not less than 95 per cent would be flavoured milk. If flavoured milk had 96 per cent, where would we be then?15:43:006327Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—If it is in ready-to-drink form, the product is taxable. Seeing that Senator George Campbell has come into the chamber, I want to deal with the carob issue that you raised. I actually was not aware of this product.3L6CONROYSenator Conroy—It's a chocolate substitute.WW4Kemp, Sen RodSenator KEMP—I have since become aware of that. That was Senator Campbell's contribution to the sum of human knowledge. You may have eating habits which are not similar to mine, and that is fair enough; I make no judgment on that. If it is marketed as a confectionery, it will be taxable; if it is marketed as an additive for milk, it will be GST free.15:44:006327Campbell, Sen GeorgeSenator GEORGE CAMPBELLNB5NSWALP00—While we are on the subject of healthy foods, I also ask the minister about the exclusion of unprocessed grains, cereals and sugar cane, et cetera, which is covered in 1.11 in the explanatory memorandum. It says:This will ensure that grains sold as seed or sold for further processing or treatment will be subject to GST.What happens in circumstances where these unprocessed grains or cereals are sold through health food stores, which is a common practice. Are they GSTable if they are sold through those stores, or are they GST free?15:44:006328Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Senator, I will look—as I always do—very carefully at your question and, if you will bear with me, I will provide you some advice in a short moment of time.NB5CAMPBELLSenator George Campbell—Thank you for that, Minister. Did I get an answer to my question on bagels?WW4Kemp, Sen RodSenator KEMP—I think I did give you an answer.NB5CAMPBELLSenator George Campbell—Is it all form of bagels?WW4Kemp, Sen RodSenator KEMP—I think you asked whether a bagel with a blueberry ingredient is GST free. I am not quite sure what the cost of a bagel is, but I am advised that bagels with a blueberry ingredient are GST free.15:45:006328Campbell, Sen GeorgeSenator GEORGE CAMPBELLNB5NSWALP00—I asked in relation to bagels and to bagels which had blueberries. But I also have a question on the list of breads that is contained in the explanatory memorandum. A range of breads are mentioned—pita bread, lebanese bread, lavash bread—but it does not mention bagels. I know you come from Victoria, so I am not surprised that you may not be aware of it, but bagels are a very popular form of bread in Sydney. I want to make sure that bagels are included in the list.15:46:006328Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Senator, if it has a sweet filling or coating, it is going to be GST free. I notice your love of bagels, Senator. I do not want you to suggest or think that Victorians do not have their fair share of bagels. I am sure this is a bakery product which is popular in my state. In fact, I can buy bagels at my local shop.NB5CAMPBELLSenator George Campbell—You obviously don't.WW4Kemp, Sen RodSenator KEMP—I do not, but my wife does.15:47:006328Conroy, Sen StephenSenator CONROY3L6VICALP00—I want to talk about milk for a moment. You have defined milk and soy milk. Does coconut milk fall into any of those categories?15:47:006328Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Again, these are a range of products that I am not acutely familiar with, but my understanding is that they do not.3L6CONROYSenator Conroy—Is there an explanation? Are we discriminating against coconuts perhaps?Senator Calvert interjecting—3L6CONROYSenator Conroy—Are coconuts GST free? They are a fresh fruit—or a fresh vegetable.WW4Kemp, Sen RodSenator KEMP—They are GST free, Senator. To be quite frank, I used to think it was rather pleasant when Senator Cook was not in the chamber, but—10000CHAIRMANThe CHAIRMAN—Minister, would you please be relevant.WW4Kemp, Sen RodSenator KEMP—I was just trying to urge Senator Cook—10000CHAIRMANThe CHAIRMAN—Would you like to answer the question and stop worrying about who is in the chamber.WW4Kemp, Sen RodSenator KEMP—I have just answered the question. Madam Chair, I am delighted at the authority you are showing, and if you can show it on the other side, too, it would just be fantastic.10000CHAIRMANThe CHAIRMAN—I do not need that reflection, thank you.WW4Kemp, Sen RodSenator KEMP—I do not know why the Labor Party is in favour of dearer food. GST-free food should be cheaper, and I am astonished, to be quite frank, that the Labor Party seems to object to this.15:48:006328Conroy, Sen StephenSenator CONROY3L6VICALP00—Coconuts are GST free, and coconut milk is not. At what point in the drinking of it do you charge a GST—as they poke the holes in?5F4CALVERTSenator Calvert—When it falls on your head but not on the ground.10000CHAIRMANThe CHAIRMAN—Order! Can I ask people to curb their mirth, please, especially the galleries. Minister, do you have an answer?15:49:006329Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Senator, I have a tax ruling, I think. The Treasury has consulted, and coconut milk is GST free.15:49:006329Conroy, Sen StephenSenator CONROY3L6VICALP00—That is a change from where we were a minute ago. I am particularly interested in soy milk, because there has been some argument about whether soy should be allowed to be referred to as milk.WW4KEMPSenator Kemp—We picked up the current case law on how soy milk is defined, Senator.3L6Conroy, Sen StephenSenator CONROY—So if you wanted to produce another product and tack the name `milk' on the end—like, say, a pumpkin milk, and you can get a milky substance out of pumpkins—and you wanted to market something like that, is it in or out for the purposes of GST?15:50:006329Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—That sort of issue would be a matter for the tax office, as it always is when a new product is brought forward. When a new product is brought forward, there may be a submission made to the tax office and the tax office would give a ruling on it.3L6CONROYSenator Conroy—What about goat's milk?WW4Kemp, Sen RodSenator KEMP—Goat's milk is GST free.Senator Conroy interjecting—WW4Kemp, Sen RodSenator KEMP—I have not finished, Senator.10000CHAIRMANThe CHAIRMAN—Senator Conroy, please resume your seat.WW4Kemp, Sen RodSenator KEMP—This debate on food is an interesting one, but I think the point needs to be made that as a result of the amendments which, as we know—Senator Conroy interjecting—WW4Kemp, Sen RodSenator KEMP—I think you have to recognise that GST-free food should fall in price. Whatever arguments you may wish to adduce, Senator, the fact of the matter is—as the Treasurer has pointed out—that there should be some falls in prices. I think that can easily be claimed as a plus, and I am amazed that the Labor Party seems to be opposed to it.15:52:006329Conroy, Sen StephenSenator CONROY3L6VICALP00—I would think that even Senator Kemp would concede that there are compliance costs involved. One of the issues about this particular package is the extra compliance costs, which are substantial. You have had Mark Paterson of ACCI, a noted supporter of the GST, indicate that the compliance cost burden is a problem. You have ATAX, our country's leading compliance specialists; you have the tax institute; you have Ray Regan—not a favourite of yours, Senator Kemp—all talk about the compliance cost burden that has been put on to many more businesses. You are asserting that any savings from what could be described as the `embedded taxes' will be greater than the compliance costs when you make that statement. It is not a statement you can make with any confidence whatsoever; it is just one of your many, many assertions without foundation. That is just to respond to that. Do we have another ruling—a quick, instantaneous ruling?WW4KEMPSenator Kemp—No, you're right, keep going.3L6Conroy, Sen StephenSenator CONROY—Are you okay over there? Is Blair available regularly?10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Order! Senator Conroy, would you please be relevant?3L6Conroy, Sen StephenSenator CONROY—I understand that Senator Sherry raised some questions about the definition of `hot' in relation to food. I was wondering if we had any answers?15:53:006329Murray, Sen AndrewSenator MURRAY3M6WAAD00—Madam Chair, with your permission, I would like to add to the milk debate. Senator Conroy, you have made me somewhat hysterical at the back here—and forgive me, Madam Chair, for my amusement. Of course, there is an underlying seriousness in your questions and there needs to be an underlying seriousness in the answers. The first point is that when you make 80 per cent of household goods GST free for equity reasons, you are going to end up with some definitional prob lems. I think you had two directions to your remarks. The first is the complexity issue. From everything that we know about international practice in this area, the complexity issue is vastly overstated; the compliance issue is vastly overstated. All this stuff about nightmares is just so much political hooey and, as you know, that is a line I have stuck to consistently for months and months. I do not think it is that difficult, in terms of compliance costs, to determine which carries GST and which do not.The more serious issue I thought you were driving at was the definitional issue, and that occasioned some mirth. As you know, I have lived in a number of countries and had experience of many places. I am aware that it is not just cow's milk, sheep's milk and goat's milk that people drink but yak's milk, llama's milk—all sorts of milk. I think behind your view was the question of what milk might end up being GSTable as opposed to GST free. As someone who has been promoting this course of milk being GST free, my expectation is that the ruling would be very wide and that milk would include any milk that is fit for human consumption. I think the definition approaches that. Within the amendment is the fact that the GST-free category commences once food is fit for human consumption. I do not think milk is defined in the dictionary, but it is surely defined elsewhere in Australian law, under food standards or whatever. So as someone who is, if you like, supportive of the amendment, I am suggesting to you that I would seek that yak's milk, goat's milk or whatever other milk be widely acceptable.15:56:006330Conroy, Sen StephenSenator CONROY3L6VICALP00—If there are any debates in the future over this issue in the courts, they will look to the words and their intent in the Senate, so I appreciate that. My question on the definitional aspects is probably more that soy is a bean. Just because you produce it and it might be coloured white—it could be coloured anything that you might colour it—you can call it milk. So what happens if you produce another product, another vegetable, that produces a liquid that is then called milk simply to get it into the wide definition? It is fit for human consumption so it falls into that category. Just because I manufacture it and call it milk, where do you go then? What happens then? I am seeking guidance.15:57:006330Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Senator, soy and rice milk are defined, as I understand it, under the current wholesale sales tax law. So I do not think this is a dramatic change that you are promoting. As I said, if there are new products brought on it is a matter for tax office ruling. I think that it is probably worth putting on the record that there is an attempt here to blow the compliance issue out of all proportion. The reality is that most classifications of products will be done by the manufacturer of the product, and the number of manufacturers is a relatively small proportion of the total taxpayer population. The manufacturers, of course, have the best knowledge of their products and if they have any doubt—and this is the point I made—they can go and seek guidance from the ATO.When a small business buys a product, they will know from the invoice whether it is GST free or taxable. The small business will be able to sell the item GST free if they bought it GST free, provided they do not substantially alter its condition. Small businesses that sell prepared meals will generally sell a small range, much of which will have a very obvious classification. In addition, most small businesses, if they need guidance, will need guidance only once and they can apply that in each subsequent period. As we move to a new tax system of course there will be some new things that people have to do—some new procedures to follow, a new way of reporting and, of course, a new way in which we tax products. That is going to require a major education campaign by the tax office to make sure that people in small businesses are fully across the requirements, and this is exactly what the government proposes to do.The government recognises the compliance issue. The government clearly understands that we must take every step to make sure that businesses are properly and accurately informed about the requirements under the new tax law. But we need to keep it in perspective, and it does concern me that some of the comments seem to be somewhat over blown. On the compliance issue there is, of course, a RIS which has been distributed with the bills and distributed to the chamber which outlines the net recurrent costs of compliance. So I make the point that compliance issues are important, and that is why the government seeks to address them in a most comprehensive manner, but at the same time we should not attempt to overstate them.16:01:006331Sherry, Sen NickSenator SHERRYZW4TASALP00—There are a number of matters I want to raise on this issue of food. Firstly, in the explanatory memorandum, in the final paragraph of page 1, it says:In addition, there will be some administrative costs for a business that has to account for GST on only some of its supplies.We have had a considerable discussion about compliance costs for small business and the additional cost because of the food exemption. I do not want to overstate that, but what I would point out to the chamber is that the phrase `some administrative costs' is a clear understatement of the additional costs of compliance for small business of this food exemption. I would like to know what are the estimated additional administrative costs for the food exemption.Also, looking at the input taxing of school tuckshops and canteens, it says in the explanatory memorandum that tuckshops and canteens run by a non-profit body such as a parents and citizens association or a parents and friends association—I am sure everyone is aware of the factual situation—will be GST free. But what is the difference between a tuckshop and a canteen being run by a non-profit body and one run by a contractor? There are quite a number of catering companies that run tuckshops and canteens on school premises. It is an identical business, but they are not free of the GST.Fresh fruit and vegetables from a primary producer will be GST free. But it says that the exclusion for live animals ensures that live cows, sheep, pigs and poultry are not food. However, live crustaceans and molluscs—lobsters, oysters and crabs—will be GST free. I just want to point out here the difficulty for farmers. Many farmers on the north-west coast of Tasmania have mixed farms: they grow fresh fruit and vegetables but they also are engaged in other primary production. This certainly adds to the difficulties that farmers on the north-west coast of Tasmania will experience. My colleague Senator Campbell has raised the issue of what is rotten food, whether meat or vegetables. That seems to me to be an obvious way that the definitions of meat and vegetables can be twisted. We have asked for a definition of what is hot and what is not.Also, I notice on page 9 of the explanatory memorandum that the tables and chairs set up on the sidewalk as part of a cafe would fall within the definition of premises. However, seats at a bus stop outside a takeaway outlet would not be premises. I can confidently predict an explosion in bus stop seats near takeaways. That again would be an obvious way to minimise GST obligations.WH4McGAURANSenator McGauran—Come on!ZW4Sherry, Sen NickSenator SHERRY—You might think it sounds stupid, Senator McGauran, but we have had example after example from no less a person than the Treasurer, Mr Costello, highlighting these sorts of absurdities as they are practised in other countries that have a GST with food exempted.WH4McGAURANSenator McGauran—That was then.ZW4Sherry, Sen NickSenator SHERRY—I bet you there will be some after this little deal goes through. We have got the issue of what is hot and what is not. Non-heated takeaway food—5F4CALVERTSenator Calvert—It is cold.ZW4Sherry, Sen NickSenator SHERRY—Of course it is cold, but what is to stop people taking it home and reheating it? There is a price advantage to the seller in doing that. What has even happened in some other countries is that a microwave is installed on legally separate premises and not on the premises of the seller. You could actually have the seller subcontracting as a business next door a microwave processing centre to heat the food. They would get away with it, I think, quite legally. This has happened in other countries.I would like to turn to the detail of the amendments. I did ask about the definition of premises where it refers to a boundary or limit. When you go to the footy—certainly in Tasmania, where we do not have the great grandstands and the clearly delineated boundaries around the football ground—it is not clear what is the boundary. You would need to pull a map out to identify what is the boundary of the football ground, the showground, the garden, the amusement park or similar area because in some cases there is not a clear boundary or clear limit. That seems to me to be an obvious way of evading the GST.Also, is cream GST free? I am looking at the definition of milk products. It says that milk, skimmed milk or buttermilk—whether liquid, powdered, concentrated or condensed—casein and whey powder or whey paste are milk products. It does not seem to me that cream fits in there anywhere. I would like a clarification of that. The difficulties of this food exemption just go on and on. This is not the only reason we oppose a GST; there are other reasons, and my colleagues and I have put them on the record. I do not intend to go into them now, but I would like answers to the specific issues I have raised. There are many more problems with this particular legislation. What we have here is the Democrats on main street—the Democrats have driven onto main street.I really did take exception to the comments of Senator Lees, the Leader of the Democrats. I do not want to misquote her, but I think she said words to the effect that they had achieved more in 13 hours of negotiations than they had with the Labor government in 13 years. I recall her saying that. I see the government advisers nodding, so I believe that is an accurate reflection of what she said. Senator Lees is not in the chamber, again. She helped hatch this little deal with the Liberals. She should be in here, along with Senator Murray, defending and explaining these issues that my colleagues and I have been raising. But she is not here, and I think that is a pity. We all know that, from time to time, we cannot all be in the chamber, but Senator Lees is involved in these negotiations and she should be in here explaining these issues. Unfortunately she is not.Senator Lees claims that she got more out of the Liberals in 13 hours than she got from us in 13 years. I do not believe the record will show that. What really worries me about that statement is that what Senator Lees and five-sevenths of her Democrat colleagues have done in 13 hours—Senator Lees is entering the chamber—is create for lower and middle income Australians and for small business a potentially disastrous position.One of the reasons—and Senator Harradine, to his credit, identified this—Labor and Senator Harradine would not support a GST is that the compensation measures can be taken away at some future date. You only have to look at the comments of the Premier of Victoria, Mr Kennett. I bet we will have the Liberals—Mr Kennett, Mr Costello and the Prime Minister—all attempting to remove this food exemption in coming years. The Liberals have jumped at this deal with the Democrats because they get a GST into Australia, and their strategy will be to get food out at some future date. The compensation to lower and middle income earners will ultimately be eroded. If the budget goes into deficit or if the surplus declines it will not be higher income earners who will have to pay tax increases or suffer service reductions; it will be lower and middle income earners.We have the Democrats on main street. I think their attempts to drive on main street are very unfortunate. We have the Democrats driving along in their solar powered bus reading the map to main street. You have Senator Lees at the wheel. Next to her you have Senator Stott Despoiler trying to grab the wheel. You have Senator Murray trying to drive from the back seat. They are trying to find main street in this 13 hours and Senator Lees is complaining about the dreadful pressure she is under in this 13 hours of negotiation. What the Democrats have done with respect to this and other matters in the package really does concern me.I would like answers to the specific matters that I have raised. They are by no means the only concerns we have about the problems of partial food exemption. I note that Senator Knowles in her earlier contribution referred to us as being `petty nitpickers'. But quite frankly most of the examples and issues that my colleagues and I have raised are ones that Senator Ferguson—I am glad he is back in the Senate again—and his colleagues referred to in their own report.WP6LIGHTFOOTSenator Lightfoot—You are a major nitpicker.ZW4Sherry, Sen NickSenator SHERRY—They are major nitpicking but they are also very similar to the sorts of criticisms we have been making. I am going to come back very briefly to this report and again refer to some of the examples.3L6CONROYSenator Conroy—What report was that?ZW4Sherry, Sen NickSenator SHERRY—This is the report of the Senate Select Committee on A New Tax System, and the issue of food was a major issue before the committee. The Liberal senators signed off only a few weeks ago on the report. On page 333 they went to considerable detail on this issue of food. In fact, much of the thrust of the questions from Senator Ferguson and his colleagues went to the issue of not exempting food. The major component of their report relates to food. The Liberal senators went into considerable detail about why food should be in the GST. They actually had a reference to the irresponsibility of the Democrat position. The position the Liberals are speaking in favour of today, as a result of their deal with the Democrats, was an irresponsible position only a few weeks ago. The report says:One disappointing aspect of the debate has been the propensity of the Democrats to claim the support of people whose views do not actually support them.The Liberal senators, including Senator Ferguson, go on to highlight the division in the Democrats over the crucial question of how much food should be exempt. Senator Lees is condemned for supporting a narrow definition which excludes restaurants and for contradicting her own economics spokesperson, Senator Murray, who favours a wider definition including restaurants. The report goes on—the problems for small farmers, the problems for small business generally and the problems referred to by the National Farmers Federation. For example, the decision not to tax basic food but to tax restaurant meals and takeaways `adds mind-numbing complexity to the tax system', according to the National Farmers Federation submission to the Senate select committee.I have to say we have not heard too much from the NFF on this issue; we haven't heard a lot. On this issue the NFF are really just toeing the government line. They are absolute lackeys for the government on this issue. We have not heard them repeat this sort of criticism since this Liberal-Democrats deal was struck. It just goes on, and of course Mr Howard himself repeated these criticisms. (Time expired)16:16:006333Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Senator Sherry is weeping into his cups, pretending to show some concern for small business. I would have to say, Senator, that that fits ill in a Labor Party senator's mouth.Opposition senators interjecting—WW4Kemp, Sen RodSenator KEMP—It fits ill in a Labor Party senator's mouth, let me say, to show concern for small business. One of the things that small business certainly wanted was some reform of the unfair dismissals law, which of course you opposed and you continue to oppose—so much for you going around worrying about small business when you are run by the trade unions and the George Campbells of this world. How much concern did George Campbell show for small business?Opposition senators interjecting—10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Hogg)—Senator Conroy and Senator Campbell! Order!WW4Kemp, Sen RodSenator KEMP—Thank you for reminding me. Senator Sherry gets up and weeps for small business. Senator George Campbell, who is in the chamber, is famous for one thing. It was very nicely conceptualised by former Labor Prime Minister Keating, who—after one of George Campbell's outrageous demands on business as a leader of a trade union—said that as a result of his efforts Senator Campbell `has 100,000 dead men hanging around his neck'.Senator George Campbell interjecting—WW4Kemp, Sen RodSenator KEMP—That is what you did for small business, Senator Campbell. So I think everyone should remember, when Senator Campbell gets up here and expresses great concern about small business, that very famous quote by Mr Keating.NB5CAMPBELLSenator George Campbell—Boring.WW4Kemp, Sen RodSenator KEMP—You might find it boring, Senator, but every time you get up and talk about business we will remind you. Let me assure you: you will be reminded time and time again, because that is the one thing you are remembered for. Again, Senator Sherry got up and sort of wept over huge concerns about what he saw as boundary line issues. That is what Senator Sherry said: he was worried about complexity. Well, Senator, I have already mentioned some problems with the Labor Party's preferred system, the wholesale sales tax system. If we are talking about complexities, let us look at the incredible complexities which occur under your system.ZW4SHERRYSenator Sherry—Mr Temporary Chairman, I have a point of order and it does go to relevance. We are dealing with food amendments in respect of a GST and the questions that I posed directly related to that. They are the questions the minister should be addressing at this stage in the committee. It is about relevance.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Minister, I think that it would be wise to come back to the issue in hand. You have been given a fair hearing; I think I would rule that.WW4Kemp, Sen RodSenator KEMP—On the point of order as to relevance, Mr Temporary Chairman: I think that you have of course shown considerable tolerance in rulings to allow Senator Sherry to range far and wide into issues that are primarily the concern of the Democrats.ZW4SHERRYSenator Sherry—I didn't, actually.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—There is no point of order—if you raised one.WW4Kemp, Sen RodSenator KEMP—Look at some of the issues that we have to grapple with in the current tax system—toothpaste is taxable but toothbrushes are exempt. Why? I don't know. Has anyone explained that to us? No, no-one knows. Books, pamphlets, leaflets and magazines are exempt but atlases are taxed at 12 per cent. Why is that? I don't know. This is your preferred system. State libraries, museums and art galleries are exempt if they are in a capital city—that is the advice I have received—but are taxable if they are in regional centres. In other words, they are exempt from sales tax if they are in a capital city. Wedding rings are exempt. Engagement rings are taxed at 32 per cent. What a great system! Why? I don't know why. Senator, that is your system.3L6CONROYSenator Conroy—It's your system.WW4Kemp, Sen RodSenator KEMP—No, that's your system. We are trying to change this.3L6CONROYSenator Conroy—It's your system.WW4Kemp, Sen RodSenator KEMP—It's your system and we are trying to change it. Senator Sherry has just got married. Why, Senator Sherry, are wedding rings exempt but engagement rings are taxed at 32 per cent?ZW4SHERRYSenator Sherry—I only bought the wedding ring. I didn't buy the engagement ring, if that is the answer.WW4Kemp, Sen RodSenator KEMP—There we are—that is the answer.3L6CONROYSenator Conroy—Senator Sherry, you tax avoider! You're miserable!10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Senator Conroy! Order!WW4Kemp, Sen RodSenator KEMP—All I am saying is that Senator Sherry has revealed what a cheapskate he really is.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Order! Senator Kemp! I think that everyone can get back to the point of the questions.WW4Kemp, Sen RodSenator KEMP—Thank you. A Learjet is exempt. A luxury yacht—Senator Cook has come into the chamber—is taxed at 22 per cent and a luxury car at 45 per cent. Why the difference? I don't know. But this is the Labor Party's preferred tax system. Dishwashers, microwave ovens and air conditioners are 12 per cent. TVs, radios and videos are 32 per cent. Why? No-one knows. But this is the tax system which Senator Sherry is a really strong supporter of. Senator Sherry, you are truly Australia's greatest supporter of the wholesale sales tax system. No other country in the world wants to adopt this system; no other country wants to adopt your wholesale sales tax. In fact, I think only five countries, including Botswana, have a system which is remotely similar to ours. Funny, it is so good but no other countries want to do it. It is an amazing thing.3L6CONROYSenator Conroy—Botswana is a country that is actually booming.WW4Kemp, Sen RodSenator KEMP—If you like Botswana, you go to it. I do not see people pouring into Botswana, but I may be wrong. Senator Sherry was concerned about farmers. The first of the issues he raised related to farmers. The ATO estimates that some 84 per cent of farmers will only sell taxable items. The other 16 per cent will face additional compliance costs, that is correct. This has been factored into the estimate, which is covered in the RIS.ZW4SHERRYSenator Sherry—Do the farmers know that?WW4Kemp, Sen RodSenator KEMP—Senator, have you read the RIS?ZW4SHERRYSenator Sherry—Yes, I have.3L6CONROYSenator Conroy—We've read them a couple of times, but they still don't make any sense.WW4Kemp, Sen RodSenator KEMP—Nothing makes any sense to you, Senator. Please get up and explain to us your preferred wholesale sales tax. No-one can explain it away, because it is inexplicable. It is a mess. You are out defending it and that is a disgrace.Recurrent compliance costs are estimated at some $240 per firm. Of course, some businesses will simply need to activate a GST module on their existing accounting software. Others may have to upgrade their cash registers or revise their accounting procedures, but I have mentioned the education program which will be carried out by the Taxation Office. We are very conscious of the issues of compliance and we are very conscious of the need to ensure that businesses have the new system properly explained to them. The Taxation Office will be undertaking a major education program.Senator Sherry raised the issue of premises. It is a fact that if the managers of a sporting ground—that was the one you raised, Senator Sherry—are unsure, they can seek a ruling from the Taxation Office. They have to seek guidance only once. If they are unsure about it, they are perfectly able to seek a ruling. Premises includes places where food is supplied, for example a club, a restaurant, a cafe or a takeaway outlet. Premises also includes the area surrounding clubs and restaurants where that area is used for supplying food; for example, tables and chairs set up outside a restaurant where food is supplied to patrons at those tables. I do not see that there is great complexity there. Premises also includes the whole of an enclosed space such as a football ground. That was one of the issues that Senator Sherry raised. It also includes a garden, showground, amusement park or similar. Senator Sherry's example of no boundary at a football ground is not included, I do not think. I do not see that as a problem, but if there is a problem you are able to seek a ruling from the Taxation Office.Hot food that is sold for consumption away from premises is also taxable. On the issue of a tuckshop and a canteen, which you raised, the definition of a tuckshop and a canteen is given in the amendments. I do not think there is any confusion. If it is run by a non-profit body and only sells food, and if it is on primary school or secondary school grounds, it is not providing food to boarders as part of their board. I do not think that that would cause big confusion. You can get up and grandstand, but you as a great supporter of the wholesale sales tax system should be more modest in your concerns about boundary issues. I think I have covered the issues that Senator Sherry raised. If I have not, I will come back to them.16:27:006335Campbell, Sen GeorgeSenator GEORGE CAMPBELLNB5NSWALP00—I would like to come to an issue in the explanatory memorandum at 1.12, but before I do—WP6LIGHTFOOTSenator Lightfoot—You are going to explain the wholesale sales tax system.NB5Campbell, Sen GeorgeSenator GEORGE CAMPBELL—I want to make a couple of comments, Senator Lightfoot, particularly in relation to the references made earlier by Senator Kemp about our contribution to small business. I want to read into the Hansard a reference in the Melbourne Age of 24 June, which says:The Premier, Mr Jeff Kennett,—a good friend of Senator Kemp—said the Democrats had hijacked the tax package. He said the deal meant there would be enormous problems for small businesses and that dysfunctional state taxes may not be removed until 2005, if at all.He warned that the complexity of the legislation could mean that governments around the country would alter part of the taxation system every year.WP6LIGHTFOOTSenator Lightfoot—So that is manifest of your respect.NB5Campbell, Sen GeorgeSenator GEORGE CAMPBELL—That is not criticism of your package by the Labor Party opposition, which you would expect; that is criticism from your premier Premier—from the pretender to the throne. It is from the person who sees himself as being the guardian of the intellectual leadership of the Liberal Party. This is your guru who is saying to you that you have mucked it up.3L6CONROYSenator Conroy—He said much worse than that.NB5Campbell, Sen GeorgeSenator GEORGE CAMPBELL—What he said in private, I understand, may be different. Some of his telephone calls have been recorded in the past. I am sure his language in private is a bit more colourful than what he uses in public. But he said you have mucked it up. You let the Democrats hijack your tax package. What has he said? The problems will be enormous for small business. So we might see, in the not too distant future, Senator Kemp, how much damage you have actually done in real terms to small businesses around the country.EP5FERGUSONSenator Ferguson—If you lot had ever run a small business, you would understand.WP6LIGHTFOOTSenator Lightfoot—You've run a few strikes, George.NB5Campbell, Sen GeorgeSenator GEORGE CAMPBELL—I know, and I ran the Metal Workers Union, which you would classify as a big business. I am referring to point 1.12 on page 7 of the further supplementary explanatory memorandum. I ask the minister to explain the logic behind this point. It talks about the exclusion for plants under cultivation and says `will ensure that plants are not sold GST free where they are still in a growing medium'. It goes on to say:For example, leaves of a herb plant can be picked and used as an ingredient for food even though the plant is growing in a container. Herbs when sold in bunches and not as part of a living plant will be GST-free. A lettuce that is grown hydroponically will be GST-free when picked and sold to a customer.Minister, does that mean that if I go into a greengrocer's shop and buy some basil which still has the roots on I have to pay GST on that basil?EP5FERGUSONSenator Ferguson—In your greengrocer it should not have the roots still on it.NB5Campbell, Sen GeorgeSenator GEORGE CAMPBELL—It could be in a container, Senator Ferguson, but I do not think you would see too many herbs where you come from. If it still has the roots on, do you pay GST on it? If I ask him to take it out of the container and cut the roots off, does it then become GST free? If go into a health food store and buy herbs that are grown hydroponically—WP6LIGHTFOOTSenator Lightfoot—It doesn't matter how they are grown.NB5Campbell, Sen GeorgeSenator GEORGE CAMPBELL—It certainly does, Senator Lightfoot. I would not expect you to understand. If they are grown hydroponically, Senator Kemp, are they GST free?16:32:006336Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Senator Sherry raised the issue of cream. Cream is not a beverage and therefore is not specifically listed in the explanatory memorandum. Food is GST free, unless it is specifically taxed. Cream is not specifically taxable and therefore is GST free. So you can have cream on your strawberries, Senator. You might not be prepared to buy a wedding ring, but you can have cream on your strawberries.Senator Sherry interjecting—Senator Conroy interjecting—WW4Kemp, Sen RodSenator KEMP—With your role in the wholesale sales tax system, Senator, it ill behoves you to speak about boundary matters. A lot of quotes from various bodies have been thrown around this chamber about whether or not we should have a GST. My attention has been drawn to some observations by the Evatt Foundation. We know that a number of Labor Party luminaries, such as Mr Bob Hogg, are very supportive of this, and other Labor Party luminaries, particularly in earlier days, were very supportive of this. As we seem to be having a very frank exchange of quotes on a range of issues, I refer to chapter 3, `Broadening the Indirect Tax Base' where it says:In these circumstances, a case may be argued for the replacement of the existing wholesale sales tax with a largely revenue neutral inflation neutral GST at the rate of about 5 per cent.So even your own Labor Party bodies are no great beef for the wholesale sales tax system. Senator George Campbell ranged far and wide over rare meat, live fish, carob and we are now into basil. We are getting a very good idea of your diet, Senator.NB5CAMPBELLSenator George Campbell—My wife looks after me exceedingly well.WW4Kemp, Sen RodSenator KEMP—That was nice to get on the record.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Hogg)—Order! It would improve this debate if there were fewer interjections and comments were directed to the chair.WW4Kemp, Sen RodSenator KEMP—That is a very good ruling, might I say, Mr Temporary Chair.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—I do not need your approval, thank you.WW4Kemp, Sen RodSenator KEMP—I know you do not, but I thought you might like it. Concerning plants under cultivation, which Senator George Campbell referred to, so long as plants such as herbs are no longer in a growing medium, they will be GST free, even if the roots are still attached. Hydroponic plants are not to be considered under cultivation once they are removed from the hydroponic system. Once taken out of the hydroponic system, the herb is GST free.16:36:006337Conroy, Sen StephenSenator CONROY3L6VICALP00—On that, Senator Kemp, you talk about the exclusion for plants under cultivation—for example, leaves of a herb plant can be picked and used as an ingredient for food. Herbs when sold in bunches are not. So you pluck the leaf and sell it in a bunch and that is GST free? That is what it says. It is not growing. They are in their little pot plant. If you tie them together in a bunch, what is the ruling?16:37:006337Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—It seems to me that you have suggested that they still in the growing medium.Senator Conroy interjecting—WW4Kemp, Sen RodSenator KEMP—I really hoped that the Labor Party would get its act together a little bit here. Just sit down for a moment. I know that you are keen and enthusiastic, and that these things are really so pressing on the Labor Party psyche—albeit that the irony is apparent given that the Labor Party supports the wholesale sales tax system. Herbs sold in bunches and not as part of a living plant will be GST free. A lettuce that has been grown hydroponically will be GST free when it is picked and sold to the customer.16:38:006337Conroy, Sen StephenSenator CONROY3L6VICALP00—Hamburger patties sold separately will be GST free.WW4KEMPSenator Kemp—What page are you on?3L6Conroy, Sen StephenSenator CONROY—I am on page 11, on prepared foods. Is that bunches of hamburger patties or singles? Can I buy a single patty? I think I got a yes.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Hogg)—Finish your question, Senator Conroy, and then I will call the minister.3L6Conroy, Sen StephenSenator CONROY—I can buy a single patty, so if I walk up to a hamburger stall, I pay GST?16:39:006337Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—If you want to buy two patties and take them home and cook them, they are GST free. You can do that. I am not going to stop you.16:39:006337Conroy, Sen StephenSenator CONROY3L6VICALP00—So if I walk up to a hamburger stall and say, `I would like a hamburger, but I do not want you to put the hamburger around the two patties; I just want to buy the two patties separately from you, but I want you to cook the meat for me and then I will walk over there and assemble it myself,' where am I at?10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Senator Kemp, do you want to answer?WW4KEMPSenator Kemp—I will answer the question after Senator Campbell has spoken.16:40:006338Campbell, Sen GeorgeSenator GEORGE CAMPBELLNB5NSWALP00—I want to make a brief comment in relation to Senator Kemp's taking in vain the name of the Evatt Foundation with his selective quoting from the tax report. I just happen to have the report in front of me, Senator Kemp, and, to counter-balance what you said, I would like to read into the record what the report actually said under the heading of `Broadening the indirect tax base':Economic growth, employment growth and comprehensive base broadening and repairs to the direct tax system would go a long way towards guaranteeing robust adequacy of revenue into the future. In that context some reform of the indirect tax base could improve the overall system.It then went on to say that:The government's package runs counter to these principles: it proposes inequitable income tax rate and threshold changes, replaces a range of indirect taxes with unfair appendage, and seeks to square off through a variety of compensation measures.That is to balance Senator Kemp's selective quoting.16:41:006338Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I am not normally provoked by Senator George Campbell. My restraint is quite well known and often remarked on. Senator, all I was saying was that I was drawing attention to some circumstances where even the Evatt Foundation supports a GST. Now I am not suggesting that the Evatt Foundation is behind the government's package. Frankly, we would be pretty nervous if the Evatt Foundation was behind the government's package given the raft of taxes that they are proposing, including death duties. Those are issues of course which the Labor Party has always been keen to impose and it is not our policy. I suppose the other point—and it is quite a useful one—is that if the Labor Party were so happy with the Evatt Foundation's work, why didn't they release it before the election? The release of it was very delayed.NB5CAMPBELLSenator George Campbell—The Labor Party was not in control of the release.WW4Kemp, Sen RodSenator KEMP—Who is the chair of the Evatt Foundation, as a matter of interest? Former Senator Childs is the editor of that. On the hamburger issue, if you get your patties heated, that is hot food and you will be taxed.16:43:006338Conroy, Sen StephenSenator CONROY3L6VICALP00—I say, `Do not sell me the bun as a whole'—because the GST is on the whole item—`just give me the two buns, I will buy them separately, and give me the heated patty and I will make it myself.' Am I a tax avoider?EP5FERGUSONSenator Ferguson—Mr Temporary Chairman, I raise a point of order. I have sat here now for half an hour listening to Senator Conroy ask questions and not once has he addressed the question to you as the chair. Every question has been a conversation across the chamber and he has sometimes not even waited to be called before he starts the question. If Senator Conroy chooses to ask questions, he should obey the rules of the chamber, which say that he should address the chair—not even speak through the chair but address the chair—and ask the question in the third person.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Senator Ferguson, you are quite correct in what you say. I have drawn to the attention of both sides the need to address the chair rather than to carry on discussions and conversations across the chamber. It is not orderly to do so, so I remind those taking part in this debate to address their remarks to the chair.3L6Conroy, Sen StephenSenator CONROY—Thank you for your guidance, Senator Hogg. I appreciate Senator Ferguson drawing the standing orders to our attention. Through you—10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—No; to the chair.LI4PATTERSONSenator Patterson—This will be a challenge.3L6Conroy, Sen StephenSenator CONROY—To you, Mr Chairman: I was just wondering about the hamburger question and whether or not I am getting a cheaper burger by having it broken up into bits and then just putting it together myself. What would be the ruling? I do not pay GST on the whole hamburger, Mr Chair, if I do it myself?16:45:006339Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—You have asked for a ruling and we will give you a ruling. It is not our usual practice, I have to say, to continue to give rulings. In fact, I think it is a very odd procedure that we are expected to provide instant rulings. We will respond to your comments, Senator. If anyone else would like to make a comment, we will get back to you.16:46:006339Conroy, Sen StephenSenator CONROY3L6VICALP00—I also wanted to turn to the definition of `hot'. I was not sure we actually got an answer to that. Senator Sherry asked about that a little earlier. I was just wondering if the government had had a chance to get any advice on `hot' yet. If we ever get out of this building some time before the end of the year I am hoping to go up to the snow, so I am looking to get some explanation.16:46:006339Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—We did discuss this issue. It settles that hot takeaway food will be subject to GST. For example, hot chips, hamburgers, soup and coffee are hot food and subject to GST. Hot food is food for consumption that has been heated above the room temperature or above the generally surrounding air temperature. You obviously do not need to check the precise temperature of food. Food or drink that has been heated so that it can be consumed while still hot will be at a higher temperature, obviously, than the surrounding air temperature. Food that you sell while it is still warm, because it happens to be freshly baked, and is not intended to be eaten while it is still hot is GST free. I suppose an example of that is freshly baked bread.Also, you will see in the EM that there is a discussion on what is hot and hot food. Hot takeaway food is taxable, so a hamburger heated would be taxable. If the bread roll is genuinely marketed as a separate supply, it would be GST free. However, both would be taxable if marketed so as to buy a pattie with the bread rolls as this would be a mixed supply. 16:48:006339Conroy, Sen StephenSenator CONROY3L6VICALP00—I was wondering if the government could say what `genuinely marketed' means.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Senator Ferguson, I will give you the call whilst we wait for the minister.16:48:006339Ferguson, Sen AlanSenator FERGUSONEP5SALP10—We have heard the Labor Party try to differentiate amongst a whole range of goods which have been put by definition in this set of amendments before us today. It is amazing, when they are complaining at such length about the perceived complexities, that this is the same Labor Party which wants to retain a 12 per cent tax on all of the cooking utensils that are used to prepare the food that they are so concerned is now going to become tax free. Saucepans, frypans, woks—all goods to heat food—are taxed at 12 per cent. The utensils to prepare food maintain a 12 per cent tax and yet we are now making the goods that they are actually cooking tax free. The way they are arguing the case can only mean, I suggest, that the Labor Party at last are saying they actually believe that all food should be taxed. You can only deduce that from the things that the Labor Party are saying at present. It is not only the things that heat food but also the things that save food, the things that keep food cool, such as freezers, that attract a wholesale sales tax. So there is this tremendous concern about what we are actually eating and yet they want to retain a wholesale sales tax of 12 per cent on those items.It has not always been the case that the Labor Party have been in the position that they are in now. A former Prime Minister said at a press conference:I have always believed that an across the board, broad based consumption tax was the best tax option for achieving major reform of the Australian taxation system and moving the weight of taxation of direct taxation onto indirect taxation.That Prime Minister was, of course, none other than Mr Keating. Then, when a journalist said, `Will the wholesale sales tax rationalisation raise any additional revenue?', Mr Keating said:No, it will be revenue neutral, but that will still mean substantial additions to its base—a new tax system, a broadening of the base—They will not be as substantial as perhaps we proposed post-Summit—and we all remember the summit that took place—that is clothing, books, newspapers . . . He was then asked, `Was it worth the political pain?' Mr Keating at that time said:Well, let me just say this about that. I think the answer to that is yes. That I think the reform which will emerge will be well worth the effort. I think the value of the White Paper will sit on the public record as the Campbell Report sat on the public record. It is the first costed, analysed proposal for major tax reform in this country. It is not just a figment of someone's imagination, any other costed, untested idea . . . But then comes the key. The journalist said, `Do you think option C's time will come in a future government?' Former Prime Minister Keating said:It may it will do. Option C's time may come when the public of this country believes that such a reform can and should be undertaken.We have reached that stage now. The public of Australia, when they voted at the election in October last year, decided that now was the time that this change to the taxation system, the broad based indirect tax, should take place. They voted this government back in. The public of Australia believe that it is time that that tax reform took place.We have a situation where, in conjunction with the Democrats and having had extensive consultation with the public of Australia—with industries and various bodies who came to put forward their own point of view—we have reached the situation where option C's time has come. Only it is no longer option C, of course, but a more comprehensive tax reform package which takes over a whole range of issues that in fact have been catered for partly in those amendments that are before the chair right now.When we are talking about things that the Labor Party and opposition senators are trying to raise at present—issues which they think undermine the integrity of this tax package—they only need to be reminded of the awful mess of a taxation system that they have in place and that they support right now: one that they never tried to change in 13 years. All they did was add to the taxation rates. Over all that period of time, all we ever saw was an increase in the rate of wholesale sales tax. At last, after 14 years, the public of Australia have decided and believe that now is the time—just as former Prime Minister Keating said that, at some time in the future, `option C's time may come'—that such a reform should be undertaken.And a significant number of Australians do believe this reform should be undertaken. As Senator Murray said earlier, when we are talking about people who support taxation reform and the proposals that have been put forward by the government and the Democrats, an overwhelming number of Australians do believe that taxation reform is necessary and that this is the best reform that we can possibly have.I will not take up any more time at present except to say that, with the amendments that are before us on food, Senator Conroy and Senator Sherry can nitpick all they like about bits and pieces that they think are not suitable; but, with the overall tax package, the time for taxation reform is here. And whether they like it or not, at the end of the day they will not have the numbers to stop it from taking place, because an overwhelming number of senators in this place want taxation reform and an overwhelming number of Australians want taxation reform. And the sooner that that taxation reform takes place, the better.16:56:006340Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Senator Conroy is now turning his mind to what is `genuinely marketed' and how that would be defined. A high degree of commonsense would help provide you with the answer, Senator. Essentially, if there is an artificial attempt to split or disaggregate what is essentially one product, that would not be considered `genuine'. The tax office has wide ranging experience, and many of the issues that you raise are not new to bodies like the tax office that have responsibilities in this area. It is not clear where the Labor Party is coming from, to be quite frank. It is not clear—3L6CONROYSenator Conroy—It is a serious small business issue.WW4Kemp, Sen RodSenator KEMP—It is clear that the Labor Party is not genuinely interested in small business. If you were, to use your expression, genuinely interested in small business, Senator, you would not have come to this so late in your career. You would not have opposed virtually every measure that we have tried to take to assist small business. Even in the area of capital gains relief for small business you were not particularly helpful, if I remember rightly, Senator. In relation to unfair dismissal, Senator, you were of no help at all, and that was of major concern to small business—and a few others around here were not of great help either, if I remember rightly. Senator, your getting up and speaking about concern for small business is just absolute nonsense and hypocrisy of the lowest order.16:58:006341Conroy, Sen StephenSenator CONROY3L6VICALP00—I am a little concerned by that answer, because, as I have made the point earlier, whenever there is a dispute in a court between the tax office and a taxpayer, the judges look to the debate in parliament for guidance. They look to your words, to see what interpretation there is. Say that I am a hamburger seller, now.WP6LIGHTFOOTSenator Lightfoot—Address the chair.3L6Conroy, Sen StephenSenator CONROY—I am talking to myself. I am a hamburger seller. I put up a little sign that says `Hamburger buns sold separately, GST free'. Is a little sign `commonsense'? It clearly defines that I am selling my hamburger buns separately: is that genuine? Give the courts some guidance.There are a couple of other issues. The government has defined a footy ground as a take-away, and also other establishments, including a zoo. An entire zoo is apparently now a take-away. We are not big-game hunting now, Senator Murray.ZW4SHERRYSenator Sherry—Shoot them on the hoof.3L6Conroy, Sen StephenSenator CONROY—Yes, I am not even going to try that one. Let us say I buy a salad at a football ground and I want to go out of the ground to eat my salad and have a smoke—just like Mr Elliott, the president of Senator Kemp's football club is forced to go outside to have a smoke, I want to go out and have my smoke and eat my salad; I am a healthy individual. How does the seller deal with that situation when somebody says they want to take the salad out of the football ground, because they are going out to have a smoke because they are not allowed to smoke at the MCG anymore? That is another question for which I am hoping some clarification can be given for the courts for the future.Let me return to the ski slopes. I want to discuss ambient temperature up on the slopes, which I am hoping to get to sometime in the next few weeks, if there is any snow. Ambient temperature up there is much colder, room temperature is a lot colder. A lot of the stores up there, to avoid their goods freezing overnight, have heated rooms so they keep their goods hotter overnight than they otherwise would. When they bring their goods out in the morning they are hotter than room temperature, they are hotter than the ambient temperature outside. Will tax be applicable then? As is often the case, and I am not sure if you have ever been to the slopes, Senator Kemp—WP6LIGHTFOOTSenator Lightfoot—Go through the chair.3L6Conroy, Sen StephenSenator CONROY—Yes, through the chair. Thank you, Senator Lightfoot—as always, vigilant. Quite often the hamburger stall stands separate but there are chairs all around. Does the hamburger stall have to be a separate business entity from the chalet? If it is established by the chalet, and they are using the chairs that are in the boundary of the chalet, is that eating in for the purposes of the GST?Senator Kemp interjecting—3L6Conroy, Sen StephenSenator CONROY—These are questions that if you cared to wander up and chat to these small businesses up on the slopes they would be asking you. Will they have to contract out their little hamburger stall or is it theirs and the chairs that are being used—VW4HERRONSenator Herron—They could put it in a microwave.3L6Conroy, Sen StephenSenator CONROY—It is funny you should mention that, Senator Herron, because Senator Lees has had a contribution on microwave ovens today, and you know she is running the tax debate so you had better pay attention. Senator Lees said that the government would need to keep an eye on shops that tried to dodge the GST on takeaway food by installing microwave ovens at their front door. That is Senator Lees and Senator Murray in today's Australian . So you can ridicule and mock but genuine small businesses in this country want answers to questions like this. I have raised three or four issues there and I am hoping the government can enlighten the small business community.17:03:006342Murray, Sen AndrewSenator MURRAY3M6WAAD00—Before the minister responds, I hope I can encourage Senator Conroy in his next contribution to assist us a little in terms of the direction of his questions. I think some of them are very entertaining. You have opened up whole new worlds for me personally. Some of them have a great meaning