1999-06-283913SENATE655701999-06-28The PRESIDENT(Senator the Hon. Margaret Reid) took the chair at 12.30 p.m., and read prayers.Ministerial Arrangements65576557Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—by leave—I inform the Senate that Senator Robert Hill, the Minister for the Environment and Heritage and Minister representing the Prime Minister, the Minister for Trade, the Minister for Foreign Affairs and the Minister for Forestry and Conservation will be absent from the Senate until approximately 5 p.m. today as he is attending a funeral in Adelaide.Bills6558r703Billsr667Billsr666Billsr702Billsr699Billsr698Billsr664Billsr660Billsr658Billsr657Billsr701Billsr663Billsr659Billsr700Billsr661Billsr754Billsr755Billsr761Billsr765Billsr763Billsr764Billsr757Billsr760Bills6558r758Billsr759Billsr756Billsr7626558Consideration resumed from 25 June.A NEW TAX SYSTEM (BONUSES FOR OLDER AUSTRALIANS) BILL 1998The bill.10000CHAIRMANThe CHAIRMAN—Order! The committee is considering the A New Tax System (Bonuses for Older Australians) Bill 1998 . The question is that the bill stand as printed. At this stage, we have no running sheet; however, there are only government requests and amendments.12:32:006558Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—by leave—I move government requests Nos 5 to 9 and No. 13 and government amendments Nos 1 to 4, Nos 10 to 12 and Nos 14 to 19:(1) Clause 4, page 4 (after line 6), before the definition of annual retirement income , insert: annual business and wages income has the meaning given by section 6A.(2) Clause 4, page 4 (after line 14), after the definition of bereavement allowance , insert: business includes any profession, trade, employment, vocation or calling, but does not include occupation as an employee.(3) Clause 4, page 5 (after line 16), after the definition of qualifying year , insert: salary and wages has the meaning given by section 10A of the Social Security Act 1991 .(4) Page 8 (after line 26), after clause 6, insert:6A Annual business and wages incomeA Family and Community Services customer's annual business and wages income for the purposes of this Part is worked out as follows: Method statementStep 1. Work out what would be the customer's annual retirement income if it were worked out under subsection 6(2).Step 2. Work out how much of the step 1 amount is attributable to income from a business carried on by the customer, or to salary and wages earned by the customer. The result is the customer's annual business and wages income .(5) Clause 10, page 11 (lines 3 to 10), omit the clause, substitute:10 Qualification for bonus paymentA Family and Community Services customer is qualified for a bonus payment under this Part if the customer is qualified for: (a) only the aged persons savings bonus component of the bonus payment; or (b) only the self-funded retirees supplementary bonus component of the bonus payment; or (c) the aged persons savings bonus component, and the self-funded retirees supplementary bonus component, of the bonus payment.(6) Clause 11, page 11 (line 25) to page 12 (line 24), omit subclause (2), substitute:Self-funded retirees supplementary bonus component—person aged over 611/2 (woman) or over 65 (man) (2) A Family and Community Services customer is qualified for the self-funded retirees supplementary bonus component of a bonus payment if: (a) on 1 July 2000, he is aged 65 or more or she is aged 611/2 or more; and (b) he or she is an Australian resident on 1 July 2000; and (c) his or her annual retirement income is less than $30,000 and he or she has annual savings and investment income of more than $1,000; and (d) at least one of the following applies: (i) he or she did not receive a disqualifying payment at any time during the period from the start of 1 April 2000 until the end of 1 July 2000; (ii) he or she received a disqualifying payment during the period from the start of 1 April 2000 until the end of 30 June 2000, his or her partner died during that period and he or she is not receiving a disqualifying payment on 1 July 2000; (iii) he or she received a disqualifying payment during the period from the start of 1 April 2000 until the end of 1 July 2000 in a circumstance prescribed by the regulations for the purposes of this subparagraph; and (e) the amount of the self-funded retirees supplementary bonus component, worked out under subsection 15(3), is greater than nil. Note: The customer's annual retirement income and annual savings and investment income are worked out based on either of 2 qualifying years or the customer's circumstances at the time his or her bonus entitlement is determined under this Part: see sections 5 and 6.Self-funded retirees supplementary bonus component—person aged between 55 and 611/2 (woman) or 65 (man) (3) A Family and Community Services customer is qualified for the self-funded retirees supplementary bonus component of a bonus payment if: (a) on 1 July 2000: (i) he or she is aged 55 or more; and (ii) he is aged under 65 or she is aged under 611/2; and (b) he or she is an Australian resident on 1 July 2000; and (c) his or her annual retirement income is less than $30,000 and he or she has annual savings and investment income; and (d) his or her annual business and wages income does not exceed $1,000; and (e) he or she did not receive a disqualifying payment at any time during the year beginning on 1 July 1999; and (f) the amount of the self-funded retirees supplementary bonus component, worked out under whichever of subsections 15(3) and (3A) applies, is greater than nil. Note 1: The customer's annual retirement income and annual savings and investment income are worked out based on either of 2 qualifying years or the customer's circumstances at the time his or her bonus entitlement is determined under this Part: see sections 5 and 6. Note 2: The customer's annual business and wages income is worked out based on the customer's circumstances at the time his or her bonus entitlement is determined under this Part: see section 6A.(7) Clause 15, page 15 (lines 6 to 12), omit paragraphs (a) and (b), substitute: (a) if he or she is qualified for only the aged persons savings bonus component of the bonus payment—the amount of that component; or (b) if he or she is qualified for only the self-funded retirees supplementary bonus component of the bonus payment—the amount of that component; or (c) if he or she is qualified for both the aged persons savings bonus component and the self-funded retirees supplementary bonus component of the bonus payment—the sum of those components.(8) Clause 15, page 16 (line 12), after "payment", insert "for a Family and Community Services customer aged 60 or more".(9) Clause 15, page 17 (after line 11), after subclause (3), insert:Self-funded retirees supplementary bonus component—person aged under 60 (3A) The self-funded retirees supplementary bonus component of a bonus payment for a Family and Community Services customer aged under 60 is worked out in accordance with the following table:Amount of self-funded retirees supplementary bonus componentItemIf the Family and Community Services customer's annual retirement income is:. . . the amount of the self-funded retirees supplementary bonus component is equal to:1$20,000 or lesshis or her annual savings and investment income, up to a maximum of $2,000 2more than $20,000 but less than $30,000(a) his or her annual savings and investment income, up to a maximum of $2,000; less (b) the phasing out fraction (see subsection (5)) of the amount worked out under paragraph (a) of this item Example: Dawn, aged 59, has annual retirement income of $24,000, all of which is annual savings and investment income. Dawn's self-funded retirees supplementary bonus component is worked out as follows. Dawn's savings and investment income of $24,000 is only allowable up to a maximum of $2,000. The phasing out fraction of the $2,000 then needs to be subtracted. The fraction is: Therefore 4/10 of $2,000 (i.e. $800) needs to be subtracted. This leaves a self-funded retirees supplementary bonus component of $1,200.(10) Clause 33, page 32 (after line 6), before the definition of adjusted savings and investment income , insert: adjusted business and wages income has the meaning given by section 34A.(11) Clause 33, page 32 (after line 21), after the definition of bereavement allowance , insert: business includes any profession, trade, employment, vocation or calling, but does not include occupation as an employee. business and wages income has the meaning given by section 34A.(12) Page 36 (after line 20), after clause 34, insert:34A Adjusted business and wages income (1) In this Part, an individual's adjusted business and wages income for the 1999-2000 income year is worked out as follows:Method statementStep 1. Work out the individual's business and wages income for the year: see subsections (2) and (3).Step 2. Subtract from the step 1 amount the sum of the individual's deductions for the year, to the extent that the deductions relate to any or all of his or her business and wages income. Step 3. If the final result is nil or negative, the individual does not have any adjusted business and wages income. (2) In this Part, an individual's business and wages income is the sum of the following: (a) all of the individual's assessable income that is PAYE earnings; (b) all of the individual's assessable income (other than PAYE earnings) derived from a business carried on by the individual. (3) However, an individual's business and wages income does not include the following amounts: (a) any amount paid to the individual that is included in the individual's assessable income and that is covered by paragraph (c) of the definition of salary or wages in subsection 221A(1) of the Income Tax Assessment Act 1936 ; (b) so much of the amount of any eligible termination payment (as defined in section 27A of the Income Tax Assessment Act 1936 ) made to the individual as is included in the individual's assessable income under section 27B or 27C of that Act.(13) Clause 38, page 39 (lines 3 to 10), omit the clause, substitute:38 Qualification for bonus paymentAn ATO client is qualified for a bonus payment under this Part if he or she is qualified for: (a) only the aged persons savings bonus component of the bonus payment; or (b) only the self-funded retirees supplementary bonus component of the bonus payment; or (c) the aged persons savings bonus component, and the self-funded retirees supplementary bonus component, of the bonus payment. (14) Clause 39, page 39 (line 19), omit "for either or each of the qualifying years", substitute "for the qualifying year, or for either or each of the qualifying years,".(15) Clause 39, page 39 (line 23) to page 40 (line 20), omit subclause (2), substitute:Self-funded retirees supplementary bonus component—person aged over 61 1/2 (woman) or over 65 (man) (2) An ATO client is qualified for the self-funded retirees supplementary bonus component of a bonus payment if: (a) on 1 July 2000, he is aged 65 or more or she is aged 611/2 or more; and (b) he or she is an Australian resident on 1 July 2000; and (c) his or her taxable income as shown in his or her assessment for the qualifying year, or for either or each of the qualifying years, is less than $30,000, and he or she has adjusted savings and investment income of more than $1,000, for that year or those years; and (d) at least one of the following applies: (i) he or she did not receive a disqualifying payment at any time during the period from the start of 1 April 2000 until the end of 1 July 2000; (ii) he or she received a disqualifying payment during the period from the start of 1 April 2000 until the end of 30 June 2000, his or her partner died during that period and he or she is not receiving a disqualifying payment on 1 July 2000; (iii) he or she received a disqualifying payment during the period from the start of 1 April 2000 until the end of 1 July 2000 in a circumstance prescribed by the regulations for the purposes of this subparagraph; and (e) the amount of the self-funded retirees supplementary bonus component, worked out under subsection 43(5), is greater than nil.Self-funded retirees supplementary bonus component—person aged between 55 and 61 1/2 (woman) or 65 (man) (3) An ATO client is qualified for the self-funded retirees supplementary bonus component of a bonus payment if: (a) on 1 July 2000: (i) he or she is aged 55 or more; and (ii) he is aged under 65 or she is aged under 61 1/2; and (b) he or she is an Australian resident on 1 July 2000; and (c) his or her taxable income as shown in his or her assessment for the qualifying year, or for either or each of the qualifying years, is less than $30,000, and he or she has annual adjusted savings and investment income for that year or those years; and (d) his or her adjusted business and wages income for the 1999-2000 income year does not exceed $1,000; and (e) he or she did not receive a disqualifying payment at any time during the 1999-2000 income year; and (f) the amount of the self-funded retirees supplementary bonus component, worked out under whichever of subsections 43(5) and (5A) applies, is greater than nil.(16) Clause 43, page 42 (lines 20 to 26), omit paragraphs (3)(a) and (b), substitute: (a) if he or she is qualified for only the aged persons savings bonus component of the bonus payment—the amount of that component; or (b) if he or she is qualified for only the self-funded retirees supplementary bonus component of the bonus payment—the amount of that component; or (c) if he or she is qualified for both the aged persons savings bonus component and the self-funded retirees supplementary bonus component of the bonus payment—the sum of those components.(17) Clause 43, page 44 (line 3), after "payment", insert "for an ATO client aged 60 or more".(18) Clause 43, page 45 (after line 3), after subclause (5), insert:Self-funded retirees supplementary bonus component—person aged under 60 (5A) The self-funded retirees supplementary bonus component of a bonus payment for an ATO client aged under 60 is worked out in accordance with the following table: Amount of self-funded retirees supplementary bonus component ItemIf the ATO client's taxable income as shown in his or her assessment for the qualifying year is:. . . the amount of the self-funded retirees supplementary bonus component is equal to:1$20,000 or lesshis or her adjusted savings and investment income, up to a maximum of $2,0002more than $20,000 but less than $30,000(a) his or her adjusted savings and investment income, up to a maximum of $2,000, less (b) the phasing out fraction (see subsection (7)) of the amount worked out under paragraph (a) of this item Example: For the 1999-2000 income year Susan, aged 59, has an assessed taxable income of $24,000, all of which is annual savings and investment income. Susan's self-funded retirees supplementary bonus component is worked out as follows. Susan's adjusted savings and investment income of $24,000 is only allowable up to a maximum of $2,000. The phasing out fraction of the $2,000 then needs to be subtracted. The fraction is: $24,000—$20,00 4 _________________ = __ $10,000 10Therefore 4/10 of $2,000 (i.e. $800) needs to be subtracted. This leaves a self-funded retirees supplementary bonus component of $1,200.(19) Clause 46, page 48 (lines 14 and 15), omit "because of an amendment of an assessment of the ATO client" insert "where section 45 applies".I also move five government amendments consequential on the requests:(1) Clause 3, page 2 (line 30) to page 3 (line 8), omit subclause (3), substitute: (3) The basic qualifications for the self-funded retirees supplementary bonus are: (a) an individual is aged 55 or more, and is an Australian resident, on 1 July 2000; and (b) he or she has an income amount of less than $30,000, and a savings and investment income amount, for 1998-1999 or 1999-2000; and (c) he or she has not received certain pensions or benefits during the period 1 April 2000 to 1 July 2000; and (d) if the individual is a woman under 611/2 or a man under 65: (i) he or she has also not received those pensions or benefits during the rest of 1999-2000; and (ii) he or she has business and wages income of $1,000 or less for 1999-2000; and (e) if the individual is 60 or more, his or her annual savings and investment income is more than $1,000.(2) Heading to subclause 15(3), page 16 (line 10), omit the heading, substitute:Self-funded retirees supplementary bonus component—person aged 60 or more(3) Clause 15, page 16 (line 15), after "Kath", insert ", aged 63,".(4) Heading to subclause 43(5), page 44 (line 1), omit the heading, substitute:Self-funded retirees supplementary bonus component—person aged over 60(5) Clause 43, page 44 (line 6), after "Joan", insert ", aged 63,".12:32:006562Cook, Sen PeterSenator COOKRF4WAALP00—I wonder whether the government would favour the Senate by doing the decent thing and explaining the purpose of their amendments and requests. Just to come in, stand up, move the amendments and requests and expect the things to be put through is a bit rich, given that these are amendments to the government's own legislation. This is, of course, a bill which deals with bonuses for older Australians under the GST.Senator Ferguson interjecting—RF4Cook, Sen PeterSenator COOK—I may well qualify, but what has that got to do with the price of eggs? This is the government's big tax adventure for Australia. This is the GST, and this is the bonus for older Australians provision in order to compensate older Australians—and, in particular, self-funded retirees—against the ravages of a GST. The government comes in here and moves an amendment and expects that, without any explanation, the thing will be passed. I do not think that is a reasonable expectation of this chamber. I have a number of questions and perhaps I should ask the first one now—which the minister might wish to take note of and which, since she seems to be now prepared to make an explanation to the chamber about her amendments, she might wish to address in the course of that explanation.Prior to the deal between the Australian Democrats and the government to foist a GST on Australia, the Prime Minister is on record as having made an offer to Senator Harradine to induce him to, among other things, support the legislation. Would the minister be prepared now to inform the chamber what the terms of that offer were with respect to self-funded retirees and also how the terms of that offer meet what is now before us for consideration? Do they meet it wholly, or has there been a change during the course of the negotiations between the government and the Australian Democrats? If so, what is that change?12:35:006563Woodley, Sen JohnSenator WOODLEYHX5QLDAD00—Perhaps it might help the Senate if I give some explanation at this point. These amendments and requests are a direct result of the submissions to the Senate Select Committee on A New Tax System and arise out of the evidence which was given. I might point out that the committee received around a dozen submissions from self-funded retirees and organisations, not just from individuals, and also from retrenched workers, who argued that it was unfair that they were forced to live on their savings but were denied access to the self-funded retirees bonus.This bonus is an important part of the compensation package. Because the savings of self-funded retirees are finite—that is, they do not have any built-in increase due to CPI or inflation—the outcome for them does not rise with the GST. This effectively means that the GST discounts the value of their savings and their future income stream. This is why it is necessary to have a one-off bonus payment to offset this negative result.However, the bonus in the government's original package was made available only to people over the pension age, at 65 for men and 61 for women. Thus, many self-funded retirees were denied access to that bonus. What the Democrats have been able to achieve is to decrease the age from 65 and 61 respectively so that many retrenched workers over the age of 55 who have been denied access to social security payments will receive the lump sum.In the case of people who have voluntarily retired, it may be justifiable for them to be denied access to the bonus, but we were worried more about those who involuntarily left the work force. Beyond age 55, once a worker is retrenched from a job, it is extremely unlikely that they will ever work again; they will have to rely on their retrenchment pay to live in the future. As a result of the 1996 budget changes many of these retrenched workers over the age of 55 were denied access to social security payments because they received such a lump sum payment. Under the new tax system they would not have received any compensation, either as a bonus or because of substantial tax cuts or through social security payments. This was what those dozen or more retrenched workers wrote to the Senate committee about—and we thought they had a good case. The amendment insisted on by the Democrats will move the eligible age for the self-funded bonus down to age 55 for genuine self-funded retirees—that is, those without earned income or social security support. The cost of this is substantial—it will cost an additional $180 million—but it does ensure that one group that was not properly compensated is properly compensated now. I am pleased to commend this to the Senate as further evidence of the Democrats' determination to protect low income earners and the aged, in the new tax system.I point out that, as far as pensioners are concerned, this bonus is on top of the pension supplement which we have also managed to secure. I also point out that, if the GST were to come in today rather than in July 2000, that pension supplement would be $14.50 per fortnight for single pensioners. With inflation and other effects that will probably be more. For couples the supplement would be $24 combined additional pension per fortnight. This supplement is to be paid on top of the basic rate of pension for those pensioners who will receive it. We believe that the Senate should vote very strongly for this measure.12:40:006564Cook, Sen PeterSenator COOKRF4WAALP00—I put a question to the government, and the government has sat with its arms folded. Does the government intend to answer this question or not?10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Ferguson)—Senator Cook, I only call those people who stand. It is not for me to decide who is going to answer and who is not. You have put your question again, and I do not see anybody standing, so I will put the amendments.RF4COOKSenator Cook—Then I will seek the call, Mr Temporary Chairman.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Senator Cook.12:40:006564Cook, Sen PeterSenator COOKRF4WAALP00—We have just had a self-serving explanation from the Australian Democrats as to what they have achieved in this package. The truth is that they have voted for a GST to be imposed on Australia. You do not need to compensate for a GST if there isn't one. This package deals with compensation for self-funded retirees. The only reason this legislation is necessary is that we have a GST. The things we know about a GST are that inevitably the amount of tax rises—the tax being proposed here is 10 per cent; no-one in Australia believes that it will remain constant at 10 per cent forever and a day—and the other thing we know about a GST is that, wherever it has been applied, the bonuses or the compensation to offset the regressive impact of this flat tax erode over time. The two things we know about a GST are that the amount goes up and the compensation goes down over time.This is the question I asked the government. They put an offer to Senator Harradine: will they now outline to the chamber what that offer was, where it differs from the compromise agreement they have arrived at with the Australian Democrats, and will they say what that difference is? The government sits in this debate declining to answer those questions and declining to bring into this Senate chamber, for the information of all Australians, what their backroom dealing has been. On the basis of their absolute refusal to answer the question, it would be idle for me to conclude that they do not know the answer to it, since they are the authors of it, so the only conclusion open to me now is that the government do not wish to tell Australia what their proposal was and that, if they did, the proposal that they have now arrived at with the Australian Democrats would be seen for what it is: something less than what they were originally prepared to do. That is the only respectable conclusion able to be arrived at, because the conclusion of ignorance—`I didn't know'—is not one open to the government, who are the authors of this proposition.So we go back the fundamentals of the GST. We know the amount rises and we know the compensation erodes. It seems to me that since the government are reluctant or refuse to tell us what their position is one ought to go on to the other part of the argument: is this adequate compensation for self-funded retirees or is it not? In this debate over the last week or two I have become sick and tired of the fact that every time I ask the government a question an Australian Democrat rises and gives the answer. When you turn to the government for an answer, they are locked up at the advisers box seeking more information, because they either do not know—and when they get that information they sign off on the Democrat explanation—or sit pat, like they are now, declining to report to the chamber an answer to a reasonable question and a question that Australians are entitled to know the answer to.In these circumstances I think it is fair to conclude that this package is unfair for self-funded retirees, who are people on fixed incomes and who are most at risk if taxes, charges, prices or costs increase in the community. They are on fixed incomes. They are not in a position to negotiate a bigger income for themselves. They are not beneficiaries on the social welfare system. They have provided for their own retirement out of prudent investment or arrangement of their business affairs in such a way as to save themselves being beneficiaries and therefore they do not draw down on taxpayers' money. As a group of Australians in the community, they are entitled to due and proper compensation for an imposition of a new tax. No-one disagrees that the GST will impose higher costs.Last week when we had this debate, indeed on Friday, the Australian Democrats made much of the fact that in the Weekend Australian of the previous Saturday there was a published set of tables by Professor Harding and Professor Warren, who are regarded around Australia as being the experts on the distributional effects, that is to say, the equity effects—are things fair?—in the distribution of the tax cuts and in the distribution of the compensation with respect to the GST; in other words, do the compensation and the tax cuts fairly offset the costs and charges that Australians will have to meet when they pay a new tax like a GST?In that debate, I was referred to the Warren-Harding analysis. I was referred in that debate confidently, if I might say so, by the Australian Democrats on the basis that there would be no Australian losers. The comment was, `Go and look at the Warren-Harding tables. No Australian loses.' I have the Warren-Harding tables before me at the moment. This is the document that I was referred to. It was published in the Weekend Australian of 19-20 June—that is, the weekend before last. Under the headings `Single self-funded retiree' and `Self-funded retiree couple' it was stated that there are losers, there are people who will be worse off. So these compensatory provisions that we are debating now do not mean that no-one will be worse off. People will suffer. I remind the chamber again that these are people on fixed incomes. They are not people able to gain a higher income for themselves by negotiating new wages. They are people who live off their investments; they have fixed incomes.According to these tables, a couple of categories of self-funded retirees will be worse off. Importantly, when one looks at the categories of which self-funded retirees will be worse off, one sees that it is those self-funded retirees on lower incomes. These are not the wealthy millionaires able to live off their savings. These are Australians who have eked out investments for themselves. They have a modest income from their investments of between $10,000 and $20,000 a year but they are too proud to take a pension; they want to live off their investments. These are the ones that are worse off, the ones that are hit. These are the ones who cannot find extra income in their household budgets to compensate for the higher costs that they will be meant to be paying under a GST. It is no wonder, therefore, that at the beginning of this debate when I said to the government, `You have moved your amendments, but you haven't explained them to the chamber,' their approach was to sit pat. They declined to explain them. If they do try to explain them they will have to refer to the fact that if these amendments go through some Australians, among them self-funded retirees, will suffer. It is no wonder they are quiet and do not want to say anything. They do not want to draw attention to that fact.I listened carefully to Senator Woodley's explanation. I am used to the routine now. You ask the government a question, a Democrat provides the answer and the government nods its head and does not say anything. Senator Woodley's argument did not go to the fact of whether people will be worse off or not. It went to the argument that the Australian Democrats have made it a bit better and not so many people will be worse off. It is not that everyone has had their position met and that no-one will suffer; fewer people will suffer. This is an argument that the Australian Democrats used to justify their compromise on the GST. But, like a compromise, it does not fix the problem: it fixes part of the problem.I do not know why the Democrats are so lily-livered when it comes to negotiating with this government. Given that the government requires their vote to get the bill through, why did they not exercise their negotiating clout properly in order to make sure that no-one will be injured by this measure? The fact that they tolerate injury means that they are not fair dinkum when it comes to all their professed self-belief about protecting those people in this community that cannot stand up and protect themselves. It means that they are not prepared to have a decent red-hot go when it comes to people who are at the bottom end of the income scale trying to survive off their own investment and who need legislative backup to ensure that they are properly compensated for the new cost of a tax.Why do the Australian Democrats not do that? It is a worthwhile question to put to them. They had John Howard at the negotiating table. He required their vote to allow this legislation through. Why did they not hold firm and make sure that no-one suffered? Why did they allow some Australians to suffer? It is because they wanted a headline about how good they are as a serious political party. It is not a serious political party that reaches a compromise for the sake of public appearances but, when you look at the fine print, sells Australians down the river and makes them worse off.I again say to the Australian government, `When you rise to justify your position, will you give us the benefit of making an explanation about your offer to Senator Harradine?' I am not at all certain that it will have the courage of its position to explain it to the chamber, since I have already invited it to do so and it has refused. This is a very important issue because an offer was made to Senator Harradine, although it was rejected. I must say that it was rejected on the very moral basis that it did not solve the problem: it went part-way to solving the problem but it did not fix it up—exactly the basis the Democrats have committed their vote on. Senator Harradine, as a moral person, declined to commit his vote, and because he did that the Prime Minister said to the Australian community, `I will legislate what I promised Senator Harradine by way of my offer. I will put that in black-letter law.' Has the Prime Minister revealed the terms so we can test whether he is keeping his word by that commitment? No; we just have to take the Prime Minister on trust. Remember, this is the Prime Minister who said, `Never ever will there be a GST.' We have to take that person on trust that, although he is not revealing the contents of his offer to Senator Harradine, he is legislating for it.But we know this piece of evidence as well: we know, from the lips of the Australian Democrats themselves, that not all the things that the Prime Minister promised Senator Harradine are being legislated in this package, that some of them have changed significantly or importantly and that some of them are being delivered at a lesser level than had been undertaken. Unless the government can actually prove, by now tabling the documents concerning what they offered Senator Harradine, that they are not here dudding self-funded retirees, we must assume that their silence means that they are not prepared to tell the truth and back up the Prime Minister by saying, `Here are the documents on what we promised. You can see for yourself that we are now delivering it.' If you have nothing to fear, why not come clean and give us the evidence? The fact that you sit silent and do not want to engage in this debate suggests that you have quite a lot—10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Ferguson)—Senator Cook, please address the chair.RF4Cook, Sen PeterSenator COOK—I do address those remarks, Mr Temporary Chairman, through you to the Australian Democrats. I believe that this amendment does not go far enough and sells out self-funded retirees. The bonus for retirees goes nowhere near to compensating them for other items that they will have to pay a GST on and there are a number of items that they will have to pay a GST on for the first time. Self-funded retirees are often older people in need of the purchase of services that they themselves find difficulty in delivering. Many of them engage someone to mow their lawns or prune their gardens and require assistance with household maintenance, plumbing, electrical work and painting, et cetera. They are not significantly capable of doing that themselves, so they engage outside help. They may have covered that in their original budgets, but one must remember now that they will have to pay an extra 10 per cent GST for the first time on all those services.That is one of the reasons why this package does not go far enough to cover the cost of those extra charges that they will face. We also know from the Senate inquiry mentioned a moment ago by Senator Woodley that the Australian Investors Association, which gave evidence in Brisbane, gave evidence about what they regarded as the disastrous effect of a GST on retirees. I refer the Senate to the committee report for a full summary of that evidence. They wanted proper and full compensation in those circumstances. There are a lot of questions that have to be answered here. I will conclude my remarks because the light is on and I will have to sit down soon. We may not get the answers. The Australian Democrats and the government have imposed a guillotine on this debate so that if they do not answer the questions now, we will never get the answers because they are going to cut off this debate, stop our line of inquiry, and shut it down with a vote. They call that democracy! They ought to go and hang their heads in shame. These are serious questions about the welfare of Australians who have to face a new tax for the first time, but you are not properly compensating for it. (Time expired)12:55:006567Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—I am absolutely amazed to hear the Uriah Heep on the other side of the chamber wringing his hands over self-funded retirees. My memory is long enough, even if Senator Cook's is not, to just remember what the Australian Labor Party in government did to self-funded retirees. Let me start with probably the most heinous crime of all, that is, letting inflation rip in this country. That was a dreadful thing for people who are retired, an absolutely shocking thing, where the value of their assets and their savings simply disappeared—it left them high and dry in very worrying circumstances. What did Labor ever do that was good for self-funded retirees?Yet this government is introducing substantial tax cuts for all Australians who have an income. This government is abolishing provisional tax, which is a great worry to older people and retirees generally. We have kept inflation low and provided the Commonwealth seniors health card for up to 220,000 more Australians—self-funded retirees every one of them. The tax reforms introduced in the package of measures that are before the chamber mean that the 50 per cent taper rate for the old age pension being reduced to 40 per cent will lead to 50,000 more people being able to access a part pension, including a pensioner concession card. Those 50,000 people are currently all self-funded retirees. It is an incredible thing that we could observe that wringing of hands from Senator Cook on behalf of the Australian Labor Party when this government has done all those things that have helped self-funded retirees, with more to come under the legislation that is in front of us.Do not forget the tax rebate treatment, which now means that self-funded retirees and pensioners are getting the same treatment there. I remember Labor being lobbied about that long and hard. The Association of Independent Retirees tried very hard for a number of years to get the Australian Labor Party to do something about that, but they sat on their hands. They did not sit on their hands entirely of course because they said that there were going to be l-a-w tax cuts. They introduced the legislation, they did not say that there would be any wholesale sales tax increases and they went to an election. The people of Australia voted them in again in 1993—but they did not get the tax cuts.DX5MARGETTSSenator Margetts—Mr Temporary Chairman, on the standing order in relation to relevance, we have the government's amendments to these bills in front of us. Perhaps you could ask the minister to speak to her own amendments?10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—There is no point of order. Senator Cook ranged reasonably far and wide in presenting his point of view. The minister is talking about matters of interest that relate to the amendments before us and she is not out of order.RF4COOKSenator Cook—On the point of order, Mr Temporary Chairman: since you have ruled out relevance, although the minister is talking about the alleged sins—and quite improperly and misleadingly because most of what she is saying is not entirely right but that hasn't stopped her before—10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—What is your point of order?RF4COOKSenator Cook—My point of order is that I have put a couple of direct questions to the minister. Apart from smearing the Australian Labor Party, will she bother to answer either of them?10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—That is not a point of order, Senator Cook.BE4Newman, Sen JocelynSenator NEWMAN—Senator Cook is only a new chum here, Mr Temporary Chairman, and he does not know that. I would also like to point out that Senator Cook has just misled the Senate in the speech that he made. He was referring to Professor Harding and the use made by the Democrats of her findings on Friday, I think he was saying, with regard to what is going to happen to people under the amended package agreed with the Democrats. Senator Cook talked about some self-funded retirees remaining losers under the compromise tax package: a single person with $10,000 in private income and a couple with $20,000. He quite dishonestly refused to read the second sentence of that paragraph.