because if you did happen to own a cafe on a ski slope somewhere, and such people do exist, you will have such questions. But what I want to know is whether you are about trying to improve the way in which this is being worked out or you are putting the case for all food to be taxed. If it is about improving it, in terms of better definitions or different definitions, I think that is always very helpful. If it is about putting a case for all food to be taxed, then your motive and objective would influence it.3L6CONROYSenator Conroy—You are not impugning my motives, are you, Senator Murray? You know that is against standing orders. I was seeking information.3M6Murray, Sen AndrewSenator MURRAY—And I think you are. I am trying to assess in my own mind where it goes, and I certainly would not impugn your motive. I thought it might be helpful if I rose just to indicate some of the concepts we took to the government which we asked them to consider when they were designing their improved version of our suggested food definition. Amongst those principles were the following: firstly, we felt that if you are going to introduce food definitions you should as far as possible keep close to the existing wholesale sales tax definitions because obviously there is convention, precedent, law, et cetera, which has been established over time.If you look at pages 6 and 7 and running onto page 8 you will find there the categories of food that are not GST free—in other words, have GST on them. Very many of those items mirror the wholesale sales tax present definitions, and that is for a good reason, because you have ruling, precedent, convention and law to do that. So that diminishes any definitional difficulties you have there.The second area we wanted to pay attention to was that of international precedent, because, plainly, when the tax office are asked to come to rulings, as they will, on various issues, the ways in which these things have been developed in other tax jurisdictions would, I assume, be a source of inspiration for them as to exactly how they express themselves here.The third area was to take account of politically sensitive issues. There, for instance, we looked at the savoury snacks area, and you will find that those definitions come very close to what the wholesale sales tax areas have. And the Treasury advisers could say that, so it is pretty close to that. But of course it has one key difference from the wholesale sales tax days in that caviar is taxed. I know the Labor Party was always under pressure because they would not tax caviar. I know eventually you agreed you would tax caviar.3L6CONROYSenator Conroy—We said we would at the last election.3M6Murray, Sen AndrewSenator MURRAY—I agree that that is what you said, but that was put in there. In the area of ice-cream foods, all ice-cream foods were in wholesale sales tax, including frozen yoghurt. I recall that it was the Labor government which pursued the issue of frozen yoghurt through the courts because it wished it to be taxed. I think that is a legitimate government purpose, and the fact is that it is now—3L6CONROYSenator Conroy—Are you suggesting the Tax Commissioner is not independent of government?3M6Murray, Sen AndrewSenator MURRAY—No, I am suggesting that under your governmental period that is what happened. The Labor government at the time could have passed a law that said that frozen yoghurt should not be taxed or should be taxed, so it was within your ambit.3L6CONROYSenator Conroy—It was the Tax Commissioner who pursued the case.3M6Murray, Sen AndrewSenator MURRAY—I accept the interjection; I shall put it on the record for you: the senator quite rightly points out it was the Tax Commissioner who pursued the case. The point I am trying to make is that, in developing the law on that and deciding on a definition, the Labor government thought it was appropriate, left it alone and did not move in legislation to take it out of wholesale sales tax. I think, within this range of items which are laid out on pages 6, 7 and 8, you will find many, many instances in which the definitions accord exactly with the wholesale sales tax definitions at present. The new areas of introductions, which are the subject of much of your questioning, are of course in the areas of prepared food.3L6CONROYSenator Conroy—`Inefficient and antiquated'—they were your words.3M6Murray, Sen AndrewSenator MURRAY—I was incidentally referring to the tax system, not to the tax definitions. I think some of your tax definitions were quite smart, but let us leave it at that. The prepared food definitions are different, and that is where much of your questioning has been. I think it has been very helpful because the milk analogy shows some potential minefields. But the key thing we must remember is the purpose for which the `prepared meal' definition was developed, and that purpose was to ensure that jobs would be preserved in the takeaway industry. We could have devised a much easier definition and simply said that everything in takeaway and restaurants is taxed, and everything in supermarkets is not taxed. The result of that unfair competition would have been the loss of substantial numbers of jobs, which I think was a point recognised by the Labor Party in the committee review.Whilst I accept, and we all know, that there will be definitional difficulties, my expectation is that the government and the Tax Office will work over the next 12 months to refine these areas to ensure that rulings minimise potential areas of concern, such as with your ambient temperature on the ski slope when drinking Angora goat's milk through a straw out of a coconut shell. I hope those remarks put this matter into perspective.We view it from the bigger issue of jobs and equity and, whilst the issue of definitions and compliance cost is very important and must be resolved for small business and business, our expectation is that international precedent and practice and experience in Australia through the administration of the wholesale sales tax regime will result in a very manageable, very easily operated system, certainly by the time we have passed through 12 months worth of tax ruling development.17:11:006343Murphy, Sen ShayneSenator MURPHYFX5TASALP00—I have a question with regard to the definition that goes to seeds and nuts. Minister, I would be interested to hear—and I do not want you to stand up and give me the WST treatment line, when all we are dealing with here—WW4KEMPSenator Kemp—I'll decide how I answer the question.FX5Murphy, Sen ShayneSenator MURPHY—I fully appreciate that, Minister. I am trying to say to you that there is no point in standing up and saying that, because you are proposing to put in place a whole new taxation system.WW4KEMPSenator Kemp—You don't know what your own taxation system produced—FX5Murphy, Sen ShayneSenator MURPHY—I have a fair idea. It is important when you are putting in place a whole new taxation system that it is not a question of trying to blame the existing taxation system. If you are going to put in place a new taxation system, you have to justify why you are applying tax to certain things under your proposed new taxation system.With regard to seeds and nuts, it says on page 13 of the further supplementary explanatory memorandum:The treatment of seeds and nuts has been simplified [item 16 of new Schedule 1A] . Seeds and nuts which have been processed or treated by salting, spicing, smoking or roasting, or in any other similar way will be taxable. Similar to the effective WST treatment, unshelled nuts and raw nuts will be GST-free. I have two questions with regard to that: are nuts that are shelled and/or husked—that is, you get the kernel from the seed—covered by the explanation `which have been processed or treated'? What about sun-dried? With regard to the unshelled and raw nuts, does `unshelled' cover those seeds that are husked as well? Minister, 1.53 on page 14 of the further supplementary explanatory memorandum states:Breakfast cereals (which may consist of biscuit type compressed, rolled or flattened cereal that is not individually wrapped) will be GST-free under the first exclusion. Rusks for infants or invalids will also be GST-free.Minister, I know you have probably gone into the odd hotel where they have bread sticks. I would be curious as to what definition would be placed on bread sticks and/or similar products, and whether or not they will be GST free. You might let me know what definition you are going to place on those two things, for a start.17:15:006344Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—We have covered a range of issues. Let me, first of all, look at Senator Conroy's concerns, which were basically what is hot—3L6CONROYSenator Conroy—Genuinely marketed.WW4Kemp, Sen RodSenator KEMP—We have answered `genuinely marketed'.3L6CONROYSenator Conroy—No, you said commonsense.WW4Kemp, Sen RodSenator KEMP—This is a little bit rich—I actually answer the question, and Senator Conroy is talking to his advisers and does not listen. We are now going back about 20 minutes, but I shall repeat what I said in relation to `genuinely marketed'. If there is an artificial attempt to split or disaggregate what is essentially one product, then that would not be considered genuine. That is what I said, Senator, and that is what I stand by. In relation to how courts will interpret taxation—3L6CONROYSenator Conroy—Put it in two words right now. You tell us.WW4Kemp, Sen RodSenator KEMP—I have just told you.3L6CONROYSenator Conroy—No, I asked you if you are going to put a sign up—WW4Kemp, Sen RodSenator KEMP—Senator, you have asked a question, and I am standing up. I know that you are overenthusiastic, as usual, and excitable and you do not listen, but I am going to respond how I wish to respond. In interpreting taxation laws, as though the courts are going to look closely at what you are saying here, Senator—3L6CONROYSenator Conroy—No, it is what you say that matters.WW4Kemp, Sen RodSenator KEMP—In interpreting taxation laws, the courts are, under the Acts Interpretation Act—3L6CONROYSenator Conroy—They are looking at you.WW4Kemp, Sen RodSenator KEMP—You talk all the time and then I stand up and you continue to talk. Could you kindly keep quiet. As I said, I am a man who has a reputation as very slow to anger. But, Senator, I plan to answer your questions in the way I wish to answer them.EP5FERGUSONSenator Ferguson—Unlike Senator Cook.WW4Kemp, Sen RodSenator KEMP—Unlike Senator Peter Cook, I am very slow to anger. That is the point that Senator Ferguson reminded me of. In interpreting taxation laws, the courts are required under the Acts Interpretation Act to look at the plain words of the legislation. It is only if the words are not clear that the courts then look to supportive documents. The courts look first at the explanatory memorandum and then at the second reading speech. My advice is that it is only in very rare examples that the court will look to a Senate debate. This may come as a source of great discouragement to us all. As I have said, I have sought advice on the matters you have raised, and that is the advice I have been given. In interpreting revenue legislation, the courts tend to take a broad approach that would be beneficial to taxpayers.In relation to the hot food issue that has excited Senator Conroy, I am advised that the European Court of Justice, when interpreting provisions dealing with hot food, has said that you look at what a reasonable person would consider hot. Despite the huge excitement in this chamber over hot food, there are in fact rarely court cases on such issues in countries that have a GST-style tax.So we have dealt with `genuinely marketed' and we have dealt with how courts interpret taxation law. Let me now turn to the pressing issue of seeds and nuts. Senator Murphy, in the case of a savoury snack—and this is going to come as a dreadful blow to you—the definition is the WST definition. You, as a very strong supporter, as is Senator Sherry, of the wholesale sales tax, would feel that that is an extremely important source of clarity to you. Was bread sticks your next issue?FX5MURPHYSenator Murphy—Bread sticks and rusks.WW4Kemp, Sen RodSenator KEMP—Bread sticks are also dealt with under this category. In this case, I take the senator to mean bread sticks that are like pretzels or crisps. Is that right?FX5MURPHYSenator Murphy—No.WW4Kemp, Sen RodSenator KEMP—Okay, you get up and then we can get back into the bread sticks issues. On the takeaway salad issue, which was turning the mind of Senator Conroy, indicators of a takeaway to determine if the food would be taxable or GST free would include the presentation of the salad and the manner in which it is prepared. If it was, for example, placed in a container without cutlery, this would indicate that the salad is a takeaway and will presumably not be consumed on the premises. When presented in a form ready for immediate consumption—that is, on a plate with cutlery—this would be taxable because it would clearly be eaten on the premises. If Senator Murphy would like to clarify the bread sticks issue, we will turn our minds to that one again.17:21:006345Murphy, Sen ShayneSenator MURPHYFX5TASALP00—Minister, in terms of bread sticks, I asked whether you had been to any hotels, et cetera, because bread sticks, I have to say, are almost identical to rusks in many instances. It is just a matter of the size of the bread stick and/or rusk. That is the question that I was asking. Bread sticks are often seen in hotels. They have them standing on their end. They are normally about eight inches long and they are a very similar product to rusks.WH4McGAURANSenator McGauran—Have you ever had one?FX5Murphy, Sen ShayneSenator MURPHY—I know you are still on them. When you graduate to cornflakes, let me know. Minister, I am asking how you are actually going to determine that, because you say that rusks for infants or invalids will also be GST free. So can you explain to me how you determine which are the rusks for the invalids and the infants and which are the rusks for the people in the pub and how you are going to determine which ones are which at the bakery shop? If the people at the local child-care centre are going down to the local baker and buying six dozen rusks and the local publican is buying 10 dozen bread sticks, how are you going to work out which the GST will apply to, if it applies at all?17:23:006345Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—As I said, I am not familiar with the product you are talking about. If it is bread it is GST free. There is no argument if it is bread. I will get my advisers to burrow deep into the WST rulings and they can tell me whether this is bread or not and, when I have some further advice, I will give it to you. It is worth making the point, I think, that most savoury snacks are mass produced and the manufacturer, in practice, will classify these.FX5MURPHYSenator Murphy—What about rusks?WW4Kemp, Sen RodSenator KEMP—Senator, I am just seeking that. You have asked about a product which I do not have knowledge on so I am going to seek some advice on it. Most savoury snacks, as I said, are mass produced. The manufacturer will in practice classify these goods, as they do now for the wholesale sales tax. So there is no big deal, and there is no great compliance problem for the manufacturer in these cases. I think that there is an awful attempt to beat-up a compliance issue when in fact, as far as the hotel or the business is concerned, these products will be typically classified by the manufacturer.17:25:006345Conroy, Sen StephenSenator CONROY3L6VICALP00—Mr Temporary Chairman Bartlett, I am pleased that you are in the chair today for this next part of the debate because I want to talk about the Democrats and the reason that we are having this debate today. The reason the government has proceeded with their amendments is that the Democrats caved in. The Democrats made ordinary Australians a promise before the last election about their position on the GST and a range of issues around the GST. It is disappointing that Senator Murray or Senator Lees are not here right now.ZW4SHERRYSenator Sherry—Where are the Democrats?3L6Conroy, Sen StephenSenator CONROY—They have left the floor to Senator Bartlett from the Democrats. I will read from a document entitled `The Australian Democrats Taxation Policy Response', dated 18 September 1998. This is their document from before the election. This is the party that was going to keep the bastards honest. This is what the Democrats say:The Democrats believe the Coalitions tax package can and must be significantly amended to be made fairer. The following amendments will be non-negotiable . . . Non-negotiable, Senator Kemp. The first one says, `Taking the GST off food.' There is no pretence about food being this or food being that and no definitional arguments like we have had to have today. The Democrats, as they claim, did quite well in the election, though any serious analysis of the actual polling does not quite back up their claim. But that was the promise, that was the basis on which all of the people who voted for the Democrats voted for them—that is, they were going to make the tax package fairer, they had six non-negotiable points and they were not going to be moved from them. It did not take long, unfortunately, for things to start to change in the Democrats. I even have Senator Murray reiterating the same thing on 22 September. As I said, I am disappointed that Senator Murray is not here today, or right now.ZW4SHERRYSenator Sherry—He's not on a toilet break?WW4KEMPSenator Kemp—Mr Temporary Chairman, I raise a point of order. Senator Murray has slipped out of the chamber. He has been here, as far as I am aware, all day. I would not like the record to give an indication—and it is the implication—to someone who is reading that Senator Murray is not showing sufficient interest in this legislation. He has been a very active contributor all day.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Bartlett)—There is no point of order.3L6Conroy, Sen StephenSenator CONROY—As I said, we had Senator Murray on 22 September absolutely and categorically supporting that document of 18 September and, again, I quote from his press release:The Democrats believe the Coalitions tax package can and must be significantly amended to be made fairer. The following amendments will be non-negotiable. . . Guess what the first one is: `Taking the GST off food.' Again, that was absolutely categorical. Then Senator Murray started to suggest publicly that there were some grey areas about what food was and he suggested that there was a variety of opinions inside the Democrats. What did Senator Lees do to Senator Murray? She went on Face to Face on Channel Seven on 14 February to again reiterate. This is from the transcript:. . . we would ask that the tax not be applied to food. Indeed, that is what we would insist on . . . and now you can trust us to do what we said we would be doing.ZW4SHERRYSenator Sherry—Food is food.3L6Conroy, Sen StephenSenator CONROY—That is right, Senator Sherry, thank you for that interjection. Senator Meg Lees said, `Food is food.' But it did not take long. Senator Lees suddenly started to change her position, and we had her saying:We went into the election campaign saying very clearly . . . we would ask that the tax not be applied to food. Indeed, that is what we would insist on.But as the pressure was increased, on 20 April at the National Press Club she said:So how do we define food?This is from her speech. She said:The Democrats fought the last election with a clear position of broad principle—no GST on food.In fact, I released our taxation response here at the Press Club.We said then that we were leaning towards the widest possible definition, but left the question open within the Party room.That is funny. I have been looking through the 18 September election document seeking this statement that the definition of food would be left to the party room, and I cannot find it. I cannot find, Mr Temporary Chairman Bartlett, anywhere in this document that it would be left to the party room; that the Democrats were leaning towards the widest possible definition but left the question open within the party room. Where was that in the election documents? There is no suggestion in any of those press releases from Senator Lees or Senator Murray, or in the Democrats' election documents, about leaving it to the party room. What did we have here: a secret agreement in the party room that they would decide what food was after the election? Is that what Senator Lees is saying—that after the election it would be left open to the party room and that that was understood and agreed upon? During the election, no, it was perfectly clear that food was food, as Senator Sherry described it, and that was quoting Senator Lees: `Food is food.' So we have got a situation where we are here today debating these amendments on the definition of food. It has been a frustrating debate at times, as I am sure the minister would agree.WW4KEMPSenator Kemp—I have enjoyed it thoroughly.3L6Conroy, Sen StephenSenator CONROY—I am pleased. But we are here only because the Democrats caved in. They have let down the Australian public who voted for them, they have let down some of the senators in this chamber and they have let down their party membership. They made promises to their party membership, just like they made promises to the Australian people, about what food was.Many commentators and many members of the Democrats have said the same thing: you would not want to have your life depending on that mob negotiating on your behalf. They caved in to the very clever performance by the government and some of the advisers. We saw you on the television, Mr Gaetjens, and clearly you have been to that charm school. When Senator Lees came in, you got out the chocolate biscuits, the nice fine china, showed them the big wooden cabinet table down at 4 Treasury Place—NB5CAMPBELLSenator George Campbell—The limousine to the Lodge.3L6Conroy, Sen StephenSenator CONROY—I do not know that they went to the Lodge. I am not sure that anyone goes to the Lodge anymore. But down at 4 Treasury Place the cameras showed it, and the big cabinet room table. They treated them seriously for a week or two.ZW4SHERRYSenator Sherry—Thirteen days. Now they are on main street.3L6Conroy, Sen StephenSenator CONROY—Yes. The government turned on the charm. Mr Gaetjens, I know you are going to do well out of this, but you deserve it, can I say.NB5CAMPBELLSenator George Campbell—Has he got his name on a seat?3L6Conroy, Sen StephenSenator CONROY—He is an adviser to the Treasurer. I think that means Jeff will veto him. You have got a situation where the Democrats were suckered good and proper. The worst part is they have even been suckered after the deal. The fact that they did the deal in the first place has been quite a lot of entertainment to many and a disappointment and a frustration to a lot. But they have been suckered afterwards. What we have seen is the fight on chooks. We have seen Senator Murray and Senator Lees arguing about who is going to die in a ditch on chooks. We have had, once again, as with the definition of food, Senator Murray roll Senator Lees. Senator Lees said, `We are not going to give in on chooks.' Senator Murray said, `I am not going to die in a ditch.' And what does the final package say? Senator Murray won, just like on the definition of food. You had the government learning from Senator Murray and sweet-talking Senator Lees.The agreement said that they would define these things. Where has the bread recipe gone? That is out. We had a long chat at the estimates hearings, as I am sure the minister would remember, about all the different types of bread that we had.ZW4SHERRYSenator Sherry—Crumpets?3L6Conroy, Sen StephenSenator CONROY—No, there was pumpernickel bread, there was blueberry bread. I sure the minister remembers that. At that stage the indications were quite clear that we were going to have a bread definition. So why don't we have one? Because the Democrats have caved in again. They are not actually setting the policy. They are no longer deciding what is food for the purposes of this bill and what is not. They have abdicated and are giving it over to the tax office. Once we get past 30 June, it has got nothing to do with the government, it is about the tax commissioner. So they have handed the definition of food over to the tax commissioner.They are not even able to come before us today, Mr Temporary Chairman Bartlett, and present us with a bill that gives us certainty, that says, `This is in and this is out.' You cannot really be accused of a sell-out, I guess, because no-one really understood where you stood before and no-one understands where we are at now. What we have seen is cave-in after cave-in by the Democrats. The government sit and smile and say, `We've got 85 per cent.' By the time the tax commissioner is finished, it could be 87, 89 or 91 per cent. By the time the tax commissioner is finished interpreting this shemozzle in another year or two, the Democrats will be sitting there saying, `But that is not what we meant.' So the Democrats have caved in and caved in. In finishing my contributions for the afternoon—EP5FERGUSONSenator Ferguson—You have got something else on, have you?WH4McGAURANSenator McGauran—Don't go.3L6Conroy, Sen StephenSenator CONROY—I appreciate your ongoing support, Senators McGauran and Ferguson, but today is going to be a day of shame for the Australian Democrats. They are going to wear the GST, because the government are going to walk away and, just as we have seen in a couple of little by-plays today, every time the hard issue comes up they will be standing there saying, `Oh well, that's what the Democrats forced us to do. We can't help it if it is complicated. It is the Democrats who forced it on us.'That is what is going to happen to the Democrats for the rest of their political lives. This will hang around their necks. In particular it will hang around the necks of Senator Murray, Senator Lees and Senator Allison, who have conspired to rat on their party membership and on the voters who voted for them. They will wear it because the government will be whispering behind their hands, `It was all the Democrats' fault.' That will not change after 30 June, ever, because we are going to be stuck with this. When the Democrats vote later on these amendments they should hang their heads in shame.FX5MURPHYSenator Murphy—They're not in the chamber.3L6Conroy, Sen StephenSenator CONROY—They're still not back. That's right. They should hang their heads in shame over where they have brought the debate today. ACOSS have a lot to answer for for getting us the first package, but the Democrats have taken over as the people who have kept the GST alive, and the government will leave them holding the bad news every time on this issue.17:38:006348Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—That was an absolutely pathetic contribution from Senator Conroy. It is a matter of considerable public debate at the moment as to just how low the Labor Party has sunk. A raft of recent press articles has speculated on the utter policy free zone of the Labor Party. Senator Sherry says it is going to take a couple of years to develop a tax policy.ZW4SHERRYSenator Sherry—It is next year—the conference is next year.WW4Kemp, Sen RodSenator KEMP—You have already had three years, now you want a fourth and then you will want some more time before the Labor Party can come up with anything coherent. What the Labor Party is worried about is that once these tax bills go through, which they will, the Labor Party will be exposed for what it totally is. People will be asking, `What will the Labor Party do?' If you ever want to see ducking and weaving on the TV or anywhere else, wait for the questions to Mr Beazley on what the Labor Party will do. Will there be a roll back? If there is a roll back, where will it be?The truth of the matter is that there is not one single idea on taxation reform coming out of the Labor Party. People should understand the reason for this is that the only things people like Senator Conroy, Senator Faulkner and Senator Ray are interested in are sleaze and trying to attack people from the gutter. They are not remotely interested in serious policy work. It surprised me that in one comment Senator Conroy indicated the quality of the advisers we have. Frankly, the Labor Party has some good advisers, but they are never listened to. All they are instructed to do is write silly questions for Senator Conroy and Senator Sherry, when they should be down doing some serious policy work.It will not be the Democrats that will be exposed. Let me make a prediction: it will be the Labor Party. It will be the policy free zone of the Labor Party. It will be the leadership of Mr Beazley, which is already being seriously questioned, and rightly so. You would think that, after four years in the job, the guy could have given them some sense of direction. He gave them no direction whatsoever. So day after day they run the Faulkner-Robert Ray agenda and relentlessly attack people, but they keep off policy. The riding instructions are that the Labor Party are not to go near policy: say nothing on policy. One of the many reasons they failed to make it over the mark in the last election was the fact that people saw them for what they are—a party devoid of any policy initiative. They had the chance in this chamber to be at the table on tax reform but they rejected it. They did not want tax reform under any circumstances.And you get up and talk about people breaking promises. I have said it once today, but I will say it again. The sole aim of Labor senators in this chamber is to attempt to make the government break its election promises—and not only on these particular tax bills. The Labor Party is the most negative, carping opposition that I believe we have ever seen in this place. Policy does not excite the Labor Party because it has to shy away from that; it cannot get near policy. Look how the Tanners of this world have been treated when they at least make an attempt. I am not running in support of Lindsay Tanner, let me say, but at least he is prepared to get out and do some work—unlike Senator Faulkner and Senator Ray and the sort of sleaze they are so enamoured of.I do not need to defend the Democrats. I am pointing out the sensitivity of the Labor Party. After 30 June they are going to be utterly exposed as the policy free vacuum that they really are. The only idea that has ever come out of the Labor Party that I can remember is Senator Cook's view to keep R&D syndicates. That was Senator Cook's great contribution to tax reform. The people who are in the gun sights are not the government or the Democrats, but the Labor Party.17:44:006349Cook, Sen PeterSenator COOKRF4WAALP00—I will not stoop to reply to that tirade from the minister; it is just his standard speech. Someone said, `Why don't you change the cassette?' That is an appropriate comment on it. We hear this in question time, we hear it now, we will probably hear it tomorrow and we will probably hear it next week as well.WW4KEMPSenator Kemp—It is pretty flattening.RF4Cook, Sen PeterSenator COOK—It is devastating. Maybe I am just a bit weary this afternoon; normally I would rise to the bait but I do not think I will dignify the occasion. When I was last on my feet I was asking some questions about the position the Democrats have taken, and I had almost exhausted those questions. I think, in view of the hour, I will go to the final matter that I was asked to respond to. This was a question from Senator Murray. In fact, he asked it on two separate occasions, so I think he is concerned about getting an answer. The question was: how will Labor vote on this amendment—or words to that effect—and will we be voting for it or against it?I am surprised this question was asked, because this question is meant to enmesh us in a consideration of what type of GST should be applied. Our position is that there should be no GST applied. We do not think you can make a GST better, and we do apprehend that this is a view that is not unique to us; it seems to be held in this chamber. It is a view that has been expressed in different ways by at least one of the Independent members of this chamber. It seems to be a view—and I cannot speak for them, of course; they speak best for themselves—that the Greens also express and, from what I read in the newspaper, it seems to be a view expressed as well by at least a couple of—maybe more—Australian Democrats.So let me answer the question by saying we will vote in whatever way we can in order to break this package up. This package introduces a GST to Australia, and where the Australian Labor Party stand is in opposition to that. It might well be that advocates can argue, as I am sure they will, that this is a more humane package than the one the government had—that is the whole line of argument here—and of course it is. I do not deny that, but it is still inequitable, it is still unfair and it is still the truth that once you have a GST it goes on forever but the compensation erodes over time, and people are worse off. Those things are still the basic truths, so we will vote in a manner that enables us to try and break this package up. For that reason we are going to vote against this amendment, and we hope we can attract as many people as possible across the floor to vote with us against it.I say that mindful of the fact that the last time we had an opportunity to vote on this type of amendment—the government of course was opposed to it—I asked Senator Meg Lees a question in that debate, through the chair, in the appropriate form, and, I must say, she responded forthwith. That question was: if we defeat your amendment on food, will you vote down the GST bills? She said yes, the Australian Democrats would vote down the GST bills. Well, we are going to put that to the test. If we can attract sufficient numbers to defeat this amendment, that is the end of the GST. So now we come to a moment of truth—an opportunity to defeat this legislation. By defeating this clause we will defeat the bill, and we want to give this chamber an opportunity to do so.Having said that, I am mindful that some people in politics are wilful and do misrepresent opposition parties. The Labor Party are always massively misrepresented by the minister at the table and by spokespeople from his party, and there will be an attempt to smear us and to say that we do not want a GST off food. Let me answer that now, lest those people outside of this chamber try and pull that stunt. We want a GST off food and everything else. We do not want a GST on anything. We will be voting strategically to break the package and the way in which our motion here should be interpreted is as an attempt to break the package.If we do not succeed today—and I hope we do—the package will eventually fetch up on the shores of the House of Representatives. We will then express our view about the final package. But this is not a done deal yet, and we are going to take this to the wire. We are not going to miss an opportunity to smash the GST and this will be an occasion on which we try to do that. I therefore underline this as important: by defeating this clause now, the Democrats—by the commitment of their leader—will have to defeat the GST, and this is an opportunity too good to be missed. But do not let anyone say that the Labor Party do not want a GST just on food: we do not want a GST on food and we do not want a GST on anything else. We do not want a GST on services. We do not want a GST on all transport. We do not want a GST that affects the finance industry. We do not want a GST that affects anything; we do not want a GST and so we are voting strategically. When it comes to the final document in the House, we will vote according to what is the appropriate end product of our strategic voting in the Senate.In answer to the question from Senator Murray: one of the reasons we in this chamber do not want to get involved in what type of GST we have has been illustrated in the discussion so far—if one can dignify it as a discussion—and that is that this is a complex tax. This is a tax that industry does not want. This is a tax that, with its compliance requirements, frightens small business in Australia. This is a tax that, according to Professor Peter Dixon, will reduce employment in Australia. This is a tax that will affect people adversely. While you might improve one part of if, you will not improve all of it, and that point has been made with blinding clarity earlier in this debate by Senator Harradine—and we acknowledge him for his honesty. So I answer the question thus, and I have nothing further to contribute, other than to say: let this be a test of whether we can smash a GST and then turn our attention to constructing a fair tax system for Australia.The Labor Party have always said that we are in favour of tax reform, but we are not in favour of a GST. The dishonesty of the argu ment in this debate is to pretend that the GST is tax reform. It is tax change. Reform suggests improvement, something for the better. A GST is something for the worse. It is not improvement. We will not be cornered by the language that the government chooses to appropriate and misuse to describe these measures as reform. They are not.What this country does need is tax improvement, and what the Australian Labor Party are prepared to do is to deliver that. What the Australian Labor Party are prepared to do is, if we can defeat this GST, cooperate around decent principles of fairness and equity to construct a tax package which captures support across the whole community and not have a tax package which divides Australia. If we fail in doing that and the GST is introduced, as Kim Beazley said just recently, and I affirm it again now, we will do our best to walk back the GST and to introduce a fair tax system for Australia.The problem we have is the manifest problem of the complexity of doing so. It is a problem created by the abolition of state taxes and charges, and it becomes a matter of how you then restructure the system to compensate for those and how you then obtain fairness in other avenues of taxation. It is not an easy thing. It is not a matter of clicking your fingers and saying, `Hey presto, we have a new tax system.' We have believed that, once you have a GST, you have it forever. I think that is probably the truth, but we are committed to finding ways of undoing it and introducing tax fairness to this nation.If Australians regard their tax system as unfair and as treating people more favourably according to their income and less favourably according to their need, the seeds of the gradual erosion of our tax system are sown and the tax system itself will break down over time. If you offend the basic principle of equity and you persist in offending it, then the tax system itself is in disrepute. The tax system relies on a degree of integrity for a high level of compliance. That is an issue that the government ought to pay attention to.The question has been put to us as to what we will do. That is what we will do. We will try to destroy the GST and we will vote in this chamber according to that goal. But the final word is, perhaps incongruously, a quote from Terry McCrann of the Herald Sun on 30 May this year, on page 8 of that newspaper. In order not to justify but to explain more clearly, I reach for a quote from what is a conservative commentator on taxation, just to indicate that the Labor Party is not alone in this. He said:John Howard and Peter Costello have not only abandoned tax reform—he is referring to this package—far worse, they have actually taken us backwards.The Labor Party will vote strategically to try to prevent that from occurring.17:56:006351Murray, Sen AndrewSenator MURRAY3M6WAAD00—Senator Cook, through the chair, I will do my very best not to misrepresent you. If I put out a press release tomorrow which says that you voted to tax food twice but you made a clear commitment that at the next election, if there was a tax on food, you would fight to keep tax off food, I think that would show an accurate understanding of what you have just said. You voted twice strategically, you do not believe there should be a tax on food and you will continue to support the position that there should not be a tax on food.17:56:006351Cook, Sen PeterSenator COOKRF4WAALP00—Given your leader's commitment, Senator Murray, that if this amendment is defeated the Democrats will vote against the GST package, we will defeat this amendment in order to defeat the package. That is why we are voting as we are. When these bills go to the House, we will vote according to the best outcome for Australia at that level. But we want to try to defeat these bills here. We are not making a judgment about trying to tax food. We are not in favour of a GST. We are voting strategically. That would be an accurate representation of our position.17:57:006351Murray, Sen AndrewSenator MURRAY3M6WAAD00—Through the chair, Senator Cook: I am not sure, given the late hour, that we are getting all of this right, because the government plus five Democrat senators would have the numbers. I have not asked them, but I cannot conceive of Senator Bartlett and Senator Stott Despoja voting to tax food, so I would expect them to be with us on this amendment. So you will not have the numbers. I accept that you are going to be voting strategically to tax food, but I did hear you clearly say that the Australian Labor Party does not want a tax on food. That is all I am seeking.FX5MURPHYSenator Murphy—Andrew, it is very simple: you are voting for a GST; we are not.3M6Murray, Sen AndrewSenator MURRAY—Okay, so if I put out a press release tomorrow saying that the Australian Labor Party wants to tax food but does not want a GST, that would be right? What I was trying to do was to establish whether, once the GST is through, you will support the Australian Democrats in not wanting food taxed or whether thereafter you are going to be saying you do want food taxed.I thought I understood Senator Cook to say three things very clearly. Firstly, he does not want a GST. I and everyone else understand that. Secondly, he wants to vote strategically to try to force a number spill on his side. I think that is illusory but, nevertheless, let us accept that as legitimate. Thirdly, I thought I heard him say—and I am paraphrasing you, Senator Cook, but do not let me misrepresent you—`Let us understand here in this chamber that the Australian Labor Party does not want a tax on food.' That is what I heard you say. By transposition I would therefore assume that, if the whole thing went through, you would continue to hold the position that you do not want food taxed—GST or otherwise.RF4COOKSenator Cook—We will continue to hold the position that we do not want a GST on food—3M6Murray, Sen AndrewSenator MURRAY—Thank you, I understand completely.RF4COOKSenator Cook—or on anything else.3M6Murray, Sen AndrewSenator MURRAY—For the record, Senator Cook just said to me that they do not want a GST on food.UNKNOWNOpposition senatorsOpposition senators—Or on anything else.3M6Murray, Sen AndrewSenator MURRAY—Or on anything else. That I clearly understand and, as you would understand, that is important to us.FX5MURPHYSenator Murphy—Why are you voting for it?3M6Murray, Sen AndrewSenator MURRAY—Because we do not want a GST on food but we do believe in taxing services.FX5MURPHYSenator Murphy—That does not make sense.3M6Murray, Sen AndrewSenator MURRAY—Yes, it does.Senator Murphy interjecting—3M6Murray, Sen AndrewSenator MURRAY—I am being distracted by the interjections here. Minister, I understand there was a press release today from some horticulturalists—I have not seen it but I have heard about it—who had concerns about how the GST will apply to them. I would appreciate your response on that matter, if you know about it.18:00:006352Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—It seems to me that the debate on food at least is drawing to a conclusion. I will respond briefly to the situation referred to by Senator Murray. There was a press release today which expressed concern about the GST ruling. The Queensland Fruit and Vegetable Growers are in the unique position of wanting to pay tax on their fruit and vegetable produce. This organisation objects to having GST-free fruit and vegetables while having to pay GST on inputs to their business. Their reasoning for this objection is that they appear to believe they have a perceived cash flow detriment. To assist their consideration of this matter, there may be no cash flow detriment to such farmers if they pay their inputs on an accruals basis, that is, they can claim GST input tax credits before they ever pay for their purchases. Even if purchases are paid for prior to claiming input tax credits, the cash flow detriment is overstated and expected to be more than offset by the wholesale sales tax savings that come through this package.If farmers pay GST on their fruit and vegetable sales, they may suffer disadvantage when competing with wholesalers selling the same food GST free. A quotation system similar to the wholesale sales tax would add further complexity for businesses selling items to farmers. I think that deals with the matters they raised. I take it, from what Senator Cook says, that they support GST-free food but they are going to vote in a way which would have food taxed. I understand your position perfectly, Senator.18:03:006353Murray, Sen AndrewSenator MURRAY3M6WAAD00—The next question I have, Minister, is being written about by some business commentators and is being asked in the business world. It concerns the concept of GST being applied through the chain. Could you outline exactly how that proceeds?18:03:006353Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—As you know, most of the GST-free areas apply to services and possibly to any incidental supplies of goods. It will be GST free only at the retail sale. In the proposed GST-free areas—the recipients of education, health, child care, et cetera—supply is easy to identify. So the GST-free treatment can be quarantined to the final consumer. With GST-free food, it would be difficult to define retail sale and enforce such a provision objectively. At any stage, for example, in the food chain, there may be a sale to a final consumer all the way from the farm to the supermarket. Sellers will need to make retail-wholesale decisions whether GST free or taxable while under pressure from customers wanting to buy GST free and from market competition.Attempting to limit the concession to retail sales would be unsustainable, we believe, because these commercial pressures would push the GST-free treatment back further up the line. For example, wholesalers would be forced to become retailers in order to obtain GST-free status.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Hogg)—The question is that government amendments 1 and 14 on sheet 238 and amendments 7, 8, 9, 12, 14 and 22 on sheet 239 be agreed to.18:05:006353Harradine, Sen BrianSenator HARRADINE6H4TASIND00—I want to enter this debate very briefly. I understand the point made by Senator Cook about the opposition's proposal to vote against this measure—on the face of it because these amendments in fact ensure that there is GST-free food. I will not go into the discussion of what is food and what is not; that has taken place. It should be understood—and it would obviously be understood—that the opposition is voting against the amendment for strategic purposes because of a statement by the Democrats that if food is subject to GST, the Democrats will not vote for the package as a whole, as amended by them and the government. In any strategic approach you have to think about numbers and the numbers are just not there for that sort of approach.ZW4SHERRYSenator Sherry—The Democrats are free thinkers.6H4Harradine, Sen BrianSenator HARRADINE—I do not know what is in the minds of the Democrats or any other senator here, but on this particular amendment I have heard the views of at least two of the Democrats: Senator Meg Lees and Senator Murray. They have made it perfectly clear that they are going to vote for this amendment and if only those two vote for the amendment, together with the government, these amendments will be carried, no matter what you do or what I do or what anyone else does. Under those particular circumstances—and I do not expect you to change your mind—I feel that I should vote for the amendment because at least it is attacking the problem of the original legislation which imposed GST on food. In saying this, I indicate perfectly clearly my intention to vote against the third reading of this measure. The CHAIRMAN—The question is that government amendments 1 and 14 on sheet 238, and 7,8,9,12,14,22 and 28 on sheet 239 be agreed to18:13:00The committee divided. (The Chairman—Senator S. M. West)43Abetz, E. Allison, L.Alston, R. K. R. Bartlett, A. J. J.Boswell, R. L. D. Bourne, V.Brownhill, D. G. C. Calvert, P. H.Campbell, I. G. Chapman, H. G. P.Colston, M. A. Coonan, H.Crane, W. Eggleston, A.Ellison, C. Ferguson, A. B.Ferris, J. Harradine, B.Heffernan, W. Herron, J.Kemp, R. Knowles, S. C.Lees, M. H. Lightfoot, P. R.Macdonald, I. Macdonald, S.MacGibbon, D. J. Margetts, D.McGauran, J. J. J. Minchin, N. H.Murray, A. O'Chee, W. G. *Parer, W. R. Payne, M. A.Reid, M. E. Stott Despoja, N.Synon, K. M. Tambling, G. E. J.Tierney, J. Troeth, J.Vanstone, A. E. Watson, J. O. W.Woodley, J.24Bishop, T. M. Bolkus, N.Campbell, G. Carr, K.Collins, J. M. A. Conroy, S.Cook, P. F. S. Cooney, B.Crossin, P. M. Crowley, R. A.Denman, K. J. Evans, C. V.Gibbs, B. Hogg, J.Lundy, K. McKiernan, J. P.Murphy, S. M. O'Brien, K. W. K. *Quirke, J. A. Ray, R. F.Reynolds, M. Schacht, C. C.Sherry, N. West, S. M.Gibson, B. F. Hutchins, S.Hill, R. M. Mackay, S.Newman, J. M. Forshaw, M. G.Patterson, K. C. L. Faulkner, J. P.* denotes tellerQuestion so resolved in the affirmative.18:17:006354Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—by leave—I move government amendments Nos 2, 3 and 4 on sheet EF238 and government amendment No. 6 on EF 239:(2) Clause 38-10, page 79 (after table item 1), insert:1AAcupuncture(3) Clause 38-10, page 79 (after table item 6), insert:6AHerbal medicine (including traditional Chinese herbal medicine)6BNaturopathy(4) Clause 38-10, page 80 (after line 11), after subclause (3), insert: (3A) A supply of goods is GST-free if: (a) it is made to a person in the course of supplying to the person a service referred to in item 6A or 6B of the table in subsection (1); and (b) it is supplied, and used or consumed, at the premises at which the service is supplied.(6) Clause 38-10, page 80 (line 9), before "9 or 12", insert "6A, 6B,".The government proposes an amendment that will expand the range of other health services that will be GST free. Under this amendment, acupuncture, herbal medicine—including traditional Chinese herbal medicine, Senator Cooney—and naturopathy will be GST free if provided by appropriately qualified practitioners. Subject to transitional arrangements, the supply of the health service will be GST free only if it is necessary for the treatment of the patient and is of a type that is normally supplied in that profession.18:19:006354Lees, Sen MegSenator LEES8U4SAAD00—It has been a long-term goal, since I first took over the Democrats' health portfolio, to look at what many Australians are choosing to use and give it some credibility, and also to look at the issue of qualifications. But I go back a little and look at the way in which the government drew the lines on health. Basically, they were quarantining people into Medicare. In other words, if you went to a doctor for acupuncture, fine, it was zero rated. But if you went to an acupuncturist who was—I hate to say this and I am probably going to get phone calls any minute—probably better qualified in many respects, given that some doctors are only just getting this as a very small part of their practice, then you were going to pay the GST. So the message we were sending out to people was: if you want to get GST-free medicine, you have to go into Medicare and tick over a bill on Medicare.Later I will talk about the complementary medicines and the S2s we have brought in. Basically, that is for the same reason. Again, the same message was being sent out about pharmaceuticals: if it was on script, fine; but if you went down for your own cough medicine, if you went down for your own Panadol, you paid your 10 per cent. So I had to really question those. And this is one of the issues Senator Cook was looking at before in the committee, when I do not think we really got to the bottom of some of the mechanics of what the government was doing, because largely it involved Treasury. I do not expect Treasury to be familiar with what happens in Medicare; I just wish we had had access to people who were familiar with it in those hearings, in that what the government was doing was actually going to cost it more than what we are asking to happen now.We have got a bill for this. Eventually we got the answers on how much S2 medicines were going to cost, how much for acupuncture and for alternative therapies generally. At the end of the day in a few years time when you consider the fact that people chose to pay for this out of their own pockets, that they got no supplements and that if they went to a naturopath they paid the whole amount themselves, I think it will be seen to have been very important not to have continued to send a message to people that the only real health services we care about are those that are under MedicareBasically where we are going in the processes is that we are giving these people three years. We are giving them an incentive to hang on to their GST-free status by within three years getting into organised accredited bodies at a state level. Why at a state level? Because that is what we have to do. That is the way it is structured. I point to the chiropractors who have done this fairly recently—over the last few years. They now have got together and have a formal organisation that requires formal qualifications to get into it. There was some grandfathering of some of those people, but largely now there is every confidence when you go to a chiropractor that they are fully trained, they are accredited by their own organisation and you are getting a high quality service.So this is the process that will be needed if these amendments are successful. At each state level you will see the various organisations going through the procedures. Obviously, they will be needing to get the support and assistance of state governments and state health departments to set up registered and recognised organisations to which they belong. After three years, if that has not been done, they will lose their GST-free status and they will then have to charge when they provide a service. Therefore, as many of their colleagues will be registered and recognised, I suspect they will perhaps even lose some of their patients. I think that natural and complementary medicine is a very important part of Australia's health system. More and more Australians are using it and I think more and more Australians have a right to have some confidence in it.Just to go through them again, this includes herbal medicine, acupuncture and naturopathy. For many Australians, I suspect this decision is going to mean further savings. It is very important that we use the tax system in this way. We use it to send messages on the environment, on what we would like people to do and not to do. In this case, we can use it to send messages to people that it is not just Medicare that the government is worried about and supports but that it also wants to see complementary medicine used to keep people healthy in the first place and to give them another opportunity or option to get a service if they are in need of one.18:24:006356Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I will be supporting these amendments, and for very good reason: it was one of the amendments moved both by the Democrats and the Greens (WA) last time it was moved. I would like to remind the chamber—and perhaps this is unkind—of what the minister said last time we moved it. He said:I have listened carefully to the arguments, as I promised to Senator Margetts and Senator Bartlett. I have to say that I am unpersuaded.At that point, I asked him to tell us what the hole was in the acupuncture argument—I am sorry; I could not help it—and Senator Kemp replied:In its consideration of the GST-free treatment of the health sector, the government's main concern is to have as broadly based a tax as possible while recognising the need to ensure a level playing field for both private and public suppliers of health goods and services.So far, he has not made too much sense in relation to the argument. He continued:The current list does not include services that most people would regard as complementary medicine. I think that point was sensibly canvassed in the Democrat amendment that we had before—and as I said, I listened carefully to it.The government has listed as GST free health services that would generally be considered by the community as mainstream rather than complementary or—to use the term used by Senator Bartlett—alternative. The government recognises that there are many services, including recreational pursuits, that may have health benefits. But, at the end of the day the government does have to draw the line at a reasonable point. As you would be aware, a great deal of work and thought has gone into the drawing of the line. The Vos committee was very useful in helping to set the boundaries.I bet they were! He continued:The government believes the way the line has been drawn is appropriate. Therefore, after due consideration, we will not be supporting the amendments which Senator Margetts has moved.Obviously the `due consideration' was not due enough, and after further due consideration they have now decided that the line can be shifted. I was not persuaded by Senator Kemp's arguments at the time, obviously, and therefore I will be happy to support again the amendments which I moved last time. There is no reason not to, of course.We have some other issues that we will be moving later on which broaden the category, which at the time the Democrats also agreed ought to be broadened. I would like to put in a plug, however, that what did come up during the debate and will continue to come up is the need to look at the whole picture of what is covered under government funding processes and what is not covered and on what basis things are covered. We have asked, quite sensibly, that this be put to a proper Senate committee process.I understand that the government, under the direction of Senator Tambling, is looking at these issues via a community committee, but I think there are processes that are important that can be done also by way of Senate inquiry. Obviously, this is one of those processes that I would not be able to follow through, but I do know that they have a large and growing level of support within the community. Otherwise, we will be continuing to have these debates that some kinds of medicine are considered mainstream and others are considered to be complementary. We have never really established within the parliamentary process the way in which government money should be allocated to support the beneficial aspects of these kinds of treatments—and the way that many of these kinds of treatments can actually save public money—and, of course, the health benefits at what is often called the `pointy end' of medicine.Unfortunately, when we cut out a lot of the self-help, community based and alternative