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Order, Senator Newman. I would ask you to withdraw that imputation.BE4Newman, Sen JocelynSenator NEWMAN—I withdraw. It is mysterious that Senator Cook managed to miss the second sentence in that paragraph, which I will read into the record. It reads:But Professor Harding said these examples were unrealistic because these people should qualify for the pension unless they had expensive assets over and above the family home.I was talking about wholesale sales tax when Senator Margetts called the point of order. That is very relevant to what is before us today because, when the wholesale sales tax went up substantially after the 1993 election, with no prior warning and with no compensation at all, that hit all Australians. It inevitably must hit people on fixed incomes who are not in the workplace and who have little or no chance of increasing their savings when they want to buy replacement items for their home, for example.Many older people, when they retire, want to make sure they can replace their fridge, which may have seen better days—like they often feel they have themselves—or perhaps their TV is on the blink once too often and it costs them a lot in service charges. When a whole range of electrical goods need replacing after a lifetime, as they do, the increase in wholesale sales tax hits retirees very hard. By comparison, this tax package will mean the cost of the purchase of whitegoods and browngoods will be reduced substantially. That will help all Australians, but it will be particularly valuable for people who are in retirement and whose savings are finite.These government amendments do relate to a supplementary bonus for self-funded retirees aged 55 and over on 1 July next year in the limited circumstances where the retiree has no more than a $1,000 business and/or salary income during the 1999-2000 tax year and has not received any income support payment during that year. That is an important factor in the whole consideration of tax reform. There will be extra costs on some items, for which the government and the Democrats agreement is providing additional compensation, but on a number of quite costly items there will be a reduction in price. Those reductions will be in an area that is very important to older Australians.We continue to hear this same old chant from the ALP that the compensation will erode over time. I do not think it is necessary to go through that whole debate again. The ALP have run this line every chance they have had in this debate. It is not true. The compensation measures, as now completed in the drafting, will mean that the compensation remains indefinitely for people who need assistance through the pension or for people on low incomes. We are obviously just wiling away the time, as the ALP want to use up the time between now and half past one. I daresay we are going to get simply more of the same. It is becoming very tedious, and I wonder whether they want to call it quits now.13:04:006569Sherry, Sen NickSenator SHERRYZW4TASALP00—I just want to make a couple of points about this. People who are in retirement are overwhelmingly dissavers. They no longer continue to save money; they are actually running down their savings, for fairly obvious reasons. They are generally no longer employed or earning an income, and they are spending the money they have accrued throughout their working life. That is why a switch to a consumption tax, in this case a goods and services tax, has a particularly detrimental impact on people who are close to retirement or who are already retired. Because elderly Australians are overwhelmingly dissavers, it is difficult to disaggregate this and, I would argue, impossible to make any claim that elderly Australians are all better off and that there are no losers, as Senator Cook highlighted in the couple of examples that he gave the Senate earlier.What is interesting about the difference between the government's initial package and the requests that the Senate is considering is that the latter drops the age for the qualification of the self-funded retiree supplementary bonus down to 55. What is interesting about that is that it is, in part at least, attempting to compensate for another measure that this government introduced shortly after it came into office: the so-called deeming provisions, whereby persons who had reached the age of 55 had their superannuation deemed.These particular requests that we have before us are in contrast to the deeming provision that this government introduced, which effectively forced people at the age of 55 to run down their savings and which, I might say, Labor fought hard and long against. It is a contradictory policy approach. To some extent you are attempting to give back moneys, having taken substantially more moneys off people who reached the age of 55.My main concern with all this is how to guarantee that this inadequate compensation the Senate is considering for retired Austral ians will be maintained forever. One of the great difficulties with a GST is that invariably the compensation payments made—not just to retirees but to other people in society who are disadvantaged—do not remain forever. We only have to look across the Tasman to New Zealand to see what occurred there. One of the requests we are considering in relation to A New Tax System (Bonuses for Older Australians) Bill 1998 is a self-funded retiree bonus at age 55. In the explanatory memorandum that is costed at $150 million. I guarantee the Senate—I do not guarantee much to the Senate; politics is that sort of game—that, at some future date, the Department of Finance and Administration and the Treasury will be viewing this $150 million of expenditure with some considerable concern.Like the government's activities shortly after it was elected when it introduced the deeming of superannuation at age 55, I am sure that Treasury and Finance would be eyeing off these compensation measures for future reduction in future budgets. I am sure that, at some future date when economic growth declines, as it inevitably will at some point, and there is a need to adjust budget expenditure, it will not be the higher income earners who gain very significantly from the income tax cuts that we will be considering after 1.30 p.m., who will be targeted for future budget cuts; it will be people who are retired, pensioners, self-funded retirees and lower income Australians. I am sure that these are the sorts of areas that will be targeted by this government in future budgets.So I have two basic reasons: firstly, the inadequate compensation for people who have saved all their lives, and generally saved after they have paid tax. There is an interesting overall comment on a GST on people who are retired or close to retirement: they have been taxed on the way in and they are taxed on the way out. They are taxed on the way in because invariably much of their savings has been made from after-tax income earned during their working lives. Because they are dissavers—they are running down their savings—they are particularly hard hit by an expenditure tax, in this case a goods and services tax. Secondly, there is the difficulty you have in guaranteeing—locking in—these sorts of compensation measures forever. It would need to be forever. It is not just persons who are close to retirement or currently retired whom we need to be concerned about. It is people who are in their 40s at the moment and who have saved considerable sums. I would be very doubtful that these sorts of measures will be in place for people who are currently in their 40s and intend retiring in 15 or 20 years time.I, like my colleague Senator Cook, am extremely concerned at the very poor outcome that the Democrats have reached on this issue. Firstly, it is next to impossible to compensate older Australians for a consumption tax. Secondly, it is certainly impossible to guarantee that these inadequate compensation measures that they have negotiated with the government will remain locked in forever. I issue a word of warning to the Democrats. We do not need to warn the government because we know what their approach will be in a few years time—roll back these compensation measures for the elderly. That will be their approach. I warn the Democrats that, at some future date, the pressure will come on, whether they have the balance of power or not, to roll back these sorts of compensation measures. That is certainly one of my underlying concerns with the approach that has been taken by the Australian Democrats, and the very poor outcome that they have negotiated for retired people or people who are close to retirement in this country.13:12:006570Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I have a question that relates to my earlier point of order. We are dealing here with the A New Tax System (Bonuses for Older Australians) Bill 1998 and my question is, first of all: is Senator Newman the minister with carriage of the bill or in this instance is she sitting in for Senator Kemp? The reason I ask this is that earlier on in the debate Senator Cook asked a number of questions on issues relating to these amendments, but more importantly he asked Senator Newman whether she would briefly explain the amendments she herself moved. We have not heard either of those answers. So my question is: is Senator Newman the minister with carriage of this bill? Even if she is not and is standing in for someone else, there should be some explanatory notes to go with the amendments that have been moved. I do not think it is unreasonable for the Senate to ask for a brief explanation of the amendments that are being moved.Considering we are dealing with a bill that is intimately linked with the whole package, I also ask leave to incorporate in the Hansard six pages from Commentaries on the Constitution of the Australian Commonwealth by Quick and Garran which specifically relate to section 55 of the Constitution.Leave granted.The pages read as follows—254. The Imposition of Taxation.During the debate on the financial sections 53 and 55, the meaning of the expression "the imposition of taxation" was discussed, and the question raised whether a law imposing taxation and also providing for its collection would be ultra vires of the Constitution. Doubts were suggested whether the restriction that tax bills should deal only with the imposition of taxation might not be read so as to exclude from tax bills the ordinary machinery clauses, providing for the assessment and valuation of property, the subject of taxation, and for the enforcement and collection of the tax.Referring to this point, Sir Samuel Griffith wrote: "A more serious question is whether provisions regulating the collection of taxes should be allowed to form part of the same laws by which the amount of the tax is fixed. This point should be clearly settled and expressed." (Notes on the Draft Federal Constitution, 1897, p.9.) Mr. Isaacs understood this note to mean that "imposing taxation" does not include collection and machinery. (Conv. Deb., Melb., p.2049.) Mr. Barton was inclined to think that, according to the well-known principle that the grant of a power includes all the necessary means for its effective exercise, the exclusive power given to the House of Representatives to originate bills "imposing taxation" would carry with it the subsidiary power to provide machinery in the same Bill for the collection of the taxes. It was pointed out that according to the practice observed in some constitutionally governed countries, taxing bills, fixing the nature, amount, and incidence of proposed taxes, were kept separate and distinct from machinery bills, dealing with such details as collection, assessment, and valuation. "Would not the power of collection be embraced in the power to impose taxation?" asked Sir Edward Braddon. (Conv. Deb., Melb., p.2056.) Mr. Barton said that power to collect would be, ordinarily, included in the power to impose taxation, but in a section such as this, so strong in its intention to restrict laws imposing taxation to the mere imposition of taxation, it might be as well to remove doubt by adding after "imposition" the words "and collection." It was pointed out, however, that as the Senate was prohibited from amending proposed laws imposing taxation, the addition of the words "and collection" would have the effect of depriving the Senate of the power to amend matters in a tax Bill, relating to its method of collection."I confess that when I first proposed the amendment I did not see the extent to which it went. But, having appreciated the extent to which it goes, I still feel bound to adhere to it. The difficulty that would arise unless you allowed the House of Representatives to include in these Bills the ordinary powers of assessment and collection would be, that, while you might have a certain tax imposed in the Bill fixing the amount of the tax, the machinery Bill might be so subject to amendment by the Senate that the whole financial policy of the Government which introduced it, with a majority of the House of Representatives behind them, might be entirely subverted. That is a difficulty which, I think, none of us wish to create. Therefore, I am prepared to take the responsibility of adhering to the amendment. Holding the position I have always held, that the Senate should be a real body and not a mockery of State interests—while it should be a Second Chamber holding definite powers and rights as expressing the will of the people within the States which it represents—I have also held that we should only carry responsible Government into effect by making it real and effective, and a power of amending a machinery Bill to the extent of making a tax not worth collecting would be equal to the power of amending a Bill imposing taxation." (Mr. E. Barton, Conv. Deb., Melb., p.2060.)"All I am endeavouring to do is to attribute a meaning to words in this Constitution, which I believed in Adelaide—and I explained my belief as I have read—that they did convey, which I am inclined to believe now they do convey, without a special explanation; but as to which I am in serious doubt, because of the very strong express nature of the words `shall deal with the imposition of taxation only.' It is in order to remove that doubt, and for that purpose only, that I wish these words to be inserted, and I really do believe that the insertion of the words will carry out the real spirit of the understanding of 1891." (Id. p. 2067.)Mr. Barton's amendment to add the words "and collection" was rejected by 26 votes to 16. But see Note, 248, supra.255. "Shall be of No Effect."The next important point discussed was whether a law violating the rule forbidding the combination of taxation with any other matter, or the rule forbidding a tax Act to contain more than one subject of taxation, should be void in toto, or should be void only to the extent of the irrelevancy, or to the extent of the additional subjects. Mr. G. H. Reid moved that the prohibition should not invalidate any part of the law which did not infringe the provisions of the Constitution, and that if any law imposing taxation contained more than one subject of taxation, the tax first in order of enactment should be taken to be properly passed. (Conv. Deb., Melb., p.2089.) This amendment was negatived by 27 to 15 votes. The feeling, however, prevailed in the Convention that some provision should be made in the Constitution, to the effect that only the parts of the Act in which the forbidden matter existed should be invalid. At a later stage Mr. Reid moved the insertion of the words "and any provision therein dealing with any other matter shall be of no effect." This amendment was accepted without a division. (Conv. Deb., Melb., 2415.)256. "One Subject of Taxation Only."By the first paragraph of the section, laws imposing taxation must deal only with the imposition of taxation. If the section contained no other limitation regulating and restricting the exercising of the taxing power there would be nothing to prevent the House of Representatives from sending to the Senate a bill containing a number of separate and independent taxes. The section, however, goes on to enact that laws imposing taxation shall, with the exception of those relating to customs and excise, deal with one subject of taxation only. It is necessary to explain the object of this limitation. By the second paragraph of sec. 53, the Senate is deprived of the power to amend tax bills, but it may constitutionally reject them. In order to maintain its right to veto, in detail, each specific tax to which it objects, without thereby involving the rejection of other taxes of which it approved, the Constitution prohibits the combination of taxation proposals; it requires each proposed tax to be submitted by the House of Representatives to the Senate, in a separate bill. This procedure being followed, the Senate can exercise its discretion with respect to each tax, without being coerced to pass a tax to which it objects, in order to carry a tax which it desires. In this respect the Senate will have greater control over taxation than the House of Lords enjoys.The Papers Duties Precedent may be here referred to in illustration of the manner in which sec. 55 will operate in strengthening the Senate. In 1860, the Commons determined to balance the year's ways and means by an increase of the property tax and stamp duties, and the repeal of the duties on paper. The increased taxation had already received the assent of Parliament, when the Lords rejected the Paper Duties Repeal Bill, and thus overruled the financial arrangements voted by the Commons. That House was naturally sensitive to this encroachment upon its privileges; but the Lords had exercised a legal right, and their vote was irrevocable during that session. The Commons, therefore, to maintain their privileges, recorded upon their journal, 6th July, resolutions affirming that the right of granting aids and supplies to the Crown is in the Commons alone; that the power of the Lords to reject bills relating to taxation "is justly regarded by this House with peculiar jealousy, as affecting the right of the Commons to grant the Supplies, and to provide the ways and means for the service of the year; and that to guard, for the future, against an undue exercise of that power by the Lords, and to secure to the Commons their rightful control over taxation and supply, this House has in its own hands the power so to impose and remit taxes, and to frame bills of supply, that the right of the Commons as to the matter, manner, measure, and time may be maintained inviolate." In accordance with these resolutions, during the next session, the financial scheme of the year was presented to the Lords for acceptance or rejection as a whole. The Commons again resolved that the paper duties should be repealed; but, instead of seeking the concurrence of the Lords to a separate bill for that purpose, they included in one bill the repeal of those duties with the property tax, the tea and sugar duties, and other ways and means for the service of the year; and this bill the Lords were constrained to accept. The budget of each year has since that occasion been comprised in a general and composite Act—a proceeding supported by precedent. In 1787, Mr. Pitt's entire budget was comprised in a single bill; and during many subsequent years great varieties of taxes were imposed and continued in the same Acts. (May's Parl. Prac. 10th ed. pp. 550-1.)From this precedent it appears that the Commons have the right to send to the Lords a single scheme of taxation embodying the repeal of old taxes and the imposition of new taxes; the functions of the Lords being, in such a case, limited to a simple assent to the whole scheme or a simple negative of the whole scheme. Such a composite or general tax bill could not be submitted by the House of Representatives to the Senate; it would be unconstitutional, the maxim being "one tax one bill," except in the case of bills dealing with customs and excise.We have now to consider what will be the consequence if Parliament should, whether by accident or design, pass a law imposing taxation, yet dealing with more than one subject of taxation—a law, say, imposing an income tax and a stamp duty. A proposal that the tax standing first in order in the enactment should be valid, whilst the other, or others, next in order should be null and void, was rejected by the Convention. No provision is made in the Constitution, therefore, for segregating the taxes and providing for the validity of one and the nullity of the others. Where the Constitution intends that one portion of an Act only shall be of no effect and the rest operative it is so expressed. The only conclusion is that an Act embodying a plurality of taxes would be absolutely and completely ultra vires.DX5Margetts, Sen DeeSenator MARGETTS—I thank the Senate. I would be very interested in responses from the minister in relation to the carriage of the bill.13:14:006572Murray, Sen AndrewSenator MURRAY3M6WAAD00—The Labor Party are, of course, quite right. In considering these matters, you do have to have regard to what a future government would do. In that respect you have to have an eye on what a future Labor government would do. With that regard, past actions do indicate possible future attitudes as well as present actions. We do know, as the minister has pointed out, that in 1993 when Labor introduced the wholesale sales tax changes they did not provide compensation because they do not believe in providing compensation for regressive indirect taxes such as the wholesale sales tax. They also at that time affected self-funded retirees by taxing deemed capital gains. They did not compensate for that either. They also introduced an excessively high provisional tax and did not compensate for that either. My guess would be that, if the Labor Party vote against any of the compensation bills which are within this package, that will be a signal as to their likely attitude to whether or not they would seek to withdraw compensation—or, to use their words, roll back the package—when they perhaps come into power at the next election. I think there is a warning there for us all.They have already, as we know, indicated that they believe food should be taxed. We do know that Senator Cook has said that that is a strategic decision and they do not really want to tax food, but I must say, having heard the shadow Treasurer on Sunday, I remained unconvinced that Labor did not want to tax food. So we have the potential of a future Labor government affecting self-funded retirees by winding back compensation and by taxing food.RF4COOKSenator Cook—We are not going to wind back compensation. Our position is not to wind back compensation but to wind back the tax.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Ferguson)—Order, Senator Cook!3M6Murray, Sen AndrewSenator MURRAY—I heard Senator Cook in silence. My point is that, if the Labor Party supports this bill, that will indicate that they do support compensation. If they oppose it, my view is that it indicates that they do not support compensation. I cannot put it clearer than that. As for the rolling guillotine, which I think was introduced originally by the Labor Party, I do not have to remind anyone in here that we have had the longest debate ever on these bills.Returning to the issue laid out in the criticism of this package, as the explanatory memorandum says, it does attend to the extension of the self-funded retiree supplementary bonus to persons aged 55 years and over. Senator Cook drew attention to the Warren-Harding modelling. The minister quite rightly responded with the very clear qualification they put on that particular instance. The point is that, if self-funded retirees own their own home and do not smoke and if the real appreciation effect is taken into account, they will be $2.38 a week better off. Do I wish that they would be even better off? Of course. Everybody would like everybody to be better off. But that is as far as you can go with these things. When we look at the Access Economics modelling, we notice that their modelling did not take into account the franking credits adjustment. That is about $550 million which will be of benefit to this group of people. That was not modelled in there. Unfortunately, I am not able to do that arithmetically, but if that is taken into account their position improves even more.I simply say in response to all this that not only have the Democrats attempted to ensure with the government that this category of persons is properly compensated in view of the introduction of the GST, despite the taking away of the WST, but also we have attempted to put them in the position where in real terms they are better off. I appreciate that that is modest, it is not a vast sum of money, but nevertheless our calculations and our assessment of the matter are that they will be better off—unless, of course, a future government were to roll back compensation and to tax food.13:19:006573Cook, Sen PeterSenator COOKRF4WAALP00—I want to conclude my remarks in ample time for the minister to have at least a third opportunity to answer the questions that I have put. I notice that the minister has taken advantage of the opportunity to speak in this debate but she has not taken advantage of the opportunity to provide any explanation about her own amendments and she has not taken the opportunity to actually answer the questions which I sought answers to and which I put to her very early in this debate. All she has done is enter into a general political rave, some of which, but not all of which, was misleading, about what Labor is supposed to have done.BE4NEWMANSenator Newman—Or not done.RF4Cook, Sen PeterSenator COOK—Or not done.BE4NEWMANSenator Newman—Yes, and should have done.RF4Cook, Sen PeterSenator COOK—Okay, you can put all your qualifications up. All you allege about that is a debate we can have, because that is a debate in which you have not depicted the record of the Labor government at all accurately, nor would you, because it suits your purpose not to. I remind the minister that this is the government's legislation that is before us now and it is for the government to answer now what it is proposing to do. Harking back to history is interesting, but it is not the question that Australians want to know about today.This is what you are proposing and this is a bill to compensate for a GST, and you decline to answer the key questions as to whether the compensation provided now is equal to the compensation offered by the Prime Minister to Senator Harradine. I have put that question to you now three times and every time you have declined to answer it. We want to know whether the Prime Minister, who said that he would deliver on what he promised Senator Harradine, has in fact delivered here, despite the fact that the Democrats say, `Well, that is not entirely true. The Prime Minister has not delivered.' That is what they said on the record before. It is a question of honesty in politics. The fact that you will not answer any questions or provide any explanation is the most eloquent testimony to the fact that you have not got an explanation or an answer because, if you did provide them, you would be shown for what you are doing in these circumstances, which is not treating truthfully with the Australian electorate.I have respect for Senator Murray, but I find it a bit rude, if I may say so, of Senator Murray to tell people what the Australian Labor Party will do in office. We are the authority on what we will do in office—not the Australian Democrats who have a vested interest in painting us black in this debate. We have said that once a GST is introduced it is almost impossible to remove it. No-one really argues that point. Think about the number of state taxes and charges that would be removed. How would you replace them? Think about the way in which the tax scales are being remodelled. How would you model them back? And think about all the extra costs and charges that will be imposed for the first time on services.We say that it would be very difficult to unscramble this omelette once it has been made. I draw the line again in this debate. We have drawn the line in this chamber: we do not want a GST because unscrambling it is almost an impossibility. Kim Beazley has said that we will work at trying to do the best we can. The governing rule that we apply in this debate about taxation is that Australians should be treated fairly. It is a bit rude to argue that a future Labor government may withdraw compensation. That is not our position at all; we have never said that. We are not committed to do that, and nor would we be—but it takes the heat off focusing on the issue before us now.The issue before us now is that, despite the compensation, a number of Australians will be worse off. That is the issue before us now. You said that no-one will be worse off. That is not true. The minister might try to explain that in some cases these people are entitled to claim the pension. I draw attention to the evidence of Mr Bricknell on behalf of self-funded retirees before the Senate Select Committee on A New Tax System. He said that many of these people do not draw the pension but live off their savings.Let me now conclude, because I want to allow time for the minister to answer the questions I have put. The guillotine voted on by the Democrats and the government to kill this debate will descend in five minutes, so the minister will have one last shot to answer the questions about what the Prime Minister offered Senator Harradine so we can see whether we have the same deal here. Before I exit the stage, let the last word be from a self-funded retiree, as these are the people we are devoting our attention to at this stage of the debate.In the edition of the Weekend Australian in which the tables that I referred to were published, there were a number of vignettes or snapshots of how people will be affected and what they think about it. Above the heading `Retiree', there is a photograph of a woman called Kate Arnold. It says that she is 70, is divorced and lives in Canberra. Her income is $22,000 from superannuation and a small British pension. She has a daughter aged 39. She pays no rent or mortgage and her only government payment is a health concession card. She spends about 80 per cent of her income. It is alleged under the tables of the economic modellers that she will be $41.04 ahead. What does she think about that? Let me quote what Matthew Spencer reported she said:KATE Arnold has been around too long, she says, to accept economic modelling suggesting she will be $41.04 a week better off under the new tax package."I don't believe it," Ms Arnold says."It's tenuous as far as I'm concerned. Economic projections are very questionable—they're like statistics."Nothing is going to compensate for the increase in service charges to start with."The article then goes on to describe her circumstances. The last paragraph says:However, Ms Arnold still believes the GST will fall unfairly on low-income women, particularly as there are more older women in the community.Let the last word in this debate be from someone affected by it. Her income is within the range in the tables which shows people who will be worse off. She does not believe the modellers who make assumptions that if you do not have to pay for housing or if you do not buy cigarettes you will be better off. She does not believe the assumption that inflation will be 1.9 when, in fact, we know it will be 2.3 in the first year. She does not believe a number of the other assumptions—blithely made by economists for a nice model—which do not hold true to what people experience in real life as they struggle with their household budgets.Kate Arnold does not believe that the cost savings will be passed on in their entirety and that no-one will bother to appropriate some of the cost savings to their profit and pocket it themselves rather than give it to the consumers. She does not believe any of that because she has come up through the world of hard knocks. She knows what happens in real life. Life does not conform to an economic model. It conforms to a whole series of imperfect applications of cost where people are trying to maximise their profits. She knows that. She also knows that the assumption of compliance costs—which we now know is $1.9 billion for small business—will be passed on. That was not included in the model either. She knows a lot of those practical, real life things. It is her last word that the Senate should have regard to.We will support the compensation because the government is going to make sure that at this level it is done and it is not provided anymore. We will vote for this in order that someone can get something out of it, but that is not the ideal outcome—not by a long stretch. I will stop here. Perhaps, Minister, you will answer my questions.13:28:006575Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—In the very short time that Senator Cook has quite deliberately left me, I will answer some of the questions that have been raised. Senator Sherry went on and on at some length about how compensation measures do not last forever. If anybody looks at the Hansard later on, it will reveal just how altogether ignorant he is of the compensation measures. I will not waste time on him.Senator Margetts referred to section 55 of the Constitution. This legislation does not impose a tax, if that was your general drift, Senator Margetts—and I am the minister responsible for this legislation. I also draw senators' attention to the fact that retirees frequently have children and grandchildren. As I have gone around the country, I have found that, even where the ALP has managed to frighten older people about tax reform, those people have still constantly said to me, `Look, I'm not sure what it will do for me, but I know it will be good for my country and it will be good for my kids and my grandkids.' The ALP only looks backwards. It has its mind shut to the future. This legislation means reform for Australia for the next century and the ALP has been left behind—it is a sad thing for Australia.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Ferguson)—Order! The time for consideration of the bill has expired. I put the question that the government requests and amendments be agreed to.Question resolved in the affirmative.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—I now put the question that the bill, as amended, be agreed to, subject to requests.Question resolved in the affirmative.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Proceedings on the bill now being completed, I will report progress.Progress reported.Sitting suspended from 1.31 p.m. to 2.00 p.m.Ministerial Arrangements657514:00:006575Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—I seek leave to make a statement about ministerial arrangements.Leave granted.LD4Alston, Sen RichardSenator ALSTON—I inform the Senate that Senator Robert Hill, the Minister for the Environment and Heritage and Minister representing the Prime Minister, the Minister for Trade, the Minister for Foreign Affairs and the Minister for Forestry and Conservation will be absent from the Senate for question time today. Senator Hill is attending the funeral of Judge Pasquale Pironi, late of South Australia's District Court, in Adelaide. During Senator Hill's absence, I shall take questions relating to the Prime Minister's portfolio, the Trade portfolio and the Foreign Affairs portfolio. Senator Minchin will take questions relating to the Environment and Heritage portfolio and the Forestry and Conservation portfolio.Questions Without Notice657665766576West, Sen SueSenator WEST1X4NSWALP00—My question is to Senator Kemp, the Assistant Treasurer. Is it true that the government has sought legal advice on whether the excise reductions proposed under the ANTS package breach section 92 of the Constitution by effectively discriminating against the owners and drivers of the 60,000 petrol powered trucks of over 4.5 tonnes which operate in regional and rural Australia, who will not get any benefit from the reduced diesel excise? If so, will the government release that advice?6576Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—It is not the government's practice—based, I might say, on a long-established precedent by the Labor Party—to release any legal advices that may or may not have been obtained by the government. It is not our practice to do it. It was not the practice of the previous government. Senator, let me assure you that the government will make sure that all the bills that it passes through the Senate are constitutionally valid, and so you should have no worries on that score whatsoever.6576West, Sen SueSenator WEST1X4NSWALP00—I ask a supplementary question, Madam President. How can the minister justify withholding that advice, including the advice that we have been seeking on the potential invalidity of the GST legislation under section 55 of the Constitu tion, when at the same time it was happy to release advice from the Acting Solicitor-General about Mr Entsch's potential breach of section 64 of the Constitution? Does the release of advice hinge on the section of the Constitution to which it refers, the extent to which it reinforces the government's line or just the whim of the Prime Minister?6576Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—It actually rests on the established precedent that the Labor Party strongly endorsed while it was in government. If it was good enough for the Labor Party not to release advices, this government will follow that practice. Obviously there may be occasions when a different decision is made. But let me tell you that we will be resting strongly on the precedent that you yourself in government so strongly established.65766576Gibson, Sen BrianSenator GIBSONBX5TASLP10—My question without notice is directed to the Minister for Communications, Information Technology and the Arts. Minister, does the government believe that Telstra should be maintained as a single, unified, vertically integrated, world class, world scale telecommunications company? Is the minister aware of any alternative policy proposals which could involve the dismembering of this great Australian company?6576Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—Yes. There is one thing we have been very consistent about over many years and that is that not only do we support the privatisation of Telstra but we support its sale as a going concern. In other words, we have always taken the view that Telstra, to compete either domestically or internationally, has to have a full suite of services available—these days described as a fully aggregated model. I imagine that everyone who bought shares in Telstra did so on the basis that it would be a world class company able to—UI4RAYSenator Robert Ray—Ask them: they are all over there.LD4Senator ALSTON—Senator Crowley might like to explain later. Madam President, there is no doubt that those who have any degree of interest at all in this debate would be absolutely horrified at the proposal floated over the weekend by Mr Crean. Of course, he is jumping on the bandwagon of Mr Tanner, who thinks that somehow you can break it up before you flog it. But that is not the way to go, and never has been. It was the preferred approach of Mr Keating, who wanted to hive-off mobiles, directory assistance, OTC and basically anything else.Of course, we discovered later on from the George Campbells of this world that that was really the union model. The union took the view that the techs were the ones you had to look after: they are the ones who pay the union fees and who get you into the Senate, and therefore you keep them happy by keeping government ownership of particular core aspects of the network. The only problem with that, as Col Cooper eloquently pointed out the other day, is that that model was ridiculed 20 years ago because you simply do not know where to draw the boundary. You have increasingly intelligent functionality built into the backbone network, and no-one in this day and age is able to say where the network finishes and where the services hanging off the network ought to begin.Of course, there are some very important questions that need to be answered by all those who believe they are serious about the policy debate. I see that Mr Della Bosca thinks he is serious. He, we now discover, was always against Labor running on tax. That is a very big revelation to me. I thought this mob were down on their hands and knees praying for tax to be the only issue in the last election, because they thought they would cream us. Do you know what his extra advice was? That he regretted the fact that they had not been positive; they were too negative.I will tell you what: they could save a fortune on advertising this time around, because they will not have to spend a cent. They have not got any policy initiatives, nothing positive out there. The break-up of Telstra in no shape or form represents any sort of sensible policy solution. It is basically the sort of thing you do to fill in the long, cold hours in opposition. It might have been a very good idea if it was floated in the back room of the John Curtin Hotel, but it simply does not stand up to sensible policy analysis, and the Labor Party knows that. Mr Crean knows it. They will not run with it, because they will get kicked to death by everyone with an interest in the subject.Once again, it is just another way of filling in time, another way of proposing something which even the CEPU is violently opposed to—so heaven knows who is going to support them financially next time around. Mr Cooper said that this was `a technologically laughable thing to do' and signalled that the union would strongly oppose any ALP plan to break up Telstra. So don't you get yourself into shocking problems when you basically treat politics as a debating society, when you do not want to do the hard yards and when you think you can just trawl the gutter and spend endless hours trying to find little things here and there that you think might get you some passing glory, instead of concentrating on the real issues?I read that Mr Stephen Smith thinks it is about time we had a review of Telstra policy, but basically his idea is to forget all about it, change the subject and talk about competition issues. We welcome that aspect of the debate, but it is little more than half the story. The Labor Party will have to do a lot better than this if they are to be taken seriously as a policy alternative.65776577Murphy, Sen ShayneSenator MURPHYFX5TASALP00—My question is to the Assistant Treasurer, Senator Kemp. Is the minister aware that the National Audit Office found that the current off-road Diesel Fuel Rebate Scheme costs about $12 million per year to administer just 110,000 claimants and that this involves about 125 staff years? Can the minister explain how the government's new Energy Credit Scheme will be administered, with thousands more claimants and more complex eligibility criteria? What is the government's estimate of how much its scheme will cost to administer? What guarantees can the minister give to Australians taxpayers that the Energy Credit Scheme will not see a blow-out in costs?6577Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Let me make it absolutely clear to you that there is one thing which is a major difference between the coalition and the Labor Party, and that is that we are wanting to deliver cheaper diesel fuel costs to the public. Your policy, Senator, is to have high diesel prices; our policy is to have lower diesel prices. I can absolutely assure that you that our policy is one which will be widely welcomed by the public, as distinct from the Labor Party policy on diesel fuel. You can be absolutely assured that the diesel credit scheme, along with all other schemes administered by this government, will be administered at world's best practice. Let me make it absolutely clear that we make no apology for delivering cheaper fuel prices to rural and regional Australia. This is one of the many big pluses in this package.FX5MURPHYSenator Murphy—How much will it cost?10000PRESIDENTThe PRESIDENT—Order! Senator Murphy, you will have the opportunity to ask a supplementary question. Shouting out further questions while the minister is answering is not appropriate.WW4Senator KEMP—I make this point to the Labor Party: we believe that when we go out to rural and regional Australia our cheaper fuel policies will be very much welcomed. I assure you that the Labor Party policy of higher fuel prices will be totally rejected by the electorate.65786578Eggleston, Sen AlanSenator EGGLESTON4L6WALP10—I have a question for Senator Vanstone, the Minister for Justice and Customs. What action is the government taking to combat the growing global problem of illegal immigration?6578Vanstone, Sen AmandaSenator VANSTONE7E4SALPJustice and Customs10—I thank the senator for his question. Coming from Western Australia he no doubt has a very close interest in this matter. People smuggling is a growing problem worldwide. Countries such as Australia, the United States and Canada have all seen very substantial increases in the number of people attempting to enter illegally. Globally, the number is estimated to be around four million attempts each year. In addition to the problem growing, the nature of the problem is changing. It is now a sophisticated, organised criminal business worth at least $10 billion. In addition to the old wooden fishing vessels, we now have large steel-hulled vessels with sophisticated radar, global positioning equipment and hidden compartments. These new challenges require a systematic and considered response. Yesterday's announcement by the Prime Minister was just that.The Australian government will spend an additional $124 million over four years to strengthen our capacity to detect and deter illegal arrivals. The initiatives include two additional Dash 8 aircraft to extend the footprint and intensity of Coastwatch's aerial surveillance, especially along eastern Australia, the apparent new favoured target; an additional night capable helicopter to be deployed in the Torres Strait; the establishment of a national surveillance centre at Coastwatch's Canberra headquarters, with electronic links to state government agencies and defence establishments; the creation of a new position, Director-General of Coastwatch, which will be filled by a senior officer of the Australian Defence Force. Liaison arrangements between Coastwatch, Defence and other agencies will also be strengthened. Twelve immigration officers will be posted overseas to major source and transit countries, including airport liaison officers at key airports. Bilateral agreements with source and transit countries will be concluded for cooperation on people smuggling issues and to provide for the return of illegal arrivals.Australia will also give very strong support for the conclusion, as soon as possible, of a protocol on people smuggling in the proposed United Nations Convention on Transnational Organised Crime. A high level committee chaired by the Office of National Assessments will also be established to coordinate information and intelligence on people smuggling. People smuggling, as with other crimes, is best targeted with intelligence at hand to focus one's resources appropriately. We will also introduce comprehensive legislative amendments to strengthen maritime investigatory and enforcement powers, and those provisions will be complemented by legislation that will strengthen penalties against people smuggling. There will be an opportunity soon for Labor and the Democrats to support increased penalties in relation to this area.The government has therefore taken a very comprehensive and holistic approach. We are doing this by making sure that the key agencies involved can respond to the changing nature of people smuggling by having better intelligence, better coordination and far more resources.6579Eggleston, Sen AlanSenator EGGLESTON4L6WALP10—Madam President, I ask a supplementary question. Despite the $124 million funding boost and the positive reception by both the media and general public, is the minister aware of any negative comments about these initiatives?6579Vanstone, Sen AmandaSenator VANSTONE7E4SALPJustice and Customs10—As it happens, yes, I am. Mr Sciacca has said that massive cuts to expenditure over recent years by the government have resulted in reductions in staffing. Mr Kerr claims that the new funding is largely a robbing Peter to pay Paul exercise and that we are simply repackaging funding slashed in previous years. They both could not be more wrong. It is about time somebody took them to task for us. I look forward to the media taking up this issue. The expenditure in 1994-95 was $24.5 million.UI4RAYSenator Robert Ray—It is always politicised—every time.7E4Senator VANSTONE—I acknowledge Senator Ray saying that I always politicise it. It was not us, Madam President, who put out the misinformation criticising this additional funding for Coastwatch. If Labor are happy to politicise it, we are happy to meet them head-on with that. We have shifted the funding from $24.5 million to an estimated expenditure this year of $35.7 million. The area covered in square nautical miles has increased dramatically from 29 million to an expected 84 million this year. (Time expired) .65796579Mackay, Sen SueSenator MACKAY9L6TASALP00—My question is to Senator Ian Macdonald, the Minister for Regional Services, Territories and Local Government. Has the minister seen the analysis of the publication Inside Canberra that the excise savings on diesel which will result from the GST package—after all the government's hype on the bonanza for the bush—will mean a saving of only 0.33 cents in the dollar on food costs in rural and regional Australia? What does the government's own modelling of the impact of the GST package on food prices in country Australia show? Does it confirm the analysis by Inside Canberra ?6579Macdonald, Sen IanSenator IAN MACDONALDYW4QLDLPRegional Services, Territories and Local Government10—I thank Senator Mackay for the question because I do not often get a question from Senator Mackay. I am grateful whenever one comes. Unfortunately, Senator Mackay, I am not at my sparkling best today, so you will have to persevere.Opposition senators interjecting—YW4Senator IAN MACDONALD—Thank you for your sympathy. I appreciate that. I understand that the publication Senator Mackay referred to is a Labor Party publication. It is written by a fellow traveller, or someone. So I cannot confess to having read the article that the senator referred to. What I can say is that any reduction in fuel prices will be of particular benefit to those of us who live in rural and regional Australia. You, Senator Mackay, living in a state that is remote from the mainland capitals, would also appreciate that the costs of transport have an enormous impact on every aspect of life in rural and regional Australia. I am sure they do in Tasmania, notwithstanding that the Howard government has done a lot to help Tasmania with its freight equalisation scheme and passenger vehicle subsidy scheme.We have done a lot to help Tasmania and we want to help all parts of rural and regional Australia. The best way we can do that is by reducing the costs of transport. I do not have the figures that Senator Mackay referred to. I suspect they would be open to challenge. It simply stands to reason that, if you reduce the costs of transport both on road and rail, you will get cheaper transport costs out into the regions and that will mean cheaper goods for all.RF4COOKSenator Cook—If only the reductions are passed on—and only then.10000PRESIDENTThe PRESIDENT—Order! Conversations across the chamber are disorderly.YW4Senator IAN MACDONALD—Senator Cook, you are suggesting that the reductions are not going to be passed on.RF4COOKSenator Cook—Some of them.YW4Senator IAN MACDONALD—You are suggesting that the transport companies are going to put the money straight into their pocket. Is that what you are suggesting?RF4COOKSenator Cook—Yep.YW4Senator IAN MACDONALD—I hope that your mates in the Transport Workers Union understand your saying that because they, like—Opposition senators interjecting—YW4Senator IAN MACDONALD—You don't have any mates in the Transport Workers Union? I am not surprised. I would be surprised if you had mates anywhere. Senator Cook, you have lost Senator Conroy.I am interested to take this up because in the consultations that we have had—and I do not mean particularly formal consultations; I mean going round to transport companies in rural and regional Australia and discussing this with them, as we on this side have done and you obviously have not done—they have said to us that the transport industry is so competitive that if they do not reduce their costs they will go out of business. One transport company will reduce its costs and, if the others do not do so, they will go out of business. Senator Cook shakes his head, but that confirms that he has no idea and he has not consulted with the transport industry or the Transport Workers Union. I suggest that he does those sorts of things. It is a fairly simple proposition: once you reduce the costs of transport—transport has a big impact on those of us living in rural and regional Australia—you must get cheaper goods and services.6580Mackay, Sen SueSenator MACKAY9L6TASALP00—Madam President, I ask a supplementary question. I presume the minister has taken the first part of my question on notice. Perhaps he could clarify that when he answers my supplementary question. Is the minister aware that the same analysis shows that the GST package will actually widen the disparity in petrol prices between the city and the bush by bringing about a small reduction in city prices, of about 0.7c per litre on a price of 70c a litre, and an increase in prices in any country areas where petrol is sold at 80c a litre or more? Does the minister agree that the package will exacerbate the current disadvantage of country Australia with respect to city petrol prices? If not, what is the minister's own analysis of the impact of the package on the city-country petrol price disparity?6580Macdonald, Sen IanSenator IAN MACDONALDYW4QLDLPRegional Services, Territories and Local Government10—I am not sure that I got all of the question, and I apologise for that.3L6CONROYSenator Conroy—Tell your colleagues to shut up while you are being asked a question.YW4Senator IAN MACDONALD—Thank you, Senator Conroy. It would be useful also if you would shut up, as you say.656FORSHAWSenator Forshaw—You would not be so polite.YW4Senator IAN MACDONALD—That is his comment; not mine. I would not use that sort of language. I am quoting Senator Conroy. The disparity in fuel prices between city and regional areas is what I understood to be the import of Senator Mackay's question. The point I try to get over to Senator Mackay all the time is that petrol prices are going the right way under our government. Under 13 years of Labor all that happened with petrol prices out in the bush was that they went up. Services left the bush and petrol prices went up. In fact, the price of most things in the bush went up during Labor's 13 long years. We are addressing that now. (Time expired)65806580Woodley, Sen JohnSenator WOODLEYHX5QLDAD00—My question is addressed to the minister representing the Minister for Agriculture, Fisheries and Forestry, Senator Alston. I ask the minister: does the minister agree that any further deregulation of the dairy industry will cause harm to Australian dairy farmers? Does the minister agree with National Party Senator Ron Boswell's statement last year that deregulation of the dairy industry would only benefit the big supermarket chains? Will the government therefore reconsider its push to deregulate one of our most profitable rural industries? I acknowledge Senator Boswell: he is right.6581Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—I do not think that the government is in the business of wanting to damage the dairy industry. By the same token, we are certainly very committed to ensuring that the benefits of deregulation are fully appreciated. ABARE released its analysis of the potential impacts of deregulation on Australia's dairy farmers at Outlook `99 earlier this year and this analysis was based on its assumptions regarding the farm gate price of milk in a deregulated market. The government's understanding is that the analysis does not fully take account of the substantial commercial benefits that industry sees coming from deregulation. At the time the ABARE estimates were released, dairy industry leaders queried the ABARE assumptions, arguing that the impact of deregulation would be much less severe than ABARE estimates. Indeed, the Australian Dairy Industry Council, the peak industry organisation, claims that the current price premium on market milk will not decline by as much as ABARE assumes. They argue that dairy processors and manufacturers will still need to offer incentives to secure a continuous supply of milk throughout the year.I think it is fair to say that Senator Boswell is always out there ensuring that the best interests of people in rural areas are properly protected and I am sure that he will be an active participant in the debate. But I am sure that the last thing that he would want would be to prematurely close down a sensible discussion of how we might actually be able to achieve some lasting benefits from a sensible approach to deregulation6581Woodley, Sen JohnSenator WOODLEYHX5QLDAD00—Madam President, I ask a supplementary question. I thank the minister for his answer and he is right about Senator Boswell. In part of your answer to the question, you said that commercial benefits would flow from deregulation. My question is: to whom, given that—and I wonder if you are aware of this—after partial deregulation of the dairy industry this year, rises have not flowed back to dairy farmers but have simply improved profits for the big supermarkets?6581Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—There seems to be a bit of misunderstanding on the part of Senator Woodley that one should always simply assess the benefits in terms of the suppliers, but I think it is a very important thing to take into account that essentially competition and deregulation are aimed at benefiting consumers. Therefore, I think you have to take a global view of the issue and not simply look at what impact, in the short term, one particular change might have made. At the end of the day, if you end up with a more efficient industry, lower prices and a better quality of milk, you have had a win all round.65816581Collins, Sen JacintaSenator JACINTA COLLINSGB6VICALP00—My question is to Senator Kemp, the Assistant Treasurer. Did the Assistant Treasurer see the following comments of the Victorian Premier, Jeff Kennett:It is not Howard's package but the Democrats package and I tragically fear we are going to pay a very high price.. . . the benefits are going . . . to be questionable.. . . because this is going to be such a complicated piece of legislation . . . governments now . . . will alter the taxation system in part every year.No doubt the Assistant Treasurer will totally disagree with Mr Kennett and claim that he has got it completely wrong. But what are Australians to make of it when one of the Liberal Party's most successful national figures makes claims about your crowning glory, the GST, which are diametrically opposed to the claims made by your own government?6581Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Senator, I would have thought that you would have been more worried about the comments in the battle between Mr Della Bosca and Gary Gray at present and—10000PRESIDENTThe PRESIDENT—Senator, you should direct your remarks to the Chair.WW4Senator KEMP—the serious questions which are being posed over the leadership of Mr Beazley because what we are seeing in the Labor Party is a total policy vacuum. When these bills are finally through the Senate, the absolute nakedness of the Labor Party in relation to policy will be totally exposed. The fact is that we have had 65 hours of debate and there has been no significant contribution by the Labor Party; there has been massive time wasting; and the Labor Party has put forward no alternative, with the sole exception of continuing with a completely outdated, complex wholesale sales tax system which only five other countries in the world, including Botswana, are prepared to accept. Nobody wants to adopt your system.10000PRESIDENTThe PRESIDENT—Senator Kemp, I do draw your attention to the question that was asked.WW4Senator KEMP—Thank you, Madam President. I have seen comments by Mr Kennett in relation to the package and I do not agree with those comments. There are huge benefits for Australians out of this system. Look at the enormous costs which will come off business and the huge savings which we will make in the export sector as a result of this package. Talking about benefits: look at the benefits to rural and regional Australia which Senator Boswell has spoken about many times in this chamber. This is a huge plus. Mr Kennett could not have been thinking, when he made those comments, of the huge benefits of the $12 billion tax cuts going to families.This is the largest tax cut in Australian history, a huge tax cut which the Labor Party opposes. I do not think Mr Kennett could have been thinking about the real rise in pensions which is going to occur as a result of this package—of the real benefits flowing to the people on pensions and benefits. There are huge benefits under this package. It is quite clear that, in order to get the package through the Senate, the government had to enter into constructive negotiations with other parties. The Labor Party was not interested in tax reform. It went missing in action.As is well known, we held very constructive talks with the Democrats and we believe we have a package now before the Senate which amounts to real tax reform. It is a package which will deliver huge benefits to business, huge benefits to families and huge benefits to rural and regional Australia. The fact is that the Labor Party does not have a single solitary idea on what to do about tax reform. Senator, you have been the laziest opposition that we have ever seen.10000PRESIDENTThe PRESIDENT—Senator, you should direct your remarks to the chair.WW4Senator KEMP—There has not been a sensible or constructive idea. Madam President, the Labor Party are totally exposed for their failure to take part in any constructive negotiations on tax reform, unlike the Australian Democrats.6582Collins, Sen JacintaSenator JACINTA COLLINSGB6VICALP00—Madam President, I ask a supplementary question, taking the minister back to the question rather than the Labor Party. Does the Assistant Treasurer deny that Australians will pay a high price for the hybrid GST, that its benefits are questionable and that the package is so complicated it will have to be altered every year? Is he absolutely right while Mr Kennett is absolutely wrong?6582Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Madam President, this is always the problem when someone has a supplementary question written out and they refuse to listen to the answer. I have been through that. Mr Kennett, in relation to those comments, is wrong—I have said that. I have been through, in quite exquisite detail, the benefits which will flow to the Australian public as a result of this package. Senator, you should listen to the answers rather than just tritely read out a supplementary question which has already been written down.Distinguished Visitors65826582The PRESIDENTThe PRESIDENT10000PON/A10—Order! I draw the attention of honourable senators to the presence in the chamber of the Speaker of the parliament of Singapore, Mr Tan Soo Khoon. On behalf of honourable senators I have pleasure in welcoming you to the chamber and trust that your visit to this country will be enjoyable and informative. With the concurrence of honourable senators, I propose to invite the Speaker to take a seat on the floor of the chamber.UNKNOWNHonourable senatorsHonourable senators—Hear, hear!Questions Without Notice658265826582Brown, Sen BobSenator BROWNQD4TASAG00—Madam President, my question is to the Minister representing the Minister for the Environment and Heritage, Senator Minchin. I refer to an article in today's Age which points out that, under new federal government policy, farmers will be allowed to grow genetically modified crops that are toxic to birds, insects and grazing animals and which could make some weeds resistant to herbicides. Last week the European Union announced a moratorium on the release of such crops. Given the rapidly rising concern in Australia about this issue, is this not exactly the kind of issue for which the environment minister should take full responsibility? Is it a fact that, under the old environment laws, the Commonwealth had the power to require an environmental impact assessment for imports of such organisms and that, once the office of gene regulator was established, the Commonwealth would have had the power to require an EIS for the release of such organisms? Why, then, did the Democrats and government guillotine new environmental laws through the Senate last week which would prevent the Commonwealth from requiring an EIS on GMOs? (Time expired)6583Minchin, Sen NickSenator MINCHINJX4SALPIndustry, Science and Resources10—I am advised that, under the new legislation, the regulation of genetically modified organisms with regard to the environment will in fact be an improvement. The government will, in conjunction with the establishment of the new gene technology regulator—that is, the Gene Technology Office—introduce amendments to the Environment Protection and Biodiversity Conservation Act to ensure that decisions of this new gene technology regulator in relation to environmentally significant releases of genetically modified organisms and products are subject to environmental assessment.The Department of Health and Aged Care is currently preparing legislation to establish this new office of the gene technology regulator and will, following that drafting, consult with all stakeholders, including environment groups and state governments, and introduce that legislation into parliament. The situation will be an improvement. Under the old EPIP Act there had been absolutely no referrals to the environment minister of GMO decisions, so we do believe this will be an improvement.6583Brown, Sen BobSenator BROWNQD4TASAG00—Madam President, I ask a supplementary question. I ask the honour able minister: what is a `significant' organism? What does the word `significant' mean in relation to genetically modified organisms? Does this not open the avenue for a complete cop-out by the Commonwealth? Secondly, I repeat the question: why did not the government and the Democrats ensure that a trigger mechanism was available to ensure full Commonwealth assessment of the impact of genetically modified organisms before their release in Australia before guillotining this legislation through last week?6583Minchin, Sen NickSenator MINCHINJX4SALPIndustry, Science and Resources10—It is not a cop-out, it is an improvement. We have taken the necessary steps to ensure, as I have said, that environmentally significant releases of genetically modified organisms are subject to environmental assessment. That will be a matter for debate. The legislation will be presented and you can debate the question of the definition of `environmentally significant'. But it is an improvement and a much better deal for the environment.65836583Denman, Sen KaySenator DENMANFY5TASALP00—Madam President, my question is to the Minister representing the Prime Minister, Senator Alston. How does the minister respond to the report on private sector executive salaries in the Weekend Australian , which cited 19 senior executives who each receive an average annual salary of $2.6 million? Does the government believe that it is fair and acceptable that 19 senior executives receive almost $50 million between them? If not, what concrete steps is the government taking to curb such gross excesses?6583Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—Madam President, that is a classic example of the politics of envy because quite clearly Senator Denman is saying that, simply because someone gets a particular level of salary that is not available to the vast majority of other Australians, by definition that person could not be entitled to it.5K4FAULKNER Senator Faulkner—She's actually asking you a question.LD4Senator ALSTON—She did, she asked me whether 19 people getting $2.6 million—a total of $50 million—is somehow outrageous and obscene. I am in the process of explaining why it is not. What I think might be a much more constructive approach to take, Madam President, would be to look at whether or not people ought to be entitled to significant pay increases when they are in charge of companies that have a bad year. I think you are on much stronger ground if you do that because then you are looking at performance. I understand why you blokes are not interested in performance—it is because none of you would be here if you were paid on merit.5K4FAULKNER Senator Faulkner—Madam President, I raise a point of order. Did you note, Madam President, that Senator Alston is not addressing you, not addressing the Senate through the chair, and is talking about `you blokes'? I assume he is also referring to Senator Denman as `you'. When other senators do it you rule them out of order. I wonder if you would do that on this occasion and ask him to address his comments through the chair.10000PRESIDENTThe PRESIDENT—I think both senators at the table have been in breach of the standing orders: you for interjecting during the answer to the question and the minister for not addressing his remarks to the chair.LD4Senator ALSTON—Thankyou, Madam President, for that timely reminder. The fact is that there are a number of people in the Australian work force who are entitled to very generous pay packages measured by the standards of, say, AWE or those who might earn a lot less than AWE. At the end of the day you have to look at what they are being paid to do.5K4FAULKNER Senator Faulkner—You see, he is doing it again.LD4Senator ALSTON—I am not talking about you personally, Madam President. Senator Faulkner does not understand. I suppose he thinks the plural of you is youse. I was using it in the plural.AW5CARRSenator Carr—Where did you learn that? Brighton Grammar?LD4Senator ALSTON—I doubt that you would know the difference.10000PRESIDENTThe PRESIDENT—Order! Senator Denman wants an answer to her question and her own senators should cease interjecting.LD4Senator ALSTON—The proper approach to take is to look at whether the particular salary is appropriate to the level of responsibility. A number