medicine, we in fact do not save a lot at all. As far as I am concerned, we end up with more people requiring critical care within our medical system. So, yes, I certainly will support the amendments, but I would still like to ask the Senate to consider as well that we need some means, as a parliamentary process, of looking at the whole basis of funding of complementary medicine and alternative health care so that we can get an idea of how we can make proper legislative change in the future.18:29:006356Cook, Sen PeterSenator COOKRF4WAALP00—I rise somewhat sad dened now. The Labor Party voted strategically on the last motion. Had we succeeded, there would have been an end to the GST. We did not succeed, and now it appears that there will be a GST, and that is a sad occasion for Australia. It is a very disappointing occasion for us, I might say, because the Labor Party is on the record as being opposed to a GST, and we have voted strategically in this chamber in order to defeat it. It now appears very likely that there will be one, and, as I say, that is a very sad occasion.The amendment before us now though is an amendment that we voted against when it appeared in a similar guise last time. On that occasion, we voted against the amendment—I think it was understood here that we were voting for all 218 government amendments to their GST package, save the high-roller amendments—because we wanted, at the end of the committee stage of this debate, the clear government position on the GST to be before the chamber. We defeated amendments which in the normal course we might have supported because we wanted the government's proposition, its perfect version of the GST, if you like, to be judged by the chamber. It is now a matter of record that had that been done this chamber would have given it the thumbs down and there would have been no GST.If anyone misrepresented our position—and I don't know that they did—last time as far as acupuncture is concerned, they would have done so knowing it was a strategic vote and not a vote going to the issue. However, the opportunity for strategic voting is now extraordinarily limited. While there might be one or two more occasions on this running sheet to do so, the substantive strategic opportunity has passed us by and we should go to the issue, which I will now do; and I indicate that the Labor Party will support this amendment.18:31:006357Bartlett, Sen AndrewSenator BARTLETTDT6QLDAD00—I would also like to speak to this amendment, one which, it appears, is going to get the unanimous support of the chamber, which is a great thing. It is a positive parliamentary affirmation, if you like, of the validity of complementary medicines, an area of activity in Australia that has for many years not been properly recognise, has tended to be dismissed and has had aspersions cast on it. Indeed, even after the announcement of the agreement between the Democrats and the government on the tax package, criticisms came from the AMA on this area because they were not happy that complementary medicines were being recognised in this way. While the AMA may still not be happy, it is a matter of great pleasure to me that the chamber, it appears unanimously, is happy. It gives a great signal to the complementary medicines industry and the alternative medicine industry—if you prefer that title—that they have achieved a significant advance in recognition of the legitimate role they play in health care in Australia.The arguments as to why it is inappropriate to apply a GST to a number of complementary medicines, I outlined to this chamber when we were debating this legislation last—however many weeks ago it was when were talking taxation legislation, back in the days when the government was not interested in listening to our arguments on these issues and was certainly expressing a great degree of disappointment. Even in such a clearly recognised area such as acupuncture, it appeared there was no willingness to recognise the validity of exempting that area. It is a matter of great pleasure to me that we have made such an advance in that short period of time and that not only acupuncture but a number of other complementary medicines have been exempted from the GST, as is appropriate, avoiding anomalies and avoiding extra market discrimination against a number of complementary medicines.I think the only legitimate argument the government had about why this should not be exempt from a GST was that they had to draw a line somewhere and these were on the wrong side of the line. That is a reasonable argument if you have some sort of logic to back up where you are drawing your line. Certainly the Democrats' view with the government's previous position was that there was not any logic to where they were drawing the line. It was simply based on an outdated and outmoded understanding of health care in Australia today. Indeed, it lacked recognition of the choices of the Australian community, a hugh number of which choose, in many cases, complementary medicine over what is sometimes called mainstream medicine.Nonetheless, what we are doing here is drawing a line; I concede that, and there are issues about some of those being on the wrong side of the line. I think those arguments can legitimately be made and will continue to be made in the not too distant future in this chamber, with later amendments and, after this legislation has passed, in the ongoing examination of the operation of the legislation in the implementation phase over the next 12 months and beyond. I think the challenge will be for other people in what is broadly called the complementary medicine industry who will feel they have been left out here to make their case and also for the parliament and the government to continue to make a reasonable case as to why those that will be taxed should stay taxed. Part of that ongoing debate will be about various areas of alternative health treatment in the community and one of the issues in relation to that will be a clear degree of recognition and registration of those areas of activity.One of the other areas of achievement the Democrats have gained, as part of the amendments in relation to this tax package, is putting in place a mechanism for clarifying, registering and determining registered and professional practitioners in these areas of complementary medicine activity. It has been an ongoing battle. One of the reasons complementary medicines have in the past had difficulty in getting proper recognition has been their difficulty in having a uniform system of registration and recognition of qualified and effective practitioners. The agreement the Democrats have achieved puts in place a mechanism and provides extra support and encouragement for some of those medical practices which are not as well resourced as traditional mainstream medicine—surgeons and GPs, et cetera—and do not have the resources of the establishment behind them but still have a great desire to be recognised for the valuable health role they play in the community.We have managed to achieve an outcome not just in relation to taxation treatment but we have utilised taxation legislation to provide broader assistance for the ongoing development and recognition of an effective complementary medicine industry, if `industry' is the right word. That is another one of the great gains the Democrats have achieved. This package firstly needs to be recognised and, given my disappointment in this chamber only two or three weeks ago, it needs to be celebrated. It is a great step forward in this area.As Senator Lees, the Democrats leader, previously said, it is an area that Senator Lees and others in this chamber have promoted for many years and have sought greater recognition for. I guess, when you have been bashing away at an issue for many years, it is not inappropriate to point out successes when you manage to achieve them, and certainly this is a great success in areas that the Democrats have advocated for many years. We will continue the task, as in many other areas it is not over, and we will continue to advocate in this area, but certainly this is a great step forward and one that I am very pleased has been achieved. I hope it is a sign of more positive moves in this direction in the future. I return to my original point, that the fact that we have got what appears to be unanimous support in the chamber for this move does augur well for a more open-minded and understanding attitude from the parliament towards complementary and alternative medicines in Australia.18:39:006358Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I may have inadvertently misled the Senate a little while ago when I said that these were the amendments I moved last time. They are not; my amendments are still to come. We did have acupuncture amendments, and they were our second option when we moved them last time. Yes, we had amendments in relation to acupuncture. The amendments that I was probably referring to were the ones that we will be moving a little later. This was our second option at the time that we last debated it. I will admit it is a step forward from what exists now in relation to a recognition of those. There is still a long way to go, as I have argued before, and we will still support these amendments that are being put forward as government amendments now, but I have inadvertently misled the Senate in the sense that our first preference last time is embodied in the ones that are coming up under Greens (WA) amendments Nos 2, 3 and 5.18:40:006359Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I want to make a couple of points: firstly, I think that Senator Margetts has made a number of very sharp points in relation to acupuncture, which we have noted. More seriously, I wanted to pick up the point made by Senator Cook about the opposition's strategic voting position on the GST, his sadness at the last vote and his commitment that, apart from a number of selected examples which I am sure he will tell us about at the time, the opposition will not be voting strategically anymore but will be voting on the merits of the propositions and that this is a sad thing because they wanted the world to see the coalition's proposals on tax reform in their fullness, and that is why they voted strategically last time, but now that opportunity has passed they want to vote on the merits of exemptions.I heard Senator Ferguson, I think it was, earlier referring to the former Prime Minister and former Treasurer's views on a broad-based consumption tax, which of course was proposed by the then Treasurer for a large part of his early term as Treasurer, leading up to Option C that was put to the Tax Summit in 1985 and then ignominiously defeated by a coalition of forces. I am not sure where Senator Cook stood in that debate. I know, having read the biography of Mr Keating written by John Edwards, that Senator Cook and Mr Keating worked closely together. If I can read between the lines, they probably formed more than a close working relationship but also a close friendship, which I know is rare in politics—you do tend to work with colleagues and you tend to enjoy some of their company, but on the rare occasion you do strike up what one might call a genuine friendship. I would suspect that that is some thing that occurred between Senator Cook and Mr Keating, probably because one of the great redeeming features of both Mr Keating and Senator Cook is that they both have a love of ocean-going yachts. I know that one of Mr Keating's great redeeming feature is his great interest in the America's Cup and particularly classic wooden yachts. I am sure Senator Cook would have supported Mr Keating at the time—he may not have on this issue; he will probably let us know one day.It is important that we understand the background to this significant change of policy in the Labor Party on tax reform. Mr Keating, for example, at a lunch in New York in April 1985 said:Tax reform is not for the faint of heart—he might have been thinking of Senator Cook at the time—. . . the Australian government intends to reform the tax system. We are under no illusion about the difficulties of this task.He went on to say on the Sunday program later in the year, in May 1985:The purpose of tax reform is unambiguously to redistribute the burden of taxes, not to facilitate an increase in that burden.He also said, very importantly, and I thought with great foresight:Tax reform cannot be regarded as optional for Australia. Despite its difficulties, the cost of not beginning a substantial reform program are now unacceptably high.History will record that Mr Keating's—I am not using this word in the Sir Humphrey pejorative sense—brave attempt to reform the tax system in the early 1980s failed. There is no doubt that, when that failure was clear to Mr Keating, he was incredibly angry about it. He felt defeated. He felt that a major opportunity had been passed up. But Mr Keating was a complex character. Not only was he someone who did seek to implement major reforms during his political career—he did, and I credit him with that; I think some of the reforms of the Keating era were remarkably and historically important for Australia—but he was also a pragmatic and practical politician who was schooled in the New South Wales Labor Right and understood the practicalities of practical, pragmatic politics.Mr Keating, when presented with an opportunity in the early 1990s, firstly, to wrest the prime ministership from Bob Hawke and, secondly, to fight an election against a 15 per cent GST and a range of other radical reforms proposed by the then Hewson-led opposition, chose to do a 180-degree turn on tax reform. As Mr Keating said in 1985:We must commit ourselves to three propositions. The tax base must be broadened, the ideals of tax reform require us to commit ourselves to a lower marginal tax rate and we should attempt to use the tax system to solve every problem that looks too difficult to solve in some other way.He went on to say:There are three main advantages of the broad based consumption tax. First, it will allow a more rational indirect tax system than the current anomaly ridden wholesale tax which has multiple rates, numerous exemptions and fails to tax the services sector. Second, it will enable us to generate tax revenues to provide for a major reduction in marginal rates of income tax. No other tax has the same potential for this purpose. Third—and this is a very important point that has been forgotten or at least ignored by the Labor Party, but it was made very well by Paul Keating, the Treasurer in 1985—it generates from those who will continue to evade or avoid income tax. That provides a useful net dividend for distribution to the rest of the community.That is the important equity consideration of this. Mr Keating was the most eloquent and strong advocate of a broad-based consumption tax that this nation had seen in 1985. He drove it hard. Senator Cook would recall how hard he drove it, I am sure. When Mr Keating got hold of a proposition and a reform proposal, he drove it very hard, and that is to his great credit. He did not like it when he was defeated. He did not just lie down, roll over and get on to the next thing. I am sure he was angry about it for many weeks and months afterwards.Although he had a fantastic political opportunity to defeat the Hewson-led coalition team in 1993, I doubt very seriously whether Mr Keating did a road to Damascus conversion on the issue of tax reform. I suggest—and I am sure Mr Keating will not admit this until much later in his life—that Mr Keating is probably extremely pleased that, ultimately, the parliament will pass major tax reform. If he was incredibly frank about it—or unless he has done a total 180-degree turn on all of the sound propositions he put before the New York business community in 1985, the Sunday program and the National Press Club and on all that he seemed to so fervently believe in then—he would very much be pleased that Australia has achieved what he described as reform that we could not afford to put off. As he said on 12 May in the Sunday program:. . . the cost of not beginning a substantial reform program are now unacceptably high.He said that more than a decade ago, and the costs, of course, have risen since then. I am sure that Mr Keating would have preferred, I am sure, as he would have in 1985, for the package to go through with very limited exemptions, but I am sure that he would, as a practical, pragmatic and reformist politician, be very pleased to see the package go forward with the compromise that has been so sensibly negotiated between the Democrats leadership, the Prime Minister and the Treasurer.I make that point. Senator Cook has spoken about his sadness about the vote the Senate has just had and his strategic voting nature. But I think the history of tax reform in the Labor Party needs to be well understood as we proceed in this debate.18:50:006360Cook, Sen PeterSenator COOKRF4WAALP00—I fear I must rise and deal with these things very quickly. Firstly, I do not know what that contribution had to do with the motion before the chair on acupuncture, but I am sure that sometime, somewhere and somehow we will be enlightened on that. I really do not want to be enlightened now.Secondly, yes, it is true that Paul Keating is an admirer of antique wooden yachts, and he would be the first to admit it. In fact, he is an admirer of antiques, and he has a cultural dimension to him that is not as well understood in Australia but often derided by the Liberal Party. It is a cultural depth that is not shared by those across the chamber, apparently.Thirdly, I welcome the disclosure, reluctant and hesitating though it was, by Senator Campbell that he is a closet Keating supporter and a Keating admirer. We must be on truth serum here because it is unusual for this disclosure to be made. But it has been made, and I welcome the forthright way in which you have done that, Senator Campbell. We will remember that in the future when you and your colleagues sometimes criticise our former Prime Minister.Fourthly, I would like to think that I am a friend of Paul Keating. I certainly am a great admirer of him. He is a great Australian and a former great Prime Minister. He is misunderstood, and he will be appreciated more and more as the years roll by.Finally, with regard to his position on a GST, all you have to do is ask him. He is on the record as opposing this GST package. He opposed the Fightback package in 1993 very successfully. He did advocate a consumption tax in 1985—of course he did, he is on the record about that. He took part in that debate in the vigorous way which we know he is capable of, accepted the outcome and moved on from there. I just hope that the Liberal Party will one day move on from a consumption tax in the same way in which the former Prime Minister did. I think that answers all the questions.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Hogg)—The question is that amendments Nos 2, 3 and 4 on sheet EF238 and amendment No. 6 on sheet EF239 be agreed to.Question resolved in the affirmative.18:52:006361Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I move government amendment No. 5 on sheet EF238:(5) Clause 38-40, page 82 (line 24) to page 83 (line 5), omit the clause, substitute:38-40 Specialist disability services A supply of services is GST-free if the supplier receives funding under the Disability Services Act 1986 or under a complementary *State law or *Territory law in respect of the services.This amendment deals with the specialist disability services. The government proposes an amendment that would make the supply of services GST free if the supplier receives funding under the Disability Services Act 1986 or under a complementary state or territory law in respect of the services. This amendment broadens the range of disability services that will be GST free. Under this amendment, services such as advocacy, print disability, independent living training, information and many others will be GST free. This is in addition to accommodation, community support, community access and respite services which were initially proposed by the government to be GST free.18:53:006361Lees, Sen MegSenator LEES8U4SAAD00—This is an extremely important amendment, and I would like to thank the government for it. It is one of those areas that, for us, was a very, very pivotal issue.Basically, the government's original exemption was restrictive. It narrowed quite substantially what was GST free for people with disabilities, and it would have resulted in many very, very important disability services simply not being within that zero rating area; they would have attracted a GST. We have to remember that, for people with disabilities, these services are what actually enable them to participate actively and fully in the community. In particular, the ones we were worried about were advocacy services, print disability services and employment services. Under the original definition, there was a considerable risk that many of those services would have been excluded, and we are very pleased to say now that we are confident people with disabilities will be looked after.People with disabilities face additional costs already. This is one of the reasons, as we negotiated food out and pensions up, we were very concerned and aware that people with a disability had to have a number of support mechanisms within this package to ensure they would be better off. One of the very important areas was to keep this range of services GST free.Effectively, this amendment stops any possibility of people with a disability paying GST on services which the government itself has funded to meet identified needs, and it provides an exemption for all disability services funded under the Disability Services Act or equivalent state and territory acts. I think the rest of it speaks for itself. This is an extremely important amendment, and I look forward to unanimous support right across the chamber.Amendment agreed to.18:56:006362Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—by leave—I now move government amendments Nos 28 and 29 on sheet FA210:(28) Clause 38-45, page 83 (after line 12), after subclause (1), insert: (1A) A supply is GST-free if the thing supplied is supplied as a spare part for, and is specifically designed as a spare part for, another thing the supply of which would be GST-free under subsection (1).[GST-free medical aids and appliances](29) Clause 38-45, page 83 (line 13), omit "subsection (1)", substitute "subsection (1) or (1A)".[GST-free medical aids and appliances]These amendments refer to GST-free treatment for spare parts for medical aids and appliances. Clause 38-45 gives GST-free status to medical aids and appliances specifically designed for people with an illness or disability. However, it does not extend the same treatment to spare parts that are specifically designed for GST-free medical aids and appliances. These requests seek to extend the GST-free status to spare parts specifically designed for medical aids and appliances covered under schedule 1 of the GST bill.18:58:006362Bartlett, Sen AndrewSenator BARTLETTDT6QLDAD00—I would like to express my support and the Democrats support for this amendment as well, which again extends the area of GST-free treatment for medical aids and appliances. The Democrats support these amendments on the basic principle that people with an illness or a disability should not have to incur any additional costs for the aids and appliances they require.As I understand it, there was to some extent an oversight in the drafting of the initial legislation, and we are pleased that the government has recognised what was either an oversight or an inability at the time to recognise the need, for reasons of consistency apart from justice, to extend the eligibility to ensure it did not enable any additional costs for aids and appliances provided for people with illness and disabilities. So the Democrats are once again pleased to support another amendment that has been made on the basis of problems with the initial legislation that the Democrats were able to identify and address.Amendments agreed to.18:59:006362Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I move government amendment No. 6:(6) Page 83 (after line 16), after clause 38-45, insert:38-47 Other GST-free health goods (1) A supply is GST-free if it is a supply of goods of a kind that the *Health Minister, by determination in writing, declares to be goods the supply of which is GST-free. (2) However, a supply is not GST-free under subsection (1) if the supplier and the *recipient have agreed that the supply, or supplies of a kind that include that supply, not be treated as GST-free supplies.This amendment is under the heading of `Other GST-free health goods'. The government proposes a measure that will allow—10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Hogg)—Before you continue, the running sheet says amendments Nos 6 to 8. Have you only moved 6?WW4Kemp, Sen RodSenator KEMP—I have only moved 6.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—I just wanted that clarified.WW4Kemp, Sen RodSenator KEMP—In light of the briefing I have before me, I will move No. 6 and then I will move to No. 8.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—And then will you move Nos 7 and 8 together? For the purposes of the running sheet, it would be helpful if you could advise us.WW4Kemp, Sen RodSenator KEMP—Yes, I will move those together.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—You will move Nos 6 to 8 together?WW4Kemp, Sen RodSenator KEMP—No, I have already moved No. 6 and then I will move Nos 7 and 8 together.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Right. Thank you.WW4Kemp, Sen RodSenator KEMP—The government proposes a measure that would allow appropriate public health goods to be GST free. Under this amendment, the minister for health will be able to make a good GST free by way of ministerial determination subject to the approval of the ministerial council as described in the intergovernmental agreement on the reform of Commonwealth-state financial relations.Amendment agreed to.19:00:006363Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—by leave—I move government amendments Nos 7 and 8 on sheet EF238:(7) Clause 38-50, page 83 (after line 29), after subclause (2), insert: (2A) A supply of a drug or medicinal preparation is GST-free if, under a *State law or a *Territory law in the State or Territory in which it is supplied, the drug or medicinal preparation may only be supplied: (a) by a *medical practitioner, *dental practitioner, or by, or on behalf of, a pharmacist; or (b) a person who is permitted by that law to supply the drug or medicinal preparation in circumstances where pharmacy services are not available.(8) Clause 38-50, page 84 (after line 6), at the end of the clause, add: (4) A supply of a drug or medicinal preparation is GST-free if: (a) the drug or medicinal preparation is an analgesic that has a single active ingredient the supply of which as a drug or medicinal preparation would be GST-free under subsection (2A) if it were supplied in a larger quantity; and (b) the drug or medicinal preparation is of a kind the supply of which is declared by the *Health Minister to be GST-free, by determination in writing.The government proposes an amendment that will expand the list of GST free drugs and preparations. Under this amendment, drugs and medicinal preparations that are generally supplied at a pharmacy will be GST free. These are drugs covered under schedule 2 of the Standard for the Uniform Scheduling of Drugs and Poisons. Amendment No. 8 relates to analgesics in small packs. The government proposes an amendment that will expand the list of GST free drugs and medicinal preparations. Under the amendment, analgesics with a single active ingredient will be GST free if supplied in smaller quantities provided they would not be covered by schedule 2 of the SUSDP if the same analgesic was supplied in a larger quantity. For an analgesic to be GST free under this provision, it must also be of a kind determined by the health minister to be GST free.19:02:006363Bartlett, Sen AndrewSenator BARTLETTDT6QLDAD00—Again the Democrats are happy to support this amendment as another significant improvement that the Democrats have managed to achieve in this overall tax package. The minister has given a good technical explanation of the impact of the amendment. I would just briefly like to explain the philosophy, the rationale or the principle behind the technical explanation that the minister has given and the reason why the Democrats believe this change is so important and why it is a positive move. We are pleased that the government has agreed with us on that.The Democrats were concerned that the original legislation would have significantly discriminated against people with disabilities, people with chronic illnesses and young families. These people are all high level users of S2 products which would have been hit with the GST under the original government proposal. Under that proposal, many common medicines such as pain relievers, cold and flu tablets and anti-fungal treatments would have incurred a GST. Of course, medicines such as these are used very frequently by people on low incomes or people who are chronically ill and the elderly, some of whom may be on higher incomes but have to spend a disproportionate amount of that income on these sorts of medicinal products. Many people, particularly those on low incomes or with a chronic illness or disability, are already struggling to afford the medications they need. Even a small additional cost in the price of each medicine can add up to a significant cost burden on some of the most disadvantaged people in the community.The Democrats were also concerned that the different rates of a GST on different pack sizes of the same product could create confusion amongst consumers and induce behaviours contrary to achieving quality use of medicines and optimum health outcomes. It is a matter of pleasure to the Democrats that the government has agreed to extend the GST exemption to S2 products, including smaller pack sizes of those products. That deals with the amendments that the minister has just moved and the one he is about to move—that is, amendment No. 11. Having spoken to that in advance, I shall not speak to it when he moves it.Amendments agreed to.19:04:006364Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—A consequential amendment now flows from this—that is, government amendment No. 11 on EF239. As I said, in light of the amendments which have just been passed, this one is now one of those consequential amendments. I move:(11) Clause 177-10, page 237 (lines 24 and 25), omit subclause (4), substitute: (4) The *Health Minister may make a determination for the purposes of: (a) paragraph 38-15(c); or (b) subsection 38-47(1); or (c) paragraph 38-50(4)(b).Amendment agreed to.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator McKiernan)—We now move to Greens (WA) amendments Nos 2, 3 and 5 on sheet 1315.19:05:006364Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—We are getting to the amendments I foreshadowed a little earlier, and these are a wider definition in relation to complementary medicine. The amendment extends the current medical exemption to include complementary medicine registered on the Register of Therapeutic Goods. To be listed on this register, the goods must have been shown to be of acceptable safety, quality and efficacy. In addition, these amendments extend the GST free status to medical services provided by a person who is an accredited member of a body listed in schedule 1 of the Therapeutic Goods Regulations. There is a list of bodies that are included in schedule 1.This position is the same as the initial position of the Australian Democrats in relation to complementary medicine. It is much broader than what the Democrats have negotiated with the government. Basically, the Australian Democrats deal on complementary medicine has picked out acupuncturists, herbalists and naturopaths. Yes, it is an improvement on what existed before. However, the problems that these particular complementary medicine providers have with the GST are common to many other aspects of complementary medicine. Indeed, the Democrats noted that this amendment was needed because the government's definition was too narrow. The government's definition is for services that are basically provided through ordinary medical practitioners.The Democrats outlined the need for this amendment very well when they moved the same one before the deal. Complementary medicine providers are effectively discriminated against under the government's original deal and only a few less are discriminated against under the government's changes in relation to the Democrats. Mainstream doctors who practise some complementary techniques will have their services classified as GST free. So that is clearly an issue of equity in the provision of the same service.Although this exacerbates the current discrimination that applies to mainstream doctors who can supply complementary services and receive a Medicare rebate for doing so, complementary health practitioners do not have access to this concession for their patients. As I pointed out in the argument I gave last time we debated this issue, that means that on occasion people who are qualified to provide a service will not be provided with a concession and people who are not as qualified as those practitioners but just happen to be a GP are going to be provided with the concession, and that we believe is rather strange.Let us look at the choice for consumers. The government has acknowledged that many people actually prefer complementary techniques and medicines in their health care regime. Many consumers use complementary medicine as a matter of practice, as Senator Bartlett spent about five minutes explaining when he moved his own amendment in relation to this. These amendments are also consistent with government initiatives in this area, for example, the establishment of an Office of Complementary Medicine and the enhancement of the Complementary Medicines Evaluation Committee. I mention the need for us to look seriously at the committee of inquiry within the parliament on this issue.Complementary medicine other than acupuncturists, naturopaths and herbalists is actually rebatable under health insurers. In the Democrats' explanation they mentioned that the provision of massage therapy is sometimes rebatable. Also, as the Democrats pointed out, it would save the government money in the long term. By not disadvantaging complementary medicine, this offers people extra choices and often complementary medicine can be preventative which relieves pressure, as I mentioned before, on the pointy end of the health system—the one that is the most expensive.All this is on the record. It is what was the preferred position before, and now we are putting it to the chamber—that is, the chance to now vote for the preferred position of the Greens (WA) and the Australian Democrats. I seek leave to move Greens (WA) amendments 2, 3 and 5 on sheet 1315. Leave granted.DX5Margetts, Sen DeeSenator MARGETTS—I move:(2) Clause 38-10, page 79 (after table item 4), insert:4A Complementary medicine[complementary medicine](3) Clause 38-50, page 84 (after line 6), at the end of the clause, add: (4) A supply of a drug or medicinal preparation is GST-free if the supply is of a drug or medicinal preparation which is registered or listed on the Australian Register of Therapeutic Goods.[complementary medicine](5) Clause 195-1, page 271 (line 19), at the end of the definition of recognised professional , add: ; or (d) in the case of services covered by item 4A in the table—the service is supplied by a person who is accredited as a member of a body listed in Schedule 1 of the Therapeutic Goods Regulations.[complementary medicine]19:09:006365Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—We will not be supporting the amendments. We of course always have to make a judgment on where you draw the line on these matters. Let me assure you that a great deal of work was done, I understand, with the negotiators looking at these issues.DX5MARGETTSSenator Margetts—That's what you said last time.WW4Kemp, Sen RodSenator KEMP—Well, you were not at the table, Senator. You never bothered to make a contribution. You were not at the table. The trouble with the Greens—and it has to be said it is a chronic problem—is that they are never there. They are never there to advance the cause of anything, not even the cause of the Greens. To be quite frank, Senator, the lesson for you should be: if you want to have an influence on government policy, if you want to have an influence on the policies which affect this nation, you have to talk to people. You have had two people in this chamber, we have needed two votes on every issue, and you have never spoken to us. We hear what you say, but you have squandered the balance of power you had in this chamber. You were not at the table, so we have drawn the balance which we believe is an appropriate balance on this issue.19:11:006365Bartlett, Sen AndrewSenator BARTLETTDT6QLDAD00—The Democrats, not surprisingly, have a great deal of sympathy for the amendments which Senator Margetts has just moved, and they go to an issue that was examined in the Senate Community Affairs References Committee on which I was the Democrats' representative during the tax inquiry. The issue of complementary medicines and the tax treatment thereof and the definitional issues that relate to that are issues that the Democrats, and certainly I, have tried to have quite a close look at.I think Senator Kemp's comments were a trifle unfair in relation to Senator Margetts's contribution. She certainly put forward these arguments and other related amendments last time around and I think explained quite well the rationale for them. One way of being involved in obtaining positive outcomes to legislation is obviously to move amendments in this chamber. I do not think that should be completely dismissed as a valid mode of activity. I think one of the problems with this amendment and one of the reasons why the Democrats are not able to support these amendments, particularly amendments 2 and 5—and this is where I get a chance to complain about the government, which is always a fun thing to do, in a positive way of course—is that there was such little constructive engagement by the government during the committee inquiry process. So it was very difficult to examine clearly how best to define these issues when we were trying to wrestle with them in the committee process.A lot of people from various aspects of the complementary medicine industry, from all parts—as people would recognise, it is a very diverse area of activity—put forward their views obviously explaining why they believed it would be best if they were exempt. The Democrats, not surprisingly, were sympathetic to that. Indeed, that is why we moved amendments similar to those which Senator Margetts has just moved. We recognised some potential definitional issues there, but they were based on our judgment following the Senate committee's inquiries and the evidence available to us then. As I say, that was done with very little engagement from the government.If I can turn around the criticism that Senator Kemp made before of Senator Margetts, it would be much more productive in the future if the government engaged in the Senate committee inquiry process more fully so that we could sort out all those issues much more fully through that process. I think that would be a far more helpful approach to take. I think it would have saved us a lot of time that we have had to spend in recent weeks and enable the process to be done in a much more measured fashion rather than in such a pressured atmosphere. I give that for the government to take on board for future reference.However, once we were able to have extensive, meaningful discussions with the government on this issue, which we were only able to do in the last couple of weeks, the Democrats had to work out with the government how we would draw the line and how that would work in practice. Whilst we obviously have the view—as we have expressed previously, both in our amendments and on other occasions—that exemption should be as broad as possible, you need to look at the impacts whenever you are defining issues. These amendments that Senator Margetts has moved would allow any practitioner to provide a GST-free service as long as they are a member of a society listed in the schedule to the Therapeutic Goods Act.After the extensive discussions we were finally able to have with the government on this issue—discussions that we could not have during the Senate committee process—the Democrats were made aware that the government had little or no knowledge of many of the organisations that are listed in the schedule to the Therapeutic Goods Act. While some of these organisations—quite a few—are responsible and credible, others are groups about which the government knows very little. What the government does know about a few of these groups is worrying. One group, for example, claimed that it could cure baldness. The issue is that this particular schedule—and the mechanism for which it is established and the rationale for it operating now—does not necessarily correlate purely to providing a recognised and proven health benefit. Most of the organisations do, but some do not. Unfortunately, that would mean that this amendment could result in some irresponsible practitioners obtaining tax-free status which could create confusion for consumers of complementary medicine.As much as the principle that Senator Margetts outlined before is important—that people who are qualified and competent to provide a particular service should receive the same tax treatment, so if someone gets that service through a GP or gets the same service through a qualified and competent practitioner they should have the same tax treatment—the danger with this amendment is the reverse of that. There is the potential for some people who are not qualified or, much more import antly, not competent, to get an exemption for their service, enabling those people to get a toehold in the overall broader health market. The Democrats have been concerned about this, and it has always been `the' issue, as I have highlighted in my comments previously in relation to complementary medicine. Irresponsible and unscrupulous practices in the complementary medicine sector is the issue which the sector itself highlights.In my previous comments on earlier amendments I spoke about the importance of a recognised system of registration so that the consumer as well as the practitioner, and the credibility of the industry as a whole, is protected. That is something that the industry, practitioners and consumers highlight quite frequently. I spoke to many through the Senate committee inquiry process and, following on from that, when our amendments were being drafted. That is a common concern; it is not a new concern. Unfortunately, that concern has often been used—and still is used by groups such as the AMA—to try to dismiss the whole complementary medicine sector. Hopefully, one of the extra benefits of the amendments that the government has taken on board and that we passed previously will be a weakening of the ability for that weapon to be used against credible complementary medicine practitioners.That is the rationale for the Democrats' position having moved, following our ability to discuss in a meaningful way with the government the practical applications of what we are proposing. Our concern would be that the amendment would raise the danger that the advance, the benefits, that we have achieved through the amendments we have just passed in our agreement with the government—advancing the industry so it will be more regulated and more controlled for the protection of the consumer and the industry—may be lost and we would be left with an unregulated and uncontrolled industry. It would provide less incentive and there would be no government funding for the various practitioners to come together and develop an accreditation system. As I have said previously, that is one of the key needs for that sector to ensure that they can establish themselves as credible health providers in the broader area of health services in Australia.It is obviously a difficult area, and an area that the Democrats have a lot of sympathy with. I do acknowledge that if this amendment were to succeed there would be a number of other credible practitioners, genuine health providers, who will be GST free, but there would also be the danger of a number of unqualified, noncompetent—rather than incompetent—practitioners who would also receive that exemption. That is the danger that the Democrats see in this.It is important to acknowledge that the Democrats have achieved significant gains for complementary medicine services and have won agreement from the government to provide $600,000 to support complementary practitioners to develop accreditation systems. So, in addition to the amendments that we have already had passed, we have required the government, or enabled the government to agree, to provide financial assistance to practitioners to develop their accreditation systems. That will provide a mechanism for addressing the unfortunate aspect of not being able to pass this amendment, which is that some genuine practitioners will not be able to provide free treatment now. But it will provide a concrete mechanism to enable those people to move into the GST-free area in the future, and certainly that is the ultimate goal the Democrats will continue to encourage. We do not believe that being able to make a forward step in this area should be lost by not being able to go all the way in one jump, particularly given some of the difficulties about drawing the line where this amendment does.19:21:006367Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I am concerned that it is thought that this amendment gives people who are not accredited the ability to claim GST-free status, but of course this amendment extends the GST-free status to medical services provided by a person who is an accredited member of a body listed in schedule 1 of the Therapeutic Goods Act. The problem we have always had with this definition—as I mentioned before—is that people who are GPs will have access to such things even if they might not be properly accredited to provide those services. It is always a problem and I do not think this problem has been solved. I hope that what we have heard from the Australian Democrats just now indicates that they would also support a further Senate inquiry into this issue.I would like to point out that in the report in relation to this tax measure the Democrats recommended that all products approved by the government as therapeutic goods should be GST free. The Democrats also recommended that all services provided by recognised complementary medicine practitioners and all complementary medicine approved for sale in Australia as therapeutic goods should be GST free. The Australian Democrats felt strongly enough about this in the committee process for it to be a recommendation. It was not just mentioned in passing; it was a recommendation. Of course, the Greens (WA) would agree with that. In fact, from much of Senator Bartlett's speech today I understood that he was in effect saying the same thing but that the government's line happened to be drawn on the other side of their preferred position. I think it is important enough to call a division on this issue, and I intend to do so.10000CHAIRMANThe CHAIRMAN—The question is that Greens (WA) amendments Nos 2, 3 and 5 on sheet 1315 be agreed to.19:28:00The committee divided. (The Chairman—Senator S. M. West)2Brown, B. Margetts, D. *51Allison, L. Bishop, T. M.Boswell, R. L. D. Bourne, V.Brownhill, D. G. C. Calvert, P. H. *Campbell, G. Campbell, I. G.Carr, K. Conroy, S.Coonan, H. Cooney, B.Crossin, P. M. Crowley, R. A.Denman, K. J. Eggleston, A.Ferguson, A. B. Ferris, J.Forshaw, M. G. Gibbs, B.Heffernan, W. Herron, J.Hill, R. M. Kemp, R.Knowles, S. C. Lees, M. H.Lightfoot, P. R. Macdonald, S.MacGibbon, D. J. Mackay, S.McGauran, J. J. J. McKiernan, J. P.Minchin, N. H. Murphy, S. M.Murray, A. Parer, W. R.Patterson, K. C. L. Payne, M. A.Quirke, J. A. Ray, R. F.Reid, M. E. Reynolds, M.Schacht, C. C. Sherry, N.Synon, K. M. Tambling, G. E. J.Tierney, J. Troeth, J.Watson, J. O. W. West, S. M.Woodley, J.Question so resolved in the negative.19:32:006368Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—by leave—I move government amendment No. 12 on sheet EF238 and government amendments Nos 10 and 13 on sheet EF239:(12) Clause 195-1, page 257 (after line 17), after paragraph (f) of the definition of education course , insert: (fa) an *adult and community education course; or(10) Clause 177-10, page 237 (before line 18), before paragraph (a), insert: (aa) paragraphs (a) and (b) of the definition of adult and community education course in the Dictionary; or(13) Clause 195-1, page 251 (after line 5), after the definition of adjustment period , insert: adult and community education course means a course of study or instruction that is likely to add to the employment related skills of people undertaking the course and: (a) is of a kind determined by the *Education Minister to be an adult and community education course and is provided by, or on behalf of, a body: (i) that is a *higher education institution; or (ii) that is recognised, by a State or Territory authority, as a provider of courses of a kind described in the determination; or (iii) that is funded by a State or Territory on the basis that it is a provider of courses of a kind described in the determination; or (b) is determined by the *Education Minister to be an adult and community education course.These amendments seek to broaden the scope of GST-free education. The amendments would allow recognised adult and community education courses which are likely to add to employment related skills to take advantage of the GST provisions applying to the education sector. I know that these are issues which have been of particular concern to Senator Allison. These provisions will also apply to first aid and lifesaving courses provided by recognised non-profit bodies.19:33:006369Conroy, Sen StephenSenator CONROY3L6VICALP00—As I indicated earlier, I have not had a chance to catch up with all of the amendments, given that there are so many. Are school excursions taxable? I am just seeking clarification. Are they going to be taxable?19:33:006369Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—They are not covered by these amendments, and there has been no change in policy.19:34:006369Allison, Sen LynSenator ALLISON1M6VICAD00—Perhaps I can assist with these amendments. The first amendment inserts a reference to adult and community education courses into the definition of `education course'. I understand the dictionary is in clause 195-1 of the bill. The next amendments we will deal with are Nos 10 and 13 on EF239, which will insert a definition about adult and community education courses into that dictionary. The Democrats were not happy with the government's original proposal that the criteria for taxing or for not taxing an adult and community education course be on the basis of whether or not the course was accredited. We took the view that using a distinction of that sort would result in a reversion to quite outdated emphasis on accredited versus non-accredited courses.At the same time, we hold the view that it is not inappropriate to tax purely hobby or recreational courses. So if we are talking about the sorts of things which you do which are not at all related to something which could be argued was to do with occupations, then that would be regarded as a hobby or a recreational course. To that extent, we regard courses of a hobby or a recreational nature in the same way that we do other leisure activities. So we do not object to the application of a GST to those activities. So if we are talking about skiing or tenpin bowling or other activities which are purely recreational, then we wanted to draw the distinction between those. It has been our view that short-term occupational courses and courses for skills upgrading should not be subject to a GST, nor should any course which could add to a person's employment related skills. The definition of `adult and community education course' in the Democrats' amendment differed from the government's current amendment. Our amendment was predicated on the delivery of the course by a non-profit body or registered training organisation recognised by a state or territory education and training authority as an approved provider of adult and community education. Whilst it was our preferred position, we understand that only two states administer an approval system such that that amendment envisages. In that circumstance, the use of a state administrated system of approval is just not workable.With that in mind, we accept the government's amendment. We believe that it results in a fair test which must be satisfied before a course will be regarded as GST free. Three criteria need to be satisfied. First of all, the course must be of a type prescribed by the education minister as an adult and community education course; secondly, the course must be provided by either a higher education institution, a recognised provider of those courses or a state funded provider of those courses; and, thirdly, the course must be likely to add to the employment related skills of people undertaking it.There is an additional provision which would allow the education minister to determine that a particular course is GST free, even if it does not satisfy the first two criteria that I mentioned—that is, that the course must be of a type prescribed by the education minister as an adult and community education course; or that it must be provided by a higher education institution, a recognised provider of those courses or a state funded provider of the courses. But, in any event, the course must still add to the employment related skills of the people undertaking it. So the Australian Democrats support the change of focus from accredited to non-accredited courses to courses which add to employment related skills. Consequently, we support this amendment. Amendments agreed to.19:39:006370Brown, Sen BobSenator BROWNQD4TASAG00—by leave—I move Australian Greens' amendments Nos 1 to 4 on sheet 1328, revised 2:(1) Division 38, page 77 (line 12), omit the table item relating to Subdivision 38-F, substitute: 38-F Eligible non-profit organisations(2) Heading to Subdivision 38-F, page 92 (lines 6 and 7), omit the heading, substitute:Subdivision 38-F—Eligible non-profit organisations[eligible non-profit organisations](3) Clause 38-250, page 92 (lines 8 to 19), omit the clause, substitute:38-250 Supplies by eligible non-profit organisations A supply is GST-free if it is supplied by an *eligible non-profit organisation.