of our leading Australian companies are indeed major players, both domestically and internationally. The sorts of salary levels that are paid here are often well below those available in the international marketplace. I know you do not believe in any of those things.5K4FAULKNER Senator Faulkner—You are doing it again.LD4Senator ALSTON—I thought I explained to you that `you' is plural as well as singular. Madam President, if Senator Faulkner does not want to listen I am afraid I cannot help that. I make the point that by some standards the levels of executive remuneration in this country are generous, by other standards they are probably less than available on world market places. At the end of the day you are on much safer ground to look at whether the position attracts a commensurate salary and then start to debate the merits.Those opposite think we ought to somehow draw a line and say, `No-one should be entitled to a salary in excess of,' what, `a million'? I presume the left wing of the Labor Party would think a million is pretty obscene. Half a million? They would probably think that was pretty outrageous too. Madam President, you simply cannot get into that business. Look at things on their merits and you will make a lot more progress.65846584McGauran, Sen JulianSenator McGAURANWH4VICNP10—My question is to the Minister representing the Minister for the Environment and Heritage, Senator Minchin. Has the government performed any analysis of the environmental impact of the revised tax package and will the minister inform the Senate of what the impact on air quality and greenhouse emissions will be?6584Minchin, Sen NickSenator MINCHINJX4SALPIndustry, Science and Resources10—There have been a lot of false claims made about the environmental impact of the government's new tax package. Regrettably, a lot of that seems to be based on the work of Dr Clive Hamilton of the Australia Institute. The government now has some new analysis done by Environment Australia and the Australian Greenhouse Office, drawing on work done by the Bureau of Transport Economics and ABARE. The research shows that Dr Hamilton's assumptions about the impact of the new tax system are wrong. Dr Hamilton has overstated the greenhouse implications of the original tax package and ignored the greenhouse savings impacts of the renewable energy and transport initiatives in the revised package. He also fails to take into account the additional greenhouse savings to be generated by the $100 million a year greenhouse abatement program that will run for four years.The new work confirms the positive environmental outcomes secured during the negotiations with the Democrats—delivering benefits both in terms of air quality and greenhouse gas savings. This new analysis shows the revised tax package will deliver greenhouse gas savings of 5.5 megatonnes by 2010 compared with business as usual. It is significant that the analysis used to obtain this figure was put out for independent review by respected energy economist Dr David James. He has indicated that the estimated greenhouse emission savings almost certainly will be significantly greater than those stated. In simple terms, the deal secured with the Democrats will ensure that there is no detrimental impact on greenhouse gas emissions as a result of tax reform. In fact, there will be a net benefit in terms of greenhouse savings.The news is just as good on air quality. The Bureau of Transport Economics estimates the revised tax package delivers a reduction of 40 per cent on business as usual projections for particle emissions from the transport sector by 2015. In fact, particle emission levels from the transport sector in 2015 are predicted to be below 1997 levels. This is because the package negotiated with the Democrats will deliver cleaner fuel and better engine technology.So it is clear that the changes negotiated do deliver significant environmental benefits for air quality and greenhouse gas savings. It will give the Senate even greater confidence that there will be no detrimental impact on the environment from the revised tax package. I am pleased to table the new research, the advice of Dr David James, and a brief covering note from the minister.65856585Quirke, Sen JohnSenator QUIRKEZS6SAALP00—My question is to Senator Alston, the Minister representing the Prime Minister. Can the Minister confirm that, after an earlier episode of conflict of interests, the Secretary to Prime Minister and Cabinet was required by the Prime Minister to cross-check the public and confidential statements of interests for all frontbenchers and to have any anomalies corrected? Did Mr Moore-Wilton scrutinise the interest declarations for the Parliamentary Secretary to Cabinet? Did he raise the absence of Sestial Pty Ltd from the Senate register with the Prime Minister or Senator Heffernan? Under this cross-checking system, how is it that Senator Heffernan disclosed his directorship and shareholding in Sestial to the Prime Minister in October last year but waited three months to declare his directorship to the Senate and chose not to disclose his beneficial shareholding at all? What does Mr Moore-Wilton actually do?6585Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—He does a great deal more than anyone on the other side of the chamber does. He does it very effectively. As head of the Department of the Prime Minister and Cabinet he has very onerous responsibilities and he carries them out very well.I am not prepared to guttercrawl on this issue. I know the strategy; you really are not interested in the answer. You just want to put the question on notice, under privilege and hope that somehow it will get a run. If you are serious about these sorts of issues, Senator Quirke, through you Madam President, then you will urge Senator Faulkner to go outside this chamber and apologise to the Baillieu family, which he has consistently refused to do now for some years. Mr Maurice Baillieu died only 38 years ago and Mr Richard Baillieu died 58 years ago, but, having seriously defamed them under parliamentary privilege, Senator Faulkner is not prepared to go that little bit further and put out a press release to give the Baillieu family an opportunity to clear the record.10000PRESIDENTThe PRESIDENT—Senator Alston, I draw your attention to the question.LD4Senator ALSTON—Until that is done, Madam President, Labor simply cannot be taken seriously on this issue.6586Quirke, Sen JohnSenator QUIRKEZS6SAALP00—Madam President, I ask a supplementary question. Can the minister explain why Mr Max Moore-Wilton has failed to perform even the most elementary cross-check of frontbenchers' declarations with the latest available data from the Australian Securities and Investment Commission? Is the abject failure of both the Prime Minister and his senior bureaucrat to check the veracity and accuracy of ministerial declarations of interest due to their incompetence or their contempt for the parliamentary disclosure system?6586Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—I am not prepared to make any assumptions that are built into that question. I simply proceed on the basis that Mr Moore-Wilton and the Prime Minister undertook their duties conscientiously. I just wish those on the other side would do the same.65866586Bartlett, Sen AndrewSenator BARTLETTDT6QLDAD00—My question is to the Minister representing the Minister for the Environment and Heritage. What involvement has the federal government had in negotiations regarding the development of the south-east Queensland regional forest agreement? Is the minister aware that the south-east Queensland region contains the second greatest degree of biodiversity in Australia? What is the minister's response to statements made by Queensland environment organisations that the current proposals for the south-east Queensland RFA put south-east Queensland's forests at serious risk? Will the minister guarantee that the federal government will not sign off on any agreement unless it clearly meets the JANIS criteria and enjoys the protection of the biodiversity of south-east Queensland's native forests?6586Minchin, Sen NickSenator MINCHINJX4SALPIndustry, Science and Resources10—In response to that question from Senator Bartlett, I advise that the Commonwealth is committed to achieving a balanced regional forest agreement outcome in south-east Queensland. The government does recognise the diverse range of regional ecosystems and other conservation values that do require protection, but at the same time we are also conscious that regional communities and businesses rely heavily on a stable and sustainable timber industry for viability. We are exploring, through Minister Tuckey, all opportunities to develop a progressive and internationally competitive regional timber industry consistent with the environmental values we seek to protect.In relation to the development of this RFA in south-east Queensland, the directions report was released on 14 May for about six weeks of public comment. It presents indicative scenarios illustrating key RFA negotiation issues. Other recently released RFA reports on the south-east Queensland region include the comprehensive regional assessment of the region's forests environmental, social, economic and cultural values, and the social assessment report, which consolidates social analysis and information obtained in the comprehensive regional assessment and which is specifically designed to provide stakeholders, communities and governments with a clear understanding of the implications of forest management decisions on communities. The Commonwealth still intends to finalise the south-east Queensland regional forest agreement in the second half of 1999, in cooperation with the Queensland government.6586Bartlett, Sen AndrewSenator BARTLETTDT6QLDAD00—Madam President, I ask a supplementary question. Could the minister outline to the Senate in what ways the options outlined in the directions paper actually meet adequate fauna habitat protection standards? The RFA is supposed to provide a comprehensive, adequate and representative reserve system for forest protection. Will the government make available statistics on species and habitat, as well as regional ecosystems and alternative employment options, to ensure that the community can assess adequately and accurately that the requirement for adequate protection of the south-east Queensland forests is met?6587Minchin, Sen NickSenator MINCHINJX4SALPIndustry, Science and Resources10—I hope that Senator Bartlett would understand that I will need to take that question on notice and get him an answer as soon as I can.65876587O'Brien, Sen KerrySenator O'BRIEN8O6TASALP00—My question is to Senator Vanstone, representing the Minister for Immigration and Multicultural Affairs. The minister would be aware of her government's commitment to the removal of cabotage, thereby allowing foreign ships unrestricted access to the Australian coast. Is the minister aware that her former colleague the then minister for transport, Mr Sharp, received a report in March 1997, prepared by Mr Julian Manser, that warned that the removal of cabotage would require substantial changes to Australian immigration and customs controls. Is the minister aware that the current Minister for Transport and Regional Services, Mr Anderson, has recently received another report on shipping reform? Can the minister confirm that this second report also addresses the issue of cabotage and immigration and customs control? Would the end of cabotage require changes to allow foreign seafarers to work in Australia for extended periods of time? Can the minister assure the Senate that the liberalised customs and immigration arrangements necessitated by the end of cabotage would not result in an increased number of people attempting to enter Australia illegally?6587Vanstone, Sen AmandaSenator VANSTONE7E4SALPJustice and Customs10—I thank the senator for his question. The answer to the first question is no; to the second is no; to the third is no; to the fourth, I am unable to say; and to the fifth, I will make inquiries and get back to you.6587O'Brien, Sen KerrySenator O'BRIEN8O6TASALP00—Madam President, I ask a supplementary question. Given that the minister is not aware of either the first report or the report currently before the minister, will the minister undertake to make inquiries and to respond to the Senate in relation to that part of the question which arises from those reports, essentially the question of whether the end of cabotage would require changes to allow foreign seafarers to work in Australia for extended periods of time and whether that would then necessitate changes to arrangements so that it would not result in an increased number of people attempting to enter Australia illegally?6587Vanstone, Sen AmandaSenator VANSTONE7E4SALPJustice and Customs10—Your supplementary was basically a repeat of your fifth question, and in response to that I said that I will make inquiries and get back to you. I repeat the answer.65876587Ferris, Sen JeannieSenator FERRIS5L6SALP10—My question is to the Minister for Aboriginal and Torres Strait Island Affairs, Senator Herron. Will the minister outline the very important progress that he is making in reducing family violence in indigenous communities?6587Herron, Sen JohnSenator HERRONVW4QLDLPAboriginal and Torres Strait Islander Affairs10—I thank Senator Ferris for her question and for her continued interest in this problem. I am pleased to inform the Senate that ATSIC has agreed to fund $1 million in programs for indigenous women, men, their families and communities experiencing family violence. I welcome ATSIC's cooperation in accepting that family violence is an issue that must be a priority in the ATSIC budget. I have been arguing for some time that ATSIC should put resources into family violence, and ATSIC has agreed to fund the $1 million program in the next financial year by taking $500,000 from its $11 million travel budget and another $500,000 from its $13 million public information expenditure.Family violence is a serious and distressing issue and I am pleased that key players like ATSIC and some states and territories recognise that we cannot ignore the problem. While family violence is primarily a state and territory responsibility, the Commonwealth does have a role to play. Shortly, I will host a second roundtable conference on family violence in Brisbane. It will involve community people who have on the ground experience in this difficult area and, in particular, it will involve men. I am convinced that there must be community ownership if we are to successfully tackle this problem.Almost invariably, men are the perpetrators and women are the victims, and the idea of the roundtable is to look at practical solutions and to take forward ideas to the peak Ministerial Council of Aboriginal and Torres Strait Islander Affairs ministers meeting in the Northern Territory in September. At that MCATSIA meeting, I will ask the states and territories to play a greater role in addressing the problem of family violence. I believe it is important to be able to say that the Commonwealth, through ATSIC and through mainstream programs, is willing to play its part.I have been talking about family violence for some time now but, until recently, very few people have been listening. Issues like deaths in custody seem to get a lot of attention, but the fact is that, since 1990, 30 per cent more indigenous Australians died as a result of family violence than died in custody. There were 163 family violence deaths—mainly of women—versus 126 deaths in custody. The federal government is taking a leading role in attempting to prevent family violence. Under the Prime Minister's strong leadership, we have committed $50 million over the past two budgets to the Partnerships Against Domestic Violence Program, which is focusing on the key areas of indigenous family violence, children at risk as witnesses, work with perpetrators and community education. I would also like to congratulate the Cape York Health Council on its new initiative to assist indigenous women and children experiencing family violence. This $550,000 family violence advocacy project is funded under the Partnerships Against Domestic Violence Program, and it will make a significant contribution to better outcomes for indigenous women and children.The Commonwealth is also providing accommodation assistance for women and children escaping family violence under the Supported Accommodation Assistance Program. I have also asked them to look at the fact that we take the women and children out of their homes and give them protection, when in fact we should be taking the perpetrators out of the home and putting them in sobering-up centres or somewhere so the women and children can stay in their homes. The Commonwealth is providing an extra $45 million over three years to the Supported Accommodation Assistance Program as a result of the new tax package. That is on top of the $45 million announced in last month's federal budget. The Commonwealth is committed to helping create stronger families and stronger communities through stopping family violence.65886588Mackay, Sen SueSenator MACKAY9L6TASALP00—I have another question to Senator Macdonald, the Minister for Regional Services, Territories and Local Government. Is the minister aware of a KPMG report commissioned by the Local Government Association of Queensland which shows initial GST compliance costs of up to $200,000, ongoing compliance costs of up to $15,000, plus a cash flow effect of up to $400,000 for councils in Queensland? Is he aware of the independent study carried out by the Municipal Association of Victoria which estimates that compliance costs for some Victorian councils could be up to $1 million per council and some $200,000 per year thereafter? How does this square with the minister's statement that compliance costs for local government will be minimal?6588Macdonald, Sen IanSenator IAN MACDONALDYW4QLDLPRegional Services, Territories and Local Government10—I was aware of the MAV—Municipal Association of Victoria—report. I recall that Senator Mackay issued a press release off the back of that saying `$1 million compliance costs for all councils' or something like that—something completely over the top and outrageous. It was a report that lacked any intellectual expertise.9L6MACKAYSenator Mackay—What about the LGAQ one?YW4Senator IAN MACDONALD—I will come to the LGAQ one, but I just want to finish on the MAV one. Unfortunately, the MAV were working off the sorts of stories that you and your colleagues were putting around, so they were working on the wrong premise. They had their facts and information wrong. I do not mind saying this about them because I sat with them at one of their council meetings and told them that to their face. I explained to them where they were wrong. They had the basic facts incorrect. When I explained that to them they said, `Oh, that does make a difference, doesn't it. That does make a difference.'9L6MACKAYSenator Mackay—How?YW4Senator IAN MACDONALD—I could tell the senator the answer to this chapter and verse. This was a question that I was prepared for about four months ago when—it didn't really hit the press too much—Senator Mackay issued her press release. It was wrong in its basic understanding of the facts. From memory, I think one of the things was that they had local government putting in a return every three months. That was completely wrong. Local government can put it in in one month and that makes an enormous difference to their cash flow and to the whole import. There were many examples like that where they were simply wrong in fact so, obviously, they got it wrong in their assessment.I did not quite hear what you said in the question, but I understand from your interjection that it was about the LGAQ report.9L6MACKAYSenator Mackay—The KPMG report.YW4Senator IAN MACDONALD—The KPMG report done by local government—and that was a better assessment. As KPMG said, a lot of it was still uncertain. They were not quite sure how it would impact. I think they had four or five councils who did the work and KPMG worked with them. They had a range of figures on what it would cost local councils. I think they ranged from around $6,000 for a small rural council, up to about $150,000. Do not hold me to that, Senator—I am just going from memory. As I say, when this first came out I had all the details, but my memory is a little hazy after so many months. Certainly, it was in that range.I have said to local government that, as the legislation is passed and as we know exactly what the situation is and what the system will be for local government, then I would sit down with them—I would get Treasury and the National Office of Local Government to sit down with the LGAQ and any of the other state associations—and their consultants and go through it to see whether they are correct or not. I have always said to local government that we understand that there will be some impact. We do not want councils to bear the full burden of that. There have been a number of measures announced that will help councils through this period. The tax office will set up a unit that will go around and explain things to them. As the senator will be aware, the local government incentive program, a new program—(Time expired)6589Mackay, Sen SueSenator MACKAY9L6TASALP00—Madam President, I ask a supplementary question. The minister may have been prepared for the answer four months ago but, of course, he refused to answer any questions at all in relation to the GST and local government during estimates. If the minister accepts that the LGAQ-KPMG report is in fact a fair assessment, isn't it true that the government's local government incentive program, which will primarily assist councils with GST compliance costs and provide $7 million over two years to 710 councils, will result in less than $10,000 per council? The minister surely would not be surprised to learn that local government regards this program as simply a joke.6589Macdonald, Sen IanSenator IAN MACDONALDYW4QLDLPRegional Services, Territories and Local Government10—None of the local government bodies that I have spoken to have thought the local government incentive program was a joke. In fact, they are very much looking forward to its implementation. They understand that there will be costs involved and that the government will go out of its way to assist local government through the implementation period. Senator Mackay mentions that I would not answer questions in estimates. I am glad she did that because, as I said to her then, this was the place to answer those questions. It is an issue that does not come into effect until next year's budget and the Senate estimates committees are of course for the budget 1999-2000. That is why I would not answer them, not because I did not want to. I am very happy to answer them all the time at any time. I am very happy to answer them.AX5EVANSSenator Chris Evans—No-one can pass you notes in estimates.YW4Senator IAN MACDONALD—Well, if someone is passing me notes, they should do it in a way that I can read what they are saying. 65906590Synon, Sen KarenSenator SYNONFQ6VICLP10—My question is for the Minister representing the Minister for Education, Training and Youth Affairs. Would the minister advise the Senate of the Howard government's action to deliver quality training to ensure our continuing success within the global community?6590Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—Can I acknowledge Senator Synon's longstanding interest in vocational education and training, and it is experience we will sorely miss after her departure this Wednesday from the Senate. It might interest Senator Carr to know that at the recent ANTA ministerial council there was an affirmation by all state and territory governments with the Commonwealth to pursue quality training. In fact, there was an acknowledgment that training in this country was going in the right direction, and that is in stark contrast to what Senator Carr said in relation to the training system vis-a-vis the Commonwealth and especially the Queensland government.There have been great reforms in relation to training in this country. In fact, we have seen recently the introduction of new apprenticeships. You may ask why they are called `new apprenticeships'. They are new because they are introducing new industrial sectors to the concept of training. They are involving industry training criteria so that industry is becoming involved in the training itself. We are also looking at expanding them into regional Australia. We are looking at increasing apprenticeships in regional Australia by some 30,000 places.AW5CARRSenator Carr—What are you doing about the rorting?10000PRESIDENTThe PRESIDENT—Senator Carr, stop shouting.9X5Senator ELLISON—Those are some 30,000 places, Senator Carr. Madam President, Senator Carr also needs to bear in mind the recent budget where we committed $130 million over four years, bringing total funding to $1.6 billion for that sector. Madam President, you are seeing reforms in this country which have never been seen before, and you have seen a commitment from this federal government to the training sector which has not been seen before. This has been acknowledged by state and territory governments and we look forward to working with those governments to pursue excellence in training.LD4ALSTONSenator Alston—Madam President, I ask that further questions be placed on the Notice Paper .Miscellaneous6590659015:04:006590Herron, Sen JohnSenator HERRONVW4QLDLPAboriginal and Torres Strait Islander Affairs10—Last Thursday Senator Chris Evans asked me a question and I seek leave to incorporate the answer in Hansard .Leave granted.The answer read as follows—SENATOR CHRIS EVANS —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?SENATOR CHRIS EVANS —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 raised serious concerns in the community. What I want to know, Minister, and I appreciate you will 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.Senator HERRON —Tasmanian and Victorian providers will receive a real increase in funding on 1 July. In Tasmania, providers will receive a real increase in funding in 1999-2000 of $5.1 million, or 5.1%, over that provided in 1998-99 Victorian providers will receive a real increase in funding of $36.6 million which is a 4.5% increaseThe Government will provide $3.5 billion for residential care in the next financial year—an increase of more than $200 million over 1998-99, which includes $48.9 million for indexation.The additional funds to residential aged care services will ensure that average real funding levels are maintained to the 3008 services around Australia and that more places are available across the country.The 1 July 1999 rates increases are part of an annual indexation of subsidies and supplements.The Productivity Commission's report on Nursing Home Subsidies was tabled in Parliament on 31 March 1999. The report endorses the Government's objective of uniform national subsidies for residential aged care.The Government is in the process of consulting with consumer and industry representatives prior to a whole of Government decision on the recommendations and the way ahead.659115:05:006591Mackay, Sen SueSenator MACKAY9L6TASALP00—I move:That the Senate take note of the answer given by the Assistant Treasurer (Senator Kemp) and the Minister for Regional Services, Territories and Local Government (Senator Ian Macdonald) to questions without notice asked by Senators West, Murphy and Mackay today, relating to the proposed diesel fuel rebate.I doubt very much whether the producers of the well respected newsletter Inside Canberra would be very flattered by being called Labor stooges or whatever term the Minister for Regional Services, Territories and Local Government (Senator Ian Macdonald) used. I appreciate that the minister may not be feeling well today but I still do not think that there was an excuse to do that.Just let me advise the Senate precisely what the analysis that Inside Canberra have undertaken says. To restate this, essentially what they are saying is that the excise savings on diesel will equate to a saving of only 0.33 of a cent in the dollar on food costs in rural and regional Australia. For example, if you buy a basket of groceries for $10, you receive a 3.3 per cent saving—and that is only if the transport operators actually do pass on the costs, and we saw the interchange between the minister and Senator Cook in relation to that. The figure is calculated on the fact that the diesel rebate will lower operating costs by 32 per cent. But only 21 per cent of a truck's operating costs relate to fuel and oil; 32 per cent of 21 per cent equals 6.5 per cent, which therefore equates to a retail saving to the consumer of 0.33 of a cent in the dollar. So that is how they derive their figures.Interestingly, Senator Macdonald, in his response, essentially said, `It is the right way to go—reduce costs et cetera,' but what he failed to do—and I think it would be germane for the government to undertake this—was provide its modelling in relation to savings in rural and regional Australia and, in relation to the assertions made by the publication Inside Canberra, prepare a refutation of those assertions. I would ask Senator Macdonald to take that on notice. If he would do so, that would be very useful. He has made no serious attempt—as has no government minister, including Senator Kemp—to refute not simply these allegations but allegations that have been made previously. Nor has any government senator or minister made any serious attempt to table or provide information with regard to the government's own modelling in terms of the savings that it is asserting will occur.Under the government's new legislation, which of course is the result of the deal with the Democrats, the reduced diesel excise will apply to all trucks of 20 tonnes and over and to trucks over 4.5 tonnes which operate in rural and regional Australia. Accordingly, some 60,000 petrol-powered trucks over 4.5 tonnes will receive no benefit whatsoever. Some legal authorities—and we heard the question earlier today—believe that the inequality of treatment could raise questions about breaches of section 92 of the Constitution, and that has had quite a lot of airplay recently. UW4CRANESenator Crane—Who wrote this for you, Sue?9L6Mackay, Sen SueSenator MACKAY—I did. This legislation is a compliance nightmare, and it has had a lot of air coverage in relation to the potential abuse that this scheme will come under. The reason it is a nightmare is that businesses have the capacity to simply change their base of operations so they are located on the regional side of what is an arbitrary boundary line by altering their delivery patterns to obtain the maximum benefits from the scheme. What is the government's response to this? They simply announced huge fines. They say it will not happen because there will be huge fines if people do transgress the arbitrary boundaries which have been determined.This is obviously going to result in distortions of market patterns. This is obviously going to result in disparities in relation to rural and regional Australia, and it is obviously not going to get what the government wants, which are reduced costs in terms of transport and, therefore, consequential costs in terms of food. I think it is incumbent upon the government to answer a serious question from the opposition as to whether the allegations are correct and as to whether the issues that have been brought to bear by a number of organisations in terms of the potential breaches are correct. I do not think it is reasonable for the government to simply say, `We won't give you the modelling,' or, more likely, `We haven't done the modelling.' If there was modelling done—if the savings can be realised—we want to see the figures. (Time expired)15:10:006592Boswell, Sen RonaldSenator BOSWELLYE4QLDNP10—If ever there was anyone on a hiding to nothing, it is Senator Mackay. I cannot understand where she is coming from. This package is the greatest thing that has ever happened to rural and regional Australia. It delivers a 23c reduction in the excise. Some of these large prime movers do about one kilometre to the litre. A 23c reduction in the excise means it will be 23c a kilometre cheaper to run transport in rural Aus tralia, not to mention the 22 per cent reduction in sales tax.After this package was negotiated—and I will just take Senator Mackay on a little tour of Queensland—I went to Warwick, Goondiwindi, Bundaberg, Rockhampton and Kingaroy. When I presented this package to the transport operators out there, the universal message that came through was, `This is too good. We are not going to be able to retain all the extra profits. We are going to have to renegotiate our contracts.' That was spontaneous, and it went right across all those country towns.Senator Mackay, it seems that the Labor Party has fallen into the greatest phase of negativity. You knock everything, you are against everything, and then you introduce some red herring that 60,000 petrol trucks will not be able to participate in the reduction of the fuel excise. That is trying to pull everything down to the lowest common denominator, and that is probably where the Labor Party is coming from. The coalition, on the other hand, is trying to provide benefits for rural and regional Australia, and this is going to reduce the costs on exports by $4.5 billion. You have only to mention it out there, as Senator Ian Macdonald would have done in his visits around rural Australia, and people in rural and regional Australia get absolutely excited about the prospect of cheaper fuel costs, the reduction in export costs of $4.5 billion, and the reduction in sales tax by 22 per cent on prime movers and trailers.One particular place in Kingaroy has 12 prime movers at a cost of $250,000 each, which amounts to a $50,000 saving. The trailers are about $180,000 each, which is a $36,000 saving, and then there is a 23c per kilometre reduction in diesel. Yet you come in here and say that it is not going to benefit rural and regional Australia. You are totally off the planet. Madam Deputy President, you are trying to turn a sow's ear into a silk purse, because this is the greatest silk purse, or the other way around—10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—Order! Senator Boswell, please address the chair. I am personally not trying to turn a sow's ear into a silk purse.YE4Boswell, Sen RonaldSenator BOSWELL—Madam Deputy President, Senator Mackay, the shadow minister for local government, is trying to turn a silk purse into a sow's ear, and this is the greatest silk purse that has been given to rural and regional Australia. I suggest that Senator Mackay goes out and has a talk to some of her rural constituents, and then she will come in here and sing a completely different tune. If you want to be critical, there are probably some things you can attack on, but certainly not this. You have really let your side down, Senator Mackay, because you have picked the greatest bonus ever given to rural Australia and you have come in here and bucketed it. All that proves is that you do not understand regional and rural Australia. You have not got a clue. You are disconnected from your blue-collar workers out in regional and rural Australia. For goodness sake, go out there and reconnect with them. Go out and have a talk to them on occasions, and then you will not come in here, let your side down and drop the ball, because this is the greatest benefit that has ever been presented to regional Australia.15:15:006593Senator GEORGE CAMPBELLSenator GEORGE CAMPBELLUNKNOWNUNKNOWNUNKNOWNUNKNOWN00—I also want to take note of the answers given by the coalition with respect to the diesel fuel rebate. It was interesting to hear Senator Boswell's contribution on this matter, because everything that this government has introduced since I have been in this Senate has been `the greatest thing that has ever happened to regional and rural Australia', knowing full well that, on many of the issues that have come before this chamber, Senator Boswell, his colleagues and his partners in the National Party have been party to selling out the interests of people in regional and rural Australia.They have done it on a whole range of issues which they have supported in this chamber. In fact, if you talk to some of them privately they will admit to you that they got worse than they could have got out of some of the deals that they have done with their coalition partners. They will not publicly stand up and defend the position of the constituency that they purport to represent. That is why in two or three days time there will be fewer of you in this chamber than there are today. There will be fewer of you because you have not had the courage to represent your constituency on the range of issues that have come before this government that deal with regional and rural Australia.I want to come back to the issue of the diesel fuel rebate. It was interesting that Senator Kemp avoided answering questions about the constitutionality of the arrangement with the Democrats. He avoided answering whether or not the government was looking at the constitutional question. The reality is that there are significant constitutional questions in relation to whether or not this so-called scheme that has been put together with the Democrats—their new-found partners in crime—will in fact hold up if it is challenged constitutionally. It may well be that, at the end of the day, the people in the corner who say they represent regional and rural people will in fact finish up with a pig in a poke if this legislation is challenged in terms of its constitutionality.The second point is that it is discriminatory. It discriminates against a significant section of the community who are in regional and rural Australia. It excludes whole areas of the community from participation in the scheme.WH4McGAURANSenator McGauran—Who?NB5Senator GEORGE CAMPBELLSenator GEORGE CAMPBELL—Let me tell you. It excludes people in the Brisbane-Gold Coast-Sunshine Coast strip but it does not exclude Tweed Heads. Why not Tweed Heads? What is the difference between Tweed Heads and the Sunshine Coast and the Gold Coast? It is only five minutes down the road. Why the arbitrary distinction between Tweed Heads and the Gold Coast? It excludes people in Newcastle, Sydney, Wollongong, Melbourne, Geelong, Adelaide, Perth and Canberra. Why, for example, should diesel trucks in Goulburn be included in the scheme and diesel trucks in Geelong be excluded from the scheme?WH4McGAURANSenator McGauran—Is that true?NB5Senator GEORGE CAMPBELLSenator GEORGE CAMPBELL—Of course it is true. Haven't you read the legislation? You are in here defending it, Senator McGauran, and you are probably one of the people who will get up on their feet in this chamber in the next 20 minutes—10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—Order! Senator George Campbell, address the chair, please. Senator McGauran, you know that interjections are disorderly. Unless the whips have changed the seating allocations, you are not in your correct seat. So you should not be even saying a single, solitary word, thank you very much.NB5Senator GEORGE CAMPBELLSenator GEORGE CAMPBELL—Senator McGauran will probably be one of the people who gets up in this chamber in the next 20 minutes to defend the scheme, when it is obvious that he has not even read it. He does not even know what the contents of the scheme are or how it is going to apply.In the time that is left to me I will briefly look at some of the examples about how this is going to be managed. Some of the proposals for measuring whether people are complying with this scheme or not border on the ridiculous. Some of the suggestions are that they might have log books, they might have an allocation of special number plates or they might have different coloured oils. What we might actually see are diesel trucks going through capital cities and metropolitan cities blowing out green smoke to signify that they do not get the rebate and, when they are driving out in the country, we will see blue or yellow smoke pouring out of the diesel trucks to signify that they are getting the diesel rebate. It is absolutely ridiculous. (Time expired)15:20:006594Chapman, Sen GrantSenator CHAPMANFF4SALP10—The Labor Party are at it again. All they come in here and do every question time is carp and carp. They make no positive contribution to debate and have no policies of their own. They remain a policy-free zone. Today, of course, they are trying to diminish one of the main benefits of tax reform that has been initiated by the Liberal and National Party coalition government, and that is a substantial reduction in fuel costs for the transport industry and, as a consequence of that, a much needed reduction in the overall cost of transport.The government is providing a reduction of 23c a litre in the price of diesel fuel—a massive reduction in the cost of fuel—for those qualifying trucks. Those trucks are, of course, trucks that have a total weight in excess of 4½ tonnes operating in rural and regional areas of Australia and those trucks with a total weight in excess of 20 tonnes operating anywhere in Australia, whether that be rural and regional areas or the metropolitan areas. That is a substantial benefit for the transport industry of Australia—a benefit that stands undiminished by this pathetic attempt by this pathetic Labor opposition to diminish it.On top of that, all vehicles used for business purposes will have fuel reduced by the order of 6c or 7c because they will qualify for a rebate on the GST they pay on fuel. Whether it is diesel, petrol or whatever fuel source, all those vehicles used for business purposes will have a reduction in fuel costs of that order. What we need to remember is that this is what the transport industry itself sought in their discussions with the government when we were developing our tax package over the last year or two. The transport industry put forward very strongly the view that a substantial reduction in the cost of fuel would make an important contribution towards lowering their costs.This Liberal-National Party government have delivered in full on the commitment we made to the transport industry and, as we well know, the transport industry is very satisfied with what we have delivered in this instance. So let us have no more of this carping from this pathetic opposition, which really does not know what it is talking about in relation to transport. The government have made a substantial reduction in the tax on fuel.Not only have we done that for the transport industry, but we have also abolished the wholesale sales tax; and that has been another significant cost for the transport industry. The high levels of wholesale sales tax that have applied on trucks, spare parts for trucks, tyres and batteries are all gone; they are not there anymore. They have been replaced by a GST at 10 per cent which, for these trucks, because they are all used for business purposes, will be fully rebated.WP6LIGHTFOOTSenator Lightfoot—And air-conditioning.FF4Chapman, Sen GrantSenator CHAPMAN—All of the parts and accessories that go into trucks used for business purposes in the transport industry in Australia will have that wholesale sales tax removed—the legislation has passed, but for the third reading to come—and replaced with a fully refundable GST. This is a substantial reduction in operating costs for the transport industry.All we have from the Labor Party as a response is this carping effort today in question time and in this debate. They have no policy initiatives of their own on the issue. They remain a completely policy-free zone with regard to tax reform and with regard to the important issues facing Australia. Let us remember that when they were in government they actually sought to increase the costs that were going to be imposed on heavy transport in rural and isolated areas. I well remember the inquiry that we conducted in the then Senate transport and infrastructure committee which highlighted the increase in cost that was going to be initiated by the then Labor government. This government, in contrast, has reversed that and is actually doing something to reduce the cost of transport in this country.Australia is an enormous country geographically and it has a relatively small population concentrated in particular areas. Therefore, transport is a very important factor in Australia, and the cost of transport makes up a much bigger proportion of the cost of production in Australia than it does in other countries. Therefore, to get rid of the taxes on transport is a very important initiative in reducing the cost of transport and ultimately reducing the cost of the goods that require transport from their place of manufacture to their place of market, whether it is within Australia or, very importantly, from the places of production in Australia to the ports for export to earn more export dollars for Australia. That is the benefit this government has delivered. It is also delivering a benefit for the rail industry by all taxes being eliminated on fuel for the rail industry. (Time expired)15:25:006595Murphy, Sen ShayneSenator MURPHYFX5TASALP00—On the same matter, can I just point out to the Senate that, contrary to what Senator Chapman just said, it is a pity that he, like his National Party colleagues, had not read this legislation. It really is a pity, because he would then understand exactly what it is all about and would not get up and make statements—misleading statements, I might add—as he just did when he said that, for trucks in excess of 20 tonnes, you are entitled to the rebate anywhere in Australia. Not so. The government's explanatory memorandum on the bill says:The grant will be available for on road use of these fuels in vehicles with a gross vehicle mass of 4.5 tonnes to 20 tonnes used for transporting goods or passengers. However, for vehicles under 20 tonnes, the grant is not available for the sole use of the relevant fuels in the following metropolitan areas:That is what it means, Senator Chapman.Senator Chapman interjecting—FX5Murphy, Sen ShayneSenator MURPHY—That is not what you said. Madam Deputy President, this is from the government which said we would never, ever have a GST. The Prime Minister from Never-Ever Land said we would never have a GST, and we now have a proposal for a diesel fuel rebate scheme. When I asked Senator Kemp, the Assistant Treasurer, for an explanation of the compliance costs, he did not answer me. If you read the explanatory memorandum, it says:Compliance cost impact : Medium.It is a bit like a steakhouse: well done, medium, underdone. What is the compliance cost? The explanatory memorandum goes on further to say that the compliance cost will be negligible or the same.They have introduced a whole new range of categories and expect that—as Senator George Campbell was pointing out—there will be different coloured smoke depending on whether you are in a metropolitan area or a country area. Who knows? How are you going to maintain any sort of surveillance of this system? We have heard that we will have a geographic positioning system. We will be plotting these little trucks wherever they go; their mapping system will come in. How ridiculous! It costs something in the order of $12 million per year to administer the current scheme, and the Auditor-General's office has found that the current scheme has been subject to an extreme amount of rorting. How are you going to tell the Australian taxpayers that the scheme that you propose now is going to be rorted less? You cannot, and that is why the minister could not answer the question on compliance costs. That is why you have got all sorts of trouble, and of course when you are in all sorts of trouble, what do you do? You come in here and you defend hard, but you defend in a nonsensical way, because you do not read your bill—you do not even read the explanatory memoranda.The shadow minister in the other chamber gave an example from the explanatory memorandum about a vehicle that is being set up to claim this rebate. Talking about that example of Vicki's furniture removal business, Ms Kernot said:Vicki is based in Forbes. She drives from Forbes to Sydney to pick up some furniture. That consists of a journey to a metropolitan area from a point outside it. Clearly, for that part she is entitled to the grant. Then she delivers the furniture to Dubbo. That is a journey from a metropolitan area to a point outside it, so she is eligible for the grant for that journey. Then she drives home to Forbes—that is a journey entirely outside a metropolitan area, so she gets the grant for that as well. On one reading, this seems to suggest that each separate leg of the journey is going to count as a separate journey.Ms Kernot goes on to ask the minister to confirm whether, if furniture is delivered within the city as part of that journey, you are entitled to the grant. And what happens if you base your business just outside the metropolitan areas mentioned in the explanatory memorandum, or if you work in the city and then go home just outside? How do you deal with those sorts of situations? There is no explanation from the government, and that is just how stupid this system is.10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—Order! The time for the debate has expired.Senator Kemp interjecting—10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—Order! Senator Kemp, interjections are unruly and certainly out of order when you are not in your place and not even seated. The question is that the motion moved by Senator Mackay be agreed to.Question resolved in the affirmative.Bills6597r703Billsr667Billsr666Billsr702Billsr699Billsr698Billsr664Billsr660Billsr658Billsr657Billsr701Billsr663Billsr659Billsr700Billsr661Bills6597r754Billsr755Billsr761Billsr765Billsr763Billsr764Billsr757Billsr760Billsr758Bills6597r759Billsr756Billsr7626597Consideration resumed.A NEW TAX SYSTEM (PERSONAL INCOME TAX CUTS) BILL 19986597The bill.10000CHAIRMANThe CHAIRMAN—The committee is considering the A New Tax System (Personal Income Tax Cuts) Bill 1998 , to which I understand the government has three amendments. The question is that the bill stand as printed. Minister, would you like to move your amendments?15:31:006597Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—by leave—I move government amendments Nos 1, 2 and 3:(1) Schedule 1, item 11, page 4 (lines 2 to 5), omit the item, substitute:11 Subsection 20E(2) (table) Repeal the table, substitute:Tax rates for resident taxpayer Column 1Column 2For the part of the ordinary taxable income of the taxpayer that:The rate is:exceeds $20,000 but does not exceed the adjusted tax-free threshold13%exceeds the adjusted tax-free threshold but does not exceed $50,00030%exceeds $50,000 but does not exceed $60,00042%exceeds $60,00047%Note: The heading to section 20E is altered by omitting "$20,700 " and substituting "$20,000 ".(2) Schedule 1, item 14, page 4 (lines 10 to 12), omit the item, substitute:14 Clause 1 of Part I of Schedule 7 (table) Repeal the table, substitute:Tax rates for resident taxpayerColumn 1 For the part of the ordinary taxable income of the taxpayer that: Column 2 The rate is:exceeds $6,000 but does not exceed $20,00017%exceeds $20,000 but does not exceed $50,00030%exceeds $50,000 but does not exceed $60,00042%exceeds $60,00047%(3) Schedule 1, item 15, page 5 (lines 1 to 3), omit the item, substitute:15 Clause 1 of Part II of Schedule 7 (table) Repeal the table, substitute:Tax rates for non-resident taxpayerColumn 1 For the part of the ordinary taxable income of the taxpayer that: Column 2 The rate is:does not exceed $20,00029%exceeds $20,000 but does not exceed $50,00030%exceeds $50,000 but does not exceed $60,00042%exceeds $60,00047%15:32:006598Cook, Sen PeterSenator COOKRF4WAALP00—We now have one hour to debate 22 bills, so in one hour we have just over two minutes per bill. These are bills relating to quite extensive matters of the GST and the application of it as far as tax cuts are concerned, and to a range of other things too numerous for me to quickly cover. They involve the wine equalisation tax, the luxury motor vehicles tax and a whole series of things, including the Australian business number, and bills relating to the ACCC.I have once again to protest that it is ridiculous in the extreme to deal with such complex and numerous bills all at once within an hour, when there are several amendments—some of them by the government—three of which have now been moved to its own legislation, and when no explanation as to the purpose of the amendments has been given by the government. They just move them, sit down, shut up and say nothing further to the chamber.WW4KEMPSenator Kemp—I'll get up and talk it out, then. You were complaining yesterday—10000CHAIRMANThe CHAIRMAN—Minister, order!ZS6QUIRKESenator Quirke—Yesterday was Sunday.WW4KEMPSenator Kemp—All right, you wait. I'll get up and talk it out.RF4Cook, Sen PeterSenator COOK—I am not inviting you to get up and talk it out, Minister. You know that all too well. What I am once again drawing attention to is that, when this new Democrats-government GST package came before the chamber, we asked the government and the Democrats to make a statement as to the significance of their changes, to save us having a statement made each time, and they declined to do so. So we are debating blind, without the proper information before us, in an effort—on a joint guillotine—to rush this legislation through.I make this point—and let me mark the spot in making it—that, if there are therefore errors in this legislation which proper debate would have otherwise detected, then the fault is the government's and the Democrats'. When people in the Australian community have the obligation of dealing with these laws that we are so quickly rushing through this Senate, the fault will be entirely that of the government and the Democrats, and there will not be acceptable in public debate any argument from the government or the Democrats that somehow or other it is Labor's fault. Let it be known now. Let the spot be marked right now, that the fault is the government's and the Democrats' as far as the errors go that will surface in this legislation.The first and most important of all of this legislation that we have to consider is that embodying tax cuts. The tax cuts are large cuts. I think, though, that there is an issue here of fairness and equity considerations in the manner in which these tax cuts are given. Let me make one point before I turn to some of the inequities that are apparent on the schedule, once you look at where the tax cuts fall and who gets the benefit of them.The first point is this. We are introducing a new tax, a GST—something that Labor opposes but that the Democrats and the government want. That will impose extra costs on the Australian community. As a way of offsetting the extra costs on ordinary Australian citizens, the government is providing, by way of compensation, cuts to the taxation scales. They will market those cuts as being a handout from the government to the community but, whenever they do speak about that, one should remember that this is compensation for a new tax—a new tax on everything, a new tax in the form of a GST which, if you look at the historical record, is a tax which always increases over time and never decreases.So these compensations, to the extent that they are real, are to compensate for a tax which will rise over time. That is always what happens with a GST. But the compensation will remain fixed. Worse than that, the compensation will erode, because we do know that bracket creep, or the workings of inflation on wages, pushes wage and salary earners to higher incomes but not higher real money incomes and pushes them into different tax brackets so that, when they get pushed up the scale on bracket creep, they are obliged to pay higher taxes. The net effect is that the real value of their income erodes over time, unless you compensate for bracket creep in terms of your tax scales. Do these tax scales compensate for that? No, they do not.So the two realities, the two grim reapers, of the GST are, firstly, the fact that it always increases—that is a historical record around the world wherever a GST has been introduced, and the elaborate mechanism to fool Australians into believing that it will not do so in Australia is of course a farce; it will increase here. And the second grim reality is that the tax cuts erode and therefore the compensation to offset for Australians the so-called higher costs and charges of a GST go down irretrievably as a consequence of the working of the taxation system. So when government spokespeople get up and say, `Look how munificent we are, how bountiful we are. Look at what we are giving to the Australian community,' one must remember always that the tax goes up and the compensation goes down, and that is a historical record.Having made that point, I turn to the nature of some of these tax cuts. As I do so, I point out that we are going to vote for these tax cuts, because we do think Australians need relief now that this chamber has voted for a 10 per cent GST. We do think Australia needs some relief, and that is why we are going to vote for them. But we do not think that these tax cuts embody sufficient or appropriate relief. I go to two examples of what I mean in terms of equity. The personal income taxes that we are considering favour the rich and work against middle and low income Australians. Some examples from the tables published in the Weekend Australian the Saturday before last were worked out by the two pre-eminent economists in this field, Professor Warren and Professor Harding, and give the lie to the government claims about equity. I take two examples. A single income couple with one child, receiving $35,000 a year, receives a so-called total benefit—that is, a total tax cut—of $17.80 per week. If that same family were to receive $70,000, not $35,000, it would get a total benefit of $77.19. So the family on the lower income gets $17; the family on the higher income gets $77.19. Of course, they are paying the same price for the goods and services they consume, because this is a flat tax. It charges people the same price, irrespective of their income. And it is irrespective of their income on this basis: if you get 70 grand, you get $77; but if you get only 35 grand, you get only $17. And they say this is fair.One can look at the gross figures. Gross money figures tell one sort of story. Let us look at it another way: in terms of percentages. A $17.80 tax cut as a percentage of $35,000—I have not done the sums—is just over a five per cent share of the total amount. But on $70,000, $77 is just over 10 per cent. So if you get a higher income, you get a higher percentage as well as more money; if you get a lower income, you get a lower percentage, despite less money. And they say this is fair.Remember this: the doyens of so-called fairness, the people who thump their chests and claim to be compassionate—and indeed the government has now adopted the Texas view of compassionate conservatism that George Bush Jr is campaigning on in the US primaries, a phrase coined in the United States and suddenly adopted in Australia; it does not mean anything and it has no substance to it but it has a nice ring on television—the so-called compassionate conservatives of the government are saying that is fair.But with respect to those who have raised themselves on the edifice of so-called fairness, the Australian Democrats, this is their package too. They reckon that it is fair. We all remember what they said when they went into negotiations with the government. What did they say? They said they would start to smooth out the inequities of the tax cuts. Did they? Well, they did a bit. But did they do it properly? Not at all. What they did was fiddle at the top end of the scale—and we welcome those changes. Do they go to the level of real need in the community? No, they do not. It is a bit of window dressing to say, `Well, we changed the system.' What did they give as their explanation for not doing the job properly? `Mr Howard refused. Mr Howard did not agree.' The Australian Democrats have to take the responsibility for this. Mr Howard did not agree because they did not insist. This legislation will not pass this chamber unless they vote for it. They had the ideal negotiating position. They could have said, `I am sorry, Mr Howard. That is inequitable. That is unfair. We will not vote for your package unless you restore some equity to the tax scales. Make it better than this.' Did they do that? They may have done, because it was behind closed doors, but John Howard stared them down and they bought the package at the end of the day, and therefore they own the inequities and unfairness in this package.I give you another example: a dual income family—two wage earners with one child—that receives $35,000 a year gets tax cuts of $8.59 per week. Two income earners with one child on 35 grand per year—these are not people who earn a lot of money; these are people on the lower end of the income scale in Australia—get an $8.59 per week tax cut. The same family—a dual income family with one child—on $100,000 receives a weekly benefit of $75.56. So if you are poor, you get less. If you are getting $100,000 per year, you get more. In percentage terms again: the higher the income you get, the bigger the percentage of rebate you get; the lower the income you get, the lower the percentage. So not only in money terms but also in percentage terms this package is inequitable. And this is the embodiment of fairness and equity as far as the Australian Democrats and the national coalition led by John Howard are concerned, because this is what they are doing.What has Mr Howard said about this? One of the things he has said which is most illuminating is that he is going for middle Australia and that he wants to reward effort. Well, middle Australia are entitled to some tax relief, because middle Australia are the ones that are pushed into higher income brackets by bracket creep—the matter I spoke about earlier. But there is no excuse, when you go up these scales to $150,000 and $200,000 a year, for those people to still be getting big handouts when the poor at the other end of the scale are getting miserly handouts. Remember, as I said, that the tax goes up and the compensation erodes with time, so the first victims of the erosion with time effect of the compensation will be those at the bottom end of the scale. And they say this is fair.I am one of those Australians who believe that a fair go for all is a basic right of all Australians. It is part of our folklore and what makes up our national character. Australians will say, `This is not fair.' While many of us at the higher levels of the income scales will benefit from this, and I will be one of them—I will benefit better than a lot of low income earners—I still think it is not fair and that the rights of low income earners ought to be protected. Remember this: low income earners spend every cent they earn and they have nothing left over to save. So they have no capacity to find extra funds within their miserly household budgets. They are always stretching to try to meet the needs of the day, to accommodate extra costs.What will this tax do? It will impose extra costs on these people. Why therefore do we need to have regard to the ability of welfare organisations to service the poor? In part it is because what this government-Democrats' package is doing is pushing them further down the trap into poverty. I say, `Okay, you have got away with a GST. This chamber has voted to impose one against the opposition of the Australian Labor Party. The very least you can do, if you have a bone of decency in your body, is to restore some equity to the income tax scales. Do not go chasing votes by trying to bribe people into supporting the GST, by giving the influential end of the income scales a higher handout so they will speak more proudly about a GST while ignoring the complaints at the lower end of the income scales.' This amounts to a vote bribe to support the GST by those at the wealthy end of the scale without regard to those at the other end of the scale.As I said, there are some 22 bills that I have to debate now in less than three-quarters of an hour. We are considering the first one and I have not dealt with it comprehensively. The light is on; I will have to sit down shortly. There are a number of other bills which I think deserve a particular amount of attention. I hope that the government and the Democrats do not try to soak up the remaining minutes of this debate so that we cannot get our viewpoint across. I would hope that the next call goes to my colleague Senator Sherry so he can deal with the inequities in the wine industry. I would hope that when Senator Conroy comes in here in a minute we can deal with the ACCC. (Time expired)15:47:006601Lees, Sen MegSenator LEES8U4SAAD00—There are just a couple of issues that I would like to point out to Senator Cook. Firstly, I go back to 1993. We touched on these issues before but, after what he has said today, he obviously was not listening. I remind him that when the Labor Party dealt with tax cuts—they were the last ones to do so—back in 1993, they looked at the issue of bracket creep and did not give any tax cuts to those earning under $20,700. There was no immediate compensation of any description for pensioners. Indeed, pension changes were delayed for many months. From memory, they were delayed for about eight months.I say to Senator Cook: look again at what the Labor Party did and in particular look at the fact that the maximum tax cuts went to those earning over $50,000—in other words, a similar situation to the one we are considering now concerning bracket creep. I point out that it is a separate issue from compensation for the GST. As we deal with bracket creep, we need to look at those areas where people jump into the higher brackets, and that comes back to the same area that Labor dealt with. But at least this time we are also seeing considerable tax cuts for those earning under $20,700. This time it is a very different story. I will go into more detail in a moment, but I remind Senator Cook that this time those earning over $100,000, on average, will be paying more tax.The amendments that we are considering now revise the tax scales that were in the original ANTS package. The Australian Democrats are very pleased with what we have achieved. We did not achieve everything we set out to achieve, but certainly we have seen changes above the $50,000, and now the top marginal rate cuts in at $60,000 rather than the original government proposal of $75,000. This measure will save us $1.3 billion. That will go towards the cost of taking food out of the GST which itself is a very progressive move and benefits those on low incomes the most.It is a very long time since we last revised our tax scales—it goes back to 1993. Indeed, it will be seven years by the time these changes come into place. That is too long. Perhaps something we can put on the government's agenda is that we look at indexation so we do not have this battle every three, five, seven years or whatever of making the adjustments as people creep up the scales and get into higher and higher tax brackets, that we look at indexation and put to rest once and for all this ongoing battle of who gave which tax cuts to whom.From 1993 to 2000, average earnings will have risen around 30 per cent; in other words, they will have gone up from $31,780 for a full-time adult to around $42,000 in the year 2000. That means that average income earners now face a marginal tax rate of 43 per cent. It is already one of the highest rates in the world so, given the fact that we are not indexing, again we will have this problem occurring down the line and it will have to be dealt with. Since 1993, as wage inflation has pushed up earnings, bracket creep has delivered a windfall to the government. That windfall is now in the order of $8 billion a year, or nearly 10 per cent of our total tax collections. Indeed, the entire budget surplus can be attributed to bracket creep. I think that is unacceptable. Clearly, tax reform in the form of revision of the income tax scales is overdue. We had argued, and still say to government, that it could have been done separately from the GST and then we would have seen more clearly the need for compensation as opposed to the need to deal with this second issue.The bill in its amended form will deliver $12 billion of income tax cuts in the year 2000, which is bracket creep plus the other four. We are prepared to support this because, under the new tax system, two-thirds of the funding for these tax cuts comes from base broadening—something the Labor Party did not do. Indeed, they used the rise in wholesale sales tax to pay entirely for their tax cuts. This time we are paying for some two-thirds of them by doing things like tightening up the rules of the fringe benefits tax. That will see, again, $760 million going into the coffers in relation to social security measures.An amount of $790 million will go into the coffers from taxing trusts as companies and $1.4 billion will be raised from business tax compliance measures. An amount of $2 billion will be raised from abolishing the savings rebate; $2.6 billion from new company tax payment arrangements; and $300 million from the deferred company tax payments and life insurers. So $7.7 billion is being paid for by those mostly at the top. They are the ones who are using a variety of arrangements for minimising—legally at the moment—the amount of tax they are paying. So it hits high income earners the hardest. I cannot understand how Senator Cook does not seem to be able to understand this. The revised tax cuts will be skewed to benefit middle income earners, who have borne the brunt of bracket creep.According to 1996-97 tax statistics, 88 per cent of taxpayers earn less than $50,000. They paid 60 per cent of the tax collected. They receive 67 per cent of the up-front tax cuts, but when other income tax measures are taken into account, they receive some 76 per cent of the net tax cuts. According to the 1996-97 tax statistics, 1.3 per cent of taxpayers earned over $100,000 per year and paid 12.4 per cent of tax. They receive just 4.3 per cent of the up-front tax cuts. But after the effects of all the tax measures are taken into account, taxpayers on over $100,000 a year, on average, will be paying more tax than they are now. Let me repeat that: when we put it all together and look at the base broadening and who that affects—the trusts and savings rebates; we roll all that in together—taxpayers on more than $100,000 a year will be paying more tax than they are now. This is a direct result of the Democrats' insistence that tax cuts be pared back on incomes above $50,000.The savings, as I said, are $1.3 billion and we left intact all the cuts for those at the bottom end of the system. The new top tax rate will cut in at $60,000, about 1.4 times average earnings. That compares with the last time that it was reviewed by Labor and set at $50,000, which was then 1.8 times average earnings. The bottom rate for incomes below $20,000 will be cut from 20 per cent to 17 per cent—the lowest rate for more than three decades. That is half the rate it was in the 1970s and lower than it ever was under a Labor government, so I am pleased to support this amended tax scales bill. We end up with a progressive tax system where high income earners on average end up paying more tax, low income earners enjoy the lowest marginal rates in decades and middle income earners get relief from bracket creep. That is a very worthy outcome.I have to say that I would like to see more action on closing tax loopholes. Some issues have now been referred to the Ralph inquiry and I am pleased to see the allowance of an extra month for that report to come down. As part of our agreement with the Prime Minister and the government, what has gone over to the Ralph review includes the alternative minimum company tax proposals. We have particularly asked them to look at the United States model to reduce corporate tax avoidance and also the use of company structures and contracts to reduce the tax paid by personal service workers. Those two issues have gone to Ralph. These issues, and the reduction of the concessional treatment of company cars already being considered by Ralph, could raise an additional $2 billion a year. They are fights that we will leave for another time. I commend these amendments to the Senate.15:55:006603Sherry, Sen NickSenator SHERRYZW4TASALP00—Thank you, Madam Chair.WW4KEMPSenator Kemp—Madam Chair, I jumped to my feet well before Senator Sherry.10000CHAIRMANThe CHAIRMAN—Unfortunately, I called Senator Sherry.WW4KEMPSenator Kemp—I did jump to my feet.ZW4Sherry, Sen NickSenator SHERRY—So did I, and I beat you.WW4KEMPSenator Kemp—Madam Chair, you have now called two Labor speakers on this bill. All right, Senator Sherry, you speak and I will speak last. That is fine by me. Just so we do not make a mistake, Senator. I just record that— 10000CHAIRMANThe CHAIRMAN—Order, Minister! I called the person who jumped first.WW4KEMPSenator Kemp—No, you did not. You looked at that side and saw Senator Sherry—ZW4Sherry, Sen NickSenator SHERRY—And I beat you.WW4KEMPSenator Kemp—Before you looked at this side.10000CHAIRMANThe CHAIRMAN—Order! I call on Senator Sherry.ZW4Sherry, Sen NickSenator SHERRY—As Senator Cook said, we are dealing with 22 bills and we have about 33 minutes left. I do not want to speak for the full 15 minutes, Senator Kemp. I will speak for about five minutes on the wine industry equalisation tax. I think it is a matter of great regret that, for this very important issue to one of Australia's fastest growing industries, we have got less than 35 minutes and it has not yet rated a mention in this debate. The