(4) Clause 38-255, page 92 (line 20) to page 93 (line 3), omit the clause, substitute:38-255 Second-hand goods A supply of *second-hand goods is GST-free if the supplier is an eligible non-profit organisation and the goods were supplied to the organisation as a gift.These very important amendments are being put forward by the Australian Greens to offset the enormous penalty being imposed on non-profit organisations around this country by this Democrat-government tax. One of the most disgusting components of the Democrat-government tax package is that it will cost voluntary organisations, non-profit organisations—including charitable organisations who are the third component of life in Australia but who are neither government nor profit-for-self organisations—huge damage. The Democrat-government package literally will take millions of dollars out of the pockets of community organisations—organisations which are backed up by the voluntary work given by millions of Australians to provide services for those who are not well off in our community and communities right around the world, as well as organisations which are providing community services that are not being provided by the government and private enterprise.The amendments of the Greens aim to shelter these institutions, from tiny non-profit charitable organisations in this country to the huge organisations which embrace the whole country and through which many Australians contribute to the welfare of their fellow Australians as well as to the poor and needy overseas. We are horrified at the enormous impact that the Democrat-government proposal is to have on these organisations. The Australian Greens, through these amendments, are trying not only to shelter these organisations but also to make good the Democrats's own analysis of the damage that would be done to these organisations.On 4 March this year, on the SBS TV Insight program, when summing up the impact of the government's GST, Senator Lees said:I think the question as to whether or not they—that is, charities—will be worse off has been answered—and the answer is yes.So what the Democrats have done is sign up to a taxation regime that they know will hit—and hit hard—charities as well as community groups around this country. They know that it will tax voluntaryism in this country. They know that it will tax all the things that people do to raise money in this country. Sure, there is an exemption for some fundraising activities which do not compete with private business. But, true to its philosophy, the government—now joined with the Democrats in this package—says that, wherever a charitable or non-government organisation is engaged in a fundraising activity which is the same as a commercial activity, it will be taxed.As I said earlier, that will take millions of dollars out of the pockets of non-government organisations and charities and put them into the coffers of the government which, no doubt, will put it into pursuits far removed from charitable. That money will, amongst other things, help the government and the Democrats to redistribute from the government purse billions of dollars to the big corporations in this country—not the least through the Diesel Fuel Rebate Scheme, which now also has the Democrats's imprimatur. For example—as you would know, Chair—that will give an extra $700 million a year to big mining, logging and transport corporations in this country, as millions are being taken out of the pockets of charities by the Democrats in their support for the government.The principle adopted by the Democrats and the government is that all community groups should be taxed. This is a total departure from past philosophy in this country. Groups that qualify as charities are exempted but only in so far as those activities do not compete with commercial organisations. As soon as they get into competing with commercial organisations, then they are going to get taxed, because not even charities in this country—under the new-found Democrat-government philosophy—have a right to offer any competition to the big business people who are going to be most advantaged by this package.WH4McGAURANSenator McGauran—You're kidding, aren't you?QD4Brown, Sen BobSenator BROWN—The government, of course, is going to be able to answer for itself, and I am looking forward to the Democrats explaining their role in this taxing of community groups. But these amendments do not only go to defending community groups against the new taxation which is going to be levied on them; they seek to protect these great national organisations and these hardworking local organisations which do so much for community from the enormous compliance costs which are also involved. I noticed in a recent copy of the Financial Review that there was an estimate that $130 will be going to organisations to help them with their accounting of the GST. Whether that is just meant to be small businesses or whether that includes these non-profit organisations, that is laughable. In fact, it is not just laughable; it is not just tragic; it is highway robbery out of the purses of charities and non- government organisations in this country by the Democrats and the government.In evidence given to the Senate committees looking into the GST, the community groups brought forward some of the compliance costs which this Democrats-government move is going to hit them with. They are much bigger, of course, in real and comparative terms than they will be for business, because non-profit organisations are going to have to distinguish between what is GST free and what is not GST free. When I refer to business there, of course, we have to exclude all those small corner shops and mixed businesses which are going to have huge and confusing rules between what is GSTed and what is not GSTed to sort out, much to their own loss.These organisations spread right across from little sporting organisations through retirement villages to community organisations involved in protecting the environment and in fostering social justice in this country, to great internationally linked organisations like Community Aid Abroad and the other organisations which raise money in Australia and services to help needy people around the world. Here are some of the compliance factors which are going to now rob the purse of these organisations. Under this Democrat-government arrangement, money which once would have been given to charitable and community pursuits will now be diverted into the tax basket to help compensate big corporations.There will be new accounting systems for recording GST payments and input tax credits which these organisations have never had before. They will need to upgrade present computing systems. These community organisations will need revenue collecting systems to identify GST amounts which are invoiced, and payment systems to identify and record GST amounts paid. They will need to apply money to establishing what supply of goods and services are GST free and which are not. They will need to establish procedures to assess the 50 per cent rule applying to non-commercial goods and services.As you know, Mr Temporary Chairman, the Democrats and government have come up with this totally unsatisfactory partial meas ure, which means that, roughly speaking, if a charitable organisation gets goods and sells them at less than half the going cost of a commercial organisation, then that will not be GSTed. Can you imagine the cost to charities trying to figure out what goods and services they can sell to the public or, for that matter, to needy people at less than half the cost of a competing commercial organisation? How the dickens are they going to do that?WH4McGAURANSenator McGauran—Is the ACF a charity?QD4Brown, Sen BobSenator BROWN—We are hearing now an attack from the government on the Australian Conservation Foundation. What I take from that interjection from Senator McGauran opposite, Mr Temporary Chairman, is that there is a vindictive component to this tax the Democrats are endorsing which is out to get those community groups which do not comply with government-Democrat policy. That is another thing that is changing the face of the way government is supposed to be fair and even-handed towards all the Australian community—a government for all, as John Howard said, but, from Senator McGauran's interjection, not a government at all when it gets to the way that the government is looking at imposing these taxes.These compliance costs will include the need for charitable organisations and little community non-government organisations to identify and pay their fringe benefit tax liabilities. There will be increased wage costs due to those new requirements. They will need to have the training of new accounting staff—a much expanded accounting staff. Charitable organisations, which always try to minimise administration so that they can maximise the good that they bring to the Australian or international public, are now going to have their costs blow out at administration level to comply with this GST tax which is being levied by the Democrats and the government.Another compliance cost is the need for those extra staff to deal with the extra tasks associated with compliance. But add to that the increased cost for equipment and motor vehicle insurance, since premiums are based on replacement cost, which will arise, given the effect of the price differential between wholesale taxes and goods and services taxes. They will need to fund the amount of GST input taxes paid until they are reimbursed. In other words, money will have to be put aside for this tax which could have been used for community services but which is now going to be delayed.Let me at this stage just give one estimate. The Australian Catholic Social Welfare Commission notes that the government, in its impact statement, estimated that the gross compliance cost of the GST will be $1,195 per firm. St Vincent de Paul estimates that its costs are going to be $2 million to $4 million. That is what the Democrats and the government are taking out of this great national charity and redistributing to the wealthy. That is why the Greens have moved these extraordinarily important amendments to try to undo the damage that the Democrats, joined with the government, are doing through this package.19:54:006372Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I join my colleague Senator Brown in supporting these amendments because these organisations are one of the major forgotten sectors in this whole debate in relation to the GST package. It is important to remember that this third sector goes far beyond charitable institutions and gift deductible entities. Community organisations are, of course, the backbone of society. They play a huge role in supporting and enhancing our communities. The very fact that they have tax deductible status is a long-term recognition by governments that they get very good value out of the work that is done, largely on a voluntary basis, within this sector.These include a myriad of groups that play a role in welfare, health, education, sport, recreation, child care, entertainment, finance, overseas aid, environmental protection, Aboriginal affairs, emergency services and the organised representation of interests. These issues were quite well canvassed in the report of the Senate Community Affairs References Committee of March this year entitled The lucky country goes begging. It was mentioned that the charitable sector is not small. In fact the size is indicative of the importance this sector plays within the Australian community. On page 42 of that report it says:In 1995-96, non-profit organisations spent over $25 billion in operating expenditure, which was at least 6 per cent of Gross Domestic Product.It also says on page 42:Most are small, employing less than five staff and spending less than $100,000 annually.It is surprising how far $100,000 can go when you have willing and dedicated people. The report further says:These organisations provide the majority of community services in Australia.That is an extraordinary statement, but it is true. It goes on to include all the services I mentioned earlier. It says:These include: . . . women escaping domestic violence; support for the aged to remain in their own home; support and training to help people find and retain work; financial counselling; and, emergency relief.And so on. These are hugely important services, I think, in terms of the quality of life, and even life itself, for many people in Australian society. The Australian Democrats included a supplementary report on this particular issue. On page 216 their supplementary report has a special section on the GST treatment of charities. It says:The Democrats recommend that the zero-rating for the activities of charities apply to all activities of the charity, other than those that are clearly defined by law to be commercial.. . . . . . . . .The GST, with its complex division into taxable, non-taxable and exempt goods and services will seriously damage the charitable sector, increase compliance costs and inevitably reduce services that can be provided.Yes, indeed. On page 217 they state further:The Democrats recommend that the following activities clearly be defined as being not-commercial:. Membership . . . . Fund raising . . .. Hire of facilities and associated catering;. Advertising in charitable publications;. Sponsorships not providing actual goods and services;Gambling (e.g. raffles, bingo). . . . Fees for recreational programs for under 14 year olds;. Life saving and first aid;. All purchases by libraries run on a not-for-profit basis;. Tuckshops;. Provision of housing or other services at not more than its direct cost.We would of course go further than that and say that, more and more, these charitable sectors are being given less and less support by state and federal governments. They are being told more and more that the reason they are being given less is that they are expected to be involved by raising their own funds—providing opportunities to actually get out in the community and find ways of raising funds other than relying on government. So the government gets them both ways. They take away the funding in many instances and then say, `Why don't you engage in activities that are going to raise you money?' When they do that, they are hit with a GST.Amendment No. 1, on page 1447, ensures that supplies to eligible not-for-profit organisations are GST free. The amendment provides for a certificate to be issued by the Commissioner for Taxation to confirm an organisation's status as an eligible not-for-profit organisation. I am sorry; I should actually be referring to amendments Nos 1 to 4 on 1328. It is very important that the issue of charitable and not-for-profit organisations is not swept under the carpet. It is not a side issue. It is not an issue that is of minor importance to the people of Australia, and it is certainly not a minor issue to those organisations. Who will take up the responsibility if those organisations cease to exist and cease to provide the actual benefits they have been able to provide at very little cost to the Australian public through taxes?I really think that these amendments moved by Senator Brown deserve the support of the Senate. They are mainstream issues, as far as I am concerned. They may not be the ones that are hitting the headlines but they ought to be, because this sector is not usually blessed with highly paid spin doctors and huge access to the public voice, and the reason that this does not happen as often as it should is that this sector is spending most of its resources and most of its energy on providing the absolutely essential contact and services that the Australian community needs. I feel very strongly about this. Unfortunately, these organisations seem to have lost out in this whole process. I do urge the support of the Senate for these amendments.20:01:006374Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Let me make it very clear that the government strongly support the work of charities. We believe that they make an outstanding contribution to our society. So to that extent we encompass the remarks made by Senator Margetts. Let me assure you, Senator, that the government are a very strong supporter of charities and their great community work.To pick up some of the comments you made, while it is true that charities at present are often able to purchase products wholesale sales tax free, that does not mean that they do not incur any costs from the current indirect tax system. For example, charities generally pay the full excise on fuel used in motor vehicles they own. They also purchase services which have embedded wholesale sales tax because the provider had to buy goods that incurred wholesale sales tax. Let me make this clear: under tax reform, the cost to charities of providing their services will fall. The embedded wholesale sales tax will be removed, fuel costs for their purposes will fall and so on. It has been constantly stressed that the non-commercial activities of charities will be GST free. Those other services which are GST free, like health, education, child care, nursing care et cetera, will be GST free even if charities supply them commercially. Also, the income tax cuts totalling $12 billion a year will mean that Australians will be able to donate more to charities, among other things.There was extensive discussion on the charities issue between the Democrats and the government—between Senator Murray and Senator Lees and the Prime Minister and Treasurer Costello. The results of those discussions are encompassed in the letter which the Prime Minister sent to Senator Lees on 22 June. Among other things, it stressed the following:The Government reaffirms that non-commercial charitable activities will be GST free. The Government is not disposed to extend the definition of a charitable institution to advocacy and other groups. In practice many community groups such as neighbourhood centres should not be subject to GST because they are operated by charities or are below the $100,000 registration threshold. However, given the important community service role of neighbourhood centres the Government will review the impact of the GST on their operations in the context of the previously foreshadowed consultations between the Government and the Australian Democrats on the GST impact on charities.It has been agreed that these consultations will now be brought forward and will occur no later than 31 December this year. These consultations will also canvass the application of rulings regarding the divide between commercial and non-commercial charitable activities.I think it is important that there will be these consultations to assess the impact of the GST on the operations of the community service role of neighbourhood centres. It continues:The Government confirms that relationship counselling will be GST free where it is provided by an appropriately accredited psychologist or social worker.In the light of some of your comments, it is worth noting these remarks of the Prime Minister in his letter to Senator Lees:As recommended by the Vos Committee, the Government will monitor the possible impact of the GST on sheltered workshop services and will give careful consideration to providing additional compensation if necessary.The application of the GST to membership fees payable by charities and tax-deductible bodies will be examined in the context of the consultations on charities.In relation to emergency relief payments, the Prime Minister's letter indicated as follows:. . . the Government confirms that where a charity pays for goods and services on behalf of a client, the charity would be able to claim a credit. As discussed at our meeting, where charities provide cash as emergency relief it would not be appropriate to give input tax credits because there is no control over how the money is spent by the client.In summary, we believe that this package is good for charities. We do not accept the views that Senator Margetts has put forward and we do not support the amendments that Senator Margetts has put forward. The impact of these requests would be to make all supplies by specified non-profit organisations GST free, irrespective of the price charged. The government's position is that non-commercial supplies made by charities should be GST free but their commercial supplies should be subject to GST.The amendment proposed by the Australian Greens would enable a range of non-profit organisations to sell all conceivable goods and services GST free. In our view it is far too generous a concession and would result in unfairness and distortions. If the Senate was of a mind to except the amendments moved by Senator Margetts it could result, for example, in sporting clubs selling GST-free beer and food; universities and hospitals selling their motor car fleets GST free; or a political party selling books GST free. There are no limits to the concessions that Senator Margetts and her colleague have put forward. There would be nothing preventing one of the listed organisations from purchasing a range of goods, claiming the input credits on them and then selling them GST free to raise money.The amendments moved by the Democrats also propose to extend to a wider range of non-profit organisations a concession for charities relating to the supply of donated second-hand goods. Again, the government does not accept this request. We consider the concession is appropriate for charities that have a large second-hand goods operation but we do not consider it appropriate to extend this to the broader class of non-profit organisations.This is an area which the government have looked at closely. It is an area in which there have sometimes been concerns put to the government. The government have had very widespread consultations with charities—I personally have met with a range of groups. I do not say that the consultations have solved all their problems or all the concerns that they have put to us, but certainly they have been carried out in a constructive fashion. Once the overall impact of the GST became better known, some of their fears were certainly substantially moderated. Those that are seeking further comfort for charities should read very closely the letter to Senator Lees that was signed by the Prime Minister. There is quite a deal in that letter which will give comfort to charities, particularly the reviews to consider the impact of the GST on charities. Those reviews will allow us to see whether any of those particular fears are justified.The government believe that the legislation we have is fair and adopts a balanced approach. As I indicated, it will cut the costs of the non-commercial activities of charities. We urge the Senate to reject the amendments that have been put forward by the Greens. They would lead to the consequences I have mentioned. Perhaps the Greens could attempt to answer this: do you reject the view that I put that it could result in sporting clubs selling GST-free beer and food, various charities selling their motor vehicle fleets GST free or even a political party—the Greens—opening a bookshop and selling their goods GST free? These are the issues that the Greens should have been prepared to grapple with. As far as I can see, they have not. I look forward to hearing the response from Senator Brown.20:11:006375Forshaw, Sen MichaelSenator FORSHAW656NSWALP00—I will make a comment with regard to the last remarks of the minister. Minister, if you understood anything about the operations of sporting clubs, particularly sporting clubs that are seeking to raise funds for children's sports and school sports, then you would realise that they are not in the business of trying to extract exorbitant profits from the parents of the children who play those sports. They are in the business of raising money—the dollars, the 20 cents and those sorts of amounts—from parents who are already struggling to get their kids educated and provided with sporting opportunities. Those clubs assist those parents and enable their children to play sport. To respond by talking about charging some unlimited amount for beer and so on demonstrates how little you really understand about the impact of this proposal on parents and particularly on non-profit sporting and charitable organisations.I would like you to clarify something for me. I am a parent who has a young child playing soccer and I, like all of us at some time or another, have been involved in trying to help the local school or district sporting team raise money. These are the sorts of questions I am getting asked every Saturday morning at the local soccer match. Firstly, if a sporting club—let us say a local school soccer team—purchases socks, say, in a bulk lot for the sporting teams in that club and if it then sells those on to the parents of the children at the price they have been able to obtain them for—because they are not in the business of making a profit here; they are in the business of trying to outfit their teams as cheaply as possible for the players—will GST be applicable at any point in the transaction?Secondly, what happens if that same sporting club adopts an approach different from that of purchasing the goods, which many clubs do, by seeking to raise funds through a canteen selling food, a sausage sizzle or a barbecue at the grounds on a Saturday morning? They sell the food to the parents and the children at the sporting club that day so that they can raise money to purchase the socks, the jumpers or the footballs and then provide them to the players at no cost. Will GST be applicable on the transactions involved in raising that money through that canteen or barbecue?The point is that the purpose at the end of this is the same, and that is to provide the children in that team with the wherewithal to play their sport. But, as I have said, there are a range of ways in which this can be done and sporting clubs and other non-profit organisations use a variety of means to raise funds. I also ask you to comment on the following. You know—I am sure you have seen this—that on election day, when you go along to the election polling booth, the local kindergarten or the school where the polling booth is located will more than likely run a cake stall and the cakes will have been baked at home, most likely, by the parents of the children. They have made the cakes or chocolate crackles from the ingredients they have bought at Franklin's or Woolworths, and they have provided them to the school—donated them to the school—to be sold to raise funds for the school. Very often they end up buying the cakes back again.Sporting clubs also do the same and, to come back to my first example, that is another way in which they can raise funds: by selling food that is donated to them which has been made by the parents to raise funds to buy those pairs of socks for those soccer players in that team. These are real questions. You may think that they are not really important. What you seem to be concerned with, and somehow think, Minister, is that when the system comes in—and if this proposal were adopted—the parents and the officials involved in these clubs, who give up hours and hours a week in training and in running the committees and doing the books, are all going to suddenly become mega-capitalists. You seem to think that the clubs are going to be immediately trying to rip every single dollar off those parents. You just do not understand what the purpose of these organisations is all about. I would ask you to clarify the particular examples that I have given to you. They are real examples; they occur every Saturday everywhere in this country where there is a sporting club conducting an activity to raise funds for the kids involved.20:18:006376Murray, Sen AndrewSenator MURRAY3M6WAAD00—Perhaps while the minister is getting some advice on some fairly detailed questions, I should respond with the Democrats' view on these things. I think it would be safe to say that everyone in the Senate concerns themselves with the welfare of charities. The question is whether what is happening in the GST debate is in fact in their interests or the legislation needs to be amended. One of the great difficulties we have had—which perhaps is reflective of the nature of the charitable sector, which we all understand—is indeed a lack of understanding and a fear in this area which lead to some conceptions which are probably misplaced. It reminds me to some extent of small business in the area of the GST, in that very capable small business operators are afraid of the new system coming in. Yet it is a system which has been adopted by billions of people and tens of millions of businesses worldwide, and that is true obviously of GST and VAT systems in 105 countries in the world, but it does affect charities as well.I want to go firstly to what is a charity, which is in section 38(250) on page 92. It determines the non-commercial activities of charitable institutions, and a charity is really defined as a `charitable entity' or `a gift-deductible entity'. Charitable entities are defined as `charitable institutions at common law' in the dictionary in the explanatory memorandum at page 84. It says:. . . charities are generally organisations that are established for:. the advancement of education;. the relief of poverty;. the advancement of religion; or. other purposes beneficial to the community.Somebody recently advised me that that definition stretches all the way back to the 16th or 17th century, which I did not previously know, so it is a very well-established, very well-used and very well-understood definition, I would have thought, as a result of that. The dictionary definition in the explanatory memorandum says that:Non-commercial supplies by charities are GST free. Non-commercial activities are supplies for nominal consideration and supplies of donated second-hand goods.Those areas which are considered to be GST free are also those areas where the supply for consideration is less than 50 per cent of the consideration the supplier provided. All that may sound awfully technical but it appears, from the advice we have received, that form of classification for a charity is probably amongst the most generous worldwide and in fact advantages charities considerably in this process. We, like the government and all other parties in this parliament, have been subjected to letters and queries from the charitable sector, and the difficulty we have faced is that, when we have attempted to put our finger on where the problem is, the problem has slipped away. With our advisers we went to Treasury and the government with sets of questions arising from the questions that had been put to us by charitable institutions, and we established as a result of those questions that nearly every question was answered on the basis that the charitable activity concerned was GST free or probably GST free. I will deal with the second category a little later.We went back again to the charities and had a round-robin kind of telephone conference with them. We asked a lot of questions, and then went back again to the Treasury officials with about 40 questions this time. Once again we established, with regard to nearly all of those questions, that they were either GST free or were likely to be or probably GST free. Some of the matters that were left outstanding—in other words, likely to be or probably—meant that we needed more information. That process is what we have begun with the government.The government has agreed, and feels very strongly, that not only will charities do well out of these tax changes but also the GST situation will not oppress them. What the Democrats and the government have done is to agree primarily on a process to deal with this matter. The government has said to us several times, and the Prime Minister specifically has said, that charities will not be detrimentally affected. The leading sentence of the letter that the Assistant Treasurer referred to, which I presume has been tabled, does say:The government reaffirms that non-commercial charitable activities will be GST free.The Prime Minister is determined that that will happen. We therefore asked, `Let us make sure that this is evidenced to us. Let us make sure that this is evidenced to the charitable institutions well in advance of the date the GST arrives.'The government have made a commitment that by 31 December 1999 they will provide detailed rulings which will determine these issues. That is six months before the GST arrives. Before big business, before small business and before any other sector, the charitable institutions will know exactly where they stand. The Prime Minister has committed himself twice to us in writing that if, as a result of that process, by the end of December 1999 he sees that charities are adversely affected in any way, it will be fixed. The government have told us that they are determined to do this properly and they are on the record as being determined to do this properly.In amongst all of this is also the question of when a charity is caught. Some of the discussions and some of the propositions or examples put before people forget that the $100,000 threshold operates. The $100,000 threshold operates to exclude many of the small and very important charities which otherwise might be caught up in the system. But for those that are caught up in the system, you have to accept that the compliance requirements of producing a form once every quarter are not that onerous. They will not be that onerous. It is difficult to persuade people who do this on a voluntary and part-time basis at this stage that that is so, because there is a natural fear of a new system and having to comply with a new law.In our entire interaction on this matter, when we have gone back to the government again and again on the matter, they have persuaded us in almost every case that the matter we are raising with them will result in charities not being detrimentally affected and, in some cases, being positively affected. One of the issues raised in the Australian Greens amendments widens the definition of organisations. It does have the potential to catch organisations that should not benefit through this. It does have a capacity to catch turf clubs, golf clubs, the Business Council of Australia and other people who, frankly, we do not think should fall within the ambit of this definition.Having said all that, we are satisfied that the Prime Minister and the government have committed themselves to a process and to a principle which will establish that charities will not be detrimentally affected under this system. You may say that amounts to a question of trust, but it actually amounts to a written agreement and a commitment by the Prime Minister of Australia, and in that we must put some faith. It does amount to a written commitment that the Taxation Office, which is an independent body, will produce the rulings by 31 December 1999 and will make clear any areas of determination which are presently unclear. That is as far as I can go at this stage. That is how we view this issue. We have been satisfied in our negotiations with the government that the charitable sector will be okay.20:28:006378Cook, Sen PeterSenator COOKRF4WAALP00—I want to move on but I have three quick questions which I can now put. The first one is to you, Minister. In view of what has become routine today—you are asked the question and Senator Murray gives the answer—and in view of the answer just given to the chamber by Senator Murray, can you clarify this: is it not true that the Commissioner of Taxation is a statutory office holder and therefore not answerable to the government? Is it not true therefore that the government cannot command him to give a favourable ruling? Is it not true that the Commissioner of Taxation is required to collect every cent of tax that is possible? If the extent of the undertaking, which is in writing and which I have seen, is to accept the tax commissioner's ruling, that will not solve the problem. If it does not solve the problem, is the government committed to legislation in the form of Senator Brown's amendment or in some other form that solves the problem?In relation to question two, Minister, you are at it again. We have just been handed yet another amendment to this package of bills and another explanatory memorandum. Can you assure us that this is the last and that we now have the full set? Here we are at half past eight on the second day of this debate—WW4KEMPSenator Kemp—It is the one I foreshadowed.RF4Cook, Sen PeterSenator COOK—I am just asking you for clarity. Are there are any more out there lurking that you have not told us about that are yet come?My final question is not to you at all, Minister, but to the Australian Democrats—I am not sure to which Australian Democrat it is addressed. I witnessed an ABC news bulletin tonight in which it was said that the leader of the Australian Democrats has been spilled from her leadership position. My question is: who is the leader of the Australian Democrats at the moment? Is it Senator Stott Despoja in a caretaker capacity, is it Senator Lees, despite the spill, or is it someone else we have not heard of yet?20:30:006379Woodley, Sen JohnSenator WOODLEYHX5QLDAD00—Concerning the last question, you will have to wait and see, Senator Cook. All will be revealed. Some of the other questions which Senator Cook and others have asked are very valid and need answering. I intend to give answers to at least some of those questions. One of the issues that needs to be addressed is the fact that there has been an inference or an outright statement made that either the government or the Democrats have ignored this sector or do not seem to understand it. I have to say to those who are making those assertions that that is not true.I have spent my whole life in this sector. Just in the last couple of days we have met with the Catholic Social Welfare Commission, Anglicare and the Uniting Church Community Services. They know what we are doing and are comfortable with it. So it is not true to say that we have ignored this sector. We are working with them on a daily basis.The second thing I want to say—and I agree with Senator Margetts here—is that in some cases charitable organisations have not been treated as well as they might have been by this government. I am sorry I have to say this to you, Senator Kemp, but I believe that is so. In some cases, Senator Margetts is correct when she says that this government has targeted those with whom it disagrees—but that has nothing to do with the tax system—through defunding a number of organisations. The Democrats will continue to criticise the government for that and will continue to work with them to have, where it is unjust, that funding restored.We are talking about a tax system which is going to deliver very significant benefits to this sector. That is the point that we are wanting to make, which some people clearly do not agree with and do not want to accept. The next few months will reveal that what we are saying is absolutely correct.Another thing which Senator Margetts is quite right about is the statement she made that this sector goes far beyond the usual idea of charities, and she listed quite a few. I agree with her. We are talking about a not-for-profit charitable sector which is indeed very significant and very large. I want to expand on what Senator Margetts said and perhaps illustrate the problem that we are facing because within the not-for-profit sector we have not only what we usually understand as charities or organisations which are there for the benefit of communities, but we also have a number of organisations which are very wealthy and have avoided tax up to the present time. I recall being involved in a debate over many years with the Registered Clubs Association and their hanging on to a tax free status, the distortion that that gave—for instance, to the sale of alcohol out of those clubs—and the way in which the Hotels Association said that this was a very unjust situation. It also went to their use of gambling and so on.Another illustration is wealthy golf clubs where memberships can be hundreds of dollars per annum, in some case thousands of dollars per annum. What we have to do is to make a distinction between those kinds of golf clubs and perhaps community golf clubs where people who do not have the ability to pay memberships of hundreds or thousands a year nevertheless enjoy a game of golf.The same is true of sporting clubs, some of which are the wealthiest organisations in the country, especially those supported by gambling, particularly poker machines. At the same time, I agree with Senator Forshaw who pointed out that many sporting clubs run raffles and sell pies, chips and soft drink at Saturday afternoon games and struggle to survive. I am very well aware of these clubs because I am a patron of my local ALF club. Sorry folks, for those who play rugby league. I have deserted. These days I support AFL rather than rugby league. One issue here is the ability of that local AFL club to raise money. My son-in-law coaches one of the under-age teams and I am the patron of that team.RF4COOKSenator Cook—On a point of order, Mr Temporary Chairman, as to procedure. Are we having old memoirs tonight, when everyone reveals which clubs they are patrons of or members of, or are we debating the subject? It is a bit odd that the Democrats, who have voted for a guillotine to restrict the time of this debate, now want to fill all the available time with reminiscences.HX5Woodley, Sen JohnSenator WOODLEY—I accept your rebuke, Senator Cook, as I always do.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Bartlett)—You are accepting the point of order, even though I was going to rule against it. Well done.HX5Woodley, Sen JohnSenator WOODLEY—I apologise to the chair. I am a little enthusiastic.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—That is fine. If you are willing to accept it as a point of order, then feel free to be suitably rebuked and continue with a more focused debate.HX5Woodley, Sen JohnSenator WOODLEY—Very rebuked and I will stop talking about my local ALF club. The point I was making is that of course a distinction has to be made between small, not-for-profit organisations which need the support of the community and should not be taxed, and those wealthy organisations which are in a different category altogether. And that is the problem. When we tried to make that distinction and draw the line, that was where we constantly ran into the problem of definition. I am very comfortable with the arrangements which the government has made. I will read from their letter:The government will assist charitable and not-for-profit organisations to adjust to the introduction of the GST in several ways, including. establishing a charities not-for-profit consultative committee, immediately within the ATO, to develop rulings well in advance of the introduction of the GST to better inform these organisations as to how they will be impacted;. establishing ATO teams to assist the sector to implement the GST; and. in the light of the developments with the above and before 1 July 2000, there will be further consultations as necessary between the government and the Australian Democrats on the GST impact on charities or any problems arising in the application of rulings to charities.I am pleased that the government has accepted the recommendation of ACOSS and of most of the charities, supported strongly by the Australian Democrats, to appoint Dr Myles McGregor-Lowndes to this consultative committee. I would say that he is the foremost person in knowledge of the not-for-profit sector in this country, who within the Queensland University of Technology set up a not-for-profit unit in order, over a number of years, to both analyse and assist the not-for-profit sector in its dealings with government and make the sector more useful to the community. I am pleased to say that Dr McGregor-Lowndes will be part of that consultative committee and in fact will bring an incredible depth of knowledge and experience to it.I would underline something that my colleague said earlier: that a charity has to have $100,000 worth of taxable supplies before it attracts a GST. In this way, this legislation will make the distinction that I was making between large and small charities, but it will not stop there and I think it is important to understand the way in which this will be an ongoing process. I will leave it there because I know that the minister is anxious to add his answers to the questions which have been given.20:40:006380Brown, Sen BobSenator BROWNQD4TASAG00—I am grateful for the opportunity to follow Senator Woodley. Here is a defender of the not-for-profit sector in our community par excellence who has turned on his heels and gone to the government. He has abandoned the position of defence of non-profit organisations, which he held earlier this year, and turned his back on them. He is now even indicating that he is out to get the wealthy community organisations. He mentions gambling and poker machines, so it is going to be interesting to see what he does about the government's sheltering of high rollers when we get to that section further down the line. What he is not in the business of doing is sheltering the very organisations that he was in full defence of just a couple of months ago. He is not sheltering them because, along with the other Democrats, he has now supped at the table of the Howard government.In pursuit of their own power, they decided that anything was expendable which got in the way of making an arrangement with the government and the remarkable thing is that the Democrats, as you know, got nothing out of the government—they made no advances at all, did nothing and sheltered no-one. Unlike the big multinational corporations—who are going to gain so much out of the complex diesel fuel rebate system, which they could negotiate to a finality—they are saying, as far as charities and non-profit organisations are concerned, `Let us wait until we have an inquiry after this legislation has gone through.' Senator Bartlett, you were one of those, as you will remember, who was outraged by the government's position. I am not at this stage going to take advantage of your being in the chair at the moment and therefore unable to defend your change of position.However, Senator Woodley is not in the chair. He is in the chamber and has just given a dissertation saying, `Trust us and wait until some future time for some inquiry after the passage of this legislation.' But what Senator Woodley had to say in March this year is the original policy position of the Democrats. Remember that Senator Lees said that charities will be worse off under this package. Senator Woodley said:This government seems to have an almost obsessive desire to wipe out this sector and in fact to move everything into the private sector or the for-profit sector, and I just do not think the government understands the contribution the not-for-profit and charitable sector makes to Australia.Nothing has changed, except that Senator Woodley has caved in, gone to the Howard government's table, accepted the Howard government's position and sold out on his own position. He even had the temerity to tell this committee just a minute ago that he is now very comfortable with the arrangements that the government has made. So let me read again what Senator Woodley had to say about this position some weeks ago, but change the words `the government' to `Senator Woodley' because they now apply to him: `Senator Woodley seems to have an almost obsessive desire to wipe out this sector and in fact to move everything into the private sector or the for-profit sector, and I just do not think that Senator Woodley understands the contribution the not-for-profit and charitable sector makes to Australia.'Whether or not we know that the government understands, Senator Woodley certainly does. He simply sold out principle. He sold out that lifetime of work for community organisations that he talks about and I have no doubt that what he says about that work is true. I also have no doubt that it will continue, in the small way in which we politicians, amongst others, contribute to charity, but it is in no way going to address the millions of dollars this Democrat government policy is now going to rip out of that sector.It is not going to make up for the fact that people who volunteer around this country in a whole range of charitable and community ways are going to have their free services taxed. The minister might like to tell me what would happen, for example, if the renowned Tasmanian artist and giver to the community, Elspeth Vaughan, were to donate one of her paintings to one of these organisations. The organisation would have the painting to on-sell if they wanted to, but how is the government going to tax that item given freely through the volunteer work of that great community contributor? Well, they are going to tax it. Senator Woodley is going to tax it. Senator Murray is going to tax it. Senator Stott Despoja is going to tax it. Every Democrat is now going to tax it through this process of their party's decision to go with this and for all seven of them to stick with the party—Senator Stott Despoja interjecting—QD4Brown, Sen BobSenator BROWN—Senator Stott Despoja has left angry at those words but let me have this to say on that matter.Honourable senators interjecting—QD4Brown, Sen BobSenator BROWN—She may cross the floor on it. The fact is that she is sticking with the party. Her crossing the floor is not going to make one bit of difference as far as these charities are concerned. It is not going to save anybody; it is not going to save one dollar. She is part of a party which is placing this impost on the whole of the Australian charitable and not-for-profit sector—the same as Senator Bartlett and the rest. You cannot waffle around in the middle and have it both ways.3M6MURRAYSenator Murray—It is GST free.QD4Brown, Sen BobSenator BROWN—Senator Murray says `it is GST free'—whatever that is. That is not what is in this package. The non-profitable and charitable sector is not going to be GST free; it is going to be hit for millions.3M6MURRAYSenator Murray—Rubbish.QD4Brown, Sen BobSenator BROWN—You say `rubbish', but that is the fact. The best you can do in ameliorating the damage that you know will be done, because you have read what the charitable organisations have had to say themselves, is to say, `Trust us. We will have an inquiry and another decision to help salve our consciences further down the line'—that is, if by the good grace of this government, anything at all is given back to the charities.20:47:006382Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Senator Brown, I am interested that you have suddenly taken a great interest in charities. I am not aware that you were very active at all in the committee hearings on this issue. I am not aware that you have ever made contact with the government to discuss this issue. I am not aware that you have ever brought along any charity group to have consultations with the government about their concerns. I will check the record and you can perhaps explain, when you respond, whether that happens to be the case. Like on so many issues, Senator Brown comes late to the issues. When he stands up, he makes wild and extravagant claims. Having made those and having created what he hopes will be some stunt which gets him on the media he then leaves and goes on to the next issues. He never sits down and does the hard yards.As I have said, Senator Brown will be remembered for one thing with Senator Margetts—as having squandered a balance of power in this Senate. I am at a loss to think of anything they have achieved for the environment or for any other group, because their whole approach to the Senate is typified by the creation of the stunt and the extravagant phrase. You burst onto the scene and then leave just as quickly. Senator, that is not what public policy is about. Public policy requires a bit of hard work. It requires consultations not only with the groups but with the government that has the capacity to make decisions. Senator Brown, you are always missing in action. On charities, as in all other things that you attempt, that is certainly the case.Senator Cook raised a couple of matters with me. Senator Cook was concerned about the independence of the commissioner. To the extent I can remember what he said, he correctly stated that the commissioner is an independent officer and cannot be directed by the government. The letter from the Prime Minister stated that the government would write to the commissioner requesting him to issue rulings on charities by 31 December. The government of course does not influence what is in a tax ruling. The tax ruling is issued under the name of the commissioner. It is the commissioner's interpretation of the law. The ATO has established a specialist group to consult with the charitable sector to assist them in fulfilling their obligations under the GST. But if rulings arise which are matters of concern to the government, the government can then make changes to the law. That is the nature of the process. It has ever been thus.RF4COOKSenator Cook—Are you guaranteeing that?WW4Kemp, Sen RodSenator KEMP—We believe, Senator, that when these rulings are made and the consultations are completed there will be a far wider understanding of the beneficial impact the GST can have on charities. So we believe, Senator, that when this bill is through and these consultations commence, many of the fears and concerns—some of which have been given voice to by Senator Brown in a very ill-informed way this evening—will be effectively addressed. I think Senator Murray stated my experience very well actually—and Senator Murray and I have not had joint consultations on the charities issue. It is true that once how the system works is explained and once the questions are answered you will find that a lot of the charities will find themselves far more comforted by what the government has said. Clearly some are still nervous about a new system, and it is up to the government to make sure they have all the information about what is required.So Senator Brown, if you ever showed any concern for charities, you have certainly never brought them to the government's attention. As usual, you have stood up in the chamber and carried on. But I regret to say that, as in so many other areas—because you do not do the work, because you do not do the hard yards, because you will not consult with the government and because you are more interested in the media stunt—your effect is very limited indeed. If I were a conservation group or any other group, I would choose some other senator as an advocate—to be quite frank. In relation to the second question that Senator Cook raised with me regarding amendments, there will be amendments to the Commonwealth-state bills due to be debated on Monday, should the states sign a revised intergovernmental agreement on the reform of Commonwealth-state financial relations. We will look forward to those and to a constructive debate on Monday.DX5MARGETTSSenator Margetts—After the gag?WW4Kemp, Sen RodSenator KEMP—These are the bills which are being debated on Monday. See, you do not listen. There will be amendments to the Commonwealth-state bills due to be debated on Monday should the states sign a revised agreement. The debate on that bill has not started yet, Senator. Have I made myself clear?RF4COOKSenator Cook—The debate is gagged. She is right about that.WW4Kemp, Sen RodSenator KEMP—Senator, there is plenty of time for debate. No-one could ever say that there has not been a lot of time to debate these bills. Senator Campbell's figures show that, by the time we complete the debate on these bills, we would have debated some 65 hours: longer than any other bill in the history of Federation—RF4COOKSenator Cook—You keep introducing new amendments. You just told us about some new amendments.WW4Kemp, Sen RodSenator KEMP—Always at this time of the evening, Senator Cook gets overexcited and overwrought. Senator, we have only got another half-hour to go. Just try to keep calm and we may make it in one piece.RF4COOKSenator Cook—Thank you for being patronising. WW4Kemp, Sen RodSenator KEMP—That is all right. I tried to be and I have obviously succeeded. Thanks very much. Mr Temporary Chairman, I am sorry; I was provoked. Senator Forshaw came into the debate very quickly and left, but let me make a couple of remarks about what Senator Forshaw said. This again ties in with what Senator Murray said. Of course, at the moment, many sporting goods are subject to the wholesale sales tax at 22 per cent. If he is worried about a GST at 10 per cent, it seems to me that he should look at the impact of the wholesale sales tax on the price of sporting equipment. There is 22 per cent on cricket balls, cricket bats and hockey sticks, and a similar 22 per cent on basketballs, soccer balls—which was an issue he raised—tennis rackets, footballs, surfboards, netballs and so on.Senator Lundy interjecting—WW4Kemp, Sen RodSenator KEMP—Senator Lundy, if you are worried about—Senator Lundy interjecting—WW4Kemp, Sen RodSenator KEMP—Senator Lundy says, `Why do you tell lies?' Senator Lundy, am I wrong in saying there is a wholesale sales tax on those sporting goods—Senator Lundy interjecting—WW4Kemp, Sen RodSenator KEMP—Senator Lundy has already amended the interjection. `Tell the whole story,' says Senator Lundy. Look, just for the record, the Labor Party's preferred tax system taxes at 22 per cent cricket balls, cricket bats, hockey sticks, basketballs, soccer balls, tennis rackets, footballs, surfboards, netballs and a whole host of other things. That is your preferred tax system, so do not come in here and lecture us. What am I going to do about the wholesale sales tax? Well, Senator Lundy, we are going to remove the wholesale sales tax. That is what we are going to do. We have got a policy to remove the 22 per cent off these sporting goods. You have not got a policy to remove that.The second point I would make is that Senator Forshaw referred to small community groups and soccer clubs and, of course, if you are a small community group and you are under the $100,000 threshold, you do not register. You cannot claim input tax credits but you do not charge GST on your outputs. Senator Forshaw did mention a small community club. Just to show how large a club would have to be to get over the $100,000 threshold, if you had a membership fee of, say, $200 per year and you had 100 members, if my mathematics are right at this late stage of the evening, that would only get you to $20,000, well below the $100,000 threshold. The fact of the matter is that experience has shown that some clubs, even though they are well below the threshold, may well wish to register because they can see benefits from being a registered body, and of course they can have that particular option. I think that covers the issue of the soccer club that Senator Forshaw raised.In relation to a number of other points that have been made, I would reiterate some of the remarks that Senator Murray made, particularly about the tendency to overstate problems. That is the job of the opposition, I recognise that. The government will be conducting, as I said, a major education campaign once the tax reform package becomes law. We believe, again, that that will be part of the process which will help resolve many of the concerns that charities have.I would also say, in conclusion, to Senator Brown that I am still checking with my advisers but I am still not aware that I have received many, if indeed any, letters from you on the charities issue. I am not aware that you were an active worker in the committee hearings, particularly when it dealt with charities: I may stand corrected on that. I am not aware that you have brought any charities to see the government. If that is the case, I will have to stick with my original conclusion about your attitude to this bill and, indeed, to all other major activities in this chamber.20:59:006384Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I would like to point out that my office certainly has had many approaches by charitable institutions, not-for-profit organisations, in relation to this issue, and that is why I am supporting it. Deriding anybody in the chamber is a ridiculous situation when you should be arguing the issue on this matter. How is the distinction to be made? We have heard that some issues are probably GST free or are likely to be GST free. The government has begun the process. The minister has indicated that, under the law, I guess, the government does not influence the Tax Commissioner in relation to rulings. That indicates it is just as likely—perhaps even more likely—that the Tax Commissioner will rule against these institutions. So getting the rulings does not indicate that the rulings will fall in favour of these not-for-profit organisations. If they have to deal with the law as it is writ, then the government says they cannot influence that, so simply asking for the rulings does not solve the problem.If tax experts now cannot work it out, by still saying `probably GST' or `likely', even with a ruling, what do you think the influence is going to be for those people who are not tax experts trying to understand the issue and the rulings once that is happening? One of the examples that springs to mind is Men of the Trees, who provide plants at cost for rehabilitation—very important to what is happening in many of the land care issues—but sometimes sell their trees for profit, for fundraising, so they can provide those same trees for landcare rehabilitation. How do you tell, being an expect in trees these days, the difference between a GST-free tree, a little treelet, and a non-GST tree? The answer is: you cannot. The ACCC is going to find great difficulty in working that out as well. The problems will not go away, and have not gone away, and the minister's attempt at arguing simply has not solved that problem.21:02:006384Cook, Sen PeterSenator COOKRF4WAALP00—The reason I rise is that I noticed earlier that Senator Murray was seeking the call. I think it is worth while saying that both the Australian Democrats and the government have applied a gag to this debate. What we are now witnessing is time wasting by the government and the Australian Democrats to use up the time of the gag. There are a number of matters that we are yet to get to. If you will liberate the gag so we can get to them, we would feel that there is at least some justice in this debate. But, by continuing to speak on this debate—just because Senator Brown and Senator Margetts have nailed the perfidy of the Democrats on this issue—you are simply engaging in time wasting.We want to get to the books issue tonight, if we possibly can, because on the issue of books the clear case is that the Australian Democrats have dishonoured their election undertaking. Maybe the reason they are filling up the time at this stage of the night is that they do not want us to get to that. We want to get on to the issues of dealing with tax avoidance. Maybe the reason why the debate is being filled up tonight is that that is a very uncomfortable issue for the Australian Democrats because they have sold out on dealing with tax avoidance. There are number of other issues on the running sheet, which has about 12 pages, and we are a up to page 4, that we also want to debate. Are we going to be in this endless cycle of Senator Brown or Senator Margetts driving a nail into the Democrats' coffin and the Democrats trying to somehow crawl out and justify their position and then waste the entire time of the chamber?I have not got a sensible answer to the question I put to the Australian Democrats earlier that on the ABC news tonight the report was that you do not have a leader, there had been a leadership spill. Are you are a party without a leader threshing around trying to find some relevance, or is there someone who can speak with one voice on behalf of your entire party? Is Senator Stott Despoja the acting leader? Is Senator Lees somehow clinging to authority despite the vote of no confidence in her by the membership? Is Senator Murray somehow jockeying for position to take over from the lot of you? What is the score on that? Is the inability of the Democrats to concentrate on this debate to do with the fact that in the backroom they are stabbing each other in the back while they are manoeuvring over the leadership? Is it the fact that in the Democrats' own ballot—DX5MARGETTSSenator Margetts—Mr Temporary Chairman, I rise on a point of order. Much as I am enjoying that, I am not sure whether the Democrat ballot is relevant to this amendment, and I would like to get to a vote as well. 10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Calvert)—Senator Cook, I think you should come back to the amendment.WW4KEMPSenator Kemp—You are just wasting time. You have been yabbering all day.RF4Cook, Sen PeterSenator COOK—No, you are wasting time, Minister. You have been wasting time all day and it is about time you got orderly and sat down there and behaved yourself in a proper way and stopped interrupting this debate. 