Australian wine industry, as I think most people in Australia are aware, has seen tremendous growth over the last decade. It has become a world beater. It is a very important industry in the value adding of agricultural commodities: grapes. It is a top industry in the world in terms of quality. We now export $880 million of wine annually to more than 80 countries and the industry has an international reputation as an exporter of quality and premium wine at a competitive price.I think, unfortunately, that many in the wine industry believe that, with the government's proposals for a goods and services tax, the other taxes that apply on wine—the excise taxes on alcohol generally—would either be abolished or at least be held at a level so that the price of alcohol would not go up once the GST is added. I believe that the Treasurer, Mr Costello, and the Liberals blatantly misled the wine industry about the level of the new tax—not just the GST but the new wine equalisation tax which is being introduced. The Winemakers Federation and the wine industry generally believed that the new wine equalisation tax would be revenue neutral, but of course that is not the case. The Liberals and Mr Costello have continued to mislead the wine industry, although very reluctantly and only recently, the Treasurer, Mr Costello, has conceded that the new wine equalisation tax will increase the industry's annual tax take by eight per cent.The Winemakers Federation of Australia estimates that the new wine equalisation tax plus the GST will increase the wine industry's tax impost by $147 million a year. So the total tax take from the wine industry is going up significantly, about 12 per cent, according to Mr Sutton, Chief Executive Officer of the Winemakers Federation. He says that `this breaches an earlier government promise that the new tax system would have no significant effect on tax revenue'. This has caused grave concern in the wine industry for two basic reasons. First, the level of tax on wine in Australia is being increased significantly and Mr Sutton says:. . . the government is pushing us—the wine industry—now into the rarefied position of being the most highly taxed wine growing country in the world and this is a massive increase in tax on one of Australia's most successful exporting industries.This has drawn criticism. It is interesting to see that Senator Crane is not in the chamber. An article in the Financial Review said:Senator Winston Crane (Lib)—from Western Australia—who is also chair of the Government's agriculture committee, said the wine tax policy could be `better and fairer'. Senator Crane said the Government's package should be supported when it is voted on in the Senate, but he called for `independent research' to be undertaken to determine the actual impact on the wine industry.We know what the impact is going to be: a massive increase in tax on the wine industry. Secondly, because of that increase and the structure of the existing tax on wine, which is ad valorem, this will mean a significantly greater increase in prices for the higher priced, higher quality wine—namely bottled wine—and a lower price increase for cask wine.This has some important policy implications. I would like to use, as an exhibit for the Senate, a cask of wine. I did not particularly pick on Morris wineries, but this particular issue of ad valorem—5K4FAULKNER Senator Faulkner—Exhibit A.ZW4Sherry, Sen NickSenator SHERRY—Exhibit A. This particular issue of ad valorem tax on wine means that a cask of wine is about as cheap per litre as coca-cola. It is in fact cheaper than light beer per litre. That is an absurd outcome.It was with interest that I bought this cask of wine from the bottle shop. It says on the cask:This pressing style wine is deep crimson red in colour, displaying rich ripe fruit aromas. The palate is generous and full flavoured with balanced tannins and a clean dry finish.We have, on the side of the box, `five generations of wine makers' and `established in 1859'. When you look at the back of the box it says `product of Spain 95 per cent, Australia 5 per cent'. With the skewing of the wine tax to favour bulk wine, we are seeing significantly increased imports of bulk wine from overseas. That is one detrimental impact of this structure of the tax. The second issue relates to the health impact the sale of cheaper wine will have.I want to reiterate that we are seeing an increase in the total wine tax, which is breaking the government's commitment. It is an extra $147 million. What is the Democrats' response? The Democrats claim they have a deal with the Howard government that will:. . . ensure that the states keep arrangements which provide a tax exemption for cellar door and mail order sales up to $300,000.That is the announcement by the Democrats. We would like an undertaking from the Democrats that that deal will be delivered, because apparently the Treasurer, Mr Costello, has left the wine industry floating in the wind, so to speak. The Treasurer has reiterated these arrangements. He says:We will ensure that states will keep arrangements providing for rebates on cellar door and mail order sales for wineries up to $300,000.But he then went on to say:The states should be in a position to continue those rebate schemes. Indeed I understand that South Australia has already indicated that it will.I would like Senator Lees, as a senator and the Leader of the Democrats, to explain why the South Australian state Treasurer, Mr Bob Lucas, a Liberal, when asked about Federal Treasurer Costello's assurances, said, `No, it is not true. We have not been consulted, so at this stage we cannot agree to anything.' This very important industry for Australia—a particularly important industry for South Australia—and the Democrats have been conned. It is an outright lie. This lie is being clearly illustrated by the false claims that the Treasurer of this country, Mr Costello, has made in respect of the application of this state.WW4KEMPSenator Kemp—Mr Temporary Chairman, I raise a point of order. It is quite clear that the use of the word `lie' is not appropriate or parliamentary. I suggest that it be withdrawn.5K4FAULKNER Senator Faulkner—On the point of order, Mr Temporary Chairman: as you would be aware, Senator Sherry was not calling anyone a liar, which is unparliamentary, or saying that any individual had espoused a lie. He was talking about what was contained in a press release from Mr Costello as being an outright lie. I think there is a great deal of case law on this one.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Thank you, Senator Faulkner, I think you have made your point. I must ask Senator Sherry to withdraw because he was implying that the Treasurer had lied. Before you begin again, Senator Sherry, you are aware of the standing orders in relation to exhibits in this chamber and so I would suggest that, if you have finished reading from the cask that you were using, you put it down and out of sight, because this is not a place where we have exhibits.ZW4Sherry, Sen NickSenator SHERRY—It was not a bad drop, I have to say, despite the fact that 95 per cent of it came from Spain. I withdraw that comment. The facts speak for themselves. The Treasurer of the country, Mr Costello, has said that he has an agreement with the Democrats that ensures the states will keep arrangements providing for rebates on cellar door and mail order sales for wineries up to $300,000. He then went on to say:The states should be in a position to continue those rebate schemes. Indeed I understand that South Australia has already indicated it will.But what does the South Australian state Treasurer, Mr Costello's own Liberal colleague, say? He says, `No, it is not true.' So someone is leading someone up the garden path—or up the vineyard path perhaps is more appropriate. The facts speak for themselves with regard to the integrity of the Treasurer, Mr Costello, and the integrity of the South Australian state Treasurer. We want some assurances from the Democrats, because this particular arrangement concerning the $300,000 in cellar door sales does do something for small wineries, and it should be incorporated in the legislation. It should not rely on a fuzzy, hazy lack of commitment and the promise in the deal being entered into by Mr Costello and the Democrats, who have sold out the wine industry in this country.16:07:006605Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Senator Cook complained that I had not spoken in this debate, so I will accept the invitation. I was actually trying to provide more time for Senator Cook, but as he chose to complain about it I will make a few remarks. The spleen which the Labor Party is showing is quite astonishing. This is a party without any policies, a party which has made no contribution to the tax debate and a party which has not raised any alternatives. It has come into the chamber and attempted to block a series of bills. It is worth recording, in the interests of the public, that the Labor Party is now complaining about the largest income tax cuts in Australian history. That is what the Labor Party is complaining about.If you look at Senator Cook's speech, you will see that the Labor Party is complaining that we are giving massive tax cuts. Despite what you say, Senator Cook, a fair assessment of the tax cuts that we are giving reveals that huge benefits flow to low and middle income earners. This is not just the assessment I am making; this is the assessment of independent observers. If you look at the modelling carried out by Warren and Harding or by Access Economics you will see that we are providing massive tax cuts to lower and middle income Australia.Let me outline the scale of some of these tax cuts. There are two examples which are perhaps worth recording in Hansard. This is the advice I have received. It relates to a single income family with two children between five and 13 and an income of $30,000. That is not a high income; it is lower than average weekly earnings. Warren and Harding, independent modellers, I am advised, calculate that this family will end up with an extra $49 in its pocket every week. Senator Cook comes up and sneers at it. The Labor Party has never given a tax cut like that in Labor Party history. That is not the government arguing that case; that is the advice I have received on what Warren and Harding calculated.Access, another independent modeller, estimated that the benefit to this family is $59 per week. This is an increase of over $3,000 per year after GST. These are not small derisory tax cuts; these are very substantial tax cuts which are giving very real benefits to people on low incomes. Let us look at a single income family with one child under five and an income of $30,000—less than average weekly earnings. Access, the independent modellers, calculate an extra $54 per week. That is a very substantial rise. Warren and Harding calculate an extra $44 per week. These are very substantial tax cuts. These are of great benefit to low and middle income Australia.Senator, you stand up and attempt to mock those cuts when the Labor Party offered nothing. You know that the truth of the matter is that, when this bill goes through, the Labor Party will be revealed as a party without policy and direction and as a party whose whole policy strategy has come unstuck. Your attempt to block major tax reform will be exposed for what it is. The one reason for the spleen and sheer nastiness coming from Senator Cook in this debate in the chamber is the realisation that you have failed in the task which you set yourself. You failed in the last election and you have failed in your efforts to make this government break its promises at the last election. Senator Cook, the public will judge you and your colleagues harshly, I believe.What did the Labor Party want to do in the last election? The Labor Party wanted to impose a capital gains tax on pre-1985 assets. That is essentially what your policy was. Of course, days after the election you junked that because it was a nonsense. Let me give you an example of what Labor promised at the election. Consider a family with two parents earning $35,000 each—around average weekly earnings—and with three dependent children.RF4COOKSenator Cook—Mr Temporary Chairman, I raise a point of order. The bill before the chamber is a bill for tax cuts that the government has proposed. The government has three amendments to its own legislation before us. The minister is speaking about none of that.YE4BOSWELLSenator Boswell—You should not be ashamed of your own policies; you are getting a free run.RF4COOKSenator Cook—He abuses question time by misrepresenting our policies and he is about to do it again. I suggest that, on the basis of relevance, you call him to order and ask him to address the issues before the chair. If he wants to debate our policy—in which we have no GST, so we do not have to compensate for it—I am happy to do that.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Ferguson)—There is no point of order.WW4Kemp, Sen RodSenator KEMP—Of course there is no point of order. What an astonishing thing. As Senator Boswell pointed out correctly, all I am trying to do is to indicate what the Labor Party policy is. Senator Cook knows what the answer is. Consider a family with, say, three children and both of the adults in the family earning $35,000 each—a total family income of $70,000. Do you know what this family got from the Labor Party in tax cuts? Zero; absolutely nothing. That was your policy, Senator, and it is no wonder that you were beaten again at the election. Unless you improve your approach to politics, unless you are prepared to get in there and develop real policies, the public will judge you harshly again, as indeed they should.Constant abuse of people and constant attacks on the integrity of people are not a substitute for real policy. Real policy requires a bit of work. Above all, it requires some knowledge of what you believe in. And the great problem for the Labor Party, as I have said often in this chamber, is that the hardest question you could ask them is: what do you stand for? They do not know, and nobody else knows. Until you and your colleagues do some of the hard work and work out what you stand for and build on that and develop some real policies, Senator, I suggest that you will be over on that side of the chamber for a very long period indeed, and deservedly so.Some issues regarding the wine equalisation tax were raised, so let me make some comments on that. The WET carries across the basic structure of the wholesale sales tax, so the practical change for taxpayers is minimal and generally improved. This will ensure that the principles underlying the WET are familiar and that the concepts underlying the legislation are well accepted by the industry. The WET will be integrated with the registration requirements for the Australian business number, the ABN, and this will be simpler and more consistent for business. The Commonwealth does not propose to rebate the WET on cellar door sales and samples, consistent with the existing practice where the Commonwealth provides no rebates under the wholesale sales tax.The states and territories have maintained rebate schemes as part of the safety net arrangements introduced by the Commonwealth to replace business franchise fees that were of questionable constitutional validity. The states and territories receive goods and services tax revenue. After 1 July 2000 they will receive more revenue, including the funds that would have been raised by the safety net arrangements if they had continued to be in place. As a result, the states and territories will have sufficient funds under this tax reform to continue to provide rebates for wine tasting stocks, cellar door sales and mail-order sales.ZW4SHERRYSenator Sherry—Why are you taking more tax from the wine industry?WW4Kemp, Sen RodSenator KEMP—You can huff and puff all you like, but as this debate draws to a close it is interesting to see just what a total impasse the Labor Party has reached. I thought Senator Lees made a very good point. In contrast to the changes that we are making to the indirect tax system this time, if you cast your mind back to 1993, I think Senator Lees was a bit kind. Not only were the tax cuts largely dropped, from memory, but no compensation was offered for the very large rise in wholesale sales tax and excise fees that the Labor Party brought in.RF4COOKSenator Cook—The tax cuts were brought forward.WW4Kemp, Sen RodSenator KEMP—The truth of the matter, Senator Cook, is that the Labor Party has got form on this issue and people do not like it. You have been talking about compensation packages which you do not happen to like, yet when you brought in your changes to the wholesale sales tax system no compensation was offered.RF4COOKSenator Cook—We provided a tax cut. Tell the truth.WW4Kemp, Sen RodSenator KEMP—Everyone knows that you lied to the Australian public. It was the famous l-a-w law tax cuts which you dropped. To come in here and to lecture this government on tax reform after your appalling performance is absolutely risible. I do not accept any of the points that you have made. I accept the fact that you wanted me to make a statement, and I have made that statement.While I am on my feet, I want to point out that on Thursday, 24 June, during a stage of the debate on the ANTS package, I stated correctly that bread or buns with a sweet filling or coating would be subject to GST.RF4COOKSenator Cook—Mr Temporary Chairman, I raise a point of order. This is not relevant to the question before the chair.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—I uphold that point of order. It is not relevant. If you want a make an explanation, Minister, you will have to do it another time.WW4Kemp, Sen RodSenator KEMP—In that case, I seek leave to incorporate in Hansard what I proposed to read.Leave not granted.16:19:006607Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—We are being asked to look at the issue of tax cuts. I guess what we are being asked to believe is that this will make up for a lot of the damage that is going to be done to industry by this whole package. Senator Sherry brought up fervently the issue in relation to what is going to happen with the whole package, and especially the volumetric tax on the wine industry. I would like to add something to that argument. In the West Australian newspaper on Thursday, 24 June 1999, the editorial said:The fundamental flaw in the proposed new tax is that it is to be based on value rather than volume or alcohol content.It also says:The National Small Wineries Coalition has pointed out that 97 per cent of the nation's wine is produced by 20 big corporations and the rest by more than 1000 small businesses. It says 64 per cent of the big corporations' sales in Australia are of cask wine.It also says:Apart from its financial inequity, the WET proposed is unacceptable on the ground of public health.It goes on to say:And if the Australian Democrats really cared for small business the party would have supported a volume-based system, rather than push for another confusing tax exemption.I could not agree more. The Independent Winemakers Association said:The Australian wine industry faces a choice. It can continue under a socially irresponsible tax regime which punishes the pursuit of quality and rewards instead the mass production and import of cheap alcohol; or it can urge government to adopt a more sensible system which taxes alcohol and promotes the quality improvement demanded by an ever more discerning world market.The volumetric tax advocated by the Independent Winemakers Association has full support from all major welfare, medical and drug authorities in Australia. It is simple and practical, and it gives a better deal to virtually all Australian grape and wine producers.They go on to say:Political decisions made now will show whether the government is serious in its fight against drugs, and prepared to support the industry's development as a responsible and economically valuable producer of health-giving quality wines; or whether on the contrary it will continue to pursue socially retrogressive policies, condemning the industry to future mediocrity and entrenching it as a legitimate target for anti-alcohol lobbies in the years to come.I was very encouraged by the words of Senator Sherry. I hope that means that the ALP are now moving in their position on the WET. The National Small Wineries Coalition said:During the last 15 years, successive Labor and Liberal Governments have imposed new taxes on the production of this agricultural product to the current 41%.With their new-found influence the Democrats, for the first time, have joined these two—and these are their words—rapacious and insensitive parties and this week announced that they will impose a new tax (WET), ratcheting up the total tax take from wineries to 49%.They have tried to camouflage this black act with deceitful announcements that the rebate on cellar door sales provided by the states will continue.In doing this, they have revealed the hollow nature of their action by capping this rebate to a ceiling of $300,000, that is 1500 cases of wine, that wineries can claim a 15% rebate on from their respective states, who have not even agreed to same.It then says:Meg Lees may finally meet her Waterloo following her own state, South Australia, announcing this morning that no such state arrangements were in place to support her hollow rebate gift.This press release is dated 24 June 1999. If it has happened since then, we have not yet heard. In a press release that we received on 25 May, the National Small Wineries Coalition also said:Clearly the big are benefiting at the expense of the small.The Government, Democrats, Greens and Independents in their negotiations in respect to the GST have a golden opportunity to right the wrong that the WET proposal will inflict on society and small wine producers. To not do so will guarantee it becoming an electoral issue next time round.I guess it will. In the Financial Review of 25 June, Paul Cleary said:The agreement from the Democrats to pass the WET legislation is contingent on the Government delivering on the rebates, which are of major benefit to small wineries.. . . . . . . . .Labor MP Mr David Cox, who also owns a small vineyard in McLaren Vale, revealed that South Australian Treasurer, Mr Rob Lucas, said the State had not been consulted on the reforms and, as a result, could not commit itself to the rebates. "We have not been consulted so we cannot agree to anything," Mr Lucas told an estimates hearing.This tells the story, I am afraid. The wine industry has clearly said that. This was one of the strongest issues on which I have heard a clear consensus across various groups—welfare, alcohol, Aboriginal, health and, in particular, the quality wine producers and small wineries. This issue deserves better consideration but, unfortunately, it seems to have been passed over in the hope that somehow or other it will work out okay. I am afraid that that is not the way to make legislation.I am very concerned about this. When we come to voting on these issues, I hope there will be some rethinking of the issues. I guess it is too late in relation to the Australian Democrats. I am hoping that we will get a good response from members of the opposition because they have made such strenuous comments in expressing concern about the way the Democrats have negotiated this particular issue.16:25:006609Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I want to make some brief comments, if I may—RF4COOKSenator Cook—You just made some comments a minute ago.WW4Kemp, Sen RodSenator KEMP—Senator Cook does not wish me to, but I want to make some comments in relation to the A New Tax System (Commonwealth-State Financial Arrangements) Bill 1999 . I noticed that Senator Sherry ranged far and wide over the WET and I would like to make some comments on that, if it could be permitted at this stage.RF4COOKSenator Cook—Would you be kind enough to enable me to make some comments before we close?10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Ferguson)—Order! Senator Cook, the minister has the call.RF4COOKSenator Cook—I just want to ask a question, if I may, through you, to the minister.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—You can't ask a question—RF4COOKSenator Cook—He just spoke and now he has got the call again. I wanted to speak and I am now denied the call. I just ask if you would be kind enough to enable me to speak before we close this debate.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—You are making a request, not a point of order. The minister has the call.WW4Kemp, Sen RodSenator KEMP—Thank you. My understanding is that the debate ends at 4.30.RF4COOKSenator Cook—Yes, so can I say a few words?WW4Kemp, Sen RodSenator KEMP—It is going to be difficult, Senator.RF4COOKSenator Cook—You put the guillotine on and now you are stopping me speaking.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Order!WW4Kemp, Sen RodSenator KEMP—You invited me to talk, so I will talk.RF4COOKSenator Cook—And you could talk under wet cement and say nothing!10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Order! The call was over there and now the minister has the call.WW4Kemp, Sen RodSenator KEMP—The Commonwealth, states and territories are in agreement that the financial relationship between levels of government must be reformed and that Australia needs a stronger and more productive federal system for the next century. The government is committed to the reform of Commonwealth-state financial relations, and the two bills currently before the chamber will help to deliver this system. These bills represent an important step in improving the financial position of the states and territories.At the April Premiers Conference, the heads of government endorsed an intergovernmental agreement on the reform of Commonwealth-state financial relations. The Commonwealth, state and territory governments are in the process of revising that agreement to take account of the Prime Minister's 28 May announcement. This agreement retains the core elements of the original agreement and places Commonwealth-state financial arrangements on a more efficient and durable basis. Once agreed by all parties, this revised agreement will be attached to the legislation and the legislation will record the Common wealth's intention to comply with the agreement.The amendments before us today are required to enact aspects of the reforms to the Commonwealth-state financial arrangements arising from these developments. The arrangements for transitional assistance are also modified to reflect the agreement reached between the Commonwealth and the states. The level of assistance to the states and territories will be increased to reflect the changes in the level of GST revenues that will accrue to the states and territories. Also, as agreed by the heads of government, the distribution of GST revenue grants will be solely on the basis of horizontal fiscal equalisation after two years. Following the 28 May announcement, responsibility for local government funding will be retained at the Commonwealth level. Amendments are now required to ensure that local governments can receive financial assistance grants from the Commonwealth. A number of other additional amendments are required to address some technical matters.This probably brings to an end the debate to amend the bills for the government's tax reform package. There will be a debate on diesel tomorrow, but a raft of important bills will now be voted on by the Senate. Let me make it clear that this is a great day for Australia. The Senate has, we believe, produced a tax reform package which, with the passage of the legislation, will give Australia a tax system which will set it up for the new century. It is a tax system which reforms, among other things, the indirect tax system, the income tax system and the financial arrangements between the states and the Commonwealth. It provides major real improvements for people on pensions and benefits, and it provides huge assistance to families in particular, which this government has always had a particular focus on.In my view, the efforts of the Labor Party to defeat tax reform in Australia show how far the Labor Party has fallen. The Labor Party refused to accept the mandate given to the government at the last election. We have been able to work very constructively with the Democrats. We have, I believe, produced a most effective tax reform package. As the weeks, months and years go by, I believe it will be very apparent what a momentous day this is for Australia. This is a day which has at last produced, after all the hard work over many years, major tax reform for this country.10000CHAIRMANThe CHAIRMAN—Order! The time for the debate on the remaining sections of the A New Tax System (Goods and Services Tax) Bill 1998 and 26 related bills has expired. The question before the chair is that the government amendments moved to the A New Tax System (Personal Income Tax Cuts) Bill 1998 be agreed to.Question resolved in the affirmative.10000CHAIRMANThe CHAIRMAN—I shall now put all of the government amendments and requests on the remaining bills together. The question is that the following government amendments and requests be agreed to:In respect of the A New Tax System (Goods and Services Tax Administration) Bill 1998—Schedule 1, item 7, page 8 (lines 12 and 13), omit ", creditable importations and acquisitions and importations of diesel or like fuel", substitute "and creditable importations".Schedule 1, item 7, page 12 (lines 16 and 17), omit ", an input tax credit or a diesel fuel credit", substitute "or an input tax credit".Schedule 1, item 7, page 17 (lines 10 to 12), omit ", a creditable importation or an acquisition or importation of diesel or like fuel for creditable diesel fuel consumption", substitute "or a creditable importation".Schedule 1, item 7, page 35 (lines 27 and 28), omit "or acquire or import diesel or like fuel for creditable diesel fuel consumption,".Schedule 1, item 7, page 29 (after table item 11), insert:11Arefusing a request for a determination section 27-3711Brevoking a determination under section 27-37subsection 27-38(1)11Cdeciding the date of a revocationsubsection 27-38(2)In respect of A New Tax System (Commonwealth-State Financial Arrangements) Bill 1999—Requests : That the House of Representatives be requested to make the following amendment: Clause 5, page 6 (after line 6), after paragraph (c), insert: (ca) the amount, determined in a manner agreed by the Commonwealth and all of the States, that represents amounts of voluntary GST payments that should have, but have not, been paid by local government bodies; and Page 14 (after line 4), at the end of Division 2, add:14A Revenue replacement payments, 2000-01 (1) Each State is to be paid by way of financial assistance, for the 2000-01 GST year, a revenue replacement payment. (2) The revenue replacement payment for a State for the 2000-01 GST year is: where: alcohol base amount means the sum of: (a) the amounts determined by the Commissioner of Taxation, before 15 June 2001, to be the additional amount of sales tax on taxable dealings that occurred before 1 July 2000 to which the Sales Tax (Surcharge) Acts relate that was, or is likely to be, collected in the GST year because of a Commonwealth surcharge; and (b) if the June 2000 alcohol base amount exceeds the June 2000 alcohol base amount estimate,the amount of the excess; less the sum of: (c) if the June 2000 alcohol base amount estimate exceeds the June 2000 alcohol base amount,the amount of the excess; and (d) the amount determined by the Commissioner of Taxation to be the additional administrative costs incurred by the Commonwealth in the GST year because of that surcharge or those surcharges, to the extent that the administrative costs relate to taxable dealings that occurred before 1 July 2000. alcohol share for a State means: (a) if paragraph (b) does not apply,the number set out opposite the name of the State in the table at the end of this definition; or (b) if the regulations prescribe a number as the alcohol share for each State for the purposes of this definition,the number so prescribed for the State.Revenue replacement payments, alcohol shareItemStateAlcohol share1New South Wales0.337962Victoria0.223323Queensland0.193144Western Australia0.111475South Australia0.078576Tasmania0.024157Australian Capital Territory0.015698Northern Territory0.01569 petroleum base amount means the sum of: (a) the amount determined by the Chief Executive Officer of Customs, before 15 June 2001, to be the additional amount of customs duty on goods, imported before 1 July 2000, falling to subheadings of Chapter 27 of Schedule 3 to the Customs Tariff Act 1995 that was, or is likely to be, collected during the GST year because of a Commonwealth surcharge; and Note: Chapter 27 of Schedule 3 to the Customs Tariff Act 1995 deals with petroleum products. (b) the amount determined by the Commissioner of Taxation to be the additional amount of excise duty on goods, manufactured or produced before 1 July 2000, falling to items 11 and 12 of the Schedule to the Excise Tariff Act 1921 that was, or is likely to be, collected during the GST year because of a Commonwealth surcharge; and Note: Items 11 and 12 of the Schedule to the Excise Tariff Act 1921 deal with petroleum products. (c) if the June 2000 petroleum base amount exceeds the June 2000 petroleum base amount estimate,the amount of the excess; less the sum of: (d) if the June 2000 petroleum base amount estimate exceeds the June 2000 petroleum base amount,the amount of the excess; and (e) the amount determined by the Chief Executive Officer of Customs to be the additional administrative costs incurred by the Commonwealth in the GST year because of surcharges mentioned in paragraph (a), to the extent that the administrative costs relate to goods that were imported before 1 July 2000; and (f) the amount determined by the Commissioner of Taxation to be the additional administrative costs incurred by the Commonwealth in the GST year because of surcharges mentioned in paragraph (b), to the extent that the administrative costs relate to goods that were manufactured or produced before 1 July 2000. petroleum share for a State means: (a) if paragraph (b) does not apply,the number set out opposite the name of the State in the table at the end of this definition; or (b) if the regulations prescribe a number as the petroleum share for each State for the purposes of this definition, the number so prescribed for the State.Revenue replacement payments, petroleum shareItemStatePetroleum share1New South Wales0.300392Victoria0.201533Queensland0.195934Western Australia0.171185South Australia0.075496Tasmania0.024537Australian Capital Territory0.012918Northern Territory0.01804 tobacco base amount means the sum of: (a) the amount determined by the Chief Executive Officer of Customs, before 15 June 2001, to be the additional amount of customs duty on goods, imported before 1 July 2000, falling to subheadings of Chapter 24 of Schedule 3 to the Customs Tariff Act 1995 that was, or is likely to be, collected during the GST year because of a Commonwealth surcharge; and Note: Chapter 24 of Schedule 3 to the Customs Tariff Act 1995 deals with tobacco and manufactured tobacco substitutes. (b) the amount determined by the Commissioner of Taxation to be the additional amount of excise duty on goods, manufactured or produced before 1 July 2000, falling to items 6, 7 and 8 of the Schedule to the Excise Tariff Act 1921 that was, or is likely to be, collected during the GST year because of a Commonwealth surcharge; and Note: Items 6, 7 and 8 of the Schedule to the Excise Tariff Act 1921 deal with tobacco, cigars and cigarettes. (c) if the June 2000 tobacco base amount exceeds the June 2000 tobacco base amount estimate,the amount of the excess; less the sum of: (d) if the June 2000 tobacco base amount estimate exceeds the June 2000 tobacco base amount,the amount of the excess; and (e) the amount determined by the Chief Executive Officer of Customs to be the additional administrative costs incurred by the Commonwealth in the GST year because of surcharges mentioned in paragraph (a), to the extent that the administrative costs relate to goods that were imported before 1 July 2000; and (f) the amount determined by the Commissioner of Taxation to be the additional administrative costs incurred by the Commonwealth in the GST year because of surcharges mentioned in paragraph (b), to the extent that the administrative costs relate to goods that were manufactured or produced before 1 July 2000. tobacco share for a State means: (a) if paragraph (b) does not apply,the number set out opposite the name of the State in the table at the end of this definition; or (b) if the regulations prescribe a number as the tobacco share for each State for the purposes of this definition, the number so prescribed for the State.Revenue replacement payments,tobacco shareItemStateTobacco share1New South Wales0.324922Victoria0.218033Queensland0.190654Western Australia0.111005South Australia0.089886Tasmania0.032267Australian Capital Territory0.014568Northern Territory0.01870 (3) In determining, for the purposes of subsection (2), the additional amount of customs duty or excise duty that was collected, or is likely to be collected, during a particular period because of a Commonwealth surcharge: (a) the Chief Executive Officer of Customs is to take into account the impact of the operation of section 19 of the Customs Tariff Act 1995 ; and (b) the Commissioner of Taxation is to take into account the impact of the operation of section 6A of the Excise Tariff Act 1921 . Note: Section 19 of the Customs Tariff Act 1995 and section 6A of the Excise Tariff Act 1921 provide for the automatic indexation of certain rates of duty which include rates payable on tobacco etc. and petroleum products. (4) If, after the commencement of this Act, the Customs Tariff Act 1995 or the Excise Tariff Act 1921 is amen ded to vary the method of calculating duty on goods falling to: (a) subheadings of Chapter 24 of Schedule 3 to the Customs Tariff Act 1995 ; or (b) items 6, 7 and 8 of the Schedule to the Excise Tariff Act 1921 ; then, for the purposes of subsection (2), the additional amount of customs duty or excise duty that was collected, or is likely to be collected, during a particular period is to be determined on the basis that the amendment had not been made. (5) For the purpose of subsection (4): (a) a Customs Tariff or Customs Tariff alteration proposed in the Parliament is taken to be an amendment of the Customs Tariff Act 1995 ; and (b) an excise tariff alteration proposed in the Parliament is taken to be an amendment of the Excise Tariff Act 1921 . (6) In this section: Commonwealth surcharge means the variation effected by a Surcharge Act in the rate of duty of customs or excise payable on specified goods or in the rate of sales tax applicable to specified taxable dealings (as the case may be). June 2000 alcohol base amount means the amount determined by the Commissioner of Taxation, before 15 June 2001, to be the additional amount of sales tax on taxable dealings to which the Sales Tax (Surcharge) Acts relate that was collected during the month of June 2000 because of a Commonwealth surcharge. June 2000 alcohol base amount estimate means the amount determined by the Commissioner of Taxation to be the June 2000 alcohol base amount estimate for the purposes of Schedule 6 to the States Grants (General Purposes) Act 1994 (as in force immediately before its repeal). June 2000 petroleum base amount means the sum of the amounts determined by the Chief Executive Officer of Customs, before 15 June 2001, to be: (a) the additional amount of customs duty falling to subheadings of Chapter 27 of Schedule 3 to the Customs Tariff Act 1995 that was collected during the month of June 2000 because of a Commonwealth surcharge; and (b) the additional amount of excise duty falling to items 11 and 12 of the Schedule to the Excise Tariff Act 1921 that was collected during the month of June 2000 because of a Commonwealth surcharge. June 2000 petroleum base amount estimate has the same meaning as in Schedule 6 to the States Grants (General Purposes) Act 1994 (as in force immediately before its repeal). June 2000 tobacco base amount means the sum of: (a) the amount determined by the Chief Executive Officer of Customs, before 15 June 2001, to be the additional amount of customs duty falling to subheadings of Chapter 24 of Schedule 3 to the Customs Tariff Act 1995 that was collected during the month of June 2000 because of a Commonwealth surcharge; and (b) the amount determined by the Commissioner of Taxation, before 15 June 2001, to be the additional amount of excise duty falling to items 6, 7 and 8 of the Schedule to the Excise Tariff Act 1921 that was collected during the month of June 2000 because of a Commonwealth surcharge. June 2000 tobacco base amount estimate has the same meaning as in Schedule 6 to the States Grants (General Purposes) Act 1994 (as in force immediately before its repeal). Sales Tax (Surcharge) Acts means the following Acts: (a) the Sales Tax (Customs) (Alcoholic Beverages) Act 1997 ; (b) the Sales Tax (Excise) (Alcoholic Beverages) Act 1997 ; (c) the Sales Tax (General) (Alcoholic Beverages) Act 1997 . Note: These Acts increase the rates of tax that apply to taxable dealings with the following goods: (a) goods covered by Item 1 of Schedule 7 to the Sales Tax (Exemptions and Classifications) Act 1992 ; (b) beer, spirits, liqueurs or spirituous liquors; (c) beverages that contain beer, spirits (other than spirits for fortifying wine or other beverages), liqueurs or spirituous liquors. Surcharge Acts means the following Acts: (a) the Customs Tariff Amendment Act (No. 3) 1997 ; (b) the Excise Tariff Amendment Act (No. 3) 1997 ; (c) the Sales Tax (Surcharge) Acts; (d) any Act that varies: (i) the rate of the duty of customs payable on goods falling to subheadings of Chapter 24 or 27 of the Customs Tariff Act 1995 ; or (ii) the rate of the duty of excise payable on goods falling to item 6, 7, 8 or 11 of the Schedule to the Excise Tariff Act 1921 ; or (iii) the rate of sales tax applicable to any of the taxable dealings to which the Sales Tax (Surcharge) Acts relate; and is prescribed for the purposes of this definition. Note 1: The Customs Tariff Amendment Act (No. 3) 1997 increases the rate of the duty of customs payable on goods falling to certain subheadings of Chapters 24 and 27 of Schedule 3 to the Customs Tariff Act 1995 . The relevant subheadings of Chapter 24 deal with tobacco and manufactured tobacco substitutes. The relevant subheadings of Chapter 27 deal with petroleum products. Note 2: The Excise Tariff Amendment Act (No. 3) 1997 increases the rate of the duty of excise payable on goods falling to items 6, 7, 8 and 11 in the Schedule to the Excise Tariff Act 1921 . Items 6, 7 and 8 in that Schedule deal with tobacco, cigars and cigarettes. Item 11 deals with petroleum products. Schedule 1, page 18 (line 25), omit "or 2002-03". Schedule 1, page 19 (lines 28 and 29), omit ", 2001-02 or 2002-03", substitute "or 2001-02". Schedule 1, page 20 (lines 27 to 29), omit subclause 6(1), substitute: (1) This clause applies for: (a) the 2002-03 GST year; and (b) any GST year that is prescribed to be a transitional GST year for the purpose of paragraph (b) of the definition of transitional GST year in section 4.Amendments : Clause 14, page 12 (line 28), after "1994 ", insert "(as in force immediately before its repeal)". Schedule 1, heading to clause 4, page 18 (line 23), omit "or third ". Schedule 1, heading to clause 5, page 19 (line 26), omit "3 ", substitute "2 ". Schedule 1, heading to clause 6, page 20 (line 26), omit "Prescribed ", substitute "Third or prescribed ".In respect of the A New Tax System (Commonwealth-State Financial Arrangements—Consequential Provisions) Bill 1999—Clause 2, page 2 (lines 1 to 3), omit subclause (2), substitute: (2) Schedule 2 commences at the later of: (a) the start of 1 July 2000; and (b) the commencement of the A New Tax System (Commonwealth-State Financial Arrangements) Act 1999 .In respect of the A New Tax System (Indirect Tax Administration) Bill 1999—Schedule 1, item 22, page 6 (lines 11 and 12), omit subparagraph (ii).Schedule 1, item 37, page 8 (line 22), omit "or a diesel fuel credit,".Schedule 1, item 84, page 17 (line 6), omit "or".Schedule 1, item 84, page 17 (lines 7 and 8), omit paragraph (d).Question resolved in the affirmative.10000CHAIRMANThe CHAIRMAN—The question is that the bills, as amended—RF4COOKSenator Cook—But what about our amendments?10000CHAIRMANThe CHAIRMAN—If you wish to have your amendments put, Senator, you will have to seek leave to have them put.16:31:006615Cook, Sen PeterSenator COOKRF4WAALP00—Madam Chairman, I seek leave for the opposition amendments to these bills to be put equally.10000CHAIRMANThe CHAIRMAN—Is leave granted?16:31:006615Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—by leave—I was approached by the Leader of the Opposition in relation to what items should be put separately and what items leave would be sought for. The opposition—as I understood it, and it is quite clear—want to separate some votes on the third reading. But there has been no request—which was the process that we laid down all of last week—to indicate to us, prior to the votes being taken, for which motions they would seek leave. There has been no indication whatsoever. They have made clear requests in relation to third readings but none in relation to amendments. It is impossible to deal with last-minute requests in this way; there has been a process which was laid down last week. I do not know whether anyone else has sought assistance. We are always happy to accommodate the wishes of the Senate to make things move along. WW4KEMPSenator Kemp—It is contrary to the process agreed on.H15Campbell, Sen IanSenator IAN CAMPBELL—It is contrary to any undertakings that have been sought or given.16:32:006616Cook, Sen PeterSenator COOKRF4WAALP00—by leave—My understanding of the discussions between the Leader of the Opposition and the Manager of Government Business in the Senate is that those discussions centred on how the bills should be voted on in this chamber. We obviously want to vote against the bills that impose the GST, and my understanding is that when we come to that point those bills will be put in a block to enable us to do so. We do not wish to vote against bills delivering tax cuts and other compensation for the GST, so we are happy for them to be put together.But what I am speaking about now is not any of that; it is about an understanding reached to deal with the order of business at the end of the proceedings. We have 26 bills and there are opposition amendments to a couple of them, and it would require only two questions to be presented to the chamber by the chair. One brace of opposition amendments relates to the imposition bills—the excise bill, the customs bill and the general imposition bill—that is, there are three amendments: one to each of those bills. They could be put together. The next is the wine equalisation tax bill, and we have spoken on that in this debate. We would like that amendment to be put as well. All I am asking is that the amendments that we would like to have moved be put. That does not breach any understandings reached between the Manager of Government Business in the Senate and the Leader of the Opposition. It is just a civilised procedure for us to at least be able to have a chance to vote on the amendments that we want for this package.16:34:006616Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—by leave—I am sorry I did not hear all of the comments of the Manager of Government Business in the Senate or of the Deputy Leader of the Opposition in relation to this important issue. But let me make it clear that I have spoken to the Manager of Government Business about how we deal with the third reading votes—which obviously, Madam Chair, is not something that would be of interest to you in your capacity as Chairman of Committees—and I think we have reached an understanding about how that might progress. We are now dealing with the question of those amendments in the committee stage which are most appropriately put to a vote. As I understand it, what the Deputy Leader of the Opposition has suggested is that, in relation to the opposition requests on sheet 1325 for the A New Tax System (Goods and Services Tax Imposition—Excise) Bill 1998 —RF4COOKSenator Cook—Excise, customs and general are three bills.5K4Faulkner, Sen JohnSenator FAULKNER—Yes; there is one on the excise bill, and then on the customs bill there is an opposition request on sheet 1324—H15CAMPBELLSenator Ian Campbell—We will give the leave that has been sought by your side. Just get on with the package.5K4Faulkner, Sen JohnSenator FAULKNER—If we have agreement, then we can proceed accordingly.H15CAMPBELLSenator Ian Campbell—You put your amendments together and leave will be granted.5K4Faulkner, Sen JohnSenator FAULKNER—I think it will require two amendments, won't it?10000CHAIRMANThe CHAIRMAN—They are actually requests.5K4Faulkner, Sen JohnSenator FAULKNER—Madam Chair, I am just trying to explain what I think it will require, which is that the opposition requests to the excise bill, the customs bill and the general bill can be put to one vote before the chair. There will be a need then for opposition amendments Nos 1 and 2 on sheet 1312 (revised) to be put to the ANTS wine equalisation tax bill. I believe that, if there is agreement there, leave can be sought for that. Then we will deal with the third reading, as has been discussed by the Manager of Government Business and me, and we can proceed in a sensible way. So, in answer to the Manager of Government Business's point, I think it requires two questions to be put and two divisions in the committee stage, and then we can deal with the third reading in the way in which we understand.10000CHAIRMANThe CHAIRMAN—Is leave granted to put the opposition requests to the excise, customs and general bills? There being no objection, leave is granted.16:37:006617Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I wonder if I could also make it clear at this stage that I have no objection to Greens (WA) amendments on the three WET bills being put together, but I remind the Senate that I also have a third reading amendment which is on a quite separate matter and which I would like put differently from that.10000CHAIRMANThe CHAIRMAN—I will deal with the opposition requests and amendments first, Senator Margetts, and then I will come back to your three and they can be put together. The question is that the following opposition requests be agreed to:—in respect of A New Tax System (Goods and Services Tax Imposition—Excise) Bill 1998: That the House of Representatives be requested to make the following amendment: Clause 4, page 2 (line 12), omit "10%", substitute "0%".—in respect of A New Tax System (Goods and Services Tax Imposition—Customs) Bill 1998: That the House of Representatives be requested to make the following amendment: Clause 4, page 2 (line 12), omit "10%", substitute "0%".—in respect of A New Tax System (Goods and Services Tax Imposition—General) Bill 1998:That the House of Representatives be requested to make the following amendment: Clause 4, page 2 (line 13), omit "10%", substitute "0%".16:42:00The committee divided. (The Chairman—Senator S. M. West)29Bishop, T. M. Bolkus, N.Brown, B. 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.Faulkner, J. P. Forshaw, M. G.Gibbs, B. Harradine, B.Hogg, J. Lundy, K.Mackay, S. Margetts, D.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.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. Gibson, B. F.Heffernan, W. Herron, J.Kemp, R. Knowles, S. C.Lees, M. H. Lightfoot, P. R.Macdonald, I. Macdonald, S.MacGibbon, D. J. McGauran, J. J. J.Minchin, N. H. Murray, A.Newman, J. M. O'Chee, W. G.*Parer, W. R. Patterson, K. C. L.Payne, M. A.Reid, M. E.Stott Despoja, N. Synon, K. M.Tambling, G. E. J. Tierney, J.Troeth, J. Watson, J. O. W.Woodley, J.Campbell, G. Vanstone, A. E.Hutchins, S. Hill, R. M.* denotes tellerQuestion so resolved in the negative.A NEW TAX SYSTEM (WINE EQUALISATION TAX) BILL 1999Amendments (by Senator Cook )—by leave—put:(1) Page 21 (after line 15), after clause 7-10, insert:7-11 Exemption for cellar-door sales (1) A sale is not taxable if: (a) the *manufacturer sells the wine, by *retail sale, to the purchaser, at the premises at which the *manufacturer manufactured the wine; and (b) the purchaser purchased the wine for consumption by the purchaser; and (c) the notional wholesale value of retail sales by the *manufacturer at the manufacturer's premises, to purchasers for consumption by the purchasers does not exceed $300,000 in a year (worked out using the half retail price method to determine the notional wholesale selling price), being a year beginning on 1 July and ending on 30 June the following year, providing that, where the total value of such sales exceeds $300,000 in a year, only such sales of wine in excess of $300,000 in the year are taxable. (2) The regulations may provide that, for the purposes of this section, where a number of manufacturers provide wine for sale at the premises of one *manufacturer, each of the manufacturers specified in the regulations is deemed to have made the sales at the manufacturer's own premises.(2) Page 21 (after line 15), after clause 7-11, insert:7-12 Exemption for tastings and promotions A sale is not taxable if: (a) the wine is provided for the purposes of consumption at a wine tasting or a wine promotion; and (b) the person consuming the wine does not pay, whether directly or indirectly, for the wine.16:46:00The committee divided. (The Chairman—Senator S. M. West)27Bishop, T. M. Bolkus, N.Brown, B. 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.Faulkner, J. P. Forshaw, M. G.Gibbs, B. Hogg, J.Lundy, K. Mackay, S.Margetts, D. McKiernan, J. P.Murphy, S. M. O'Brien, K. W. K. *Quirke, J. A. Reynolds, M.Schacht, C. C. Sherry, N.West, S. M.42Abetz, 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. Gibson, B. F.Heffernan, W. Herron, J.Kemp, R. Knowles, S. C.Lees, M. H. Lightfoot, P. R.Macdonald, I. Macdonald, S.MacGibbon, D. J. McGauran, J. J. J.Minchin, N. H. Murray, A.Newman, J. M. O'Chee, W. G. *Parer, W. R. Patterson, K. C. L.Payne, M. A.Reid, M. E.Stott Despoja, N. Synon, K. M.Tierney, J. Troeth, J.Watson, J. O. W. Woodley, J.Campbell, G. Vanstone, A. E.Hutchins, S. Hill, R. M.Ray, R. F. Tambling, G. E. J.* denotes tellerQuestion so resolved in the negative.A NEW TAX SYSTEM (WINE EQUALISATION TAX IMPOSITION—GENERAL) BILL 1999A NEW TAX SYSTEM (WINE EQUALISATION TAX IMPOSITION—CUSTOMS) BILL 1999A NEW TAX SYSTEM (WINE EQUALISATION TAX IMPOSITION—EXCISE) BILL 199916:48:006618Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—As I foreshadowed, we have three amendments to three bills on the wine equalisation tax, and I would like to be able to put those in a group. I am not sure—it is not on the sheet—when the question will be put that the report of the committee be adopted, but I also want that to be voted on.10000CHAIRMANThe CHAIRMAN—When we get a bit further on. Senator Margetts, are you seeking leave to have the three Greens (WA) and Australian Greens requests moved together?DX5MARGETTSSenator Margetts—Yes.Leave granted.16:49:006618Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—by leave—I move:—in respect of a New Tax System (Wine Equalisation Tax Imposition—General) Bill 1999: That the House of Representatives be requested to make the following amendment:Clause 4, page 2 (lines 9 to 11), omit the cluse, substitute:4 Rate Wine is payable under the A New Tax System (Wine Equalisation Tax) Act 1999 at the relevant rates declared bo the Act.—in respect of A New Tax System (Wine Equalisation Tax Imposition—Customs) Bill 1999:That the House of Representatives be requested to make the following amendment:Clause 4, page 2 (lines 8 to 10), omit the clause, substitute:4 Rate Wine tax is payable under the A New Tax System (Wine Equalisation Tax) Act 1999 at the relevant rates declared by that Act.—in respect of A New Tax System (Wine Equalisation Tax Imposition—Excise) Bill 1999:That the House of Representatives be requested to make the following amendment:Clause 4, page 2 (lines 8 to 10), omit the clause, substitute:4 Rate Wine tax is payable under the A New Tax System (Wine Equalisation Tax) Act 1999 at the relevant rates declared by that Act.10000CHAIRMANThe CHAIRMAN—The question is that the three Greens (WA) and Australian Greens requests to the A New Tax System (Wine Equalisation Tax Imposition—General) Bill, A New Tax System (Wine Equalisation Tax Imposition—Customs) Bill and the A New Tax System (Wine Equalisation Tax Imposition—Excise) Bill be agreed to.16:50:00The committee divided. (The Chairman—Senator S. M. West)2Brown, B. Margetts, D. *62Abetz, E. Allison, L.Alston, R. K. R. Bartlett, A. J. J.Bishop, T. M. Bolkus, N.Boswell, R. L. D. Bourne, V.Brownhill, D. G. C. Calvert, P. H.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.Gibson, B. F. Heffernan, W.Herron, J. Hogg, J.Kemp, R. Knowles, S. C.Lees, M. H.Lightfoot, P. R.Macdonald, I. Macdonald, S.Mackay, S. McGauran, J. J. J.McKiernan, J. P. Minchin, N. H.Murphy, S. M. Murray, A.Newman, J. M. O'Brien, K. W. K. *O'Chee, W. G. Parer, W. R.Patterson, K. C. L. Payne, M. A.Quirke, J. A. Reid, M. E.Reynolds, M. Schacht, C. C.Sherry, N. Synon, K. M.Tierney, J. Troeth, J.Watson, J. O. W. West, S. M.Question so resolved in the negative.10000CHAIRMANThe CHAIRMAN—The question is that the bills, as amended and with requests, be agreed to.Question resolved in the affirmative.DX5MARGETTSSenator Margetts—Madam Chairman, I seek your guidance as to when is the appropriate time to move my amendment?10000CHAIRMANThe CHAIRMAN—When we have gone out of committee. The question is that the bills, as amended and with requests, be reported. A New Tax System (Goods and Services Tax Transition) Bill 1998 , A New Tax System (Compensation Measures Legislation Amendment) Bill 1998 , A New Tax System (Bonuses for Older Australians) Bill 1998 , A New Tax System (Commonwealth-State Financial Arrangements) Bill 1999 reported with requests and amendments; A New Tax System (Goods and Services Tax) Bill 1998 , A New Tax System (Goods and Services Tax Administration) Bill 1998 , A New Tax System (Personal Income Tax Cuts) Bill 1998 , A New Tax System (Aged Care Compensation Measures Legislation Amendment) Bill 1998 , A New Tax System (Commonwealth-State Financial Arrangements—Consequential Provisions) Bill 1999 , A New Tax System (Indirect Tax Administration) Bill 1999 reported with amendments; A New Tax System (Goods and Services Tax Imposition—Excise) Bill 1998 , A New Tax System (Goods and Services Tax Imposition—Customs) Bill 1998 , A New Tax System (Goods and Services Tax Imposition—General) Bill 1998 , A New Tax System (Australian Business Number) Bill 1998 , A New Tax System (Australian Business Number Consequential Amendments) Bill 1998 , A New Tax System (End of Sales Tax) Bill 1998 , A New Tax System (Income Tax Laws Amendment) Bill 1998 , A New Tax System (Trade Practices Amendment) Bill 1998 , A New Tax System (Wine Equalisation Tax) Bill 1999 , A New Tax System (Wine Equalisation Tax Imposition—General) Bill 1999 , A New Tax System (Wine Equalisation Tax Imposition—Customs) Bill 1999 , A New Tax System (Wine Equalisation Tax Imposition—Excise) Bill 1999 , A New Tax System (Luxury Car Tax) Bill 1999 , A New Tax System (Luxury Car Tax Imposition—General) Bill 1999 , A New Tax System (Luxury Car Tax Imposition—Customs) Bill 1999 , A New Tax System (Luxury Car Tax Imposition—Excise) Bill 1999 , A New Tax System (Indirect Tax Administration) Bill 1999 , A New Tax System (Wine Equalisation Tax and Luxury Car Tax Transition) Bill 1999 reported without amendment or requests.10000PRESIDENTThe PRESIDENT—The question is that the report of the committee be adopted.16:56:006620Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—by leave—I move:At the end of the motion, add:"but the Senate, with reference to the three bills imposing the goods and services tax:(a) notes that: (i) the Government has refused to table any legal advice relating to the constitutional validity of the bills; and (ii) an article by taxation experts, Dr Terry Dwyer and David Cominos, published in the Weekly Tax Bulletin (No 25, 1999) casts serious doubt over the constitutional validity of the bills; (b) expresses grave concern about the constitutional validity of the bills;(c) requests the Government to table any legal advice it has received on the constitutionality of the bills;(d) calls on the Government to withdraw the bills for redrafting to ensure constitutional validity; and(e) resolves that a message be sent to the House of Representatives acquainting the House of this resolution".This motion seeks to refer the constitutionality of the bills back to the government to make sure they get it right.Question put:That the amendment (Senator Margetts's ) be agreed to.17:00:00The Senate divided. (The President—Senator the Hon. Margaret Reid)29Bishop, T. M. Bolkus, N.Brown, B. Carr, K.Collins, J. M. A. Colston, M. A.Conroy, S. Cook, P. F. S.Cooney, B. Crossin, P. M.Crowley, R. A. Denman, K. J.Evans, C. V. Faulkner, J. P.Forshaw, M. G. Gibbs, B.Harradine, B. Hogg, J.Lundy, K. Mackay, S.Margetts, D. McKiernan, J. P.Murphy, S. M. O'Brien, K. W. K.*Ray, R. F. Reynolds, M.Schacht, C. C. Sherry, N.West, S. M.41Abetz, 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.Coonan, H. Crane, W.Eggleston, A. Ellison, C.Ferguson, A. B. Ferris, J.Gibson, B. F. Heffernan, W.Herron, J. Kemp, R.Knowles, S. C. Lees, M. H.Lightfoot, P. R. Macdonald, I.Macdonald, S. MacGibbon, D. J.McGauran, J. J. J. Minchin, N. H.Murray, A. Newman, J. M.O'Chee, W. G.* Parer, W. R.Patterson, K. C. L. Payne, M. A.Reid, M. E. Stott Despoja, N.Synon, K. M. Tierney, J.Troeth, J. Watson, J. O. W.Woodley, J.Campbell, G. Tambling, G. E. J.Hutchins, S. Vanstone, A. E.Quirke, J. A. Hill, R. M.* denotes tellerQuestion so resolved in the negative.Original question resolved in the affirmative.Report adopted.10000PRESIDENTThe PRESIDENT—The question now is that the remaining stages be agreed to, except that bills subject to request be not put to a third reading.RF4COOKSenator Cook—My understanding was that there was an agreement between—10000PRESIDENTThe PRESIDENT—You have to ask for the ones that you want put separately, Senator.RF4COOKSenator Cook—Bills Nos. 2 to 5.10000PRESIDENTThe PRESIDENT—I shall put bills Nos 2 to 5 separately. The question is that the remaining stages of the A New Tax System (Goods and Services Tax) Bill 1998, A New Tax System (Goods and Service Tax Imposition—Excise) Bill 1998, A New Tax System (Goods and Services tax Imposition—Customs) Bill 1998, A New Tax System (Goods and Services Tax Imposition—General) Bill 1998 and A New Tax System (Goods and Services Tax Administration) Bill 1998 be agreed to.17:04:00The Senate divided. (The President—Senator the Hon. Margaret Reid)38Abetz, E. Allison, L.Boswell, R. L. D. Bourne, V.Brownhill, D. G. C. Calvert, P. H.Campbell, I. G. Chapman, H. G. P.Coonan, H. Crane, W.Eggleston, A. Ellison, C.Ferguson, A. B. Ferris, J.Gibson, B. F. Heffernan, W.Herron, J. Kemp, R.Knowles, S. C. Lees, M. H.Lightfoot, P. R. Macdonald, I.Macdonald, S. MacGibbon, D. J.McGauran, J. J. J. Minchin, N. H.Murray, A. Newman, J. M.O'Chee, W. G.* Parer, W. R.Patterson, K. C. L. Payne, M. A.Reid, M. E. Synon, K. M.Tierney, J. Troeth, J.Watson, J. O. W. Woodley, J.30Bartlett, A. J. J.Bishop, T. M.Bolkus, N. Brown, B.Carr, K. Collins, J. M. A.Colston, M. A. Conroy, S.Cook, P. F. S. Cooney, B.Crossin, P. M. Crowley, R. A.Denman, K. J. Evans, C. V.Faulkner, J. P. Forshaw, M. G.Gibbs, B. Harradine, B.Lundy, K. Mackay, S.Margetts, D. McKiernan, J. P.Murphy, S. M. O'Brien, K. W. K.*Quirke, J. A. Ray, R. F.Reynolds, M. Schacht, C. C.Sherry, N. Stott Despoja, N.Alston, R. K. R. Hogg, J.Hill, R. M. Hutchins, S.Tambling, G. E. J. West, S. M.Vanstone, A. E. Campbell, G.* denotes tellerQuestion so resolved in the affirmative.10000PRESIDENTThe PRESIDENT—The question is that the remaining stages of the remaining bills be agreed to, except that bills subject to requests be not put to a third reading.Question resolved in the affirmative.Bills read a third time.Condolences6621662110000PRESIDENTThe PRESIDENT—Order! It is with deep regret that I inform the Senate of the death on 21 April 1999 of Reginald Charles O'Brien, member of the House of Representatives for the division of Petrie from 1961 to 1963.662210001CLERK ASSISTANTThe Clerk—Petitions have been lodged for presentation as follows:662225TW4Bourne Sen VickiTo the Honourable the President and members of the Senate in the Parliament assembled:The Petition of the undersigned recognises the vital role of a strong, comprehensive, independent and publicly funded Australian Broadcasting Corporation (ABC) and asks that:(1) Coalition Senators honour their 1996 election promise, namely that `The Coalition will maintain existing levels of Commonwealth funding to the ABC' [at pre-1996 levels].(2) The Senate votes to maintain and strengthen the existing role of the ABC as a fully independent, publicly funded and publicly owned organisation.(3) The Senate oppose any weakening of the Charter of the ABC.Senator BourneTW4Senator Bourne(from 25 citizens)66223210000VICE-CHAIRMANTo the Honourable the President and Members of the Senate in Parliament assembled: The Petition of the undersigned shows:That services and goods provided by natural and traditional therapy practitioners are an integral component of Australia's health care system and should be included in the health care exempt (zero rated) category under the Government's proposed Tax Reform Package. Preclusion implies a discrimination and could seriously restrict the choice of affordable health care available to Australians.Your Petitioners request that services and goods provided by natural and traditional therapy practitioners be included in the health care exempt (zero rated) category under the Government's proposed Tax Reform Package.The President10000The President(from 32 citizens)66226HX5Woodley Sen JohnTo the Honourable the President and Members of the Senate in Parliament assembledWe, the undersigned petitioners believe that(a) a valid mandate does not exist for the introduction of a Goods and Services Tax (GST)(b) the Australian electorate was not adequately informed, prior to the 1998 Federal election, to be able to deliver a valid mandate (c) the overwhelming response to the Senate inquiry into the tax system confirms these beliefs(d) the findings of the Senate Inquiry have shown, over recent weeks, that the proposed GST will be a regressive tax instead of the intended tax reform. It is abundantly clear that the enactment of the GST will result in the rich of this country benefiting at the expense of the more than five (5) million citizens living near or below the poverty lineYour petitioners request that the Senate should:(a) reject legislation presented to the Senate for the enactment of a Goods and Services Tax(b) initiate a process, based on the findings of the Senate Inquiry, which should inform and enable the Australian electorate to deliver a valid mandate for a just tax system. This process to culminate in a referendum.Senator WoodleyHX5Senator Woodley(from six citizens)6622210AW5 LI4Carr Sen Kim; Patterson Sen KayTo the Honourable the President and Members of the Senate in Parliament assembled:The petition of the undersigned students, staff and friends of the University of Ballarat requests the Senate to call on the Australian Government to withdraw its draconian Higher Education Legislation Amendment Bill (HEL) which will if passed only serve to reduce student services and facilities and seriously erode the efficient representative structure which has been established over many years.Senator CarrAW5Senator Carr(from 105 citizens)Senator PattersonLI4Senator Patterson(from 105 citizens)66222002TW4Bourne Sen VickiTo the Honourable the President and Members of the Senate in Parliament assembled:The Petition of the undersigned draws the attention of the Senate to the dangers of Voluntary Student Unionism (VSU) which we believe would cut vital services to all university students such as:catering and sporting facilities;legal, welfare and sexual counselling;childcare services; andsupport to university clubs and societies.Your petitioners therefore humbly request that the Senate refrains from the introduction of VSU through the Higher Education Legislation Amendment Bill 1999 or through any other means.Senator BourneTW4Senator Bourne(from 2,002 citizens)66231157G6Lundy Sen KateTo the members of the House of Representatives and Senate in Parliament assembled.I the undersigned hereby reject the Broadcasting Services Amendment (Online services) Bill as it currently stands and as has been passed by the Senate and respectfully request that the members of the House of Representatives and the Senate recognise: That, for many Australians, the Internet plays a vital role as a means of communication, a vehicle for the expression of ideas and opinions, and a source of information. That the Internet is a complex, global environment where traditional concepts of regulation are not easily applied or enforced. That there is a need to make a clear distinction between the responsibility of those who produce and publish content and that of intermediaries such as carriers and Internet Service providers. That the full potential for development of the Internet in Australia will depend on governments recognising rights to freedom of speech taken for granted by other societies. That the emerging information industries should not be burdened with unnecessary and poorly conceived regulation.In Brief: The Legislation just won't work.By trying to prevent adult access to adult content, the Bill not only impinges on our basic freedoms—it will actually make it more likely that children will be exposed to unsuitable material.It will cause extensive damage to Australia's Internet industry, both access and content providers, raising costs for everyone.Collateral damage accompanying the legislation will result in the blocking of all kinds of content—and threats to personal privacy.It will give us a more authoritarian regime than Singapore or Malaysia—and make us the laughing-stock of the world.I hereby call for the repeal of the legislation.It is both unnecessary and dangerous.Senator Lundy7G6Senator Lundy(from 115 citizens)Petitions received.Committees662366236623Motion (by Senator O'Brien, at the request of Senator George Campbell)—by leave—agreed to:That the following matters be referred to the Finance and Public Administration References Committee for inquiry and report:Australian Public Service employment matters, including:1. The evolving changes in the nature of the Senior Executive Service (including chief executive officers) as a result of the devolution of responsibility for staffing matters to individual agencies. Such changes would include, but not be limited to selection, tenure, independence, remuneration (including relativities), mobility and career development;2. The impact of agency-based bargaining in contributing to the development of a more efficient, productive and independent Australian Public Service, accountable to the Australian Parliament; and3. The extent to which performance pay is being incorporated into agreements negotiated by individual agencies, the disparity between agency agreements in performance pay and the impact of such agreements on agency performance, accountability and transparency.Notices66236623Senator Murray to move, on the next day of sitting:That the following bill be introduced: A Bill for an Act to provide for the electors to be consulted on an elected president at the same time as the Constitution Alteration (Establishment of Republic) 1999 is submitted to them, and, if the electors express a preference for an elected president, to initiate an alteration of the Constitution to achieve an elected president.Republic (Consultation on an elected President) Bill 1999.Senator Murray to move, on the next day of sitting:That the Government appoint a new working party consisting of members and senators from all parties and groups represented in both Houses of the Parliament to prepare a report, for tabling by the last day of sitting in October 1999, on the following matters:(a) the adequacy, in terms of both comprehensiveness and enforceability, of existing guidelines or codes of conduct for ministers and parliamentary secretaries;(b) the appropriateness and desirability of a new code of conduct for parliamentarians who hold such office; (c) the form, content and enforcement procedures for any new code of conduct that the working party deems commendable; and(d) the appropriateness and desirability of establishing new bodies to supervise the operation of such standards or codes of conduct, including: (i) an independent commission or commissioner, and/or (ii) committees of each House of the Parliament or a joint committee, and (iii) the appropriate functions and powers, including enforcement powers, of any bodies recommended by the working party to be established.Senator Jacinta Collins to move, on the next day of sitting:That the following matters be referred to the Employment, Workplace Relations, Small Business and Education References Committee for inquiry and report by the last sitting day of the second sitting week in November 2000:The effectiveness of the vocational education and training sector in developing the educational skills of the Australian people and the skills formation and productivity of the Australian workforce, including:(1) An evaluation of the place of the new apprenticeships scheme within the national priorities set for Australia's vocational education system and the appropriateness of those priorities, with particular reference to: (a) resource allocation across the sector, between the states and territories, and within program priorities; (b) demographic distribution and equity of structured training opportunities; (c) opportunities for youth and for older people; and (d) the respective obligations of industry and government.