10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Order! Senator Cook come back to the debate, please.RF4Cook, Sen PeterSenator COOK—Thank you, Mr Temporary Chairman. I would be grateful if you would call your colleague the minister to order when he is disorderly. I want to put those matters down because I am now somewhat alarmed that at 6 minutes past the hour of 9, when we are to be cut off by the guillotine at 9.30, we will not have an opportunity to get to some of the issues that need to be debated and aired. I conclude by saying there are a lot more things I would like to put on the record about this but obviously I want to make space for the debate. Let us get into the debate. If the Democrats are somewhat testy or somewhat painful about the fact they have sold out most of Australia—and I do not include all the Democrats in that—on the GST, well, they ought to sit here and take their medicine. They ought to expect to be told what is wrong with this deal. Let us get into it and debate it properly.21:06:006385Murray, Sen AndrewSenator MURRAY3M6WAAD00—I will be brief. Mr Temporary Chairman, the leader of the Australian Democrats is not in the chamber at the moment and she will be through shortly to make an announcement, which should satisfy Senator Cook's somewhat prurient interest, I think, in this matter.That is how that matter will be dealt with. The second thing to say is this: I suspect that if we look back through the 65 hours of debate on this bill and we assess the amount of time that was addressed to general remarks long before we ever got to amendments, we would establish that the Labor Party has had terrific opportunity to express its views. I appreciate that the Labor Party may think that the book sector is more important than the charitable sector, but the Australian Democrats do not. Following your line of thinking, if we were embarrassed by this we would want to hurry through, because Senator Brown—it's not a compliment—has done his best to give us a bagging. I think it was a very inaccurate bagging but he has certainly given it to us. Senator Margetts is right in there on the issue as well. We are happy to listen to that debate and respond to it, and I think it is appropriate.Senator Margetts properly put to the chamber the size of the sector that is involved, and the size of the sector involved deserves, therefore, those issues to be properly covered during the debate. I am sorry to upset you, Senator Cook. We will get to books and then you can go to town on that but, in the meantime, we are on charities.Minister, I have been asked by the charitable organisations to ascertain on the record some answers from you so that we can establish some matters. Having these aspects on the record is important, so my first question to you is with regard to tax deductible organisations.RF4COOKSenator Cook—Mr Temporary Chairman, I rise on a point of order. Do I understand the remarks of Senator Murray to mean that he is now prepared to lift the gag so we can have a proper debate and not take up all the time by having friendly questions backwards and forwards between the conspirators on the GST just to fill up the time of this debate? Can we actually get on with voting on some of these things?UNKNOWNThe TEMPORARY CHAIRMAN (Senator Calvert)The TEMPORARY CHAIRMAN (Senator Calvert)—Senator Cook, there is no point of order. Remain seated please.RF4COOKSenator Cook—I had not concluded; I was not aware that you were addressing me, Mr Chairman.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—I said that there is no point of order.3M6Murray, Sen AndrewSenator MURRAY—Senator Cook would be well aware that my normal style is in fact a friendly and I hope a polite one. I am sorry if you find that offensive.RF4COOKSenator Cook—I don't find it offensive. What I find offensive is using up the time when essentially you've put a guillotine on us.3M6Murray, Sen AndrewSenator MURRAY—I think I should direct my remarks through the chair.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—I would be pleased if you would.3M6Murray, Sen AndrewSenator MURRAY—Minister, just briefly, the charities have asked you to identify how many tax deductible organisations will be beneficially affected by being GST free in terms of the definitions in the bills. Could the minister please outline what sorts of organisations are affected by this, and what sorts of activities are covered by being tax deductible entities?Consideration interrupted.Distinguished Visitors638610000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Calvert)—Order! I draw to the attention of honourable senators that we have a very distinguished delegation in the public gallery of honourable members of the upper house in Tasmania. I hope you are enjoying this very enlightened debate.UNKNOWNHonourable senatorsHonourable senators—Hear, hear!Bills6387r703Billsr667Billsr666Billsr702Billsr699Billsr698Bills6387r664Billsr660Billsr658Billsr657Billsr701Billsr663Billsr659Billsr700Billsr661Billsr754Billsr755Billsr761Billsr765Billsr763Billsr764Billsr757Billsr760Billsr758Billsr759Billsr756Billsr7626387A NEW TAX SYSTEM (GOODS AND SERVICES TAX) BILL 1998Consideration resumed.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Calvert)—The committee is considering Australian Greens amendments Nos 1 to 4 on sheet 1328, revised 2. The question is that the amendments be agreed to.21:10:006387Cook, Sen PeterSenator COOKRF4WAALP00—Mr Temporary Chairman, I wonder if the minister, who is engaged with his advisers, would mind if I asked through you to him if he would take the question from Senator Murray on notice and supply the answer in writing tomorrow so that we can get on with the issue. That would enable the concerns of this dorothy dix exchange to be at least on the record and we can concentrate on the substantive issues of this debate.21:11:006387Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I must say, Senator Cook, you really have stung me! I have indicated to you that I am very slow to be provoked, but I have been attacked by you today both for not answering questions and for getting up and answering questions. You genuinely cannot have it both ways. You are annoyed if I wait until four or five of your colleagues speak, and then when I get up and respond to them, you get anxious and annoyed.You asked me a series of questions. I got up and responded to them, and then you got up and attacked me because I got to my feet. This is an astonishing thing. If you do not want me to get to my feet, don't ask me questions. If you want me to respond, I will be more than happy to get up and respond, but I have never seen such a sloppy argument in all my time in this Senate. You have wasted so much time on this bill. The total debate on this bill will be 65 hours. If you chose through your own strategy—which is so often unwise, which is so often short term—not to have had enough time on this bill, it is entirely the Labor Party's fault. You wasted time. Look at the way Senator Conroy was behaving today. You tell me that was not time wasting! Look at Senator George Campbell and the amount of time he wasted today. I have to tell you, Senator, if you are worried about getting this debate completed, get control of your own side.That is the problem with you, Senator Cook: you have no authority. You cannot control your own people so you get up and you vent your spleen on me and the government. We are responding to the questions that have been put to us, as we are entitled to do. For you to suggest that we are wasting time is frankly absurd. Senator Cook wants more time. He is going to have 65 hours to debate these bills and he wants more time. The fact of the matter is that the Labor Party has appallingly handled the legislation before the chamber. Your strategy has been negative from day one, and it is no wonder, Senator Cook, that you are showing signs of temper at this time of the evening. If I had made as big a goose of myself as you have made of yourself, I would be upset, too. The fact is that with the strategy you have had, you have absolutely blown it.656FORSHAWSenator Forshaw—Is that a cooked goose or an uncooked goose?WW4Kemp, Sen RodSenator KEMP—It is nice to have Senator Forshaw back again. He flashed into the debate and flashed out of the debate. You showed real interest in the charities issue. We will get it on record how much interest you showed in the charities issue. You got in and you asked a question, and then you were annoyed that I did not get up immediately to respond, because that might have stopped you leaving to go off for your dinner. Well, too bad!QD4BROWNSenator Brown—Mr Temporary Chairman, I raise a point of order. Can you prevent the interjections, which are, at the moment, leading the government speaker astray? I ask you to bring him back to the question before the chair.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Calvert)—Minister, I am wondering whether you could return to the question and address your remarks through the chair, and perhaps we could get back to some debate on this particular matter. I believe Senator Murray did ask you a question.WW4Kemp, Sen RodSenator KEMP—Yes, indeed. In fact, I was about to respond to Senator Murray's question: how many tax deductible organisations are there? I think there are thousands. I do not know whether we can provide you with a complete list, but a huge number of organisations are going to benefit from this, Senator. If you need any greater precision in your answer, I would be very happy to do it.What are the sorts of organisations that will benefit? Senator, I tell you, it is quite awesome. I refer you to Australian Tax Legislation 1999, volume 1. From page 1,234 onwards, it lists a very wide range of bodies in the health area. For example, public hospitals—NB5CAMPBELLSenator George Campbell—Why don't you read the book out?RF4COOKSenator Cook—Don't encourage him.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Minister, I would ask you to ignore the interjections.WW4Kemp, Sen RodSenator KEMP—I am easily encouraged, if you wish me to, Senator Cook. I am more controlled, however, than you. I do not think there is any argument about that. In the education sector, again we list a vast range of bodies, including a public university, a public fund for the establishment of a university and a residential educational institution established by the Commonwealth. The education one goes on for a number of pages. Then we go to areas like gifts to a public fund established to benefit a rural school hostel building which must satisfy certain requirements. We go on to welfare rights. Welfare rights is a very big issue. There is a vast list. I refer Senator Murray to those pages. A vast range of bodies are going to benefit from this.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Order! The question is that Australian Greens amendments Nos 1 to 4 on sheet 1328, revised 2, be agreed to.21:22:00The committee divided. (The Chairman—Senator S. M. West)2Brown, B. Margetts, D. *63Allison, L. Alston, R. K. R.Bishop, T. M. Boswell, R. L. D.Bourne, V. Brownhill, D. G. C.Calvert, P. H. Campbell, G.Campbell, I. G. Carr, K.Chapman, H. G. P. Collins, J. M. A.Colston, M. A. Conroy, S.Cook, P. F. S. Coonan, H.Cooney, B. Crane, W.Crossin, P. M. Crowley, R. A.Denman, K. J. Eggleston, A.Ellison, C. Evans, C. V.Ferguson, A. B. Ferris, J.Forshaw, M. G. Gibbs, B.Harradine, B. Heffernan, W.Herron, J. Hill, R. M.Hogg, J. Kemp, R.Knowles, S. C. Lees, M. H.Lightfoot, P. R. Lundy, K.Macdonald, I. Macdonald, S.MacGibbon, D. J. Mackay, S.McGauran, J. J. J. McKiernan, J. P.Murphy, S. M. Murray, A.O'Brien, K. W. K. *O'Chee, W. G.Parer, W. R. Patterson, K. C. L.Payne, M. A.Quirke, J. A.Ray, R. F. Reid, M. E.Reynolds, M. Schacht, C. C.Sherry, N. Synon, K. M.Tambling, G. E. J. Troeth, J.Vanstone, A. E. Watson, J. O. W.West, S. M.Question so resolved in the negative.21:26:006389Brown, Sen BobSenator BROWNQD4TASAG00—by leave—I give notice that I withdraw all further Greens (WA) and Australian Greens amendments on pages 5 and 6 of the running sheet.21:26:006389Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I move government amendment No. 30 on sheet FA210:(30) Clause 38-255, page 92 (lines 24 and 25), omit paragraph (b), substitute: (b) the goods were supplied to the institution, trustee or gift-deductible entity: (i) as a gift; or (ii) by way of a supply that was GST-free because of a previous application of this section.This amendment refers to GST-free sales by charities and the treatment of donated second-hand goods. Under the GST bill, donated second-hand goods will be GST free when sold by charities. However, in some cases the goods are sold to another charity before being sold to consumers. In such cases the second sale would not be GST free. This request seeks to make this sale and subsequent sales by charities GST free. This is achieved by extending GST-free treatment to sales by a charity of donated second-hand goods that they have acquired from another charity. I commend this particular amendment to the chamber. It is another amendment that makes it clear how the new tax system will affect charities. It shows the responsiveness of the government to some of the concerns which have been raised.Amendment agreed to.21:29:006389Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—by leave—I move government amendments Nos 31 and 67:(31) Page 93 (after line 3), after Subdivision 38-F, insert:Subdivision 38-FA—Raffles and bingo conducted by charitable institutions etc. 38-270 Raffles and bingo conducted by charitable institutions etc.A supply is GST-free if: (a) the supplier is a charitable institution, a trustee of a charitable fund or a *gift-deductible entity; and (b) the supply is: (i) a supply of a ticket in a raffle; or (ii) an acceptance of a person's participation in a game of bingo; or (iii) a *gambling supply of a kind specified in the regulations; and (c) the supply does not contravene a *State law or a *Territory law.(67) Clause 126-10, page 193 (after line 16), after subclause (2), insert:(2A) In working out the total monetary prizes for a tax period, disregard any *monetary prizes you are liable to pay, during the tax period, that relate to supplies that are *GST- free under Subdivision 38-FA.The government's expressed intention was that no net revenue would be raised from gambling, and this would be achieved by reducing state and territory taxes by a similar amount for the GST.10000CHAIRMANThe CHAIRMAN—Order! It being 9.30 p.m., pursuant to the guillotine, I will report progress.Progress reported.Adjournment6390UNKNOWNThe ACTING DEPUTY PRESIDENT (Senator Calvert)The ACTING DEPUTY PRESIDENT (Senator Calvert)—Order! It being 9.30 p.m., I propose the question:That the Senate do now adjourn.639021:30:006390Hill, Sen RobertSenator HILLBH4SALPEnvironment and Heritage10—I understand that some senators may wish to speak for more than 10 minutes in tonight's debate. The government is willing to accommodate those senators and proposes a blanket leave of the Senate to enable each senator to speak for up to 15 minutes. I hope that most will stick to the 10, or less.Leave granted.BH4Hill, Sen RobertSenator HILL—As suggested by that introduction, Mr Acting Deputy President, tonight we are farewelling a number of colleagues and giving them the opportunity to make what might well be their last speeches in this place. It is interesting that upon retirement one's speeches are rarely ever read, but if they are it is generally the first speech and sometimes the last speech. It is as if there is nothing in between, which is most unfair. It was once said that it is a mistake to underestimate the capacity of any individual in this place. To simply get here requires someone with determination, drive and commitment. When I look at those who are retiring tonight, it is interesting to see how they reflect the broad spectrum of Australian society in terms of attitudes and beliefs but as a whole make up what this Senate is all about.I want to just touch briefly on each. I am not doing it in any particular order, but I turn around and I see Senator Karen Synon, who is retiring after a short time in the Senate, and I would not say retiring of her own volition. I can say to the Senate that, if the voluntary student unionism bill does not pass in this session, Karen will be back. At some time she will return to have another go. In that I think there is a sign of her determination and her commitment. I can recall her first speech, which was not long ago. It was spoken with passion and a demonstration of very strong beliefs. If only you could get the nation state out of the picture, off the backs of people, Karen told us, they will have the chance to reach their full potential. In her contributions in this place she has reminded us of that often. I know that there will be a place for Karen in Australian politics in the future, and I wish her well.The second one I come across is Senator Bill O'Chee. He joined us as a boy—24 years of age. I want to say, not wanting to sound offensive, that now he has grown up he has demonstrated the potential that he would have had to have played a very significant role in government. There is no doubt that if Bill had not been removed from this place against his will he would have been a minister in many governments and done a fine job. He is the one-man bobsled team of the Senate and a person of incredible talents, not only sporting talents but intellectual talents. In some ways he is the most unlikely National Party mem ber I could ever imagine. The fact that he succeeded in this place Senator John Stone is a demonstration of what I sometimes see as the confusion of the National Party. It is a very puzzling party in many ways, Senator Boswell, but it obviously is broad enough to encompass both John Stone and Bill O'Chee. As I was hinting a moment ago, Bill is lucky to be a natural debater, probably the best debater in this chamber, and well read. It is a great loss to Australian politics that Bill is going now that he has got a decade of parliamentary experience behind him. I suspect he will go off and make a lot of money, but I am one Australian who would like to see him find a place in politics for the future as well.Dee Margetts happens to be my third. I can remember Dee once giving me a lecture on green politics. I did not understand it then and I still do not understand it. She was trying to point out to me that it was not just about the environment; it was a whole different way of living life. Anyway, Dee comes from that line of determined, passionate green female senators from Western Australia. I think back to Senator Vallentine and Senator Chamarette. I hope Senator Margetts does not mind me saying that she comes from the same mould, driven with a great determination to do something worth while for society and for the environment. If you wanted to be critical of Dee, you would not say that she lacked application. We saw her often in this place; every day, in fact. She took perhaps just a touch more than her fair share of the time. I think that is a demonstration of her commitment. In passing, Dee, as we wish you well in the future, I do not know whether you will return to parliamentary politics but I know that you will never let your causes go. I would only suggest to you that if you have to go behind a tree again, just make sure the park ranger is not watching.Sandy Macdonald is the next one on my list. Sandy is a gentleman and a fine man.Senator Ian Campbell interjecting—BH4Hill, Sen RobertSenator HILL—There are gentlemen in this place, Senator Campbell. Sandy not only is a decent person but also works quietly in a range of fields. He is well informed in defence matters and obviously very well informed in rural matters. He is very committed to his constituency and to his party, and I will miss him. He is a very reliable person in the best sense. I would like to see Sandy back because he demonstrates the sorts of values that are very important in parliamentary life.The next on my list is Senator David MacGibbon, who is not here at the moment. He has been with us a long time. I am pleased to call David a friend. He is very well informed, particularly in defence and foreign affairs matters. He has perhaps been a touch unlucky in his political career. With a bit more luck he may have been given more opportunities. I was pleased to see him head up the Joint Standing Committee on the Australian Security Intelligence Organisation and the Joint Standing Committee on Foreign Affairs, Defence and Trade of this parliament.I think David is a person who would ask of us that we make an effort to restore a little dignity to the chamber on occasions. He has very much been one who has upheld the customs and values of this place and who perhaps feels that some of us have let them down occasionally. The last point I would make about David is that when you are in a tight fix he is a good chap to have alongside you or even behind you, which I think is very important. To me he has been a very strong ally, and I appreciate that.The next person I come across is Mal Colston, who has had difficulties in recent times. I think it is worth reflecting that when Mal was Deputy President of the Senate all sides of the Senate said that he did a good job. I hope he will look back on that period with some pride. He has pursued his interests throughout, particularly in relation to education at all levels, and he has advanced those causes through a considerable period of parliamentary life.The last person I have on my list—and I hope I have not missed anyone—is Senator Margaret Reynolds. The second hardest job in politics I ever had was to be shadow spokesman on the status of women. The hardest job I ever had was to be shadow spokesman for the ACT. As shadow spokesman on the status of women I contested across the chamber the then Minister Assisting the Prime Minister on the Status of Women, Senator Reynolds. I have to say that she treated me kindly. She had the opportunity to humiliate me but she chose not to. Instead she chose to educate me. I hope out of that short period of time she feels that I learnt some things before they decided that I was unsuited for that position and moved me on to something else. Senator Reynolds is committed to her causes—Aboriginal reconciliation, the environment and the interests of Far North Queensland—and she has always been in there participating with dignity.Mr Acting Deputy President, they are a mixed bunch and they all came here with individual talents and aspirations. I think they all leave us tonight being able to look back upon contributions which have been worth while and for which we as their colleagues thank them.639221:41:006392Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—In this valedictory debate let me say, firstly, to my friend and colleague Margaret Reynolds how much she will be missed by all of us on this side of the chamber. Margaret's career has been a long and distinguished one. She came into the Senate in 1983 and retires now after 16 years of meritorious service. Margaret came from the local government sector—she was an alderman on the Townsville City Council. There seems to be an almost invincible Labor administration in that city.Margaret has always focused her attention on women's issues, indigenous rights and local government. As I said at a dinner earlier this week for members of our caucus to farewell Margaret, that is not always easy in North Queensland. Margaret and her husband, Henry, arrived in North Queensland in the 1960s. She said that at times she found the culture there, a culture in part of racism, very difficult to accept, cope with and take genuine steps to counter. I know that both Margaret and Henry have spent much of their lives—really devoted their lives—to ameliorating this significant problem through education and through action.As Senator Hill has said, Margaret is the one of our retiring senators who has reached ministerial office. She served as Parliamentary Secretary for Local Government and subsequently became Minister for Local Government in the Hawke government. She did serve as Minister Assisting the Prime Minister on the Status of Women. During that time she was responsible for introducing the first nationwide campaign to counter domestic violence.I also think that some of her other activities have been of great significance to her and to the community. She of course was a representative on the Council for Aboriginal Reconciliation from 1991 to 1996 and performed a very important role there. Margaret has been a standard-bearer for the Labor Party in North Queensland. I say to her that I think you go from this place, Margaret, knowing well that you and your office have assisted thousands of people in that area and have ensured that thousands of people in North Queensland have had a strong Labor voice; you have been a strong community voice. I know that we have two new Labor representatives from Queensland—Senator-elect McLucas and Senator-elect Ludwig—who will join us after your retirement. It is great to see Labor's representation there increase but I can say to you, on behalf of all your colleagues, that we really do wish you good luck in the future. We wish you and Henry well and we sincerely thank you for a very significant contribution to the Federal Parliamentary Labor Party for a very long period of time.UNKNOWNOpposition senatorsOpposition senators—Hear, hear!5K4Faulkner, Sen JohnSenator FAULKNER—Senator David MacGibbon also leaves us. He is a very long-serving senator, having been elected in 1977. He has served on many committees and in many capacities in this Senate chamber. He was a member of the then coalition shadow ministry on two occasions. He was shadow minister for veterans' affairs and defence science and personnel when I had ministerial responsibility in those areas and I was pleased to work with him on many issues. Obviously, there were many other issues, as senators would understand, where we locked horns, but I was pleased to go to the Western Front with David, and I think for both of us that was a highlight of our parliamentary careers. David is a person who has made many considered speeches on aviation and defence matters since he has been in this place. He is chairman of probably what is the most prestigious committee in this parliament, the Joint Standing Committee on Foreign Affairs, Defence and Trade. In the 1990s he visited Australian peacekeeping forces overseas on a number of occasions and his advice to the government of the day on those matters was always much appreciated.I agree with Senator Hill: Senator MacGibbon has not had much luck in politics. That is very true. He found himself in opposition for 13 years at a time when obviously, if the coalition had been in government, he almost certainly would have served as a minister. But he will be remembered by all of us as a senator with a good sense of humour who did attend to his duties in this place with admirable diligence and as someone who served his party with great loyalty—and we on this side of the chamber respect that. He leaves this place as a result of a factional brawl in the Liberal Party in Queensland. That is a fate that can befall anybody on either side of this chamber and I think we all acknowledge that that is the case. I want to say the following in relation to Senator MacGibbon. We have, from time to time, criticised the appointment of former parliamentarians to other positions of service to this country but I say this genuinely: if Senator MacGibbon were one so appointed, there would not be criticism coming from this side of the chamber. We wish David MacGibbon well in the future.Senator O'Chee, as we have heard, came to the Senate as a young senator. I think that has meant that he has received more of the national political spotlight than others have. We contemplated in the Labor Party often moving the odd disallowance motion when Senator O'Chee came dressed in the sort of waistcoat he is in today. But we had to resist the temptation because just have a look at Senator McKiernan's shirt and tie! Senator O'Chee was a victim really of what was a temporary One Nation surge in the state of Queensland in the last federal election. We recall that Senator O'Chee said at one stage that, if the One Nation Party won any seats in the Queensland state parliament, he would walk backwards to the Gold Coast. I suppose that now you have gone, Bill, you have plenty of opportunity to do that 11 times. But I want to say this as a serious point. Senator O'Chee has been criticised by some in the media—I stress `media'—over his superannuation entitlement. It ought to be realised here by all of us that Senator O'Chee did not plan his retirement from this place. He did not plan to lose his seat, and I say no more. I understand that Senator O'Chee plans to rebuild his career in the financial sector, and we wish you every success in that regard.Senator Sandy Macdonald is, of course, a fellow senator from the state of New South Wales. Along with Senator O'Chee, he has probably found himself also a victim of One Nation. I think I have to be a little constrained in what I say about Senator Sandy Macdonald because I suspect he is going to be back here. Rumour has it that he will return to this chamber at some stage. I do not want to be in a position where kind words that I express might be quoted back to me in some future debate.Senator Sandy Macdonald has, I am sure, impressed senators with his diligence and his contributions in those areas that he is most interested in. We read, Sandy, that you are planning to return to the land and will get in a little bit more horse riding and the like that you have done so little of of late. We suggest, given that you are so out of practice, having been in the Senate, that you make sure the horse is a pretty amiable one to start with. I suppose the other piece of advice is: next time, it is always better to make sure that you are number two on the ticket. I am sure you will be able to achieve that.Senator Synon has only been with us here a short time and was chosen by the parliament of Victoria to replace former Senator Short as a Victorian Liberal senator. In the short time that she has had here, Senator Synon has served on several significant Senate committees and is a fellow member of the Joint Standing Committee on Electoral Matters. The truth is that Senator Synon will not be here after 30 June because she was demoted on the coalition Senate ticket in Victoria, again as a result of a factional brawl or dispute. But I stress this: this can happen to anybody in the chamber. It has happened to people on both sides of the chamber.We read with interest that Senator Synon has indicated that she might return here one day. I read some media speculation that she might enter state politics in Victoria. Again, I think you would agree, Senator Synon, that, in view of those possibilities, any praise from me would certainly be used against you in such a preselection contest. So, on that basis, I should not go any further. Let me say, Senator Synon, that we wish you well for the future.Senator Margetts has represented the state of Western Australia since 1993 and has made a very strong contribution to Senate debates. I have to say, Dee, that the Labor Party do not always agree with your world view, but we do recognise the principles that you hold so firmly. It is not easy being the only party representative in the Senate—I think we all know that—especially when you have the additional burden of travelling from Western Australia. This did not prevent you from taking a tremendous interest in a wide range of issues.You have been a tireless worker on environment issues, and we should acknowledge that, as well as on indigenous issues and on foreign affairs and defence matters. You have approached your politics with compassion and you have approached it with real conviction. Everyone in the chamber would acknowledge that. We have even detected the development of a bit of a sense of humour lately, Senator Margetts, and we think that is terrific. On behalf of the Labor Party, we wish you well for the future. Senator Margetts, I should also acknowledge the fact that you have, on the vast majority of those votes where the opposition and the government have voted on different sides of the chamber, voted with the Labor Party. It is proper to acknowledge that.I conclude my remarks by wishing Senator MacGibbon, Senator O'Chee, Senator Synon, Senator Sandy Macdonald and Senator Margetts well for the future. Particularly, on behalf of the opposition, I sincerely thank my friend and colleague Margaret Reynolds for what has been a great service here in the Australian Senate on behalf of the federal parliamentary Labor Party. All your friends and comrades will miss you.639421:57:006394Lees, Sen MegSenator LEES8U4SAAD00—I stand tonight as the Leader of the Australian Democrats to wish all of the retiring senators well. I do have to respond to something that Senator Cook said earlier. I can assure him that, if there is any change to the leadership, he will be the first to know. I will let him know personally.While I am speaking on behalf of the Democrats, I am also speaking from a personal perspective. I am going to start with the senators that I know the best. I have to start, therefore, with Senator Reynolds, who I have known through work on a range of committees. I remember a visit to Beijing very well. I do not think there is anyone in this place who could argue that Senator Reynolds, who has been with us some 16 years, has not done an outstanding job. She is the only retiring senator who has been in the ministry. I would remind people that she was Minister Assisting the Prime Minister on the Status of Women from 1988 to 1990 and Minister for Local Government from 1987 to 1990.It is through her work on Senate committees that I have known Senator Reynolds best: estimates committees and committees generally. Anyone who has worked with Senator Reynolds on any of those committees knows her dedication, her level of preparation for committee hearings, her determination to get to the bottom of issues and her very astute questioning, particularly of departments on regular occasions.Senator Reynolds has been a strong advocate for human rights and social issues, particularly for the rights of indigenous Australians and also women. Her advocacy, particularly in those areas, has been unwavering; her arguments, clear and articulate. Through her integrity, I think the status of the Labor Party, particularly women in the Labor Party, has been greatly enhanced.In her first speech, Senator Reynolds advised us that she was in the chamber not only to represent the thousands of Queenslanders that had voted for her but also to specifically work for the disadvantaged groups in our community. She has not wavered in that commitment in her entire time here. Just a couple of examples of this are her role as adviser to the United Nations General Assembly and also her involvement in the women's conference in Beijing and all that led into that and what has come out of that. I congratulate you, Margaret, on all the work that you have done.Just reading your book, The Last Bastion, tells us a lot about your role, or the role of women, in the Labor Party and what you have been able to secure by way of policy changes against what sometimes do seem quite incredible odds, in particular your documentation of the input women have had into the Australian political landscape. I say most sincerely that we shall miss you and your contribution. I will miss you. For women in parliament generally, Margaret has been a great source of support—always a cheerful face and always someone who was there if you needed someone to have a chat to about any issue whatsoever.Margaret is undoubtedly a committed feminist. Her work on the sex discrimination legislation in the late 1980s and the lobbying of government to ratify the convention against all forms of discrimination against women was very significant and cannot be underestimated. I often wonder where we might be today if it were not for Senator Reynolds and many of the women who have worked with her. This culminated in the development of the national agenda for women which sought to advance the status of women and to implement policy which would see women actively and equally participating in all sectors of society.We all recall debates around the time of the sex discrimination legislation, debates about language. Unfortunately, under this government we have seen some of those gains whittled away and we will have to fight on without you to get back some of the territory we have recently lost. Margaret, I have always found you a person of integrity, always highly intelligent and very warm, a very friendly colleague. You will be missed by all of us. We wish you all the best for the future in whatever you choose to do and I am sure we have not seen or heard the last of Margaret Reynolds.I have always enjoyed working with Dee Margetts, although recently we have chosen to differ on a couple of issues. No-one can doubt Dee's commitment. Even though at various times there may be disagreements on the issue, the commitment is without fault. Senator Margetts entered the Senate in 1993 as the third Green senator for Western Australia. I must point out here, as we have been talking about the status of women, that there have been three female senators for the Greens (WA), and Dee is the third. Dee's efforts, particularly in the areas of social justice, the environment and Aboriginal issues, have been without fault and I am sure the commitment will go on well beyond this. She has never wavered in any of these areas, and the list goes on to nuclear activities and disarmament.Dee has never faltered in her commitment and never failed to raise issues in this place. They also include issues relating to Australia's economic sovereignty, tariffs, trade, the MAI and all those other economic issues. Holding a degree in international development and economics has certainly given Dee the background to do that extremely well.Dee has always been a very strong advocate for grassroots participation in decision making and the way in which she has worked has shown us first hand, particularly looking at her work with indigenous people, leading into the Wik debate and other areas, that she lives out that commitment to the grassroots participation in community development. I mentioned her grasp of a wide range of issues which I think has amazed all of us. Mostly we have found ourselves sitting on the same side of the chamber although, as I said, there have been two recent issues where we will have to choose to differ.Dee has been an active member on a range of committees despite the enormous impediment of travel from over there to over here. On all the committees I have been with, when she has been needed either she has been there in person or has been on a teleconference. I congratulate her for her commitment to those issues. We will miss you but again we know we have not heard the last of you. Whatever it is you choose to do, I am sure it will be along the lines of all of those issues, involving all the issues we know you so well for. I can also say we will not be surprised if we see you back here or perhaps in the parliament of Western Australia.Senator O'Chee, as people have already said, was the youngest senator to be elected. I have worked—unfortunately not very often—with Senator O'Chee. In work on committees, I have always admired his ability to make a point, to put his case and to argue. While it may not have been on a policy area where we agreed, he certainly did it in a manner that was always very forthright and strong.As others have already mentioned, he is known for many things, including bobsledding, and I shan't say anything about the car park beneath us. Senator O'Chee has been National Party whip since 1993 and has carried on in that position with his usual flair and ability. I wish him well in the future. Perhaps we have not seen the last of Senator O'Chee either.To Senator Sandy Macdonald, with whom I have never had the pleasure of working on committee, it has been a pleasure working with you. Senator Macdonald is widely acknowledged, as others have said before me, as a true gentlemen. Again, while we may have some policy differences, it has always been a pleasure to debate with you formally in this chamber and to chat in the corridors. I congratulate you on what you have done in this place. I have heard rumours that there is a commitment from you to come back here. It seems perhaps more of a chance than some of the others who have the possibility to come back. From what I have heard, you are going to try to rejoin us. As long as it is not at the expense of a Democrat, then that will be fine.Senator Colston is not with us tonight, but in his role as chair of various committees he has shown us that he has a very good grasp of standing orders and details of procedures. I think all of us wish him well in the future.To Karen Synon, I am sorry, but I have not had the opportunity to work with you very much. Unfortunately, you have been here for only a short period of time, but I wish you well. Senator Synon was only the third female Liberal senator from Victoria. She was also the youngest senator to represent the Liberal Party in Victoria. You have shown a real commitment in human rights and issues such as, for example, your membership of Amnesty International. I wish you well in whatever you choose to do.Senator David MacGibbon has had a long career and has served his state very well. He distinguished himself when he crossed the floor and voted for the EEO legislation. He was chair of the defence subcommittee and undertook that job with eagerness. Indeed, defence is perhaps the issue for which we know him best. Senator MacGibbon has also had a significant role and interest in the future of Bougainville and is highly commended by my colleague Senator Bourne.We wish all of those retiring senators well and look forward to seeing a couple of them back, as long as it is not at the expense of a Democrat.639622:07:006396Boswell, Sen RonaldSenator BOSWELLYE4QLDNP10—At this time we are faced with the fact that we are going to lose a number of our colleagues. That is an inevitable fact of life in politics and we all accept it, but Sandy Macdonald and Bill O'Chee are more than colleagues to me; they are friends. You cannot spend nine years and six years respectively with these people without becoming warm friends and enjoying their warm friendship. I would first like to mention the contribution of other senators before coming to these special representatives of the National Party and I will do that in order of seniority.Mal Colston was elected in 1975 from Queensland and I want to say that he is lucky to have his family standing by him in such difficult times. They have been loyal to him in the face of considerable opposition and I think that, if a man can say that he has got his family behind him, then he is successful in that way. I treat people the way that I find them and I have always found Mal Colston to be a decent person. I wish him well with his health problems and hope that he does have a long retirement.Dee Margetts was elected to the Senate in 1993, where she held the balance of power with Christabelle Chamarette. She has taken particular interest in issues of international agreements, nuclear disarmament and green economics. Like Jo Valentine and Christabelle Chamarette, Dee has been a vigorous contributor on everything and she has certainly got her money's worth, and her voters have got their money's worth, if time and debate can be equated to good representation. Dee, you are totally opposite from the way we think and we could not be further apart; we are 180 degrees apart on everything, I suppose—but I do enjoy your company and I wish you well.David MacGibbon, Liberal Senator, was returned in 1978, and I suppose his best years in politics were when we were in opposition and he was the shadow spokesman for Customs, veterans' affairs, and defence science and personnel. He has always had a very special interest in defence issues, such as National Service, Coastwatch and purchasing of defence equipment. I think one of his major achievements—he probably did not get a lot of profile on it—was that he took an active interest in brokering an agreement for peace for the nine-year war in Bougainville. For that, I think he should be commended.Karen Synon, Liberal Senator for Victoria—well, politics has not dealt you a very good hand. But we go into this with our eyes open and it is a very difficult situation. I know that you must be tremendously disappointed. You never got a chance to display what you could have done, but there is always state politics and there is always another chance around the corner. I know that you could get very embittered about the way in which you have been treated, but bitterness never gets you very far and I wish you the best of luck.Margaret Reynolds came into parliament with me in 1983. We both came down here together. Margaret is a representative of the Left and I suppose that we do not have a lot of politics in common, but no-one could say that Margaret is not a very pleasant person. She has been a good representative for the people in North Queensland, particularly in her interest in Aboriginal affairs. She was also the minister for local government. She now retires and she tells me that she will be spending some time in the state that she was born, Tasmania, in Launceston, and some time in Queensland. I say to you and your husband, I wish you a long and happy retirement and may you continue your interest out of politics in the things that you have been passionate about.I come to my close colleagues now, Senators Bill O'Chee and Sandy Macdonald. The National Party is a small party without organised factions. That leads to strong friendships. We take a great personal interest in each other's progress, hardships and triumphs. Tonight is a particularly difficult time for me, as National Party Senate Leader, to formally say goodbye or at least au revoir in this chamber to my two colleagues. Both Bill and Sandy are young men with young families. Both have become fathers this year. It is a great joy to see their babies around parliament. It brings home so clearly why we try to do our best in this chamber to make good laws for the future.Both Bill and Sandy potentially had many years of a parliamentary career ahead of them. Today we farewell them and pay tribute to their contributions to date. The National Party certainly cannot afford to lose people of this calibre, nor can Australia or this parliament, because they have both contributed so much in their different ways. In 1998, the National Party took on One Nation in the political arena. We bore the brunt of their electoral onslaught. The results for the National Party could have been disastrous, but we took them on and fought them off. Those who might one day think that Australia does not need a rural based party should reflect on what would have happened if the National Party had not existed in 1998. We endured casualties, which we pay testament to tonight, but we won the war and will help the wounded to come back.Sandy fits the traditional mould of a National Party parliamentarian: he is from the land, a wool grower and a grazier. He brought tremendous experience and expertise to this place. He was at the cutting edge of policy development on problems facing the wool industry and looked after their interests. Whether we froze the stockpile or changed the way that wool was sold or privatised it, Sandy was always there in that debate sharing his knowledge on the issues facing the wool industry, which is still the sixth biggest exporter in Australia and faces tremendous problems, as it has done over the last 10 years. So much of Australia can grow nothing but wool. Many country towns depend on it. It is very important to have a rural voice like Sandy's in the Senate and the parliament.From a broader political perspective, Sandy won the last Senate place in New South Wales in 1993 and shifted the balance of power, enabling government to get many bills through with Independents' support. He cut his teeth on native title legislation. He had the courage to stand up for his constituents. In his first debate he crossed the floor with Bill and Julian. I remember a funny night when, during that debate, I had cause to upbraid Sandy for not staying in the chamber, because it was a crucial vote and we had to be there. His answer to me was that he was shocked and that `he hadn't been spoken to like that since he was a jackaroo.' But he never held it against me.Native title continues to shadow Sandy's political life—still being debated till recently. It is an ironic twist that Sandy's Senate place will be taken by Democrat Aboriginal activist, Aden Ridgeway—and I wish him the best for when he comes in. One Nation cost the National Party seat in New South Wales. It cost rural people dearly, because they lost a voice and gained an eloquent advocate for native title in return—hardly what they wanted.Sandy was head of the Taiwanese Friendship Association. With that, he got the beef tariffs down in Taiwan to the level of the American tariffs—and they had a favoured nation treatment. That was a wonderful gain for rural Australia but, again, Sandy never got the recognition he deserved.He was chairman of the black spots committee, chairman of the Senate foreign affairs committee, a member of the joint committee on foreign affairs, and a member of the joint committee on ASIO. All these positions meant a sensible National Party voice in important policy considerations. In a recent Telstra debate, Sandy worked on the bush's concern over replacement of analog telephones. He made sure that the analog was not switched off till the CDMA was switched on.At a personal level, we do not have cliques and rivalries here in parliament, although friendships are formed. But I have never heard Sandy say a bad word against anyone. I have never seen him not being able to approach anyone in this chamber. Sandy is an outstanding sportsman. He has a supportive family. He is barbecue cook extraordinaire for the Boswell Christmas bash. He is the epitome of a good parliamentarian—getting on with the job of doing day-to-day diligent work in the background, making this country a better place, especially for country Australia. Sandy's favourite verse is from Les Murray:You ride on the world-horse once.No matter how brave your seatOr polished your boots,It may gallop you into undreamed-of fields.In the future, `the world-horse' is not finished with Sandy yet. There are many fields yet to gallop, and I firmly believe that at some time Sandy will be back in the Senate saddle.By contrast, Bill breaks the mould of the National Party stereotype—not from the bush but with a legal financial background. Also with a young family, he is a keen sportsman and bobsled champion. But I know Bill as a fearless and eloquent speaker with a brilliant mind and a photographic memory whose talents are going to be sorely missed in the National Party and in this parliament.Bill has been an outstanding party whip and has brought his clever mind into play in numerous exchanges in the chamber. He has been a courageous defender of rural Australia and an able defender of our constitutional system of government. He has no hesitation in standing up for his principles and has crossed the floor several times. He has been instrumental in treaty making reform—ensuring they cannot be made in secret but would be open for parliamentary scrutiny—and this will never be able to be wound back. He helped me in that CoT cases win—that David and Goliath battle with Telstra where senators joined together and came out for fairness and justice. He has been on the black spots committee.But all this fades into insignificance, because Senator O'Chee's most outstanding contributions lie in his courageous stand against One Nation, including speeches in the Senate. Despite tremendous pressure, Bill refused to budge on the One Nation preference issue. In doing so, Bill saved the National Party from itself and ensured sufficient credibility for the party to retain other seats. It was a very painful episode for Bill.The National Party has much to thank Bill for—not only for his advocacy in the Senate but because he refused to give in to the forces of populism, prejudice and negativity. They are not the way forward for our people. One Nation has cost rural Australia dearly—and nowhere more so than in the loss of these two senators from the National Party. As to Bill's future, the law of probability says that Bill will not get back in, with only a thin sliver of hope following the High Court's decision against the British One Nation candidate. But this man has nine lives—and I would not like to rule him out. For my money, I am backing him.I would like to conclude by emphasising that the National Party of Australia is a very proud political party which consistently faces electoral threats to its survival. The party is not one person or one year or one event, but a force which relies on young, positive people like Bill and Sandy to stand up and be counted in public life.639922:22:006399Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I usually have no trouble speaking, but tonight I have butterflies in my stomach and sweaty palms. That is very unusual for me in this place. Senator Faulkner mentioned that they have discovered that I have a sense of humour. I did always have a sense of humour; it just was not very obvious.BH4HILLSenator Hill—Not much to laugh about here.DX5Margetts, Sen DeeSenator MARGETTS—In this place. That is right. I have actually been walking around with a smile on my face a lot more often most recently, and I guess that is because there is a great deal of personal relief in the pressure that has lifted as a result of the end of my term—even though I did not choose the end of my term. I cannot deny the disappointment of losing the seat. I tried to find the extra 5,000 votes. I kept looking and looking, and my partner would let you know that in the middle of the night I thought, `They've got to be somewhere!' but they were not. There they were, hanging on the end of the third candidate for the Labor Party, but they just did not come across. However, there are a range of reasons.For me, the greatest sadness is losing that Green connection for Western Australia that started, of course, with Jo Valentine in 1984—for whom I handed out how to vote cards in the little town of Bridgetown. And that, of course, was followed on so ably by my colleague Senator Christabel Chamarette, who is warmly remembered by so many people in this chamber. So yes, there is grief; but it is tempered by personal relief. As I say, I will not deny that I tried to find an extra 2½ thousand votes—somewhere, anywhere—but it was not to be. From the Greens' point of view, we say that is the cosmos—because, if one door closes, another will open.I tried to think about what I set out to do and whether I have achieved it. Essentially, no, because what I wanted to be was redundant. I wanted to be in a party/movement that became so obvious to people in terms of its approach that it became the mainstream and commonsense. Some things that we have done have done that, but I just wish I was redundant. Unfortunately, we are still going to need Green politicians for long time yet.There is, of course, no end—to the Green politician—of political representation. I refer, of course, to my colleague Senator Bob Brown and his team. The Greens all work with teams: Marg, Ben, Geoff, Jo, Steven and all the people who contribute to your office. I want to say how much I have admired your contribution. For those people who always like to pick out differences, can I tell you that the Greens value and celebrate diversity. There is always more than one way to represent a green electorate.I remember back to Jo Valentine, who was never, and was never likely to be, in the position of holding the balance of power. But she was the most-known senator in Australia. I believe that polls showed that people knew of her and the work she did. That is because she was visible, as is Bob Brown.YE4BOSWELLSenator Boswell—She certainly was: she was in the slammer.DX5Margetts, Sen DeeSenator MARGETTS—She had courage, yes. And I tell you what: it takes a lot of courage to stand up in that way. It is not easy. I have immense admiration for what Jo has achieved.I have said that I have not achieved what I set out to do. I looked back at my first speech and the issues which I put on the record. It was, I think, one of the parliament's shortest first speeches, being about 7½ minutes. I was in a hurry and I wanted to get going.I talked about globalisation. I talked about my desire to have people understand some of the issues. I would like to think that, over time, some of the things I have said have actually made it into mainstream debate because they have been mentioned at the political level, but I cannot say that I have succeeded in that area.I also talked about the fact that, at the time, I wanted to see that the issues of ecological sustainability could be seen as interacting with the economy. I have worked so hard to integrate those issues. I have always recognised that it is not in the areas of environment and social issues legislation that we get the major changes and policy changes; that generally it is in issues of trade, economic policy and sometimes corporate policy that we actually get most of the changes involved with the environment, social policy and social justice. `It is about the economy, Stupid,' I guess is the kind of response that we see happening when we want to actually change things and get people working in a different direction.How did people greet us when we got here, certainly when we found that the numbers were such that we shared the balance of power? I guess derision was probably one of the first things I would say. The term `fruit loops' did pop up, and the `Gumnut Twins'. We appropriated that—yea! Even the friendly commentators, who thought they were being chummy, wrote stories of the `Pooh Bear goes to Canberra' variety—assuming two things. One was that we would simply follow a major party and vote always with that major party—because, of course, being little Greens and women, we would not know any different. And don't you all wish we did! However, the other assumption was that, if we did not do that—YE4BOSWELLSenator Boswell—You haven't voted with us yet.DX5Margetts, Sen DeeSenator MARGETTS—That is true. The other was that, if we did not do that, we would simply fall on our face, because hey: how would we understand those big issues to do with money and the economy? Well, we did not do either. There are stages, as former Senator Chamarette used to say, of cognitive dissonance. Basically, first you are ignored and nobody knows you are there. Secondly, there is derision. Thirdly, there is anger, once they work out that they cannot shift you that easily. Finally, if what you are saying reaches enough people, then those ideas become mainstream: you find them three years later actually in government policy or in legislation.At no stage, unfortunately, do we ever get the credit for those ideas, if they were originally on the cutting edge of the political debate. Of course, in many instances, if they are outside the general debate of the major parties, they do not get coverage at all, because they are not recognised as issues of importance, even if they are representative of issues involving many people.I want to move on quickly because I want my staff to have a direct say in this debate. I want to thank the little voices in the community who every now and then, and not infrequently, reminded us of what we were here for—yes, community participation and decision making is very important to us. Just moving back to the Fruit Loop packet; we did keep the Fruit Loop packet which someone very kindly sent us in our office window for a time until we finally binned them because I did not actually like the taste of them. I have kept the Fruit Loop earrings. I have kept that symbolism because they represent to me the connection between growth in world trade and environmental damage.I confess embarrassment at my own election slogan, which relates to `hardest working', because I know in reality that it means, technically, I just spoke more often than everybody else. In fact, and it is like the duck going along on the river, the people working with me were certainly some of the hardest-working people I have seen. Anything I have achieved is because of the people around me, the team and the network. The whole has always been much greater than the parts.I would now like to use the words of my own staff. When I asked my staff to give their contribution here they reminded me that it is what Christabel did as well. So if you will bear with me. Carole Perry, my wonderful office manager from Perth, whom many people have spoken to over the phone, said:As I close the doors to Dee's office for the very last time on the evening of 30 June 1999 my heart will be heavy with sadness.For six years I have waited for this House to produce a vision. Alas, I have waited in vain.Acid rains, global warming, ozone depletion and inappropriate farming and mining practices are clearly showing us the catastrophe threatening life on earth.To quote the European Greens, "only a new solidarity can save this planet for future generations".Species are vanishing a thousand times faster than the natural extinction rate.Industrialised agriculture and aquaculture and forestry based on the destruction of our ancient trees are destroying our planet forever.I am sad because the people of Australia recognise these problems. We want to stop this dangerous trend. We want our children and our children's children to inherit the Earth we were privileged to know so long ago.But I am also angry, very angry, that you—the Members of this House, who represent the people of Australia—will not listen to us.Instead, you make the laws easier so that we can be locked up or heavily fined when we protest about the need for justice and the need to save what remains of this beautiful country.You pass legislation that is responsible for the poor to become poorer. You allow health facilities, education and employment to be almost beyond our reach.And you smother our voices and our avenues of protest.Please reconsider your actions and think again.Stuart Reid, our most recent electorate officer and very hard worker, says:With only a minute I'll leave out silverchair's Anthem for the 21st Century and instead reflect on two popular culture references from my generation which vividly contrast alternate visions of our possible futures.On the one hand—from Led Zeppelin—a vision of a future in which people and communities take control of their lives and participate fully in the political life of their society:It's whispered that soonIf we all call the tune,Then the piper will lead us to reason.And a new day will dawnFor those who stand longAnd the forests will echo with laughter.And on the other hand—from King Crimson—a future in which more and more people are disenfranchised and alienated from the political process, where the distance between the haves and have nots becomes ever more stark:Blood racked barbed wirePoliticians' funeral pyreInnocents raped with napalm fireTwenty first century schizoid manDeath seeds blind mans' greedPoets' starving children bleedNothing he's got, he really needsTwenty first century schizoid manI am very much afraid that the latter is where we are headed. . . , but, in the long run, there is still time to change the road you're on.Many people will know Amanda Bohnen and the work she has done for us in managing our office and her quiet professionalism—and I am very proud of the confidence that she has shown in the work which she has done. Amanda says:If there's one thing I've learned whilst working for Dee it is this:If Australians knew the tireless, devoted hours Senators put into their work, they would be much slower to criticise.If Australians appreciated the ever-increasing complexity of a Senator's workload, they would be far less demanding.And if Australians recognised that Senators are not despots, but people entrusted with a special responsibility that they're trying devotedly, for the most part, to fulfil, they might show greater understanding.An ounce of patience and encouragement and forgiveness can and does go a long way in this political hothouse. I've seen it, on brief occasions, do remarkable things and I want to thank all those people who have shown these qualities towards Dee.I would like to think that Australians will rise to the occasion and show a bit more of these qualities to those who come to follow. In the long run it will be for the benefit of us all.Many people will know the wonderful work that Liz Peak has done as my economics adviser. Liz started as a parliamentary intern and I spent years working out a spot where Liz could join us as a permanent staff member and she has been fantastic. Liz says:Initially, I wanted to leave a message for parliamentarians—a message to listen to the community, and care what they think, and imagine what the impacts of decisions might be, and realise how privileged you are to be here.I also wanted to leave a message of idealism that expressed my passion for equity, justice, the environment and community participation.But as I am lucky enough to be able to express these idealisms every day in my job—I want to say how thankful I am to be able to be involved in politics and not walking away totally despondent and disillusioned.Despite passage of many horrific bills and cynical deals, I have been lucky enough to work with so many people of utmost integrity and principle—everyone in our office and all the wonderful and energetic and inspiring greens, activists, and community groups. These people have left me with a strong hope that in the future we will see principles and people prevailing over politics and profits. Our groovy poster in the office says it all: the future is green!!! Far from least, I thank Alan Carter, who I think everybody in Parliament House knows. I think most people recognise what a fantastic personal assistant he has been for the work that we have had to do. (Extension of time granted) This is a poem by Adele Coombs:How tempting it isto want a piece of this country—to `own' some of its space,make our dreams come true,build our heart's desire,be it haven or empire,and call it `our place'.But the land never belongs to us.It's only lent with awesome freedomto create and replenish,or waste and strip bare.What legacy will we leavealongside our footprints?What will be left to share?Though it endures title-deed holdersthe land is never ours to keep.Long after the proud `owners' have gone,merely campers moving on,will the land still be hereto sustain our children?Or will its fragile beauty be gone?Mr Acting Deputy President, I also must give special recognition to my partner, Nic, who has always been there at the end of the phone and at the end of a long parliamentary session. I certainly do not know whether I would have been able to do what I did without him.I also want to thank the many, many volunteers—and those others who have been with us on the journey. They include Anne, Shane, Andrew, Ben, Heather, Michelle, our legal adviser Gary Corr and many others. I also want to give special recognition to Kirsten, Dhanu and Matt. Few people will forget the work that Matt did through native title. Few people will forget Dhanu's colourful, ardent personality, and few people will forget the work that Kirsten has done here in this parliament and with Amnesty International. Where to from here? Well, certainly not to a television career. I have decided that is not for me after my Good News Week performance, but I guess I am surprised that after six years of our hard work in so many areas the media should have taken such an interest in my bodily functions.Before I finish though, I would like to mention my friend Margaret Reynolds. I do not often say that about other party members because I realise that often a Greens parliamentarian calling someone a friend is a kiss of death politically. But, in this case, Margaret is safe. You're getting a life too, and I wish you the very best. We worked on uranium issues, on the uranium committee, on Aboriginal issues, on environmental issues, on nuclear issues and on women's issues, and I echo all those wonderful statements that people have made about you.I wish all other departing senators well and hope that the time after the Senate is a new life, a new beginning. I would also like to say how thrilled I am that one of the new senators coming into this place is Aden Ridgway, and that we will have again an Aboriginal voice in the Senate. I think that is just fantastic.Finally, I would like to thank the staff, the clerks, the research staff, the parliamentary house staff, the committee staff and all those people who we have worked with and who make this place work. I think we should value the independence, the professionalism and the work that these people do, and guard it and defend it for all its worth. Democracy and justice is worth defending.640322:41:006403Harradine, Sen BrianSenator HARRADINE6H4TASIND00—Wasn't that typical! It is a real pleasure to listen to Senator Margetts. I say that because when she gets up to speak people listen to her, not only in the committee stage but on occasions like this. I would like to say that it was typical. She was not claiming credit for herself but recognising teamwork. It was so pleasing to see her recognise her staff and particularly Alan, whom we all know. We often tend to take for granted the work that our staff do. On this particular occasion, let me first of all wish you all the very best, Senator Margetts.I would like to also acknowledge the work that has been done by the staff of all of the departing senators. The departure of their senator from this place is difficult for them. They too will have to enter into new work, new places and a new environment, and that is not easy. I think we all acknowledge the wonderful job that our staff do and also, as Senator Margetts said, the work that is done by the staff of the Senate, the staff of the Parliamentary Library, the staff of the Joint House Department, and so on, to help democracy to run in Australia. All the very best, Dee, and we enjoyed that speech.I am not going to be long. There are 22 speakers to go, and if each of us takes 10 minutes we will be here until 2.30 a.m. I will be brief. I believe brevity would be the best possible gift I could give to the departing senators because we want to hear from them rather than their hearing from us, but I must refer to all the departing senators.Senator Colston was elected in the same election that I was—he in Queensland for the Labor Party in 1975 and I in Tasmania as an Independent. Senator Colston has been under a considerable amount of pressure over the last few years—personal, public and health wise. His family has also suffered. I do not think we should forget that members of parliament feel a great deal of concern for those whom they love, particularly their own families. In a way, it is unfair for those families to be visited with the type of criticism that is often levelled at politicians.We sometimes forget what people have contributed to this parliament. For example, Mal Colston has contributed vastly to this Senate. He has worked consistently on committees. He was a very good Chairman. You knew, when Mal baulked, you could not go any further. You could try him out when he was in the chair but you knew when he baulked that he would not cop any further nonsense, and that made this chamber a more manageable place. I think the work that Senator Colston has done for this parliament and for this Senate should be acknowledged here. I wish Senator Colston and his family well in the future.Senator MacGibbon has been around the place for a fair while, too. I think it was—what 1978 or something?N26ABETZSenator Abetz—1977.6H4Harradine, Sen BrianSenator HARRADINE—It was 1977 that he was elected. As the Leader of the Government in the Senate has said, he has been very interested in and done a lot for defence in this country. Earlier on, I can recall him being rather dismissive of my efforts, at least, and I suppose others, of getting more money for development assistance for developing countries. His view—as was expressed, I think, in 1981—was, `Why shouldn't it come to Queensland?' But over the years, his work in the Defence Subcommittee of the Joint Standing Committee on Foreign Affairs, Defence and Trade was very well recognised. He became chair of the Defence Subcommittee, but he also contributed substantially to the Joint Standing Committee on Foreign Affairs, Defence and Trade, which of course examined issues of development assistance, and he, of course, obviously, over the years, participated in this work. I wish David very well in the future, and I am sorry to see him go.Senator Margaret Reynolds, I wish you, too, all the very best. I must say that our joint interests and concern for Aboriginal people and also the work that Henry has done has meant that I have got to know you much better over the years. We do wish you very well, and I hope you do see a bit more of Tasmania in your retirement.Senator O'Chee, I wish you and your family all the best. When he came here he was single. He was supposed to be working very hard as a senator, but obviously he had time to catch—and I must say, she is a marvellous catch, your wife—UNKNOWNGovernment senatorGovernment senator—He went fishing.6H4Harradine, Sen BrianSenator HARRADINE—Yes, he went fishing. He and his wife now have a lovely child. I wish you all the best, too, Bill. It has been indicated that Bill is a vigorous debater. There is no doubt about that. He would have to be, as the Leader of the Government in the Senate said, one of the best, if not the best. I think he said that he is the best debater in this chamber. Your debating skills were evident, but your contributions in this chamber always had quality and substance. You will be missed.Senator Sandy Macdonald, your family plays a big role in your life, as it should do for us all. I might just say that it was great to see the O'Chee and Macdonald babies here around the place. People like yourselves should get a medal from the Treasurer, be cause we do need more taxpayers coming along, and we should not forget it! Senator Macdonald, the bush will be back here. I am sure, from the messages that I am getting around the place, that we will see Senator Macdonald back. Anyhow, I wish you all the best, Senator Macdonald.Last, but not least, Senator Synon. She has been here only a very short time, but I have been impressed with Senator Synon's work, particularly in the committees on which we serve. I am sorry to see her go because I am sure that she would have contributed significantly and uniquely to the work of this parliament. I know I am getting on, but it is always interesting to see young people—young members and senators—come into this place, and I think that she had a lot to contribute. Maybe she will be back again. In the meantime, I wish you all the very best.640422:52:006404Crane, Sen WinstonSenator CRANEUW4WALP10—I too would like to pay tribute tonight to the colleagues who are leaving us. Senator Harradine said that we must make it short. In my contribution tonight I would just like to highlight one thing which will remind me of those people who are leaving us, something that I think would remind me from time to time of the mark, the little bit that each one who performs in this place leaves upon you. I am sure, as you work through this, that there are particular things you remember and particular marks that are left behind.First of all, I want to start with Mal Colston. If I think of one thing when it comes to Mal Colston, it is courage under fire. I really mean that. Mal Colston has been here since 1975; he was preselected during that time at least four times, if not more. He had some great difficulties, but I think the way that he stood up to the pressure that was applied is something that should leave a mark on each one of us.What does Margaret Reynolds remind me of? In particular, her interest in Aboriginal affairs, which is something that is also very close to my heart, and those who have heard me speak in here would understand why. What I admire most about Margaret in terms of Aboriginal affairs was not that we did not always agree but that she was always keen to find or look at another solution to the particular problems that exist with our indigenous people. Those of us who have spent much of our lives out in the country recognise and know that there are number of concerns.And then there is Dee Margetts. What does she remind me of? It is her passion for her cause, a quality that is often lacking in this place.When I think of David MacGibbon I think of air, air and air; I think of air controllers, air controllers and more air controllers; I think of the Air Force, the Air Force and the Air Force. I cannot think, having heard what Senator Faulkner said tonight, of a better person to become the Chairman of CASA and take over from where Dick Smith left off.Senator McKiernan interjecting—UW4Crane, Sen WinstonSenator CRANE—You would all be safe, I promise you. Dick Smith retired.Karen Synon, I was fortunate enough to know you before you came into this place, even though that was for a short time. Your time here has certainly been too short, as has been said. The thing I remember most about Karen is her maiden speech. I remember it well, before I came into this place, I spoke to two people with regard to what you should do when giving a maiden speech. One happened to be Fred Chaney and the other one was Wilson Tuckey. They both said to me at that time that you should make sure that your maiden speech spells out who you are and what you stand for. It is absolutely crucial not only because it gives a message to everyone and the people out there who elected you but also because it is something you can go back and read from time to time; you can measure yourself against that maiden speech. I think in the short time, Karen, that you have been here, you have certainly stood firm in terms of the principles you laid down that day. I think that is incredibly admirable and, hopefully, it will also be the beginning of your coming back.There are many things you can think about Bill O'Chee. Debating skills have been mentioned and his research capacity at estimates. But, Bill, the one thing that I remember very much, which not many people here saw, was when we were at Wellington. You, Senator Cooney and I were the Australian delegates to the Commonwealth conference on legislation scrutiny. For those of us who heard Bill's contribution to that conference, it was simply outstanding. It really spelt out the importance of personal liberties and the rights of the individual. I think that was one of your great contributions, which not many Australians heard. I was fortunate.Finally, I come to the person I did the most work with amongst the people who are leaving here tonight, and that is Sandy Macdonald. Sandy, I just want to say thank you, particularly for the last 18 months. When the industry which you and I both grew up in—and there ain't many of us left here, mate, not many of us at all; I am talking about the wool industry—needed a sound mind, a person to stand firm and to bring our committee back to order, you always produced those words of wisdom and that calming effect. What I will remember you for, Sandy, is that particular contribution. What you did for wool growers was to create hope in a wool industry that had had 10 years of hell, absolute hell. For those people who are in that industry, that contribution—the solidness of it, the sincerity of it and the wisdom of it—is worth recording here. Even though it went through difficult times, is going through difficult times, it is still ranked sixth in importance in our export industries in this nation. It is still the greatest multiplier in terms of employment of any industry in this nation. I predict this industry will start climbing back up the ranks through these records, as it rebuilds under the new arrangements that have been put in place. While I am taking a bit longer on you, I think your contribution has been very important. On behalf of myself and for the support you gave me and also, I would say, on behalf of wool growers in this country, thank you.640522:59:006405Calvert, Sen PaulSenator CALVERT5F4TASLP10—I will be brief. As the whip, I have been in a privileged position to actually be able to comment on all of those senators who are retiring because I have probably seen a side of them that other senators might not have seen. To Dee Margetts, I have always found her to be very sincere and dedicated and I would like to thank her for the cooperation she has given to me in whips meetings. I wish her well with her masters degree, and I certainly wish her well if and when she goes back to Christmas Island.As has been said before, Dave MacGibbon has been around for quite some time. I always respected his advice. I do not think anybody knows the standing orders better than Dave MacGibbon. He is the only senator who comes and asks for leave personally, which I find rather quaint, and he has never abused leave at all.H15CAMPBELLSenator Ian Campbell—He does not leave your office until you give it to him!5F4Calvert, Sen PaulSenator CALVERT—That is right. He is a very persistent person who appreciates it when he does get leave. I wish him well on his cattle property.Margaret Reynolds is a Tasmanian born senator whom I have shared temporary chairman duties with. I recall very well when she was minister for local government because I was chairman of the local government committee and spent a lot of time shadowing her. I wish her well in retirement.I recall also being a temporary chairman when Mal Colston was chairman of committees. Mal used to have meetings of a morning that included breakfast, and I always found that very enjoyable. He used to lecture us consistently and persistently about our duties as temporary chairmen. Those of us who have been temporary chairmen for a long time will remember the advice that Mal gave to us. I wish him and his family well.Bill O'Chee has been the National Party Whip, and of course we have worked very closely together. It has been a pleasure to work with Bill. I guess there are a few times when Bill has turned up on time. Most of the time he is late, but I must admit that when Bill is on duty I reciprocate. Sometimes when Bill has to make a point to me I get it in writing and I return the favour in writing. Bill, your future is in banking and finance, and with Tara and Rory you have got a great future. I do not know whether you want to come back to this place, but wherever you go I know you are going to be successful. I agree with everything that has been said about you, particularly by Brian Harradine. Mate, I wish you all the best. I would like to thank you very much for allowing me the good fortune to obtain a wonderful whip's clerk, who, as you all realise, has had to put up with a fair bit of pressure since Claire went on holiday. You trained Suzanne very well. I am still learning from her some of the other ways of doing business.As has been said, Karen Synon has been here for a brief time. Karen, can I say that you have been a great team player. You have done everything I have asked of you and more. I know that sometimes you have had to fill in on committees that you did not want to. You have had long weeks of committee work but, whenever I have asked you to substitute for another person and help me out, you have been an absolutely great team player. I wish you every success in future, whatever you choose to do.For Sandy Macdonald, I guess it is back to the farm with Alice and the twins, but I do not think you will be there that long. You have been a very distinguished chairman of the Foreign Affairs, Defence and Trade Legislation Committee. I would like to commend you on the wonderful work you have done as chairman of the Taiwan Friendship Group. No-one has worked harder than you and no-one has achieved more than you have. I think you have done a lot for Australia-Taiwan relations, and I will always remember you for that, amongst other things.I guess that is it. To all of you who are retiring, bon voyage, and we hope to see you back here at the old boy functions from time to time.640623:04:006406Crowley, Sen RosemarySenator CROWLEYZF4SAALP00—I will resist making any comment about old boys' clubs.LI4PATTERSONSenator Patterson—Unusually restrained, Rosemary. ZF4Crowley, Sen RosemarySenator CROWLEY—I think that is not quite fair. I am usually restrained. If you only knew the full truth of my thoughts. Tonight I simply want to take the opportunity to join in support of everything that Senator Faulkner had to say on behalf of the Labor Party this evening and say some words about a particular friend and colleague in Margaret Reynolds. She came into the Senate in 1983, at the same time as I did, so we have travelled a fair distance fairly closely together. Margaret is a person about whom I can only speak with the greatest admiration and affection. Perhaps it goes to the point just made, I hope with some kindness, by Senator Patterson, but there is a difference between Margaret Reynolds and me. Margaret is unfailingly kind, charming and civil, and you can entertain what small differences from those characteristics might fit me.In particular, what I like so much about Margaret Reynolds is that, despite the provocation—and there is plenty in this place from time to time—her qualities that I think of are her gentleness and her constant civility. If there is a gentle way of finding a solution or working through a problem, Margaret is the person who will seek that and find it in every situation. I have never seen her driven to fury or extreme but I have seen her cope endlessly with all sorts of things that might have led her to react that way. I thank her very much for modelling, under the constant pressure of politics, that it is possible to be forever the same decent person that you are out of this place and out of parliament.Margaret has established and persisted with a constant agenda about the issues that I think go to the heart of the Labor Party: questions of social justice and in particular her commitment to human rights in all shades and varieties of how human rights can be proposed. Her work on behalf of Aboriginal people and with Aboriginal people has been exemplary and I think an example that many others of us have been pleased to take a lead from.She has also been tireless in her campaign for and on behalf of women. We were recalling earlier this week that when we first came into this place we were told that the Senate Hansard was a record of everything that was said in the parliament. Margaret and I were two of the people who chronically noticed that despite the fact that we used expressions like `he and she'—being describers of the world in non-sexist language—Hansard regularly reduced that to the third person masculine. I learnt this very quickly because I picked up one habit from Gough Whitlam and that was to read the daily Hansard every day. I could not believe that all these words under my name were really there. I still get a thrill seeing the words I have said written in Hansard. But it was very frustrating to read things that I did not think I had said. Sometimes I even referred to notes to check what I had said and I knew I had not said that. I had said `he and she' so why did it say `he' only?In the end we rose and asked Mr President if he would take note of this. Hansard claimed to be a record of what was said, but indeed it was not. It was an editorial practice as well. I believe that Margaret and I, and I would put in there Pat Giles and Olive Zakharov, to say nothing of Susan Ryan—the women in the Labor caucus—were very concerned to see that Mr President was able to institute changes so that Hansard changed a practice which they assured us was as old as the parliament. Subsequently what was said in parliament was recorded in Hansard and women got yet another forum where they were truly recorded as having said certain things and those certain things were written down forever. I was interested in the effort it took to change just a simple practice like that. It was one of those many things that Margaret and I stood together on.Another thing about Margaret is that she has the very rare skill of being able to turn a political idea or policy into action. There are any number of times when I can only say I learnt again and again from Margaret: what an interesting way of developing that further—whether it was a letter to be signed, a petition, the wearing of peace badges or any number of things all the way through to a sorry book. Margaret would say that it was not entirely and utterly her idea, but certainly it came into this place as something we could act on and not just talk about. So I thank you for that, Margaret. I do not have the skills so I may have to call you often.One other thing I want to say about Margaret is that she is a person who has established and maintained an extraordinary network of parliamentary, political and community colleagues. People maintain that contact with Margaret and are pleased for her to contact and maintain the contact with them because of the genuine way in which she listens to what they propose and say and the way in which she has acted for and on behalf of all those people. I am still aware of knowing the extreme range of her contacts. Very few people achieve anything like that same network of people who are prepared to ring and propose an idea, ask for help or seek further information. I note these are not the headline issues in Margaret's political contribution. They go much more to her role as minister and parliamentary secretary, but I remember those things as consistent throughout all her political contribution.I am certainly going to miss you, Margaret, very much. The Labor caucus will miss you—a conscience if ever there was one. It is not just in parliament that Margaret had the capacity to draw matters to the attention of all those assembled. She was the conscience quite often within the caucus too, and being the conscience in our caucus is not the easiest road. I might say that you are not the only conscience, but certainly on a number of occasions you have been. I would also say that Margaret has a rare capacity to enlist people to her conscience's cause and very often she was successful in the issues she raised or the points she wanted caucus to attend to. We will miss you. We will miss you for your warmth and for your friendship and for your unfailing contribution and encouragement to all of us to keep on keeping on.I heard Senator Margetts—I think at this stage we are probably being unparliamentary and referring to people by their first names, so it is Dee tonight if I may—say earlier that one of the goals she hoped for was that she would become redundant, that the issues she wanted to raise were no longer issues. I am pretty sure you can rest easy—you will be wanted for a long time, Dee. I certainly want to say exactly the same about Margaret Reynolds. The issues that you have raised are not finished with. We are not sure and secure that the things we achieved in the past will remain. Certainly we promoted change and we hoped that that would be an improvement, but many of us can say that it will be a matter of great regret that the constant way in which you, Margaret, have kept those issues alive and provoked us to come at them again and to persist when lots of other people are inclined to tire or flag are all of the things that I would want to put on the record as marking your characteristics in particular in this place.There are many things I would love to say to Margaret, but they would be much better said outside this place. You would not want them all on the record. None of them are nasty, I assure you. They are more in the nature of: let's have a drink sometime and talk about them. I think Margaret knows full well some of the things I am talking about. I want to take this opportunity to thank Margaret for her contribution not just to this parliament but to me and my participation in this parliament. I wish you well. I wish Henry and your children well and I hope you enjoy very much your new life wherever it takes you.640823:14:006408Stott Despoja, Sen NatashaSenator STOTT DESPOJA3I6SAAD00—I rise to support the remarks of my leader tonight in this valedictory session. I wish to speak briefly and pay tribute to two women who will be leaving. Before I do, I would like to acknowledge the contributions and the commitments of the other five senators who will be leaving and to put on record, on behalf of the Democrats, that we wish good health and good luck to Senator Colston. As to Senators Synon and MacGibbon, for the record it would be appropriate for us as Democrats to congratulate and commend them on their particular interests in human rights: in the case of Senator Synon, her involvement in the Amnesty organisation and her line on Burma and Tibet, which we also share; and in the case of Senator MacGibbon, as has been mentioned tonight on a number of occasions, his particular involvement in Bougainville.As to Senator Sandy Macdonald, I remember my former boss, Senator Karen Sowada, when she lost to him, saying to me, `If I had to lose to anyone, I am kind of glad it was Senator Sandy Macdonald, because he is such a gentleman.' I think that is probably a view that all Democrats, and certainly I, would share. Not that we were glad to lose Karen—quite the opposite—but indeed he has always been charming and very gentlemanly. As to the other Nat, Senator Bill O'Chee, before he just exited the chamber he came over and said, `Kid, I'll be listening from Senator Macdonald's office,' and I thought I was not going to put on record the fact that for the past almost four years he has called me `Kid'. For someone who got in so young—and I am talking about Senator O'Chee—he has consistently called me by that name.I have respected Senator O'Chee's intelligence and debating skills. Obviously, we have very different politics but in my early days he provided me with sometimes not needed but nevertheless useful procedural advice as well as—I think and I hope—a friendship. We have often been dragged out by various publications, as the youngest ever male and female senators, to talk about our politics and our perspectives and, as I say, they are probably not particularly similar. But to Bill: you have my respect and my best wishes.To Senator Margaret Reynolds, to whom I particular want to pay tribute tonight: when she first got in I note she said:I speak to this chamber as a member of the Labor Party, a woman, and as a senator for Queensland. These three loyalties shape my experience and determine my priorities as a member of this chamber.Indeed they have: she has served with great compassion and dignity. Her work in the areas of feminism, women's rights, indigenous rights and population issues is acknowledged by all and will be long celebrated by many men and women, but in particular by women, in this place and I think by many women yet to come. You have given me great faith in sisterhood, Senator Reynolds, because you do support other women, and for that I congratulate you.Lastly, I refer to a woman who also does believe in sisterhood. When I first got into this chamber, Senator Dee Margetts and Senator Christabel Chamarette actually moved a notice of motion to support me on my election. At the time I thought that was a rare display of cross-party support, but it is something, Senator Margetts, you have shown time and time again that you are more than capable of. You have my enduring respect and admiration. Your commitment to social justice, feminism, the environment and indigenous issues is ongoing, and I strongly support that. As for a sense of humour, no-one who saw your recent television performance could deny that. What a high point that was—and that is no pun intended, Senator Margetts. Senator Abetz obviously knows what I am talking about. In your first speech, you certainly acknowledged that you celebrate difference and diversity and you said, `The difference between Senator Chamarette and me is that Senator Chamarette is nicer.' I do not necessarily believe that. I think you are equally nice, shall we say, or do—as Kaz Cooke would say—keep yourself nice. In addition to that I would certainly say: keep strong, keep passionate and keep feisty. That is something that many of us respect in you and admire about you, and I wish you all the best for the future and look forward to contact with you in the future.640923:19:006409Parer, Sen WarwickSenator PARERKI4QLDLP10—I rise to support all our colleagues in the Senate in this valedictory to senators who are retiring on 30 June. While it is inevitable with the passage of time that all of us will leave this place, there is no escaping of course a feeling of sadness in saying farewell to friends and colleagues. From a Queensland perspective, we have four senators leaving and they are Senators MacGibbon, O'Chee, Colston and Reynolds. I want particularly to refer to my fellow Queensland Liberal senator, David MacGibbon. I first met David when he was a senator-elect in 1978. At that time I personally did not have any inkling that I would be joining him some 6½ years later. In those days there were only two of us from Queensland and David showed me the courtesy of introducing me to the ropes both in Queensland and in Old Parliament House about the same time, Mr Acting Deputy President McKiernan, as you joined.I must say that it was a very tough time for the Liberal Party in those days, probably the toughest time in its whole history, and I know he, understandably, is gratified with the significant role he played as we increased the Liberal Senate representation in Queensland from two to four. Much has been said of David's parliamentary career, of which of course he can be very justifiably proud. To me the things that stand out have been his intellect, his firm support of the parliamentary system and—as Senator Hill pointed out—his regard for the importance and the dignity of the Senate.From a personal perspective, I would like to pay tribute to his steady resolve, dedication and labours to make Australia a better and safer place, not only for this generation but also for future generations. This is borne out by his consuming interest over the years in foreign affairs, defence, trade and national security. His interest in defence was first evidenced in his being a national service recruit, where he saw benefits both for individual character building and the Australian community at large. In the early eighties he took a strong stand, making speeches on the difficult decision to spend $2,000 million on either the F18 or F16 fighters. His penchant for defence arose from his own personal fascination with aircraft. Flying had been a strong hobby interest for David long before he entered the Senate and his love of aviation has, over the years, led him to be regarded at various times as a civilian expert on fighter planes.As an aviation enthusiast, his interest in flying spilled over into his day-to-day life so much so that, by the late 1970s, David found that his pastime of collecting plane parts had overflowed the capacity to house them in his home. It became apparent that there was not enough bedroom space for his children. Rather than jettison his collection, he resolved to build a new house and designed it around the novel idea of an aircraft hangar.There have been many issues that David MacGibbon has championed. He pushed for the sale of TAA, the deregulation of the airline system and the privatisation of Qantas. He took up issues on the Australian flag and SBS. He pushed for equal employment opportunity legislation. Other matters related to coastal surveillance, air safety standards and customs. Yet other areas of interest have included the charity sector, the Senate quota system, child-care accessibility, human rights, small business in Queensland, and rural matters such as drought relief and market prices to name only a few of the matters that he has taken up over the years.However, it would certainly be true to say that David MacGibbon's priority has been matters relating to Australia's defence capabilities, with an emphasis on ensuring professional standards and financial accountability. While tackling these issues, he has also shown interest in the treatment of ADF and ASIO personnel, especially with regard to safety matters and obtaining recognition for the work of our security forces—people who often put their lives at risk in the course of their duties.David's wife Pam and his four children have been very supportive over the years of a job that, as we all know, often takes us from our homes and families for long periods of time. On behalf of the Queensland Liberal Party and on behalf of Queenslanders, we thank you for your enormous contribution over 20 years and we wish you success in whatever you do in the future. One thing I do know for sure is that you will do it with great determination, dedication and integrity.I would now like to turn to Senator Bill O'Chee. As a fellow Queenslander, I have known Bill well since he entered the Senate nine years ago as a Queensland National to occupy the seat vacated by John Stone. I think Bill still holds the record as the youngest senator to enter this place. He was young in years but very mature. Someone made the point earlier—I think it was Senator Hill—that he has matured even more. I think the great surprise for Bill was when he got preselection. He was a dark horse—a young, little dark horse. He is also the first person of Chinese descent to sit in this place, and that is a major mark for Bill.Despite his youth, Bill O'Chee came into the Senate well qualified as a legislator, with a degree in jurisprudence from Oxford and world-class debating skills. Following Oxford, Bill had a short stint as a capital markets broker in Brisbane and London. He has distinguished himself in the Senate with his intellect and with his ability to quickly get across and to speak on a wide range of legislation.He did not confine himself to youth issues but pursued a variety of rural, regional and small business matters—in fact, just about any topic. I can remember in my days in the ministry when we would get those inevitable take note of answers after question time. If you wanted to get a quick response from somebody, you would give about three notes to Bill O'Chee. He only had to talk for five minutes but I know he could have talked for 20 if he wanted to on an issue that one would think he would not know a lot about. He did it with great conviction, I can tell you.Bill O'Chee has made a very valuable contribution with his work on many committees: legal and constitutional; foreign affairs, defence and trade; and rural and regional affairs. As everyone has mentioned, he was the National Party Whip for six years. Even in his final months, Bill has worked hard as a member of the Senate Select Committee on A New Tax System, which had an exhaustive workload as it travelled around the country.Bill is well known for the strong links that he forged with Chinese and Taiwanese communities in Queensland and for his strong, principled stand against racism, which perhaps came at electoral cost to him. It is a great detriment to the Senate that Bill leaves this place prematurely. However, it is the right age for him to make the transition to a business or corporate career. His intelligence, integrity and capacity for hard work will stand him in good stead in his next career, and I am sure he will make a great success of it. I am equally sure that his family will welcome him being home more often.On behalf of the Queensland Liberal Party, I would like to thank Bill for all the work he has done in this place and, by extension, for our state of Queensland. I wish you all the best in the next stage of your life, Bill, as well as great happiness for you and your family, Tara and Rory—and maybe many others. I will be awfully surprised if we do not see you back here again.I turn to Senator Colston. I guess there are probably few people in this Senate who have experienced such a roller-coaster ride in politics as Senator Colston. He was nominated by the Labor Party to replace a deceased senator in the 1970s. The incumbent government of Queensland at the time appointed somebody else. He was subsequently elected in 1975. In 1990 the Senate went against past practice, and he was elected Deputy President when the Liberal nominee was rejected. In 1996 he abandoned the Labor Party and was again elected Deputy President. In this instance the Labor nominee was rejected. So he saw both actions. Subsequently he relinquished that position.I served on two committees with Senator Colston. As Senator Boswell said in his speech, `I always take people as I find them.' Senator Colston was chair of both of those committees. They were the good old days when the incumbent government chaired all of the committees—I just make that comment. In both instances, Mal Colston carried out his duties with great decorum and dignity. He has, in more recent times, been diagnosed with a very serious illness. His wife has also had treatment for a very serious illness. All I can say to Mal Colston, his wife Dawn and his very supportive sons is all the best for the future.I will just touch on the others who are leaving, because I know we have been told to speed up the process. They are in no particular order. Sandy Macdonald has been a great friend. He has made a major contribution while he has been here in what has been too short a time. He is a victim of an attack on the National Party, as was Bill O'Chee, which seems to be an anomaly in Australian politics; which I hope it proves to be in the future. It is a tragedy that you have been forced out under those circumstances, Sandy, but I believe you have an awful lot to contribute. This experience will stand you in good stead and I am sure you will be back like General MacArthur.Karen Synon has unfortunately had a brief time in the Senate. As Paul Calvert said, Karen has been a great colleague and a team player. The thing I like about Karen is that she and I agree on just about everything.N26ABETZSenator Abetz—She must be very sensitive.KI4Parer, Sen WarwickSenator PARER—She is mature beyond her years. No doubt Karen, with her commitment to the political arena, will have a future career in politics, and I wish her well.When I first came to the Senate, I thought Margaret Reynolds was an old hand—she certainly gave that impression. Then I discovered she had come here only a year earlier. She has done a great job over the years for her party. She has diligently pursued a number of causes. I heard the remarks by Senator Crowley about your gentle, kindly nature, Senator Reynolds, and I could not help but agree entirely with them, although your commitment we all knew about. If you could excuse a male chauvinist expression to an old feminist, I think you are a real lady.Finally, Senator Margetts and I have had a couple of fiery encounters over the period, but at no stage did I ever doubt the fact that she was entirely genuine and consistent in the views she put. You cannot say much more than that. I believe that she was probably misguided, and she knows she will excuse me if I say that. Still, she was very genuine and very committed, and I do not think you can say much more about a person.To all our colleagues who are leaving, I say collectively all the best for the future in whatever career you decide to follow.641223:32:006412Schacht, Sen ChrisSenator SCHACHT4J4SAALP00—I rise to speak on this occasion of a number of senators retiring. I do so because one of them is my colleague Senator Reynolds. I will make some remarks about her in a moment.To Senator MacGibbon: I have served on the Joint Foreign Affairs, Defence and Trade Committee for nine of the 12 years I have been in this place, and during all of that time David MacGibbon has been a member of that committee. During the three years that I was chairman of that committee, David was a very effective member, particularly on the defence subcommittee. I think it is a fitting tribute from his party and from the parliament that in the last period before he leaves us he has been chairman of that committee. It is true that David was one of the few members of the parliament who had a genuine interest in defence. Even though estimates committees and the Joint Foreign Affairs, Defence and Trade Committee can often be a forum for debate from different party political positions, David was always extremely genuine, in opposition or in government, about getting the best for the defence forces of Australia.His technical knowledge was second to none on the committee and even though one may disagree with some of the views he put, I thoroughly respected his view and always listened carefully when I was chairman and when I was a member of the defence subcommittee with him. David's work on the Joint Foreign Affairs, Defence and Trade Committee of this parliament is one reason why it is the pre-eminent parliamentary joint committee in the Australian parliament. I wish David well in the future. I do not think he will retire; I think he is far too active for that. I think he will go on with those issues—many of them have been mentioned here by other senators—with considerable success.Senator Margetts has had six years in this place and this brings to an end 14 years of representation by the Greens (WA). When Jo Valentine was elected in 1984, I thought it was a flash in the pan from Western Australia. The Greens proved me wrong by maintaining their representation—in many senses against all the odds—until the last election; until next Wednesday. You would all agree that Senator Margetts was extremely consistent in the position she put, even when she was in a very small minority. Reg Withers once said in this place, when he had to change a position dramatically because of a change of policy, that consistency in politics is the sign of a small mind. In that case, you might say that Dee Margetts has a very small mind because she has been extremely consistent in the views that she has put on behalf of the Greens and on broader environmental issues. For that I compliment her, even though I sometimes strongly disagreed.I also point out that she has been a very effective member of the Joint Foreign Affairs, Defence and Trade Committee and showed a particular interest in defence, being on that subcommittee and attending estimates when she was a member of the committee. Recently she asked a series of questions for over an hour about the submarine contract. Her knowledge of the technology of it showed that she was aware of the very complex issues in considerable detail. Dee Margetts has been a very effective senator for her cause, and I pay tribute to her. In many ways—I say this with some affection—Dee Margetts might well be called an old style Trotskyite because of the fact that she was always on the side of those who wanted to change institutions and radically reform a range of issues in society. In many of those areas, I think she has every right to be proud of her achievements.There are a number of other senators leaving, including Senator Sandy Macdonald and Senator O'Chee from the National Party. I have not served on committees with them. Senator Sandy Macdonald's office is down the corridor from my office and after a division we often have a chat. I agree that Sandy is a real gentleman and a very pleasant person to deal with. When we are able to chat openly at a private level and discuss things without any sense of political partisanship, it makes this place work better.For Bill O'Chee, it is ironic that somebody with a Chinese background has been a victim of the One Nation campaign—that dreadful campaign leading up to the last election. I pay tribute to Bill. He fought the case against them very strongly in Queensland when it might have been much easier to duck the issue. In the hotbed of the lead-up to the last federal election, and in the Queensland state election, although Bill made a couple of predictions that did not turn out correctly, at least he stood up and fought against One Nation when it might have been easier to duck and slip through on the issue. For that, Bill should be very strongly commended.Senator Synon has only been here a short time and I have not served on a committee with her. I understand that she is a dedicated political activist within the Victorian Liberal Party, so whether or not she comes back here, I suspect that she will be in another part of Victorian Liberal Party politics for quite some time.Finally, I want to turn to my colleague Senator Reynolds. In 1983, at the time of the calling of the double dissolution, I was a member of the national executive of the Labor Party. That was the first time that the national executive intervened and did the Senate preselection at a double dissolution for all states and territories. The national executive had just won a court case to say that they had the power to do that, so they exercised it to get all the tickets done and out of the way to stop brawls in various states. I was sitting there next to John Button and when we got to the Queensland ticket he said, `Listen Schachty, with Jim O'Keefe just retiring—the senator based in Townsville and the former President of the Labor Party—we have to have a senator from North Queensland. Margaret Reynolds' name has been put forward. She has been on the council and very active up there. You have got to vote for her.'I admit that I did not know Margaret from a bar of soap, but on John's say-so I voted for her. Margaret, I have to say that I have never regretted in any way making that decision because you have been an outstanding senator, not only for North Queensland and Queensland but also in this place for the Labor Party and all the people of Australia. People have mentioned your interest in human rights issues and support of the underprivileged and women's rights, et cetera. It is a list far too long for me to mention in the short time that I have, but I would say that there is one contribution that you and your husband, Henry, have made to the Australian community. Between you, you have brought to the fore issues that this community had had amnesia about—that is, the way this country had previously treated Aboriginal people.Many of us, 20 years ago, were completely unaware of what had happened in this country both in the last century and the early part of this century—everything from the stolen children to the wars, and they were wars, where Aboriginal people were massacred. Most of us had not been told about it; we were unaware of it. I think you and Henry have played a seminal role in opening up those issues and making them major moral and ethical issues for all the Australian community. What is so satisfying, and must be for both of you, is that it is now a major issue at the forefront of debate and discussion in the Australian community.Whatever other achievements you have had in this place, you will be remembered for leading the way for that issue to be brought forward, as it has to be if we are to have any sense of a nation with a moral foundation. We cannot be that without the recognition of what happened to the Aboriginal people over the last 200 years. I am sure that there are many indigenous people who will thank you more profoundly than I can express here, but as a person whom you and your husband awoke to the issues, I thank you very much for that. I know in the years ahead you and Henry together will continue that great work and it will not be a retirement; it will be a continuing good job that you will do. Thank you for being an effective member of the Senate. You have made a difference.641423:41:006414Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—I asked a good friend of mine tonight, Hal Colebatch, what you say to retiring senators. He said that, `Well, I suppose you could say, "Now they belong to the ages".' He was referring to the quote used in relation to Abraham Lincoln when he died. I think that is a bit dramatic, but nonetheless it has some application. Tonight, we are looking at some people who have served this Senate and this country—people who have come from all different walks of live and who are not going to leave the cloisters of the Senate without continuing to serve their country.I turn first to Senator David MacGibbon, who has had a long and distinguished career in the Senate. When I was a new senator, I was lucky to have his advice in relation to an Senate inquiry in which I was then engaged and which touched on defence. It was then that I realised the depth of his knowledge in relation to defence and his corporate memory in relation to events in the Senate. I came to discover that more so in relation to matters concerning the party room and various issues which arose from time to time. I say to David and his wife, Pamela, that I wish you the best. David has made a fantastic contribution in the Senate and one which perhaps goes back to a day when the Senate was a different place from today.More recently, when I arrived in this place in 1993 with Sandy Macdonald, things indeed changed. It was then that I met Senator O'Chee. Both senators were from the National Party: one from New South Wales and the other from Queensland.I will firstly refer to Senator O'Chee, whom I served with on the legal and constitutional committee. He is a senator whose knowledge of procedure in this chamber is second to none and he will be sorely missed by the government. I say to you, Bill, that you have served the Senate with distinction. You realise the importance of this institution. I recently found that Senator O'Chee, as the chairman of the Regulation and Ordinances Committee, was not adverse to even saying to the government when he thought a regulation transgressed certain rules, precedents and conventions. He made his views very well known. You might say that he gave the minister a hot news flash and I can tell the Senate that that minister was me. Bill, the only thing that I can say that I am glad I did resist was your invitation to go for an early morning row on Lake Burley Griffin and I am glad that I resisted that to this day. To you, Tara and your delightful son, Rory, I wish you all the best and I hope we see you back here again.In relation to Senator Macdonald, I was lucky to serve with Sandy on the print media inquiry, which was a rather torrid inquiry. In fact, I vividly recall Cheryl Kernot saying in the heat of the moment to Kim Carr, `I wouldn't leave you alone in a room with a quorum.' I often reflect on that. But it was a situation where there was a diversity of views, to say the least. I am always minded in relation to Senator Macdonald to think of that part of Kipling's If: `If you can keep your head while all those around you are losing theirs . . . ` Certainly, Sandy Macdonald is a man who keeps his. I think the word `gentleman' has been used tonight and that is an apt description in relation to Sandy Macdonald. To Sandy, Alice, Millie, and the twins, William and Angus, I say, `All the best for the future.' Sandy, your children will look back and be proud of your contribution. However, I think his contribution is not yet finished. I think there is still another chapter to be served, which may well be in this chamber.I also would like to make reference to Senator Synon. Karen Synon has only been here a brief time unfortunately. She has been a great supporter of voluntary student unionism, a matter which has been a burning beacon to the government and to those on this side of politics, which really centres on voluntary association—a matter which goes back in excess of 20 years. Karen, you have reinvigorated this debate. When some of us were tiring and perhaps lagging behind, you gave us that energy and refreshed the debate. I thank you for that and wish you and Joe all the best in the future. Again, you are still of that age when we could well see you again in this chamber.My comments are brief, due to the hour. We also are farewelling Senator Reynolds, whom I served with on the native title committee. The word `civility' is one which has been used tonight and it is one which I wish to endorse. Senator Reynolds and I, I dare say, would have very different views on many matters, but that is something that does not seem to get in the way of service on the Senate committees.I think that really we could all descend into some sort of cynicism in looking at politics and on these sorts of occasions when we have these valedictories. But as an old barrister in whose words I used to place a lot of store used to say, `It is not so much what is said but that it is said.' I think it is time for the Senate to take stock of contributions made by various senators. Senator Reynolds, you have represented your side of politics well, your point of view well, but you have done it with decency and civility, and for that I commend you.Senator Margetts also has views I would not readily associate myself with, but then again she has represented a sector of Australia and has put forward her views vigorously at times. I think it is a tribute to Senator Margetts that her staff were here tonight in the chamber to see her valedictory. I think it is a great tribute to someone when their staff have that loyalty to them. I also liked the quote from Led Zeppelin, an old favourite of mine.N26ABETZSenator Abetz—You old rocker.9X5Ellison, Sen ChrisSenator ELLISON—Senator Abetz said that Senator Margetts is an old rocker. I do not think she is as much of an old rocker as I am.For those who are listening I think it needs to be said that you have senators here who have come from all walks of life, senators who have served their country well and have served the Senate well. The Senate is a very fine institution and it is one of which this nation can be proud. I say to those who are leaving, `You have done well by your country, and I do not think you will let it stop there.'641523:49:006415McKiernan, Sen JamesSenator McKIERNAN1I4WAALP00—Valedictories are a funny and peculiar time in this chamber. We have heard a National Party senator being called a gentleman and nobody took a point of order! It got even worse when we heard Senator Reynolds being called a lady and that person escaped without water or something worse being tossed on him! It is a unique experience to speak in valedictories. It does bring it home to all of us, I believe, because we have all in turn, who have spoken so far, reflected on our own passage in this place and our own experience with the individuals who are moving on to another sphere in their lives. We are in turn paying tribute to them and recalling the good times that we have shared with them in the brief passage of time that we have had in this chamber.I am going to be mercifully brief tonight. Apart from a passing reference to Senator O'Chee, I am only going to speak about two male senators and two female senators, so I am balancing things. My passing comment about Senator O'Chee picks up remarks made earlier tonight by my leader, Senator Faulkner. With Senator O'Chee's political demise it probably will come to me now to have the worst male dress sense in the chamber. That is something that perhaps Jackie will have to draw further attention to.I want to particularly say goodbye and farewell to Senator Richard MacGibbon—or is it Senator Robert MacGibbon? The funny thing about Senator MacGibbon is that he could never remember my first name, and it is the easiest part of my name. He keeps remembering me as Michael so, when Senator Crane tonight suggested that Senator MacGibbon ought to be put in charge of Airservices Australia, I actually freaked at that. If he has got no memory for as short a name as Jim, that would cause me some problems. But I do understand that he has got some real expertise in that area. It is an expertise that I recall from my early days in this place: when I needed some information on one of the very first estimates committees that I served upon, he was quite willing to share with a member of the then government while he served in opposition, and I wish him well on that.With Senator Sandy Macdonald I have had the privilege of serving on very demanding committees: the Senate Publications Committee and the joint committee on publications. The most demanding thing about that committee is the time that it meets in the morning. Perhaps my greatest failure in this place is in trying to get the time shifted to a more reasonable time—like it used to be when I chaired the respective committees. I probably hold the record for the shortest committee meetings of two to three minutes, and we did not need to meet in the middle of the night in order to get the business done. The meetings still start at a quarter past eight in the morn ing, and I will try to be there next week to attend his last meeting.Senator Calvert, the current chair of the Taiwan Friendship Group, referred to Sandy's great work in that organisation. That work is recognised by this parliament but also by our friends from Taiwan, and they took the opportunity in recent months to pay tribute to and to thank Sandy for his good work. That is something that is recognised as above and beyond the call of duty in this place.Senator Margetts, all of us Western Australians wonder about our eastern states colleagues and give sympathy to them when they complain about having to travel that vast distance across the continent to Perth for committee meetings or whatever, and then sympathise even worse when they have got to travel home. We know what they go through, because we do it day in, day out. Senator Margetts does it as well but she does not have the support of the party system, which I have from the Labor side of things, and which Senator Campbell has from his side and which Senator Ellison, who has just spoken, has. Senator Margetts still serves her state as a single member senator and she also travels extensively within the state. Even though we do not share the same political viewpoint on all things, we certainly have a number of things in common, and that has already been referred to.Senator Margetts has an enormous amount of energy. She mentioned in her contribution tonight about her workload. I think she was measuring her workload by the number of times she has spoken in the Senate. I am not so sure that is such a good measurement of workload. I remember, as you will, Mr Acting Deputy President, another individual senator, who has passed on now, who probably put more words into Hansard than any of the current senators or any other senator.There is a habit—I think it is an ever increasing habit—of getting up and reading things into the Hansard without necessarily understanding what is being read. One of things I am amazed by, and I stand in awe of Senator Margetts, is her contribution on so many subjects, matters that are of importance to her and her party and the people she represents in this chamber. There is also the fact that she seems to understand what she is talking about. She is not just blandly getting up and reading material that somebody has put down for her to read. I think that is a tribute to Dee Margetts and a tribute that might not have been given to the same degree to her predecessors in this place, and even to some of the current senators who serve the parliament in this place.Finally, I want a say a few brief words about Senator Reynolds—or should we say `Lady Reynolds', when we can get away with it? I notice she has got a glass of water and that the wine carafe she has with her is still empty. She squibbed out on a dare and a challenge I made to her earlier tonight. Of all of the people I have spoken about tonight and paid tribute to, Margaret Reynolds would be the one person with whom I have argued most, and I do not argue very often with people in the chamber. The reason we do is that we are in the same party. We get to meet each other more often than not and, not only that, we are in the same faction. That gives us cause to create that dynamic that is the Labor Party—the Labor Party that was in government and is now in opposition, and the Labor Party that is full of ideas and is willing within itself to talk things through and forcefully press the point.The things I have not argued with Margaret about are issues dealing with Aboriginal affairs, native title and land rights because I am not in the same league as Margaret Reynolds on that subject matter. I accept, and have always accepted, that Margaret knows and understands a lot more about that subject than do I as a migrant to this country. I echo all of the words that my leader, Senator Faulkner, said about Margaret earlier this evening, and I join with Senator Schacht and Senator Crowley in the words they put on the record about you and, indeed, about your husband, Henry. I take this opportunity now to wish both of you well in your new life. I do not think it is going to be a retirement, but I certainly wish you and the rest of your family all the very best in your new life.641723:58:006417Brownhill, Sen DavidSenator BROWNHILLRD4NSWNP10—I rise tonight to say a few words about those of my colleagues whom I know reasonably well and who are leaving us next week. There is always some sadness when colleagues leave and I guess there is some sadness for them, but also there is some happiness for them knowing they will be able to go back and lead some sort of a normal life after this place. When I first came in here I was put onto a committee inquiry into private hospitals and nursing homes. Pat Giles chaired that committee and Senators Walters, Crowley, Bjelke-Petersen, Janine Haines and Margaret Reynolds were also on it. Senator Reynolds was a lady even then—although I am told you cannot call women `ladies' any more, you have to call them `women'. You are a very nice person, and I do not think I ever heard you use the language that was used by some of the others on that committee at some of the hearings we had. It was a pretty daunting task, I can assure you, being with a group of women on a committee at that stage.I also served on a committee with Senator Colston. He has been here since 1975. During that time, he has performed an amazing amount of committee service. When I was on that committee, the Senate Select Committee on Agricultural and Veterinary Chemicals in Australia, as the deputy chair, he was the chairman. He was an outstanding chairman, and I believe he was also an outstanding Temporary Chairman of Committees, as a couple of people have already said here tonight. I hope that Senator Colston enjoys better health in his retirement than he has had in this place in the last few years.I also mention Senator Synon. I really did not get to know her. She has been here for only a brief time. I must say I have to give Dee Margetts a little bit of thanks for making some of the legislation that I had to put through this place non-contentious. She was able to be negotiated with, even though I do not think I ever saw completely eye to eye with her, but she had her principles and she stuck to them. David MacGibbon served this place well. Anyone would have been proud to have been a senator over the period he was here.I am particularly sad to see two of my National Party colleagues leaving the Senate, and Senator Tambling will join me in the remarks that I will be making. Bill O'Chee and Sandy Macdonald will be missed not only by the National Party but by all their colleagues in the Senate. I will not elaborate on the words that have been said about them before here tonight, but I concur with all those remarks that have been made. They have both played a significant role.Senator O'Chee came here in 1990. He was a young gun—he still is a young gun actually. His youth and enthusiasm were really quite infectious to all of us. He has done an excellent job as a whip. Bill, you have always kept us in place, and I think you have done an excellent job there. You have always been a great contributor to debate, and I think everyone has said that tonight. It is not easy coming to the Senate and getting up and speaking without any notes, without a prepared speech, which you often have to do. That is a gift that not many people have.You have been incisive in your debate and you will be sorely missed by everyone in this place, not only for your debating skills but for your analytical appraisal of issues within a debate. At least you understand what a lot of the bills are all about. A lot of people in this place probably do not understand them as well as you. Let us not forget your profile as a bobsledder. You are going to be sorely missed in the car park where you did your training for some of the events that you have been so successful in overseas.I most admire you, Bill—and this has been said by everyone here tonight—for the way you stood up and confronted One Nation. You never backed away from your beliefs, even though it would cost you votes—and it did. You stood firm, and I admire you for your strength of action. I am sure that you will make your mark in the business sector before you return to this place, if you choose to do so. I am quite sure that this parliament and the government would welcome you back. You are an outstanding parliamentarian cut short by a group of people in Queensland who did not really know what they were doing when they voted.My colleague Senator Macdonald from my home state will also be missed. Sandy was elected to this place in 1993 and, in his short term here, he has made a significant contribution. He has been active in the wool debate. Of course he always said that there was no conflict of interest in any of that, but I know he runs very good sheep at Wallabadah and good cattle too, just quietly. He will be sadly missed by this place as well. I admire Sandy for the way he acted in the wool debate—he made sure that the wool industry was handed back to the people who actually produced the wool to let the people at the grassroots make the decisions.You have been active in the debate on communications affecting the bush; rural doctors was a matter that you took a very strong stand on; and you played an active role in the debates on the sale of Telstra and native title, but I did not cross the floor with you—neither did Bos, by the way. In recent years, you have been very active in foreign affairs issues and recently participated as an observer in the Indonesian elections. I still have not had the full report from your visit there to the election, and I hope that we get that before you leave the Senate.There need to be more voices representing the bush in the Senate, and it is sad to see one of the loudest, Sandy Macdonald, leaving. However, both of my National Party colleagues have young families, and out of something sad something good always comes. I am quite sure that the silver lining will be that you will be able to spend more time with your young families and enjoy that experience. Might I say, being a father and also a grandfather of, at this stage, eight children, they grow up all too quickly. You are on this earth only once, and therefore you should savour every opportunity to be with your children.When Bill O'Chee came into this place, he was unmarried with no children. He leaves with a lovely wife, Tara, and a son, Rory. When Sandy came in he was married to Alice. He is still married to her, which is great because she is a most wonderful woman. He came in with no children. Their first child, Millie, came along and now they have William and Angus. Not everyone who comes into this parliament has the opportunity to have twins—obviously Sandy has had a bit of time at home, because I did not see Alice down here in Canberra that often. Unfortunately, this place does not allow us enough time with our families. I think we are away too much. You should both savour the time you have before you come back to this place in the future. I wish you both well in your future careers, and I know you will achieve in whatever profession you choose. I wish all retiring senators all the very best in their retirement from this place.Friday, 25 June 1999641900:07:006419Herron, Sen JohnSenator HERRONVW4QLDLPAboriginal and Torres Strait Islander Affairs10—I join with my colleagues in wishing all the retiring senators well, including Senators Karen Synon, Sandy Macdonald and Dee Margetts and, in particular, my four fellow Queenslanders, Bill O'Chee, Mal Colston, Margaret Reynolds and David MacGibbon. I heard earlier the comment about Senator Reynolds having come from Tasmania and trying to understand North Queenslanders. As a North Queenslander I think it is appropriate to say that there are five states in Queensland: Far North Queensland, North Queensland, Central Queensland, South-East Queensland and Western Queensland. They are states of mind, and until people south of the border—whom we call Mexicans—have experienced them, they will not understand us Queenslanders.This, the occasion of valedictories, is, I believe, the only time that we should ever be here after the witching hour. I sympathise with the clerks and the attendants, but this is a great opportunity that has been given us. I am here particularly out of a sense of gratitude to David MacGibbon. David is not speaking tonight. That is characteristic of him; in fact, it is typical of him. He is a modest man who has never courted personal publicity or media attention. I believe that he has been underappreciated by the wider community, but he has been appreciated by his friends and in particular by his family.Many do not know that he has quite an outstanding family. He has four children: Dr Jane MacGibbon is an astrophysicist, research scientist, and a graduate and gold medal winner from the University of Queensland who attended Cambridge and worked for some years with NASA; Dr Anne MacGibbon is an obstetrician and gynaecologist; Ian MacGibbon is a graduate in agricultural science and is a regional bank manager and grazier; and Douglas MacGibbon is a mining engineer who works with BHP and is also a grazier. There is also, and above all, his wonderful wife Pam, who is also a grazier. They have been immensely supportive of David over the years that he has been here. He and John Watson have been here since 1977 and, apart from Brian Harradine and the departing Senator Mal Colston, they are the longest serving senators here.We are all honoured to serve in the Senate for without the Senate there would be no Australian nation.The Senate has been a particular interest of David's, I know. He has served it well, and others have spoken of his appointments to various committees of the Senate and his particular interest in science, the environment, foreign affairs and defence, rural and regional affairs, and economics. In his maiden speech he referred to his interest in science. His occupation before he came here was prosthodontist—many people would have to look up the dictionary to see what that is: it is the reconstruction and replacement of missing teeth. After the State of Origin the other night, I would think that would be more appropriate for the New South Wales and Queensland Rugby League teams.David forswore that when he came in here at the age of 44, and he has made a major contribution. As a matter of fact, he is a workaholic. He has taken few holidays. I looked up his CV and saw that he has taken only five trips with parliamentary committees in the 22 years he has been here. Nonetheless, one of his recreations is flying. I think Warwick Parer referred to the fact that he built a room onto his house. I was with him when he was constructing a plane in the room of this house, which he actually got out of the house and flew. It is still flying, I believe, although I have never had the privilege, nor did I actually want it, to go with him at any stage.He believes passionately in the Senate. He has played a major role in bringing about the peace accord in Bougainville. He has been a product of the organisation in Queensland. I know that he has been a member of the party for 33 years. He will return to the organisation, because he has a passionate belief in what the Liberal Party stands for, and I believe that he has a further contribution to make in that regard. I cannot finish without also referring to his staff, who are almost part of this family, particularly Carmel Draper, who has been a wonderful support to him in all the time he has been in the Senate, and Sally Kay. David will make good use of the time that he has outside the Senate. As I say, he is a workaholic. He will make further contributions to the party and to his state of Queensland. I think that his time is not finished in relation to politics because of his belief in what he has done and what he is doing. I pay tribute to him for that, and I look forward to his further friendship.642000:12:006420Abetz, Sen EricSenator ABETZN26TasLP10—Tonight we farewell seven senators—my best wishes go to all of them. To Senator Colston, with his health difficulties and uncertain future, I trust that he will find satisfaction in the considerable public service he has given to our nation. His knowledge of standing orders is superb. In his role as Chairman of the Regulations and Ordinances Committee he showed me, shortly after my arrival here, the finest traditions of the Senate, especially in its review role.I have a small anecdote: some two years ago I had my lovely daughter with me in Canberra. That particular week she was supposed to be seeking sponsors for `Jump Rope for Heart'. I promised to take her around the corridors to seek sponsorship. Armed with a skipping rope and a sponsor card, we hit the corridors. Most senators were generous with a gold coin. Senator Colston, on being convinced that my daughter, Laura, could skip, handed me a gold coin, albeit in somewhat of an embarrassed state. I did not understand why. Later that day, Senator Colston emerged at my office with a more substantial contribution, explaining his embarrassment at the small contribution he had made earlier that day and indicating that it had been the only money left on him at the time. That anecdote and his consideration, I think, speak volumes and show a side of his personality that is not necessarily appreciated. I wish all the best to Senator Colston, his wife, Dawn, children and, above all, his grandchildren and the grandchild that I know he is hoping to be able to see.Senator Reynolds, although a feminist, will, I trust, accept my clumsy attempt at a compliment by saying that she is a true lady. Working with her on ERCA and the native title committee, I witnessed a genuine senator at work. Whilst I try desperately to understand some of her views, I am convinced she only ever wanted one thing, and that was the betterment of our country. Any past sins are atoned for by her impending move to Tasmania, albeit I understand the northern spirit is still deeply embedded within her from North Queensland and, as a result, I believe she has chosen Launceston. But welcome on board.The other senators that I will refer to do not leave of their own free will. Senator Margetts is hard working, committed and has subjected herself to the hard work of detail. For that she deserves acknowledgment. Although hardly ever agreeing with her world view, I do recognise her passion and commitment.To my coalition colleagues: Senator MacGibbon's talents as a professional legislator, his corporate knowledge and his intricate knowledge of defence matters will be missed. I note and also welcome the fact that he will continue to serve the Australian people on the Defence Industry Advisory Council. His knowledge and expertise, therefore, will not be lost to the Australian people.To my country cousins Senators Macdonald and O'Chee, I unashamedly say: I will miss you. Your friendship, your sense of humour and assistance has meant a lot to me. When I first started off in this place I was on the very outskirts of the Liberal Senate seats and sat next to the National Party senators. I especially appreciated the times during question time when we enjoyed sharing interjections, potential interjections and baiting of the Democrats, a sport which is now frowned upon by the government. I will say no further on that.To Senator Macdonald—a true gentleman, he is a loss to the people of New South Wales and I trust that he will soon return. He is far too young to retire with such a wealth of talent to offer. His commitment to serving his nation still burns within him. I trust that flame is not snuffed out and that he will soon return.Now to Senator O'Chee, a great bloke with a wicked sense of humour that I appreciated, a capacity to give a bit of curry to our opponents and a clarity of thought unparalleled in this place. Above all, I admire Senator O'Chee's courage. The most courageous thing I can think of Senator O'Chee ever doing is having the cheek to ask Tara to marry him. How he did it and how she in fact agreed I will never understand, but well done. As with his choice of marriage partner, Bill always pursued excellence. His capacities will ensure his success to whatever he turns his hand. To Senator O'Chee, Tara and Rory, all the best.I seek to pay special tribute to Senator Synon. I have known Senator Synon for over 20 years. Her capacities, loyalty, teamwork and drive are unsurpassed. Her background of working for a decade with young unemployed people in the western suburbs of Melbourne provided an expertise rare in my party. On her arrival in the Senate, she was the youngest ever Victorian Liberal senator. Her arrival also gave the Victorian Liberal division the distinction of being the first major party to have a majority of female senators. She also provided, if I might say, much needed generational change. As of 30 June 1999 all that will be lost to the people of Victoria.Senator Synon is a compassionate conservative. Her first speech was mailed out by me to a number of people in Tasmania because of its intellectual rigour, its clarity and the message of challenge to our people. It is now on the public record that Senator Synon's term was cut short because of pre-selection skulduggery. Having had my advice sought on certain pre-selection irregularities, I came to the conclusion that she was dudded. I later instructed Tom Hughes QC who confirmed my preliminary views and indicated a watertight case if court proceedings were to have been taken. But Senator Synon put her party first; she put party before self. For someone as passionate about politics as Senator Synon, that was a very big ask.Premier Kennett's breaching of the Victorian Liberal constitution to effect this outrageous outcome was something that the organisational wing should have had the strength and integrity to expose and reject. It not having been so rejected, he is now wreaking similar havoc in state preselections. Preselections ought to be jealously guarded by the organisation against blatant interference by the parliamentary leader. Enough said on that. Suffice it to say that I trust that the Victorian organisation will reward Senator Synon's loyalty and correct the gross injustice perpetrated on her by a rigged preselection panel.Senator Synon has a supportive husband, Joe, a person also known to me for over 20 years. His support to Senator Synon during the disappointment of the preselection loss was, I know, a great strength to her. Senator Synon's passion and support for freedom of association for students in Australia is shared by me and is much appreciated by Australia's 600,000 students. I say to her, through you, Mr Deputy President: the fight for voluntary student unionism will be won. The `no ticket, no education' regime that currently exists is draconian and will be abolished. The right to an education should not be predicated on membership of a student union. Senator Synon, you have fought for that principle. You have breathed new life into that campaign and that will be a great monument to your very brief period in this place. Senator Synon's contribution, short though it has been, has been significant, considered, dignified and an example to us all. I hope to see Senator Synon back in service to this great nation. 642200:22:006422Macdonald, Sen IanSenator IAN MACDONALDYW4QLDLPRegional Services, Territories and Local Government10—I wish all of the retiring senators all the very best in the future. Because of the time constraints, I want to confine my principal remarks to two of the senators with whom I have had the most dealings—Senator Margaret Reynolds and Senator David MacGibbon. But briefly may I particularly wish Senator Synon all the very best. In the short time I have known her, she has shown a very great determination for the causes in which she believes. I am quite confident that we will see Senator Synon back around the political traps some time in her future.Senator Bill O'Chee entered the Senate a fraction before I did. He is a fraction younger than I am as well. At times we have shared part-time offices in the Cairns region. Again, I am sure Bill has a very good future in whatever he determines to do. I particularly want to mention and recognise, as others have done, the courage he showed in the fight against racism and against One Nation.Senator Sandy Macdonald will also, I believe, be back in this place in the not too distant future, so I will not say too much. His departure at this time will mean that I get my mail slightly quicker, rather than having it apparently go through Sandy's office most of the time. I will also appreciate getting my wife back, as very often Sandy is invited to functions with Lesley Macdonald, whereas I have the pleasure of being invited with Alice. I look forward to being invited with Alice again at some time in the future.Mal Colston—doctor, major, senator—is a very colourful political character. He has already written one book, prophetically entitled The Odd One Out, and I look forward very eagerly to the next book that Senator Colston will write. Senator Colston was Deputy President between 1990 and 1993 when I first came here as a very junior senator. I particularly remember Mal Colston's kindness at a time when I had my wife and some friends here. At that time nobody could come into this chamber but senators, and that was very carefully guarded. But Mal, in his impish way, saw us looking through the door and, as Deputy President, invited us in—at a time when the Senate was not sitting, of course. I have never forgotten that kindness and neither have my wife or our friends.Dee Margetts and I have never had much in common at all, but I do acknowledge her dedication to the causes in which she believed. I have a very special regard for Senator Margaret Reynolds. Again, Margaret and I do not share a lot in common in the policy area, but of course we do both share Townsville and we both share an interest in local government, both of us entering local government in our respective councils in the Townsville region in the same year of 1979. Margaret has been—and she will hate me saying this, as others have said, but I have to say it—a gentle woman in all senses of the word. At times Margaret has had the opportunity to score cheap political points at my expense, but she has resisted that, and I do appreciate that from her. Margaret's commitment to policy issues, involving particularly women and Aborigines, is legend. She will be missed in the Townsville political scene, and I do thank her very much for her courtesy and cooperation over the years.David MacGibbon, in structure, in principles, in commitment, in knowledge, in recognition, in ability, is a very tall man. But, particularly for me, I respect and have been a beneficiary of his leadership in the Liberal Party in Queensland. He is one of those real Liberals of honest Liberal philosophy and action. He lived through the fairly tumultuous days when the Liberal Party in Queensland was at its lowest ebb, but he never faltered in his commitment to the Liberal Party. That, of course, makes the manner of his departure a little more difficult to understand. His wide range of interests stem from his background as a specialist dental practitioner; an academic in universities in London, Michigan and Queensland; a pilot; a national serviceman; and, with his wife and family, a Central Queensland grazier.I often recall—and I know Ron and his team will forgive me for saying this—that in those days when we Liberals in Queensland were not quite as close to the National Party as we now are, and we are very close now, David MacGibbon would loudly proclaim that it was only the Liberals who were genuinely interested in rural Australia. And, even more loudly, he would claim that of all Queensland senators he was the only one with a genuine rural connection. I think it is of some satisfaction to David that the significant advances made by the Liberal Party in Queensland have occurred in recent years when he has been a leading member of the party in Queensland.David's expertise in defence matters is widely acknowledged, and he was by all recognised for his work as Chairman of the Joint Statutory Committee on ASIO and on the Joint Standing Committee on Foreign Affairs, Defence and Trade. David must leave here well satisfied with his contribution to the direction in which Australia is now heading. It is almost unnerving to see how David in his maiden speech pre-empted success of governments in their reform of tariffs and protection. The goals that he championed in his maiden speech for lower taxation and for more emphasis on the family are ironically being delivered in the last weeks of his term as a senator for Queensland in the parliament of Australia. My wife Lesley joins me in wishing David and Pam MacGibbon all the very best for the future, a future which I am sure will be fulfilling and rewarding.642300:30:006423McGauran, Sen JulianSenator McGAURANWH4VICNP10—I rise to thank my colleagues Senator O'Chee and Senator Macdonald for their service to the National Party, to their respective states and to this parliament. Having sat through my own valedictory in 1990, I realise that these moments for the departing senators are very emotive and reflective. Sometimes you might be silently saying to yourself, `Did I do enough over the time of my service?' Having worked with my colleagues in the parliament, the party room and the electorate, I can say that they can rest assured that they have met the requirements of their oath of office, which is their first and primary responsibility when they come into this parliament.In fact, Sandy Macdonald proved his mettle and genuineness towards his office within an hour of delivering his own first speech. I will quote from that first speech. Sandy Macdonald was talking about the wool growers of his electorate, in which he is well known. Sandy said:Once out, the expertise is lost forever and all woolgrowers know the skills that are necessary to produce their product. Who will buy the land anyway if farmers are forced off? The banks must recognise this and I beg for their understanding.When Sandy returned to his office for drinks with his family and friends following this speech, a New South Wales farmer, having heard Sandy's first speech, faxed a message to him alerting Sandy to his imminent bankruptcy—not Sandy's; the farmer's. The new senator, Sandy Macdonald, with a great deal of zest, immediately contacted the head of the National Bank, Don Argus, and within 24 hours he achieved a stay of proceedings and a review of that particular farmer's case.This incident epitomised his style in politics. Within an hour of his first speech, he was true to his word. He is very personable and up-front, but I am not sure that he is a gentleman, as has been said frequently by previous speakers. Within four months of coming into this parliament, Sandy had the courage of his convictions—even though he was a new senator—to reject coalition policy and cross the floor on the native title bill on the issue of pastoral leases, a matter that was to dog this parliament right up until 1998 when we successfully passed the Native Title Amendment Act.If the judgment of those three wise senators—Senators O'Chee, Macdonald and McGauran—had been followed at the time back in 1993 we probably would not have been so dogged. However, that is history and it is far too complex to delve into on this occasion. Certainly, it was an exciting political moment for Senator O'Chee, Senator Macdonald and me.I know I could delve into Senator Macdonald's parliamentary debates, particularly on wool as others have, and on the issue of the stockpile touched on by Senator Crane, but something equally encompassing for this Australian rural man was that, when he visited South Africa, in Pretoria he came across the grave of Breaker Morant which was untidy and broken up. Like a true blue Australian he set out to fix this Australian shrine.On his return to Australia he naturally contacted the RSL and Bruce Ruxton seeking support, if not funds. I am told that Bruce bellowed down the phone to him that Breaker was no better than Ned Kelly, a rogue himself, and he would not do anything to help him. Sandy was not deterred at all. Thankfully, we have a National Party Minister for Veterans' Affairs so Senator Macdonald approached Bruce Scott and today that site has been completely tidied up and it is a respected place to visit. That is Sandy and the Australian man—the Australian rural man; the words seem to go together—that he epitomises.As for my other departing colleague, Senator O'Chee, he would remember that I gave my own valedictory in 1990. He was coming in and I was going out. As everyone has said, Senator O'Chee entered parliament as the youngest senator, and I would think that that record will never be broken. It is just unimaginable that we would get another Senator O'Chee type in here at the age of 24.N26ABETZSenator Abetz—Not two of them!WH4McGauran, Sen JulianSenator McGAURAN—No. His stunning achievement has been that from that very raw base—if you think of any of us at 24 being thrown into this place—he has involved himself in so much throughout his nine-year career. His mental and physical intensity never faltered from the day he came here. During the nine years that he has served, his energy was a stimulus to a sometimes sleepy hollow party on issues no less important to the National Party than native title and Telstra, and all matters relating to immigration and racial tolerance. I would have to say that the exuberance he showed in those nine years often flowed over into his dress style. One celebrated occasion was his appearance on A Current Affair , when Ray Martin interviewed him. Suffice to say that his shirt, his tie and his waistcoat did not coordinate and were very fluorescent. Even I received mail about Bill O'Chee's dress; not that I could do anything. It was a stunning occasion. He warned us in his maiden speech, when he said, `I would hope that at no time here my dress offends.' Bill, offend, no; amaze, yes.I suppose there would be no senator who came through this place who did not think that their particular period was the most important in the nation's history, but there was something special about the period of service by Senator Sandy Macdonald and Senator O'Chee. I am sure they would admit that, after 13 years in opposition, getting into government is an exhilarating experience, as is getting down to the hard work, which has produced historic results. They both played an important part in the backroom debates, not just in the National Party but in the joint party room too. As even Labor Party colleagues would admit from their experience in government, many cabinet decisions are overturned in the party room by aggressive and articulate backbenchers. Senators O'Chee and Macdonald were no exceptions in contributing to this time in government. An example of this was when the National Party senators, after several meetings with the Prime Minister in his office, were instrumental in achieving a better deal for the rural and regional areas in regard to the sale of Telstra.On the personal side, both showed a personal quality in their commitment to family life. Sandy and his wife Alice have had three children during Sandy's term in parliament, and I have always admired the way he exudes love for his family. Recently married, Bill is especially admired for the example of spiritual strength he has brought to his family. These qualities of their private lives have inevitably flowed into public life, not just to benefit the party but to bring a better standing to the parliament. We on this side of the Senate will sorely miss their talents in the parliament. The rural and regional areas of Australia will miss their talents and they will miss two very strong voices. We in the National Party will miss their mateship. Vale, Sandy and Bill.One other colleague is Karen Synon. As has been said, she has been here for a very short time, but I cannot say that I did not know her. Like Senator Abetz, I have known Karen since way back in my university days, which is many years ago now, when I was a Liberal. I am happy to say that. It was then that she took up the issue that she is involved in now, voluntary student unionism. Since the issue has hit the table in this parliament, she has produced very well researched material and has spoken like a seasoned campaigner and politician, maybe because she has been across the issue since her university days. I think it is a fair indicator of just how well she would have adapted to this parliament and how she would have tackled issues with vigour and skill, as she has with the VSU issue.It is true to say that that was pretty obvious from the first day and her maiden speech. As Senator Crane said, very few maiden speeches around here are remembered—other than your own. But people refer back to your maiden speech; you access people's maiden speeches when you are doing these sorts of speeches. It is meant to be a gauge of who you are and what you represent. Regrettably, maiden speeches are not what they used to be, but Senator Synon's was, just that, a traditional maiden speech. She spoke then of a revolution—we were all quite stunned—and a seemingly very tough approach to social welfare. But in reality she was just slightly ahead of her time because, in this government, we have basically taken up that very philosophy which we have cloaked in the phrase of `mutual obligation', and which is very well accepted in the community. In fact, Senator Synon was talking about what is now a worldwide trend. In England we have Prime Minister Blair and in America we have President Clinton, both from the left side of politics, actually boasting about the tightening of budgets, the audit trails, the toughening of social welfare, the savings they have made and the mutual obligations that they have introduced. It is a worldwide trend, and Senator Synon's maiden speech picked up on that probably well before all of us got used to the idea.Politics, as Senator Boswell said, has dealt her a bad hand. Regrettably, she has lost her preselection. It seems pretty tough that she should be selected one time and then unselected within 12 months—but that is not for me to comment on, just to watch, I suppose. She has always been a good National Party sympathiser but, more so than Karen, her husband has been a great National Party sympathiser. In fact, her husband, Joe, has always wanted amalgamation between the two parties. I am sorry, Joe, as long as Senator Boswell sits in that front seat, we are never going to get amalgamation. I wish Senator Synon well in her studies. I wish my two colleagues well and, of course, I extend my best wishes to all retiring senators. I wish Margaret Reynolds over there in the chamber the best retirement that she could possibly have.642500:43:006425Eggleston, Sen AlanSenator EGGLESTON4L6WALP10—In the three short years I have been here in the Senate, I have always been struck by the fact that the people who come here all come with sincere, if different, beliefs. They all have a great respect for the institution while they are here, and they all make valuable contributions to the deliberations of this chamber and to the affairs thereby of our country and nation. It is a great privilege to be a member of the Senate. One of the dimensions of that privilege is to meet the interesting people who become senators. They are a very interesting group of people, coming from very different political backgrounds and all parts of this great country of ours. I would like to make a few short remarks about some of my colleagues who are retiring tonight.Bill O'Chee, in the time I have been here, has always impressed me with his absolutely unmatched command of the English language. Bill O'Chee sitting around a dinner table can suddenly burst into a quotation of Shakespeare, Tolstoy or all sorts of great authors of the past and apply it to whatever the point of the conversation is. Bill is a man of great principle, and he showed that during the last election in the stand he took on the One Nation issue. He has paid a political price for what he did but, as has been said already tonight, he did something that had to be done for the dignity and strength of the Australian nation. I have the greatest respect for you and for the stand that you took, Bill.People have spoken about you tonight as a Chinese Australian, but I believe, in fact, that your family has been in Australia for some five or even six generations. You are perhaps more Australian than almost everybody here in the parliament today. There has been a certain amount of comment about your waistcoats, dare I say, and your perhaps uncoordinated sense of colour. I have greatly admired your shirts, because I am a great collector of shirts. Your ties have been more modest and moderate than those of Senator McKiernan. I recall that once during a division he was wearing a particularly outlandish tie. As I walked by, I said, `Please reassure me, Jim, that your aunt gave you this tie.' He was unable to do that.One thing that nobody has mentioned, Bill, is an area in which you will be sadly missed—that is, the dining room. You will be missed by the dining room staff in this parliament because I do not think there will be anybody else who orders a Coca Cola spider with every meal. Bill, it has been a great privilege to know you. I wish you well in the future. I am sure that, in whatever field you devote yourself to, you will be crowned with great success. It has been a privilege to know you in the Senate.Sandy Macdonald is another person for whom I have the greatest respect. It has been said tonight that Sandy epitomises the gentleman farmer, and that he does. He is a very thoughtful man who thinks a great deal about issues. It has been said tonight that he is likely to return here in the not too distant future. I do not know whether or not that is the case, but I suppose it is an option that may be open to you, Sandy. If you do return, I am sure that you will make a very great contribution to the Senate and to this parliament over the years. If you do not come back, and if you go into other fields, I am sure, equally, you will make a great success of whatever else you choose to do. In any case, as has been said by others, it has been a great pleasure to know you. You truly are a gentleman.David MacGibbon is a person I have known only in the twilight of his political career, but he is obviously a senator with huge experience. He has brought a great deal of grace and dignity to the Senate. I wish him well in his post-Senate endeavours. I know that he has a great interest in aviation and perhaps he will follow that line. I certainly wish David well.Karen Synon, as has been said, is a senator who has been here only a very short time. She is someone whose gentle demeanour disguises the passions of her political beliefs. Karen is somebody who really knows what she believes in politically. She is here as somebody who has a definite point of view about how this country should be run. I am sure that, given her long involvement in the Victorian Liberal Party, Karen's political career will not be over on 30 June and this episode in the Senate at this time will be but a chapter in what I am sure will be a very long and perhaps distinguished political career. Karen, I wish you well in your future endeavours in the Liberal Party.Dee Margetts is another person whom I would like to mention. Dee Margetts is a fellow Western Australian representing the environmental movement, which these days draws support from all quarters of the political spectrum. It is a very interesting thing that one finds that one's friends from the far Right to the far Left these days all care quite passionately about protecting the environment. I have found from working with Dee on committees that she always has a very focused point of view and she puts her questions concisely and has a definite objective in mind. I think in the end it must be said about Dee Margetts's time in the Senate that she certainly made a valuable contribution in pursuing her cause, and she must be respected for that.I have really had very little to do with Senator Margaret Reynolds and Senator Mal Colston. I have only known Senator Margaret Reynolds in passing, but I must say my impressions coincide with all that has been said about her tonight, as a person who cares about human rights issues, as a thoroughly ladylike individual and somebody who, I believe, from all that has been said to me, has really made an outstanding contribution to this chamber over the years. I wish her every happiness in the future and a fruitful retirement.In closing, I reiterate that one of the great pleasures and privileges of being in the Senate is to know the senators. They are an interesting, diverse, sincere and committed group of people. Those who are retiring tonight certainly are characteristic of that description. I wish them all success in the future.642700:51:006427Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I would like to add some words about retiring senators. I will spend slightly longer on those whom I have got to know and, obviously, less on those whom I know less. I want to start with David MacGibbon, because he was probably the first senator I ever got to know. He was a friend and colleague in medical circles in Brisbane, as mentioned by Senator Herron this evening. As a colleague and friend of my father's, I was drawn to David MacGibbon's entry into the Senate at that time. I was always passionately interested in federal politics, particularly the Senate, from a very young age. I obviously had a very misguided youth! I used to listen to the debates in the Senate endlessly through the 1980s.Senator Faulkner interjecting—H15Campbell, Sen IanSenator IAN CAMPBELL—It does, Senator Faulkner. It is probably why I am attracted to guillotines these days. I credit David MacGibbon with instilling in me a strong interest in defence. I formed a group called the Young Australia Defence League back in the 1980s to try and get young people interested in defence policy during that time. David has remained, throughout his career, someone who has had a detailed interest and knowledge in defence issues. I particularly thank David for giving me since I entered the Senate—he probably is not even aware of my interest in defence—helpful guidance from time to time on a range of issues. It was never pushed or forced on me. Since I have been Manager of Government Business in the Senate he has given me helpful, timely, unintrusive advice which I value incredibly highly—and far more highly than David will ever know.I think Bill O'Chee is a most incredible loss to the Senate. Bill was endorsed in Brisbane the day before I was endorsed in Perth. They were both casual vacancies. I met Bill a few days later when we both arrived in Canberra and I congratulated him because, in the Sunday Times newspaper in Perth, the story appeared that a 24-year-old had been elected. I was a 30-year-old at the time and it was regarded in the WA Liberal Party as being incredibly young to be entering the Senate. It was a hotly contested preselection, as Senator Eggleston will recall. Senator Lightfoot would also have been aware of it at the time. I think there was a field of 21 candidates running for the spot that was left vacant by Senator Chaney. To have this article appear in the Sunday Times saying that a 24-year-old had been endorsed in Brisbane made a 30-year-old in the WA Liberal Party look comparatively old. That is when I first got to know you.We have served together as relatively young politicians for the past nine years and I regard that as an incredible privilege and honour. I know that whatever you do in the future will be a success, because in whatever you have done you have shown incredible commitment, thoroughness and stickability. You have always seen things through and you understand what you deal with. Whenever we dealt with things together we could always be assured that you had done it thoroughly. I am sure all of the constituents that you have helped—and there must be thousands by now—know that you have looked after them and got great results.My dad, whom I refer to again, had the pleasure of meeting you at Roma at a cattle sale. He had obviously heard of you through the telegraph wire that runs between Queensland and Western Australia. He had an image of a National Party senator, and he said that you did not match it, and I guess it is what everyone has been saying about your clothes. He said he was incredibly impressed to see this relatively young man wearing R.M. Williams moleskins, R.M. Williams boots, colourful shirts and ties and a big hat—which my dad said did not seem to go together—but you seemed to have all the people at the cattle auction in the palm of your hand. They were very interested in talking to you, and my father came home very impressed.Bill, I am sure that, whatever you turn your hand at, you will be a success. I, selfishly from the coalition's point of view, would love to see you come back here. You may well be far too intelligent, too bright and probably care too much for Tara and Rory to consider coming back here again, but I really hope you do. It is great to see the Leader of the National Party here care so deeply about your career and your life; it is great to see Senator Boswell's support for you. I do hope that the wise men and wise women in the National Party—and I am sure there are many in Queensland—do see what an incredible loss you are to the coalition and to conservative forces in Australia, and that you do, after some time and some consideration, try to come back into politics because I think you still have an enormous contribution to make.The last thing I wanted to say to you here, Bill—I am sure we will say things privately from time to time and I do hope we can keep in touch—is that I was listening to a speech that George W. Bush Jr made on 24 March, I think, when he announced the formation of his exploratory committee to run for the President of United States. One of the journalists at the press conference asked the Governor of Texas about the legacy of his father's policies and whether or not he would have to wear them in his presidential campaign. The Governor sought to distinguish the difference between his father's policies as President and his own in the most diplomatic way—and we are all diplomatic like that when we need to differentiate ourselves in politics.One of the most incredibly touching things that the Governor said—and I know you are an Internet person, Bill, and you can see the speech on videostream at www.georgewbush.com—was that his dad had done his most important thing in life very, very well, and that was being a father. Bill, you have the great honour of being the father to a new son. As someone who, like Sandy Macdonald, has become the very proud father of three children since coming into the Senate, I can assure you that being a husband to Tara and a father to Rory is the most import ant job you will have and I know you will do that very well as well. So you have my best wishes, Bill, for all you do.I met Sandy Macdonald when he came into the Senate, but we have not served on committees together. He always seems to be busy doing things and I am too. Every now and again, we get a chance to chat down at Lee's over a bit of Chinese or on a plane, but I have always thought Sandy Macdonald would rise to the very highest ranks in politics here in Australia. I was incredibly shocked and disappointed when he lost his seat in the Senate.I really hope that all of these rumours about Sandy just slipping so easily back in the Senate do prove true. I am sure nothing is that easy in politics; it is never that easy to get into the Senate. As our leader said to us earlier, virtually anyone who gets here has been very dedicated and committed and believed in something and worked hard to get here. Sandy, I hope it is as easy as everyone is saying. I am sure it is not, but I do hope you come back.I still believe you can make it to the very top of politics in Australia and, from what I have seen of you, your contribution would be very welcome and needed in Australia, where we have so much more work to do on building this economy, making it strong and taking our place in the world proudly. You can be very proud of what has been achieved in your relatively short time here. I think in the major capital cities of Australia—particularly Sydney and Melbourne, where there is such a congregation of seats in the House of Representatives—there is an incredibly sad lack of understanding of the foundations of the Australian economy.We have some fantastic new economies building. The Internet economy, the e-commerce sectors of it and the services sectors are very great new sectors. But we still have this incredibly important rural industry—the mining sector, the oil sector. The country's exports and its economic strength still depend on that. If we forget that, if the people in the major cities do not understand that, we will be at great risk. So your contribution as a seasoned rural senator is going to be a great loss.I only met Karen Synon when she came into the Senate. I do not have the benefit of Senator Abetz's long association with you, Karen. I share Senator Chris Ellison's sentiments entirely in your bringing new vigour and passion back into the debate and the fight for voluntary student unionism. Although I have known you only in the time since you have been here—and your husband Joe, whom I recognise in the gallery—we have obviously been soul mates for a couple of decades. As you know very well, I have been fighting for voluntary student unionism from my very earliest days on campus at the WA Institute of Technology, in the Young Liberal Movement and in the Liberal Party.In Western Australia, through the determination of Norman Frederick Moore, the then Minister for Education, we had introduced into that state under the Court Liberal government true voluntary student unionism. So young Western Australians, or anyone else from Australia or overseas can actually attend a university in Western Australia now—I think we are into our fifth academic year—and not be forced to join a union against their will. Nor are they forced to pay this thing called an amenities and services fee, or whatever they happen to call it in those places that think they like a bit of voluntarism but are not quite sure. So they take this sort of weak, halfway house position and say, `We'll just compel you all to pay the fee but you don't have to join the union.' It is a gutless and hopeless middle road. A young Australian, 17 or 18 years old, can walk into a campus, be made an offer to join the student union and can make a reasoned judgment as to whether or not they would like to join—like most other things they do in life. But some people believe that we had better not give them that much freedom—just a little bit of freedom.Karen, it has been fantastic for you to come here and reinvigorate that policy. It was a policy we took to the 1996 election. It is a policy that is enshrined in a bill that is actually on the Senate Notice Paper today. If we can get that bill through by close of business on 30 June, we owe you more than anyone else here at the moment.Senator Faulkner interjecting—H15Campbell, Sen IanSenator IAN CAMPBELL—There are a few little hurdles to get that one through, Senator Faulkner, as you know. But, if we do get it through, it will be in no small part due to Senator Synon's contribution.I say to Senator Colston, whose vote will be needed to get that legislation through, that it would be an incredible contribution if he was able to support that before 30 June and deliver, as Senator Abetz has said, that freedom to hundreds of thousands of students who should have it right across Australia. To live in 1999 in Australia and have to go up to a vice-chancellor and say, `I want to be a conscientious objector,' as if it is conscription, because it is conscription, is appalling.Karen, it has been a pleasure to work alongside you on that legislation. If we cannot get it through before 30 June, you can rest assured—and I know you will—that we will continue fighting for it. I hope that you will carry on the fight in Victoria for this so that one day Victoria has voluntary student unionism. It is quite amazing that it does not have it after all these years. I hope that it does get it one day so that Victorians can have that same freedom.Karen, you are, to use again a term coined by the Governor of Texas, a compassionate conservative, but you are a passionate conservative. When Newt Gingrich gave his final speech at GOPAC after he resigned as Speaker of the US Congress, he said he intended to go on and continue public service in another way. You will do that with your long record of public service already.I will conclude quickly by saying that I think Margaret Reynolds has been an absolute role model of a senator. Regardless of what sex you are, I have been absolutely inspired by working opposite you. We have taken different views on very emotive issues such as Aboriginal affairs—we have some very different views on that—but I have massive respect for Senator Reynolds for the way that she carries on the debate. Even when we disagree passionately about something, she is a true lady. I hope my daughter grows up to be just like you, Senator Reynolds; I hope she is as much a lady as you are.Senator Dee Margetts I have had to deal with regularly on matters to do with management of government business. Her leaving will make my life far less interesting, but I wish her well. As Manager of Government Business, I have had to deal with Senator Colston, and I have found him to be nothing other than truly honourable and a gentleman. I hope his health improves; I hope he has a much longer life and that his children enjoy their father. (Time expired)643001:06:006430Reynolds, Sen MargaretSenator REYNOLDSXI4QLDALP00—Madam President, I am very pleased to see that you have come into the chair because, as I look around at the faces in this parliament tonight, I think there is only one face other than your own that was here when I first entered in 1983.Senator Watson interjecting—XI4Reynolds, Sen MargaretSenator REYNOLDS—I beg your pardon, Senator Watson; it is a little late in the evening. But, of course, we were not in this building; we were in the old Parliament House. Much as I love this building for many reasons, I do not know that we have the same sort of conviviality that we had in that closer environment. We used to meet in all sorts of unlikely places, and I think it did bring a greater sense of comradeship than this vast building, where sometimes I cannot even get around to seeing colleagues on my side of the chamber in the other place just because of distance and a variety of commitments.What has struck me about tonight's debate is how frequently people have referred to first speeches. I suppose that in a valedictory debate the things of which you are most aware are how well behaved everybody is and how people are very generous in their comments—and I thank you for those comments. I think it is a pity that we cannot extend the behaviour shown with first speeches and valedictory speeches to all the time in this place. However, I am sure that is being far too idealistic and I, myself, am guilty of calling out, interjecting—even of the term that has been adopted recently, `sledging'. I would like to take this opportunity to wish all retiring senators the very best for the future. I am sorry that some of you have not chosen to go. I feel very fortunate and privileged in the sense that for my political career I have had a wonderful 16 years and yet I have been able to choose this as the time for me to move on. Not only is it time for me to move on, but also it is time for a younger person to come in, and I am sure you will all enjoy the contribution of my successor, Jan McLucas, from Cairns.I would like particularly to endorse the comments that were made by Senator Boswell about Bill O'Chee. That praise that has been given not just by Ron Boswell but by a number of honourable senators is very well earned, Bill—and I think we can be familiar this evening without anyone taking a point of order. Your stand was very strong, very committed and personal when you took on One Nation and spoke out frequently about racism and intolerance. Senators from Queensland and those who have visited that state and know a little bit about it will know also that it is not easy to take strong stands in a state that is very diverse. It does have a wide range of viewpoints, and that is the great thing about the Australian democracy—that we do tolerate a wide range of viewpoints. But it is not easy to speak out as Senator O'Chee did—and, indeed, as Senator Boswell has done in terms of his absolute rejection and condemnation of the League of Rights.I would also like to wish Senator David MacGibbon and Senator Sandy Macdonald all the very best for their futures. I hear that Senator Macdonald will be returning, and I certainly hope that that is the case. I think all the comments that have been made tonight indicate that he would be very much welcomed back.Senator Synon, we do not know each other very well, but I can really relate to what has happened to you in your political career in 1999 because it so very nearly happened to me in 1984. I was very fortunate at that time in that I did somehow manage to retain my position on the Senate ticket. In fact, I was actually pushed up into the No. 1 position to make sure that nothing could happen in terms of my being moved down the ticket. I know how disappointing it must be for you, having just established your career in this place. But, as other senators have said, I am sure there will be another time and another place, whether it is this place or the Victorian parliament.I must say that, considering that occasion when I did manage to retain my position on the Queensland Senate ticket, when there was a lot of controversy about whether or not I should be returned or somebody else should come in my place, I like to boast—and I do not know whether there is anyone here at the moment who would object to my doing so—that I must be one of the few people who actually managed to get the better of the Australia Workers Union in Queensland. It is an idle boast I can make now, being so close to the end of my political career. I have to say that I have many friends and supporters in the Australian Workers Union, but at that time there were critics who were determined to take my position.To my friend Dee Margetts: I wish there were more politicians like you—totally independent, strong minded and compassionate in your advocacy. In the Australian political scene there is a reluctance to admire independence of spirit. For instance, in the Westminster system and certainly in the US Congress, it is not unusual for political parties to find that they are criticised, or even that people cross the floor.That is not the tradition of my party. Some of us have commented on this on a number of occasions, but sooner or later that tradition will change to give a little more independence. That is not to say that there should not be a loyalty to one's party or the group that is responsible for one's election, and obviously that loyalty must come first. But sometimes there is a place for that ability to cross the floor on certain issues. Of course, I cannot help but comment that there are just two issues where that right is given, and that is in relation to abortion and euthanasia. I think it should be extended to a number of other moral and ethical issues.YW4MACDONALDSenator Ian Macdonald—You could come over and vote with us on the GST, Margaret.XI4Reynolds, Sen MargaretSenator REYNOLDS—No, that is a policy issue. I am very happy to stick with my party on that, thank you. I thought tonight was an appropriate occasion to say—late as it is, and I thank the Senate for some indulgence—that my first impression of the Senate was in 1975, which must seem many years ago to someone of Bill O'Chee's generation. I came to visit a number of members and senators in the old parliament. I had dinner and then I was taken up into the gallery to view the parliament.I have to confess that I did not know very much about politics in those days. I looked down and my lasting impression was of men dozing and they all seemed to be bald, although I should not identify a physical characteristic. I am not baldist, I assure you. They were either asleep or reading newspapers, and there were so few of them. I thought, `Is this democracy at work?'In 1983 I came back to the parliament and there had been quite a significant change. For a start, Madam President, you were here, along with Margaret Guilfoyle, Flo Bjelke-Petersen and a number of my other wonderful colleagues, Olive Zakharov, Rose Crowley, Pat Giles and, of course, Susan Ryan. But at that time there was still a very predictable male atmosphere about the place. Most nights that I can remember people automatically went to the bar. It was the obvious place to go before dinner, during dinner and probably after dinner. It was a very different atmosphere.Now as I look around I see that the parliament has changed out of all recognition. It is young, diverse and very active. I am sure we all get the opportunity to have a drink or two over a meal, but we do not have time to go to any bar, unless of course we have one in our offices. This is what breaks down some of the social camaraderie, because people do tend to remain in their offices more.Senator Margetts asked, `Have I achieved what I set out to?' and I thought I should ask myself the same question. I am afraid that my answer would be fairly typical of a politician because I would say, `Yes and no.' Yes, I have, in that I have been part of two periods of reformist government, the Hawke and Keating governments. I was part of a number of very far-reaching social policy reforms.I am not going to take the risk in terms of behaviour in the chamber tonight by outlining them, nor contrasting them with policy today. But what I would say—and this is why I give that half-hearted answer, yes and no—is that whatever was achieved, there still remains so much to be done. In that way I would like to say that one of the most important things for the Australian democracy is that we do so much more to communicate what we are about, why we are here and where we think we can change the lives of Australians for the better.Communication is not the skill of most of us in parliament. Why is it so difficult to get the messages through when we feel so strongly? Is it because the media wants to report the sensational? Is it because we have to rely on the public service to actually deliver on our ideals? Whatever it is, I am taking that task to the department of government to teach politics and international relations. I hope through doing that that I can make young people a little bit more committed to their democracy and value it.In conclusion, Madam President, I would like to take this opportunity to recognise all the unsung heroes of this parliament. There are so many unsung heroes in the parliament and they are not the elected unsung heroes. Certainly tonight, we have got more than our fair share of recognition. First of all I would like to recognise in the Department of the Senate, Harry Evans, Anne Lynch and their team. Because I am a temporary chair of committees, I have decided that they are a little bit like the wise monkeys. They sit there, they see no evil—although sometimes they do—they speak no evil and they hear no evil. They remind those of us who are taking the Senate through its paces where there is a breach of standing orders, and they tell us when there is unparliamentary language.I am just waiting, Madam President, for the day when they run out of patience, stand up and demand order. We only have to deal with it for a short time, although you, Madam President, have to deal with it for much longer than those of us in temporary positions. But the officers of the Senate have to sit through it all, all day, every day, and I think that one day they may find the role of the three wise monkeys just too much and they might say what they are really thinking. That would be a terrible shock to all of us.I would also like to take this opportunity to recognise Hansard. Hansard is similar in that they have to listen to it all and record it all. They have to have the patience to make sense of it all. I have only ever had one real dispute with Hansard. I know there was a dispute that my friend Rose Crowley mentioned earlier, but I did have a dispute very early in my political career when I made my first speech. As you would understand, Senator Macdonald, there were a number of references to North Queensland. I got the draft and there were capitals—no capitals for north, no capitals for Queensland. It was just in lower case. I really had quite a dispute at the time and said, `Look, the north of Queensland is a distinct region. I want capital letters.'Another unsung hero of this parliament that I would like to recognise is the Parliamentary Education Office. That office does an absolutely magnificent job for us all. We are all aware of it. We visit it. We visit the students from our states, but I wonder if we genuinely appreciate just how much they are sowing the seeds of recognition of our democratic process in the wonderful work that they do.The next group that I would like to mention is the Parliamentary Library. Again, they are unsung heroes for the issues papers, research and responses that they give so quickly. You can ring them and say, `Look, I am sorry it is quite urgent.' They ask, `When would you like it? Would 2 o'clock be okay?', and there will always be some information ready for you.I have special praise for the Senate printer. I have a wonderful staff member here in Canberra, Jean Willoughby, who has a background in the preparation of documents. Between Jean Willoughby and the Senate printer we have been able to produce a number of very worthwhile contributions to policy debate. Madam President, I sent you one just recently. It is the first time ever a publication has been issued about the commitment of Commonwealth countries to human rights education. That came about as a result of my membership of the Commonwealth Parliamentary Association and the fact that the document was able to be printed here in the Senate.I have to recognise Comcar and, like so many others, I have to say that I wish it was as it used to be. I think it is a tragedy that we have lost so many skilled and caring drivers. It was a wonderful service. I think the time will come—I hope it comes soon—when many people will realise that we have to rebuild that particular service. It was a service to members and senators and their families, and to senior public servants and Veterans' Affairs. It is still there, but only just. I really hope that someone can take up the fight to ensure that they get their due recognition.I would like to thank Jetset, Qantas and Ansett. No matter what my itinerary has been over 16 years, they have always been able to handle it. I cancel, I change my arrangements, I juggle flights. Most people would just throw up their hands in horror, but I have always found the airlines and Jetset to be very patient and very competent.I must thank the attendants. I thank Aussie's; where would we be without the cappuccino every few hours or so? Last of all, there are the unsung heroes who often are not mentioned in this place. Recently I did a study of who mentions their families in first speeches or, indeed, in valedictory speeches. Tonight it has been interesting that the focus has been on fathers and their contribution and commitment to their families, whereas traditionally it has been mothers and their contribution. It shows that we have seen a lot of change over my 16 years in parliament. We do talk about dual parenting and equal responsibility.On that note, could I just tell one small anecdote which relates to my early months in this place. As Senator Schacht said, I did come in quite unexpectedly—unexpectedly for me. I had ambition—what parliamentarian doesn't—but I did not think my turn would come as soon as it did. At the time I had a 10-year-old daughter. I thought, `What will I do?' Yes, she had her big sister, her father and her grandmother on the premises at home, but it seemed important that she understand what I was coming to do. So she came here with me. Down she came and was enrolled at the Red Hill school, and every afternoon she would jump on the bus, come into Old Parliament House and make friends with all the attendants—and particularly with Flo Bjelke-Petersen, who always had something much more appealing for afternoon tea than Rebecca's mother had.In those days, Madam President, we used to sit some terrible hours, didn't we. We used to sit not just as we are tonight because I am still talking, but it was nothing to be still debating legislation at 3 o'clock in the morning. Rebecca would sleep on a doona, with another one over her, on the floor of my little office in the Old Parliament House. When it was time to go home, she would trundle up, get in the car and we would go home. I think some people thought I was absolutely mad and that she would turn out to be a wild delinquent and I would regret it. Happily, I can say that she did not, and has not. But it does remind us that, all these years later, we still do not have permanent child care, long day care, in this place. I have to say that the fault is not one that I will necessarily lay at the feet of this government—though, as you know, I may lay many faults at the feet of this government.YE4BOSWELLSenator Boswell—You had 13 years in which to do it.XI4Reynolds, Sen MargaretSenator REYNOLDS—Yes, exactly—and it was a certain finance minister, whose name I forget. But there has not been commitment to change policy in that direction over those 16 years. I hope that, with the Minister for Sport and Tourism, Jackie Kelly, announcing that she is expecting next year, that policy may change in the very near future. Thank you very much and I wish you all the best.643301:30:006433O'Chee, Sen BillSenator O'CHEEEU4QLDNP10—One of the finest honours which can be enjoyed by any Australian citizen is the honour and privilege of being a member of the Senate in the parliament of Australia, to sit here within these walls, to debate the great events of the day, to lay down our visions for the future. It is a great honour because, on top of the high office, we enjoy two things. The first is that we are the heirs and the legatees of all that has gone before us. We are the custodians of the hopes and the dreams of this precious land. And it is not ours to keep, to do with as we want. It is ours to vouchsafe, in that short period when we are here, and to pass on to those that follow. To that I shall return shortly.The other great reason we are privileged is the immense service that we enjoy as senators which we sometimes, or frequently, take for granted. I believe it appropriate to begin by thanking the people who give their service to us. I start with my personal staff, a small band of people who have always been to me immensely loyal, immensely dedicated, and on whom I could rely at any time to fulfil any request. It has been a privilege to work with them, and I thank them all.To the staff of the parliament, the chamber attendants, who are here long after we leave, the gym staff, the clerks, the cleaners, the printers and, never let us forget, the staff of the dining room, and dear Kate, and all the things that are done for us by those people so that our life and our work might be little easier: for them, too, we must have thanks and praise—and to the people who support us in Queensland and in our electorates, to the Comcar drivers, to all the people that try to help us do a good job for Australia.Then, on a personal note, I want to thank my friends outside this building, the people who put in perspective all the things that we enjoy, my friends at the Institute of Sport, my friends from before I came into politics and the friends that I have made whilst I have been in politics. To that, too, I add my colleagues, my coalition colleagues and, in particular, my National Party colleagues, a group of people here in this end of the chamber that Shakespeare must have been thinking about 500 years ago when he wrote those words:We few, we happy few, we band of brothers . . . To Ron, to Grant, to David, to Julian and to Sandy in particular: I have enjoyed immensely the privilege of working with you and of being one of your brothers in our shared ambitions for what can be for rural and regional Australia. And to all the senators here: it is a great privilege to work here, it is a great privilege to enjoy debate across the chamber and conviviality and shared dreams and talk of what might be.I should make mention of those who depart but I want to do it very briefly, not because I do not value them, but because there are other things I want to say tonight. In Margaret, Karen, and Dee Margetts we have three fine Australian women with different ambitions, but each has pursued them with vigour, with enthusiasm and with a fervent belief that what they were doing made the country better. That is the service, the high service, that you have bestowed on your country and it has been a great pleasure to work with you and to watch you pursue your goals.To Mal Colston I owe an immense degree of thanks for his loyalty and support on the Regulations and Ordinances Committee where, as many senators would know, he has worked tirelessly for years and years. Of David MacGibbon I say that defence has probably rarely had a finer advocate in this place than David but that David's talents and skills range far beyond that. He has always been a steadying influence, sometimes in rocky days, for the coalition.Finally, for Sandy Macdonald, my very dear friend, my conspirator sometimes in the mutual league of trouble, but undoubtedly a great Australian and a man I admire immensely, a man that sometimes I wish I could be like. But I doubt, Sandy, that I will ever reach the pinnacle of integrity that you exemplify in this place.My final word of thanks is my most important and it is to my wife who has put up with me for so many years and only occasionally has relented. She has been an immense aid to me. She has helped me grow and become a better person and has given us a wonderful son. One of the great things in life, as Senator Ian Campbell has said, is the opportunity to be a good parent, and I look forward to the opportunity of spending much more time with Tara and with Rory and to helping him grow and develop and be a fine person.I want to return to another theme, and that is the theme of Australia, because that is why we are here. We are here charged with an obligation to care for the country which we have inherited. I want to make a few observations about this country. This ancient continent which we now call Australia was first populated by Aboriginal and islander people who, along with their forebears, inhabited the land for thousands of years. They were followed by people from the British Isles, by convicts, gaolers and later free men and free women who, disdaining tyranny and loving freedom, triumphed over humble beginnings to create a sovereign and independent nation in which democracy and equality of rule now flourish. That was their achievement.To our shores have come countless thousands more from many lands who have shed the enmities of old, who have united in the belief that while ever our nation stands, freedom and happiness, justice and opportunity shall never perish from the face of this earth. It is to that that we are the heirs and the legatees.I believe that the government of Australia requires of its parliamentarians four things, four foundations of service. They are: truth, principle, fearlessness and a vision for the common good. Truth, the first and one of the most important, is the wellspring from which every moral judgment we make comes. Without truth, there can be no moral judgments because there is no fact upon which to weigh our deliberations. It impels upon us an obligation to serve the truth, to tell the truth, to seek out the truth and never to fear the truth. When you fear the truth, you bring in weakness; you undermine your moral mandate.From truth flows principle. What is the purpose of being in parliament if we only serve power and do not serve principle? That would be to rob from the people who sent us here the moral imperative which we enjoy. They send us here, no matter what our party, in the belief that we are men and women of principle, and will serve them faithfully. So you have to form your own views, your own principles, and you have to remain true to them; and they have to be consistent and they have to flow like a theme through your life, like a river through a valley. Without it, you are nothing. And with it, you are incredibly powerful.Then, to add to those two things, you require fearlessness. Fearlessness is most important of all: to stand up, to state what you believe is right when it would be so easy to do what is popular; to withstand the assault of people who say that you are not a representative, that you do not care for their wishes, when you care passionately for what you can do for them. I hope and pray that all of you who remain, and those who follow, will be blessed with infinite amounts of fearlessness, because that is what our country needs. It is your fearlessness that returns the duty of fearlessness which was given by other Australians, in places far less salubrious than this, who had the fearlessness to lay down their lives for what we enjoy today. Therefore, how much less do we ask that we should lay aside popularity to keep faith with those who have laid down their lives.We must have a vision for the common good. That does not mean our sectoral interests, but we have to always ask: what is it that we can do which everybody will support, which will bring our nation together? That requires imagination. It requires enthusiasm. It requires give and take. It requires maturity. I know that the people in this chamber and in the other place have those qualities. When I leave this place, as an Australian and as a voter I will pray that you will always seek the common good, and advance this nation as much as we can.Finally, we should be willing to see that there is a world outside these shores. It is not good enough for us merely to say that this is a lucky country and that we are going to preserve it. It has always been the case that Australians who have gone before us have believed in this country so much that they have been willing to take the best of what we had and give it to the rest of the world. We have gone through a tough time. Economically, we have gone through a time in which we had to mend, a time to heal, a time to succour. But now is a time to rise up and, with enthusiasm, create a region of the world whose dreams, whose aspirations and whose hopes are forged in the image of our own lucky country, to give to the rest of the world, to people less fortunate than we, the great privileges and luxuries that we have in this democracy. And above it all is the rule of law. We have always to understand that we are the servants of the law, not the masters of it. We may make it, but we are still subordinate to it. That is a quality which is only found in democracies, and even then only rarely.I know my colleagues are getting tired so I wish to conclude. I said at the beginning that this nation was founded on a dream, a dream of greatness, and of what free men and free women could achieve when loosed from the bondage of the old world. And the flame of that dream still burns now. It comes glimmering to us through the mists of time. It was the light our Anzacs saw that first dawn on Gallipoli Peninsula. It illuminated the dark despair of Changi and Hellfire Pass. That light still falls on graves of Australians who rest overseas from the service of their country. And we see it today in the hopes of the man on the land and the gentle ways of the country towns.It shines to us in our children's smiles, in their eager eyes, their simple joys. Most importantly, it is a tribute to the greatness of our forebears, to ideals which endure the smallness and meanness of lesser struggles and which bestow on each and every Australian a glory that will never fade so long as this world rolls around and we are its worthy servants.643601:47:006436Macdonald, Sen SandySenator SANDY MACDONALDCX5NSWNP10—Madam President, earlier today I read my first speech for the first time in six years. Some of it is still relevant, some of it is a little dated, but mostly it was a speech of somebody who had not experienced the incredible opportunity and experience of being a member of this Senate. The ability to help people, to have access to almost anybody in pursuit of that, the oppor tunity to have an influence—albeit it small—on national and international affairs, and a chance to know well people on both sides of politics who come from many different directions but find themselves bound together working for a better Australia.In many ways I found my time here a very chastening experience. It is always interesting the things that really affect you. In my first speech I quoted The Man from Snowy River as an example of what I thought of the exciting prospect of public life. I imagined it might be a roller-coaster but that there would be a certain order about it; that I would be a backbencher; that I would be part of a government; that I would get my hands on the levers, whether they be big or small; that I would leave this place of my own volition or when my party indicated the game was up.I certainly do not agree with Enoch Powell's cynical view of politics when he says that all politicians leave as failures, but certainly political careers do not turn out as you might expect. To be perfectly honest what we most crave is the respect of our peers. So personal success in politics is realistically a very narrow gauge of worth or what your time in public life can mean.It was brought home to me especially last year at the funeral of John and Julia Anderson's little boy, Andrew, and it came from a verse of The Servant's Hymn which says:We are pilgrims on a journey;We are brothers on the road;We are here to help each otherTo walk the mile and share the loadWe should not forget that all of us lucky enough to be elected to this place are on a journey to make our abundant country a more abundant place, and we should never forget the privilege of that because that in itself is an end.Madam President, personalities and personal friendships are very important in this place and, as somebody with a very catholic taste in people, I made friends right across the political spectrum, brought about frequently by having the opportunity to travel and to serve on committees with a variety of senators and members. It is very important for the future of political debate in our country that all political parties have decent people, and I certainly will not embarrass some of my political opponents by identifying them as friends, but they know who they are. I wish them exceptionally well on a personal level, but not so well that their team gets control of the treasury benches for a long time. When and if Labor has earned the right to govern again, it will do so. Labor's continuing pursuit of political opportunism, whether it be in tax reform or the sale of Telstra or in other policies that many of them can see privately would be the correct course of action for Australia, will prevent them from earning that right.In tax reform, the Labor Party knows the present tax system needs repair but at the last election when they had the chance to argue our package in the marketplace, filling in the possible vacuums in any change as big as this, they opposed it when many—almost all—in their heart of hearts acknowledge the need for a consumption tax and a change at least to our tax base. They would also acknowledge that when they next come to power they will inherit a much fairer tax system which has the additional benefit of federal-state financial cooperation.Labor's simple opposition to tax reform has let Australia down—simple political advantage to them, yes, but it was wrong. Simple opposition to anything in politics generally lets you or your supporters down. A very early lesson for me was in 1993, which was referred to earlier, with the Mabo legislation. The Senate will recall that Dr Hewson simply opposed the legislation by saying, `When we get into government, we will simply fix it or repeal it.' That of course was never a practical solution and could not happen.Part of the reason for the subsequent Wik litigation was that the original Mabo legislation was inadequate—all sides of politics acknowledge that—but which might have been fixed if the then opposition had amended it wisely. At that time, I crossed the floor with Senators O'Chee and McGauran in an attempt in a small way to improve just that, by securing the rights of pastoral leaseholders where there was a question of co-existence of native title. This in fact was one of the Labor government's amendments which, if it had been passed at that time, would have avoided one of the most contentious aspects of the Wik legislation last year. This is really ironic. Most people have forgotten it, but I never will.I admit that my side of politics was wrong in 1993 to oppose native title outright, but Labor returned the compliment last year in spades. They let Australia down at that time and took considerable political advantage from the government's difficulties in passing legislation that was balanced and fair to all parties. This sort of humbug is not missed by your average person when they assess the performance of politicians. You might have noticed that I have used the word `humbug' and not `hypocrisy', which is a word used endlessly by politicians criticising their opponents. Hansard will recall it is a word I have never used in this place in the six years that I have been here, because politics in the broad is about people with very opposing views finding a compromise, one that frequently they are both happy with at the end of the day. To meet the needs of compromise in politics is not hypocritical but commonsense, and commonsense is a very good measure for political outcomes.It is only natural that people ask how I feel about leaving the Senate. The answer is not hard to guess. On one side, like of all us here, I have a lot of effort and resources tied up in a political career and, through no fault of my own, with every expectation of some advancement if we had been returned to government, which we were, I was voted out because of the Pauline Hanson phenomena. Almost none of the nine per cent of New South Wales voters who voted in protest to Mrs Hanson would have realised that this haemorrhage of coalition votes would mean that a Democrat would come up the middle. But I do wish Senator-elect Ridgeway well in that regard. On the other side, I am not worried about the release from the responsibilities of public life, hopefully and perhaps not forever. I am very lucky to have a young family, a life outside politics, and I look forward to spending more time with my local community.I am sure a lot of my fellow senators will understand this view—that is, when I went into politics I was somebody who played an active part in my local community. After six years in the Senate, I merely come home to sleep. This is not a criticism; it is just purely a fact of life. I certainly look forward to seeing my friends again. I am always reminded of a story about Bert Kelly who said that when he was elected to parliament he became a very important person in his local community. He said, `When I planted wheat, my neighbours planted wheat. When I bought sheep, my neighbours bought sheep. But, after I had been in politics a little while,' he said, `when I sold my cows, my neighbours bought them.'Now to a couple of asides about my six years of coming to Canberra. It was three years before I was invited into a private house in Canberra. I am not complaining because we come here to work, but it is incredible that a gregarious person can spend that length of time in our national capital, a city of more than 300,000 people, and have virtually no social contact with the locals. The other thing that I have done is that I have never locked my Parliament House office. Somehow the thought of locking my office in this wonderful building affronts me.In the broad, all of us participate in the four roles of the Senate. Firstly, we are an integral part of the government's legislative program. Everything must be passed by the Senate. As backbenchers, if we are honest, few of us get much satisfaction from this primary role, although we do have some say through our party and committee arrangements. Secondly, we review government process and make government accountable through the Senate's committee system and estimates. This area does provide enormous stimulation and the acquisition of knowledge to all of us. I have valued that and especially my chairmanship of the Senate Foreign Affairs, Defence and Trade Legislation Committee. On committee service, like all of us, I have gone places and met people that most people just dream of. To be an official observer just two weeks ago at the Indonesian election—the first one for 44 years—was just one of those privileges. To go to the Menin Gate in 1996 was one of the highlights of my life.Thirdly, we are here to help people over a whole array of electoral responsibilities. Our access as senators to people who make decisions is an extremely powerful weapon to assist. We all have stories that might appear mundane but where a mere phone call from us can change a person's life for the better. We all have examples of success stories that bring tears to the eyes of even the most cynical of people. This particular capacity to help is an area that I have found extremely stimulating. Lastly, of course, we are here because we represent our party and therefore we must nourish our members and our structures because, for better or for worse, parties make up a very large part of our democratic process and system.I thank the National Party for the opportunity to serve them. I hope I have given them and the Australian taxpayers value for money. I have tried to be honest and I have always tried to say it the way I have seen it. I was given some advice before I came into the Senate by somebody who actually had been a longstanding member of one of our large statutory boards, the Australian Wheat Board, in those days. He said, `In public life, you won't always find it easy to tell people exactly what they have to be told. One bit of advice is that, when you come home at night, you want to look at yourself in the mirror and you want to minimise the number of nights where you do not see a very pretty sight.' I have tried to do that. I have always tried to be honest. It was good advice and I have tried to keep it.Now a word about my colleagues. Almost without exception they are decent people trying to do the right thing. My National Party colleagues both here and in the House of Representatives are a good team and work extremely hard for their constituents within the constraints of coalition. I thank Senators Brownhill, Tambling, McGauran and O'Chee for their friendship and support. I leave this Senate in the very good company of Senator Bill O'Chee. As many other senators have said, he brought colour—I could say movement—and flair to this place. He has been, as you could all appreciate this evening, one of the great and best speech makers in this place. He is an exceptionally clever person. Bill does not speak or read Mandarin, but he is near fluent in German. Having sat beside him for six years, you were never quite sure what he was going to be doing next. He was especially keen on his German when he had a German girlfriend. That was a long time before he met Tara, when he used to spend a lot of question time working out appropriate words and phrases in German. I wish Bill and his wife, Tara, and son, Rory, all the fortune and happiness that they deserve. I also wish the best to other senators departing—to Senator Reynolds, Senator Margetts and particularly my colleagues Senator MacGibbon and Senator Synon. Both of them are good friends of mine—one of them had a very long career and one had a very truncated career that we have heard about tonight, and I do feel for you, Karen, very much. I have enjoyed our time together, especially our trip to Indonesia. It was a great privilege for both of us. You can be sure to take some comfort from the fact you have added to the rich fabric of this great democracy that is our Australia.I also thank my Liberal colleagues, especially Senator Hill. I am tempted to name all my Liberal colleagues who are my friends, but there are too many. To those who did not know me well, I am sorry. I have got a lot of friendships among the Liberal Party and I do value that. I thank my Canberra doctor, Senator Eggleston. I especially also thank you, Madam President, and your husband, Tom. You have been particularly generous to Alice and me.My biggest thanks goes to Senator Boswell, our leader in the Senate. I always thought I would have the chance to say a few words about Bos when he left the Senate, but I am doing it because I am leaving. His experience in life and business has made it possible for him always to be on the side of the angels. Nobody can guess what he does for people, and we all know what a wonderful turn of phrase he has.I can remember when I first came to Canberra, he said, `If you want a friend here, mate, bring a dog.' He said, `I've done more for you, than your mother has. She only carried you for nine months.' And, `A lot more people have talked themselves out of politics than into politics.' When we are particularly annoyed at Senator Faulkner, he says, `The ones that the gods wish to destroy, they first make mad.' We all love Bos. We worry about him and he says, `Don't worry about me. Any fitter and I'd be playing for the Broncos.' As a person, I look up to Bos and I think one of the unfortunate things of age is that, the older you get, the less opportunity you have to look up to people. I look up to him. We have always joked that he was about to be rolled as our leader, to which his reply always was, `Uneasy is the head that wears the crown.' So I thank all my coalition colleagues for their comradeship, but I especially thank Bos. I also thank Ian Sinclair, a most remarkable person for his wonderful company and guidance for my whole Senate term.I would like to thank my staff, present and past—Helen Freestone, Meredith McKenzie, Fiona Hobden, Martine Whitton, Beth Black, Katherine Martin, Kerri Swain, Scott McFarlane and especially Gaye White, who has made a great success of her life and who provided me with exceptional wise counsel for the whole six years I have been in the Senate. My staff have all been loyal and intelligent people, and I have been fortunate indeed to have their support and friendship. Ours has always been an office full of gossip and humour.I want to thank all the people who make the Senate work. The Comcar drivers, the Clerk and his assistants, the Black Rod and all the committee secretariats who made our job possible. I would especially like to thank Joanne Towner for her work on the Joint Standing Committee on Foreign Affairs, Defence and Trade. Also, I send thanks to the many staff members of senators, members and ministers. I found as a general rule—and it is good advice, I think—that, if you get on with the staff, you get on in this place. I have always found that a very easy role to play.Finally and most importantly, I would like to thank and show my admiration for my wife, Alice. She has been a marvellous support to me. She has kept the home fires burning in many, many ways. She is certainly not happy that I have lost my spot, but she is happy to have me home.Our three children, Millie, Will and Angus, have been born since I was elected. As we all know, this is an extremely difficult life for those with young children. I cannot tell you how the thought of being home will lighten the step as I leave here at midnight next Wednesday. One piece of advice obvious to all of you is that politics is only part of life. Important it may be to those of us elected, but, remember, there will not be another politician nursing you back to health when your political days are over. You ignore your partner and your family at your peril.I also thank my mother and my late father who gave me a great start in life. Both my parents impressed on me that if you have advantages you are duty bound to try to make the world a better place. My late father had a very jaundiced view of politics, so I would expect that for me the jury would still be out as far as he was concerned. I also thank my five sisters and my brother and our extended family. I have tried to live by the rule `family first, last and always', and so do they.So, colleagues, I come to the end of this particular political road, and I will leave you with two thoughts. Firstly, in politics, unlike in most other careers, tomorrow is always another day; and, secondly, Churchill's advice on his deathbed to all politicians: never give up, never give up, never give up. Thank you for your generous comments about me, mostly thoroughly undeserved. I always think that in life it is not how you see yourself, it is how others see you. I think I am a bit naughty to be a gentleman but, anyway, there have been some nice comments made about me. I wish God's speed to you all.644002:07:006440Synon, Sen KarenSenator SYNONFQ6VICLP10—I rise tonight to give my final speech with a sense of both gratitude and disappointment. I am grateful for the opportunity to have served the people of Victoria and the Liberal Party in the Howard government. I am, of course, disappointed that my term has been so brief. Politics and disappointments go hand in hand. I do not hide that; I accept it as part of the game.Notwithstanding this, I am so grateful for the honour that was bestowed upon me by the Liberal Party preselectors in May 1997. I leave this place with a renewed sense of the immense value of our political and parliamentary institutions and a deep and abiding respect for the values and philosophies of the Liberal Party. It is a party that I am proud and honoured to be a member of. It is a party that has the inherent ability to renew itself.I am very proud of the Howard government and all that it has achieved in such a short time. I am proud of John Howard, Tim Fischer and Peter Costello's leadership. In the two short years that I have been in this place, the government's achievements, if they were listed, would run to several pages. They include, but are certainly not limited to: bringing down interest rates to their lowest since 1970 and therefore making home ownership affordable again; bringing inflation down to just over one per cent—again, the lowest in 30 years; turning a $10 billion deficit into a budget surplus of $5.4 billion and reducing government debt by $24 billion; the second privatisation of Telstra, with its $1 billion social bonus; the Native Title Amendment Act; the 30 per cent private health insurance rebate; Work for the Dole; the common youth allowance; and, before us now, the biggest tax reform since Federation. All that and more in just two years.Before my term began, the government secured, in its first year, the Telstra sale that gave us the $1 billion environmental heritage fund, and dramatic industrial relations reform and gun law reform. Measured on fiscal, monetary, micro-economic, macro-economic and social indicators, without doubt this is the most reforming and successful government in Australia's history. And it has done all of this without the luxury of a majority in this place. I leave the Senate with a deep confidence that the rest of the Howard government's agenda will be implemented in the coming years.Madam President, I would like to pay tribute to the other retiring senators who have spoken before me tonight. They have reflected on longer and far more distinguished careers than mine. They will be a great loss to parliament. I have been warmed and encouraged greatly by the sense of camaraderie, openness and honesty that are being displayed tonight. In particular, I am very proud to share this valedictory—if you can be proud to share a valedictory—with people whom I admire and have come to know. Can I say how appreciative I am of those warm thoughts that have been extended to me tonight. Like my colleague Senator Macdonald, I feel somewhat unworthy and overwhelmed. But it has been a honour and a privilege to get to know some of you well, and I will leave on 30 June with my respect for the Senate and its institution high.When I gave my first speech on 3 September 1997, I outlined the values and beliefs that have guided me thus far in life. I spoke of the issues that were of great concern to me and where I hoped to make a contribution. We have had only 30 sitting weeks since I delivered that speech, less than 21 months of government. In that short time, many of the fundamental issues I raised have begun to be addressed.For example, in my key policy interest area of unemployment, the unemployment rate has dropped by nearly 1½ per cent since the election of the Howard government; 400,000 new jobs have been created; and, whilst unemployment is still undoubtedly too high, it is coming down.I spoke at length that afternoon about the inherent disincentive to work within our social security system and I talked specifically of the welfare state and the subsequent entitlement mentality that has grown up around it. The youth allowance is just one measure which has started to address this issue. It has taken away the financial incentive for young people to drop out of school and to go on the dole rather than study.On a larger scale, the ANTS package fundamentally addresses the poverty trap of which I spoke that day; the trap that faces many low and middle income working people coming off welfare. Due to the clawback of benefits, they are hit with effective marginal tax rates of around 80 per cent—far more than the richest Australians pay.A social security system is a critical safety net in any developed, caring society. But we must do everything that we can to prevent it from becoming a place of first refuge; a comfortable hammock. We must do this, not because of financial considerations but, because having a job, the feeling of making a contribution to society, is often so important for an individual's self-esteem and confidence.The introduction of Work for the Dole is an excellent example of the concept of reciprocal obligation that I talked of in my first speech. I have had the opportunity to visit many Work for the Dole projects around Victoria and have found the young people stimulated, enthusiastic and imbued with a renewed sense of achievement and contribution. It is a fine program, addressing a real need.On a more sobering note, our youth suicide rate continues to escalate. Last year 510 young people, many of them very young, killed themselves. According to the ABS, 417 of these 510 were young men and boys. It is a commonly recited fact that Australia has one of the highest rates of youth suicide for young men in the world. Why is this? The answer is: there is no simple answer.Without question, young people today are growing up in a very complex world, a world of great uncertainty. Increasing family dislocation, fear of the unknown and fear of failing in an unrelenting, demanding society are all undoubtedly factors.I would like to see all of us, government and the community, do more to identify the risk factors and address the issues in a preventive fashion. There are many worthy programs aimed at prevention. Unfortunately, the fact that they often straddle many government departments, perhaps at different levels of government, means that they are often underfunded. As a result, more young people enter a dangerous and tumultuous time not equipped with the life skills they need to get through it.I have just returned from Indonesia as part of the official Australian Observer Mission led by Senator Ferguson. Whilst it is inappropriate to comment on the mission itself, until Senator Ferguson has had an opportunity to present the report to parliament, I do want to say how humbled I was by the strength with which the Indonesian people have grasped democracy and the commitment they made to the whole democratic process.Many people, but particularly young people and students, worked for weeks with little sleep. Hundreds of thousands of them worked as domestic election monitors, choosing to stay outside of the party political system—although they were obviously keenly interested in politics—because their commitment to reform and democracy, was stronger than their desire to join a political party and, possibly, further their own interests. The same applies to many academic and university staff. In fact universities closed down for three weeks over the election campaign to enable students and staff to work on the monitoring task. None of this is surprising when we consider the risks that the students had previously taken in calling for democratic reforms.I found their belief in the value of democracy and trust in the election process very reassuring, but also confronting. I returned to Australia determined to value our democratic traditions and heritage far more. I am a great supporter of Minister David Kemp's initiatives to promote civics education in our schools through the Discovering Democracy Program. We have a great tradition which we should treasure and work harder to protect.I came away from Indonesia with a renewed appreciation for the vitality, vision and potential of young people. Certainly the young people, and particularly the students, of Indonesia can stand tall as they contemplate a brighter, freer, democratic future. Many of them paid a great price; some of them the ultimate price.The students of Indonesia demonstrated to me that it is not a cushy paid job in a nice student union building that builds democratic movements and creates effective advocacy. I believe tertiary students, as adults, are capable of making their own decisions about how and where they spend their money and with whom they choose to associate. Many of you know that I am extremely passionate about voluntary student unionism. I would like to thank Senators Abetz, Campbell and Ellison, and all of my colleagues, who share this passion for universal freedom of association. Many of you have worked tirelessly in this place for much longer than I have. I am disappointed to leave before the final race is run, but I leave knowing that the baton is in solid hands and I know you will not give up the fight.When I entered the Senate I didn't fully appreciate the satisfaction and enjoyment I would get from constituent meetings with my fellow Victorians. I anticipated the large amount of time senators spend in sittings and committees, however, I did not expect to meet so many wonderful people deeply interested in their local communities. I was not prepared for the buzz and the satisfaction I received from helping those people in some small way. I was delighted to be able to make dozens of trips to regional centres in country Victoria, from as far as Mildura in the Mallee to Marlo in East Gippsland. I experienced incredible warmth and hospitality wherever I went. I will certainly cherish those memories forever.I conclude these brief remarks here tonight and hope you will forgive me for not spending too long on reminiscing about my experiences in this place because they have been so short, but rather to, once again, spell out some of the values that I hold dear. I would like to thank all my Senate colleagues for their advice, assistance and friendship. I have learned a lot from many of you and consider myself privileged to have had the opportunity to work with you. To the leader of the government, Robert Hill—tired Robert Hill—thank you especially for your warm support and spirited leadership. To the other Senate officials who work tirelessly to make our lives here run smoothly, thank you. To all my friends in the Victorian division of the Liberal Party—too many to name but you know who you are—thank you for sticking by me in a difficult time. I cannot express in words how much your support has meant to me. To my staff, both past and present, friends, family and my dear husband Joe, your continued faith in me has brought me through a difficult time. I will never forget your patience, love and encouragement.Madam President, to you and all my colleagues, thank you. I hope that fate will return me here some day. So I say, au revoir.10000PRESIDENTThe PRESIDENT—My best wishes to those of my colleagues who will be retiring next week. The Senate stands adjourned until 9.30 this morning.Senate adjourned at 2.20 a.m. (Friday)