(2) An evaluation of claims that the key objectives of the original new apprenticeships scheme, as agreed by the states and territories, are not being met, and specifically whether: (a) training outcomes are of diminishing quality; (b) older people rather than younger people and new entrants to the workforce are the main beneficiaries of new apprenticeships; (c) the system is more rather than less complex; and (d) the system is being driven by financial incentives and targets rather than the needs of industry.(3) An assessment of the quality of provision of technical and further education (TAFE) and private providers in the delivery of nationally recognised and non-recognised Vocational Education and Training (VET) services and programs, including: (a) the adequacy of current administration, assessment and audit arrangements for registered training organisations and the credentials they issue; (b) processes for the recognition of registered training organisations, the effectiveness of compliance audits and validations of registered training organisations, operations, and sanctions for breaching the conditions of registration; (c) the level and quality of vocational education and training occurring within registered training organisations, including TAFE, private providers, workplaces and schools; (d) the extent to which employers of apprentices and trainees are meeting their obligations to deliver training on the job, and the adequacy of monitoring arrangements; (e) the range of work and facilities available for training on the job; (f) attainment of competencies under national training packages; and (g) the reasons for increasing rates of non-completion of apprenticeships and traineeships.(4) An examination of the impact on the quality and accessibility of VET resulting from the policy of growth through efficiencies and user choice in VET, with particular reference to the: (a) viability of TAFE, particularly in regional Australia; (b) quality of structured training; (c) quality of teaching; (d) appropriateness of curriculum and learning resources; (e) range and availability of student services; and (f) effects of fees and charges on TAFE.(5) An evaluation of the provision of Commonwealth and state employers' subsidies, including: (a) the effectiveness of existing subsidies arrangements in meeting national vocational education and training needs; (b) the impact of changes to the new apprenticeships policy, which broadened employer trainee subsidies to include existing workers; and (c) accountability and audit procedures within the Department of, Education, Training and Youth Affairs, the Australian National Training Authority and state training authorities.(6) An evaluation of the growth, breadth, effectiveness and future provision of vocational education in schools, including: (a) the quality of provision of vocational education and training in both government and non-government schools; (b) the relationship between vocational education in schools, and accredited training packages; (c) the effectiveness and quality of curriculum materials and teaching; (d) accountability provisions for the funding of vocational education in schools; and (e) school-to-work transitional arrangements.(7) An assessment of the consistency, validity and accessibility of statistical information on the performance of national vocational education and training systems, especially relating to apprenticeships and traineeships.Senator Crowley to move, on the next day of sitting:That the following matters be referred to the Community Affairs References Committee for inquiry and report by 30 December 1999: (a) the range and provision of antenatal care services to ascertain whether interventions can be minimised through the development of best practice in antenatal screening standards; (b) the variation in childbirth practices between different hospitals and different states, particularly with respect to the level of interventions such as caesarean birth, episiotomy and epidural anaesthetics; (c) the variation in such procedures between public and private patients; (d) any variations in clinical outcomes associated with the variation in intervention rates, including peri-natal and maternal morality and morbidity indicators; (e) the best practices for safe and effective births being demonstrated in particular locations and models of care and the desirability of more general application; (f) early discharge programs, to ensure their appropriateness; (g) the adequacy of access, choice, models of care and clinical outcomes for rural and remote Australians, for Aboriginal and Torres Strait Islander women and for women of non-English speaking backgrounds; (h) whether best practice guidelines are desirable, and, if so, how they should be developed and implemented; (i) the adequacy of information provided to expectant mothers and their families in relation to the choices for safe practice available to them; and (j) the impact of the new Medicare rebate provided for complex births, including the use of the term `qualified and unqualified neonates' for funding purposes, and the impact that this has had on improved patient care and reduction of average gap payments.Senator Ian Campbell to move, on the next day of sitting:That the provisions of paragraphs (5) to (7) of standing order 111 not apply to the following bills, allowing them to be considered during this period of sittings:Diesel and Alternative Fuels Grants Scheme Bill 1999Customs and Excise Amendment (Diesel Fuel Rebate Scheme) Bill 1999.Senator Ian Campbell to move, on the next day of sitting:That standing order 110 be suspended to enable the third reading of the Constitution Alteration (Establishment of Republic) Bill 1999 to be passed without a roll call.Senator Ian Campbell to move, on the next day of sitting:That the days of meeting of the Senate from 9 August for the remainder of 1999 be as follows:Monday, 9 August to Thursday, 12 AugustMonday, 23 August to Thursday, 26 AugustMonday, 30 August to Thursday, 2 SeptemberMonday, 20 September to Thursday, 23 SeptemberMonday, 27 September to Thursday, 30 SeptemberMonday, 11 October to Thursday, 14 OctoberMonday, 18 October to Thursday, 21 OctoberMonday, 22 November to Thursday, 25 November Monday, 29 November to Thursday, 2 DecemberMonday, 6 December to Thursday, 9 December.Senator Ian Campbell to move, on the next day of sitting:That on Monday, 9 August 1999, the hours of meeting shall be 2 pm to 6.30 pm, and 7.30 pm to 11.10 pm.Senator Quirke to move, on the next day of sitting:That clauses 4 and 5 of the resolution of appointment for the Select Committee on the Socio-Economic Consequences of the National Competition Policy be suspended until a new member is appointed to the committee during the August 1999 sittings of the Senate.Senator Stott Despoja to move, on the next day of sitting:That there be laid on the table by the Minister representing the Minister for Health and Aged Care (Senator Herron), no later than 3 pm on the next day of sitting, the following documents:(a) `Cadmium in Peanuts—Maximum Concentration', provided for the Australia New Zealand Foods Standards Council Meeting, 17 December 1998;(b) `Dietary Exposure Assessment Methods', provided for the Australia New Zealand Food Authority Advisory Committee Meeting, Information Paper, March 1999; and(c) `Inquiry Report. Proposal 144—Review of the Maximum Permitted Concentration of Cadmium in Food', provided for the Australia New Zealand Food Authority board meeting, June 1997.Leave of Absence6626Motion (by Senator O'Brien)—by leave—agreed to:That leave of absence be granted to Senator Hutchins for the period 21 June to 30 June 1999 on account of ill health.Committees66266626Motion (by Senator Calvert)—by leave—agreed to:That committees be authorised to meet during the sitting of the Senate:(1) The Joint Standing Committee on Electoral Matters be authorised to hold public hearings during the sitting of the Senate on Tuesday, 29 June 1999, tom 12.30 pm till 2.00 pm, and from 3.30 pm till 6.00 pm, to take evidence for the committee's inquiry into all aspects of the conduct of the 1998 federal election and matters related thereto; and(2) The Joint Select Committee on the Republic Referendum be authorised to hold a public hearing during the sittings of the Senate on Tuesday, 29 June 1999, from 4.00 pm, to take evidence from the Department of the Prime Minister and Cabinet and private individuals.6626Motion (by Senator Calvert)—by leave—agreed to:That the time for the presentation of certain reports from committees be extended as follows:Community Affairs Legislation Committee—Report on the Australia New Zealand Food Authority Amendment Bill 1999—12 August 1999.Economics References Committee—Report on the operation of the Australian Taxation Office—22 November 1999.Economics References Committee—Report on whether a new reactor should be built to replace the High Flux Australian Reactor at Lucas Heights on that site or some other site in Australia—10 August 1999.Employment, Workplace Relations, Small Business and Education References Committee—Report on assessment of the factors that contribute to the disparity in employment levels between different regions and also between regions and capital cities, as well as the continuing high levels of regional unemployment—26 August 1999.Environment, Communications, Information Technology and the Arts References Committee—Report on ale development of Hinchinbrook Channel—24 August 1999.Environment, Communications, Information Technology and the Arts References Committee—Report on the Jabiluka uranium mine proposal—30 June 1999.Foreign Affairs, Defence and Trade References Committee—Report on Australia in relation to Asia Pacific Economic Cooperation (APEC)—23 September 1999.Rural and Regional Affairs and Transport Legislation Committee—Report on fee provisions of the Petroleum Retail Legislation Repeal Bill 1998—29 June 1999.Rural and Regional Affairs and Transport References Committee—Report on the Australian dairy industry- 30 September 1999. Notices6627662717:14:006627Calvert, Sen PaulSenator CALVERT5F4TASLP10—On behalf of the respective chairs, I withdraw general business notices of motion Nos 239 and 240.Bills6627r861Billsr8626627Bills received from the House of Representatives.Motion (by Senator Ian Campbell) agreed to:That these bills may proceed without formalities, may be taken together and be now read a first time.Bills read a first time.662717:16:006627Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I move:That these bills be now read a second time.I seek leave to have the second reading speeches incorporated in Hansard .Leave granted.The speeches read as follows—DIESEL AND ALTERNATIVE FUELS GRANTS SCHEME BILL 1999The Diesel and Alternative Fuels Grants Scheme Bill 1999 represents the fulfilment of commitments that the government made to Australia's rural and regional heartland in the lead-up to the 1998 election.It is being introduced in conjunction with the Customs and Excise Amendment (Diesel Fuel Rebate Scheme) Bill 1999, which implements changes to the Diesel Fuel Rebate Scheme that extend both the range of eligible uses and magnitude of benefits available under the Scheme, although not to the extent originally proposed by the government in A New Tax System.In the lead-up to the last election, the government promised that the impact of the Goods and Services Tax on petrol and diesel prices would not just be offset by reductions in excise to ensure that the price at the pump need not rise.Recognising Australia's dependence on transport due to the vast size of our continent, we also promised the price of our major transport fuel, diesel, would fall and fall very substantially, to the benefit of businesses and consumers; in particular for those people living in regional, rural and remote areas where transport costs are a significant part of the cost of living and doing business.Under this bill, the Customs and Excise Amendment Bill, and the environmental expenditure package agreed between the government and the Australian Democrats, there will be large and enduring benefits to regional Australia, to the environment and to transport operators in the road, rail and marine sectors.And, contrary to what has been asserted by the Opposition, the government has effectively quarantined regional Australia from the impact of the changes negotiated with the Democrats. The cost of road transport provided by all articulated vehicles and other trucks servicing regional areas will fall under these arrangements.To the extent that compromises have been necessary, they have been driven by environmental concerns in the cities, and it is city-based transport that will necessarily now not receive the full gains.Businesses across Australia will all pay less for fuel than they do now because they will get back the GST paid on inputs, including fuel. It is expected that businesses should save around six to seven cents per litre by this measure alone, although the actual amount will not be determined until next year after the final pre-GST CPI adjustment to excise rates.In addition to the GST input tax credits on fuel purchased, the Diesel and Alternative Fuels Grant Scheme will provide a further major cut in costs—with grants in the order of 16 to 17 cents per litre of diesel used, for a wide variety of Australian businesses that provide transport services to country areas.These include:. interstate and city-country road transport;. the transport of goods from all Australia's rural export regions and processing centres to their markets in the city or offshore;. essential inputs being transferred from ports or factories in the city to the bush; and,. the very bread and butter, indeed, all of the goods consumed by people living in country areas across this vast continent.In addition to the grants available under this Scheme, which extend to cover alternative fuels, the government is extending concessions available under the Diesel Fuel Rebate Scheme.The major additional benefits are:. recognition of the rail industry as an off-road user of diesel and the consequent extension to rail operators of the full rebate of excise on diesel.. extension of the full rebate for diesel and like fuels to marine use and other existing qualifying uses, including agriculture, fishing and mining.. however, in the case of forestry, this industry will continue to have access to the rebate in the proportion it currently receives.Madam PresidentThe government's objective has always been to reduce the price of transport fuels for business, however, in order to honour the agreement reached with the Democrats, it is no longer possible to deliver this through the tax system.As the intention is to offset costs for only a specified part of the transport fleet and its users—those servicing regional areas, the tax system is—on legal advice—an inappropriate means by which to deliver the benefits. Thus, we will deliver this measure through a grants scheme.In addition to this, the use of a broad-ranging grants scheme will make the transition to the new, long-term scheme of Energy Credits, foreshadowed in the bill, much easier, reducing the impact on industry of multiple changes to arrangements.As agreed between the government and the Democrats, the grant for diesel use in prescribed vehicles and prescribed areas will be set so as to provide a cumulative reduction in the cost of diesel by around 23 cents per litre, when the GST input tax credits are added in.The bill not only provides grants for diesel fuel use, but also covers alternative fuels, including CNG and LPG, canola, ethanol and recycled oil. Grant rates for each of these fuels will be established by regulation so as to maintain the current price relativities between them and diesel, given that unlike diesel, they are not subject to excise. Additional fuels may be added by regulation.The grants will be potentially available for all road transport vehicles above 4.5 tonnes, however, fuels used in vehicles between 4.5 tonnes and 20 tonnes Gross Vehicle Mass will qualify only in the following circumstances:. if the vehicle is engaged in transporting goods or passengers within regional Australia;. between a metropolitan area and a regional point (and vice-versa); or. between metropolitan areas on an interstate journey. Fuel used in vehicles of 20 tonnes or more Gross Vehicle Mass will qualify if used by a business for road transport, and if the business is registered for the purposes of the Scheme with the Australian Tax Office.The explanatory memorandum accompanying the bill contains some examples of qualifying journeys and I commend it to Senators.Senators will recall that previously the ANTS package had proposed that diesel fuel credits be available to vehicles of 3.5 tonnes GVM or greater, however, this had the potential to encourage business operators to switch to heavier vehicles in order to capture the benefits of the diesel fuel credits. The result could also have been an unintended switch from petrol to diesel powered vehicles, with consequent increases in particulate emissions.The use of 4.5 tonnes as the cut-off point under this bill for a grant scheme removes these unintended incentives. Four point five (4.5) tonnes is a natural cut-off point for vehicle classes because different licensing requirements apply at this level—a truck driver's licence is needed to operate such vehicles.In addition, very few transport vehicles use petrol at this new threshold. Some 99.9 per cent of articulated vehicles and 90.5 per cent of rigid trucks already use diesel, as do a similar percentage of the bus fleet. Thus, the scope for fuel switching in heavier vehicles is extremely limited under this bill.In fact, viewed in the context of the full set of environmental commitments made by the government, particulates emissions in cities will actually fall substantially.The Bureau of Transport Economics has estimated that, based on its projections of fuel use, reflecting anticipated growth in the national transport task, fuel use would have increased by approximately 50 per cent by 2015—and by more with the added economic stimulus of the tax package boosting national productivity and our export competitiveness.As a result, there would have been a substantial increase in particulate matter emissions—and I emphasise that this is the case with or without the new tax system.In capital cities, where the health impacts and associated costs were likely to have been most noticed, this would have seen an increase from 5.7 Gigagrams of particulate emissions in 1997 to 10.3 Gigagrams by 2015.With the establishment of. standards for low sulphur diesel in 2002,. incentives for the introduction of ultra low sulphur diesel from 2003 . the introduction of mandatory ultra low sulphur diesel standards from 2006, plus. the vehicle emission standards to be determined and gazetted before this bill takes effectit is now expected that particulate matter emissions across Australia will be no greater in 2015 than they were in 1997.And in cities, where the issue is potentially at its most serious, pollutant levels should fall from the 5.7 Gigagrams noted earlier to 4.2 Gigagrams—a 26 per cent reduction.I would like to underline what a great achievement this is when one considers the anticipated growth in the national transport task over this period that I have mentioned already.Improved emission standards for both petrol and diesel vehicles are effectively incorporated into this bill.Section 2 of the bill outlines the commitments we have given in this regard. The commencement of the act is contingent upon them being implemented in Australian Design Rules made under the Motor Vehicle Standards Act 1989.Dates of application have been specifically incorporated in the bill at the request of the Democrats and I am repeating their intent today, because of the complexity of the subject.The outline in the bill in substance recognises our obligations to apply. Euro 2 emission standards to all new light diesel in 2002; and continuing models from 2003;. Euro 3 to all new medium and heavy diesel models in 2002; and continuing models from 2003;. Euro 4 to all new diesel models from 2006; and continuing models from 2007;. Euro 2 to all new petrol models from 2003; and continuing models from 2004; and. Euro 3 to new petrol models from 2005; and continuing models from 2006.The exception noted in the Section 2 of the bill is important. Our vehicle industry would have serious difficulty coping with the application of standards under Euro 4 for petrol vehicles. We thus have yet to make a commitment in that area, and the legislation is intended to reflect this.Overall, the benefit is huge. These standards will mean that emission rates from oxides of nitrogen and particulates in new medium to heavy duty trucks will be. 40 per cent and 70 per cent lower respectively after 2002; and. 50 per cent and 90 per cent lower respectively after 2006 than they are in vehicles meeting current standards.Madam President, suggestions have been made in the debate in the House on this bill that the emission standards were going to be put in place anyway. This is incorrect. The standards agreed with the Democrats go beyond what was already proposed.The National Road Transport Commission, the body responsible for implementing the new standards and recognised by the Opposition as the authority on this subject, has confirmed this package exceeds significantly what was being contemplated.It does this in three respects; firstly, it accelerates the implementation of Euro 3 standards for diesel vehicles; secondly, it provides for the introduction of Euro 4 standards for diesel—a move not previously contemplated; and thirdly, it delivers cleaner diesel fuel which had not previously been envisaged, which allows these standards and the benefits they offer to deliver much sooner.Madam President, there has also been some acrimonious debate over carbon dioxide and related Greenhouse gas emissions, with the suggestion that greenhouse gas emissions will increase as a result of this package.We need to get this issue straight. Greenhouse gas emissions are a serious matter; one which the government intends to address seriously. But expecting the tax package to solve such an issue is nonsense.Greenhouse gases emitted by the transport sector continue to grow for a reason—the reason is that the economy continues to grow, and transport grows with it.Moreover, there is nothing written in stone or derived from logic that says transport emissions must not rise. For Australia, the question must be what is the least-cost adjustment to reach the Kyoto Convention target, not simply transferring that target to each sector. Clearly, taxing our transport sector more heavily in order to suppress demand for transport is an unacceptable option, unless we are also attempting to suppress overall economic growth.As a nation, we need to recognise diesel is our main heavy transport fuel.The solution to lower emissions growth in transport lies with improved engine efficiency, use of Intelligent Transport Systems, better intermodal transfer efficiency, higher public transport efficiency and with better land use planning.It is not affected in any substantial way by the price of fuel.The price of fuel has been increased by taxation very significantly in Australia over many years, with not much impact on growth in demand for its use. It is relative pricing that will matter, not the absolute level, as this bill itself demonstrates with its plan to maintain the differentials between fuels.Under a high fuel tax regime, all that will change is the cost of doing business in Australia. And, for transport-dependent communities in regional Australia, that's not the soft option that it is for some city-based think tanks.Madam PresidentWe also intend that a further bill, putting in place the administrative arrangements, including the compliance mechanisms needed to support this bill, will be introduced by the government in the Spring Sittings in consultation with the Australian Democrats.We will be seeking passage of the Administration bill prior to Christmas, in order that industry can develop record-keeping arrangements and plan with confidence for the introduction of the grants scheme on 1 July next year.The administrative arrangements will be developed by the Australian Taxation Office in consultation with Australian National Audit Office and its views will be factored into the compliance and audit procedures.The Opposition is trying to run a scare campaign on the question of how this scheme will be administered. In one breath it warns transport operators that they face onerous and intrusive compliance requirements. In the next breath it paints this as a scheme wide open to rorting. It is wrong on both counts.The government will develop a robust risk management strategy that limits the scope for abuse, but also keeps record-keeping requirements as simple as possible.Madam President, it is the government's intention that the Diesel and Alternative Fuels Grant Scheme and the Diesel Fuel Rebate Scheme will sunset in mid-2002, and be replaced with an Energy Grants (Credits) Scheme.The future Energy Grants Scheme will maintain benefits that are equivalent to those available under the Diesel and Alternative Fuels Credit Scheme and the Diesel Fuel Rebate Scheme.Very importantly, it is the government's intention that the Energy Grants Scheme will also provide active encouragement for the move to the use of cleaner fuels by measures additional to those available under the Diesel and Alternative Fuels Grants Scheme.The detail of the Energy Grants Scheme will be developed jointly by the government and the Australian Democrats and introduced through a jointly sponsored bill. Madam President, this bill is being introduced in a highly charged atmosphere, where emotion may cloud reason. However, there is every reason for all Senators to support it—because lower transport costs benefit all Australians; and because of the significant improvements to emission standards inherent in it.This bill makes a substantial contribution to the case for tax reform—for without tax reform, the funding required to support it would simply not be available.I commend the bill to the Senate.CUSTOMS AND EXCISE AMENDMENT (DIESEL FUEL REBATE SCHEME) BILL 1999The Customs and Excise Amendment (Diesel Fuel Rebate Scheme) Bill 1999 implements changes to the Diesel Fuel Rebate Scheme agreed with the Australian Democrats as part of the package of environmental measures that will now accompany the introduction of the new tax system on 1 July 2000.The broad details of the environmental package in so far as it applies to the use of diesel and alternative fuels has been covered in the second reading speech introducing the Diesel and Alternative Fuels Grants Scheme Bill 1999, as have the broad details of changes to the Diesel Fuel Rebate Scheme.The main features of the Customs and Excise Amendment (Diesel Fuel Rebate Scheme) Bill 1999 are as follows:It introduces a 100 per cent rebate for all diesel used by registered businesses in rail transport and in the marine industry.It provides for the rebates available for diesel to also be made available to qualifying users of like fuels such as light fuel oil and bunker fuel. These like fuels will be prescribed.The full rebate will be extended to existing qualifying users, including agriculture, fishing and mining, as well as private residences, bush and other nursing homes, hospitals and aged persons home.This means that the government intends to rebate all the excise paid on diesel and like fuels for use in primary production, and all currently qualifying mining uses. Currently they do not receive a full rebate. Forestry will continue to have access to the rebate in the proportion it currently receives.The Diesel Fuel Rebate Scheme will sunset on 30 June 2002 and benefits equivalent to those available under it will be grandfathered into the new Energy Grants (Credits) Scheme that will come into effect on 1 July 2002. Madam PresidentThose off-road businesses that receive rebates under this scheme can be assured that the government will ensure these benefits are not diminished under the new Energy Grants Scheme.I commend this bill to the Senate.Ordered that further consideration of the second reading of these bills be adjourned till the first day of sitting in the spring sittings 1999, in accordance with standing order 111.Bills6631r810Billsr807Billsr8096631Bills received from the House of Representatives.Motion (by Senator Ian Campbell) agreed to:That these bills may proceed without formalities, may be taken together and be now read a first time.Bills read a first time.663117:17:006631Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I move:That these bills be now read a second time.I seek leave to have the second reading speeches incorporated in Hansard .Leave granted.The speeches read as follows—APPROPRIATION (PARLIAMENTARY DEPARTMENTS) BILL 1999-2000The purpose of this bill is to appropriate the Consolidated Revenue Fund for the expenses of the Parliamentary Departments for the year ending 30 June 2000.The total amount sought is $161.5 million. Details of the proposed appropriations are set out in the Schedule to the bill.I commend the bill to the Senate.APPROPRIATION BILL (No. 1) 1999-2000It is with great pleasure that I introduce Appropriation Bill (No. 1) 1999-2000, which, together with Appropriation Bill (No.2), is one of the principal pieces of legislation underpinning the first budget of the second term of coalition government.Appropriation Bill (No. 1) provides authority for meeting expenses on the ordinary annual services of government. The program of the government, to which the provisions in this bill relate, was outlined in the Treasurer's budget Speech, on 11 May.This bill seeks appropriations of the Consolidated Revenue Fund in 1999-2000 totalling $36,219 million.Details of the proposed expenditure are set out in the Schedule to the bill, the main features of which were outlined in the Treasurer's budget Speech.This is an historic occasion for the Parliament.It is the first time on which the Commonwealth's budget has been presented on the basis of accrual accounting principles.The move to accruals, which is consistent with the recommendation of the National Committee of Audit, complements and extends the government's accountability under the Charter of budget Honesty.As noted by my colleague, the Treasurer, the move to accruals means that, for the first time, the budget will contain financial statements for the Commonwealth general government sector for 1998-99, the budget and forward estimates years, including:. an Operating Statement;. Statement of Assets and Liabilities;. Cash Flow Statement; and. Capital Expenditure Statement.This means that Parliament, and the community at large, will have comprehensive information on the financial performance of the government consistent with the information disclosed in company annual reports.This information will be complemented by the inclusion in the Portfolio Budget Statements of full financial statements for all Commonwealth agencies.In providing estimates in this way, the Commonwealth is moving ahead of the general practice in the private sector where budgets are rarely, if ever, released to shareholders and certainly not for a five year time period.Under the accrual framework, the focus in the government's Appropriation bills is on:. achieving agency outcomes, rather than the current input focus; and. funding for the full price of agency outputs or administered expenses estimated to be in curred, rather than merely estimates of cash payments to be made.Taken together, these changes disclose to the Parliament the full costs of the government's activities and allow a greater focus on performance of agencies.I commend the bill to the Senate.APPROPRIATION BILL (No. 2) 1999-2000Appropriation Bill (No.2) provides for the revenues for agencies to meet:. expenses in relation to grants to the States under section 96 of the Constitution and for payments to the Northern Territory and the Australian Capital Territory;. administered expenses on new outcomes; and. equity injections and loans to agencies as well as administered capital funding.As part of the transition to accruals, any carryovers from 1998-99 associated with the former running costs system governing Commonwealth departments and agencies are being appropriated in bill 2 as an equity injection.This bill seeks appropriations of the Consolidated Revenue Fund in 1999-2000 totalling $5950 million.Details of the proposed appropriations are set out in Schedule 2 to the bill, the main features of which were outlined in the treasurer's budget.I commend the bill to the Senate.Debate (on motion by Senator O'Brien) adjourned.Bills6632r840Billsr833Billsr831Billsr8426632Bills received from the House of Representatives. 17:18:006632Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I indicate to the Senate that those bills which have just been announced are being introduced together. After debate on the motion for the second reading has been adjourned, I will be moving a motion to have the bills listed separately on the Notice Paper . I move:That these bills may proceed without formalities, may be taken together and be now read a first time.Question resolved in the affirmative.Bills read a first time.663217:18:006632Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I move:That these bills be now read a second time.I seek leave to have the second reading speeches incorporated in Hansard .Leave granted.The speeches read as follows—SOCIAL SECURITY (FAMILY ALLOWANCE AND RELATED MATTERS) LEGISLATION AMENDMENT BILL 1999This government recognises the integral role the family plays in Australian society. This government wants to improve the assistance that families can get through the tax and social security systems.This bill amends the Social Security Act 1991 to introduce improvements to the assistance currently provided by government to families.Specifically, this bill:. extends qualification for family allowance so that it covers both job seekers and students who have turned l 6, and continues until age 21 for job seekers, and until age 25 for full-time students;. increases the fortnightly rate of family allowance to $50, payable in respect of a young person who is aged 18 to under 21, or who is undertaking full-time study and is aged 21 to under 25; and. ensures that certain young persons are not inadvertently deprived of a health care card by force of these amendments. These amendments will commence with effect from 1 October 1999, and will provide assistance to families of $42 million in the 1999-2000 financial year, making a positive impact on the living standards of Australian families, particularly those with low incomes.Complementary amendments to the A New Tax System (Family Assistance) Bill 1999 will take effect from the commencement of that act, that is 1 July 2000, to ensure the continuance of these changes under the government's tax reform package.I commend the bill to the Senate.HEALTH INSURANCE AMENDMENT (PROFESSIONAL SERVICES REVIEW) BILL 1999Health Insurance Amendment (Professional Services Review) Amendment Bill 1999 gives effect to a number of changes to the Professional Services Review Scheme (PSR). The PSR is the government's primary means of investigating allegations of inappropriate practice under Medicare or the Pharmaceutical Benefits Scheme.The PSR commenced in July 1994, and has always enjoyed the support of all parties in this Parliament. I would like to thank the opposition and the other parties for their continued support of this legislation.The changes contained in this bill have come in the wake of criticism of some aspects of from the Federal Court. A review was undertaken by a Committee chaired by the Australian Medical Association.The review confirmed the profession's and the Government's continued support for a peer review based Scheme. The amendments to the act will enhance the administration of the Scheme to ensure that the process is fairer and more transparent.The investigation and negotiation powers of the Director of the PSR will be increased. There will be greater legal support to the peer review committees and for the person under review. The Determining Officer, currently from the Department of Health and Aged Care, will be replaced with a Determining Authority. The Determining Authority will comprise a medical practitioner as the permanent chair, a permanent lay person and a third member who is a representative of the profession of the person under review. The PSR Tribunals will be removed from the process whilst retaining the right of review on points of law.There will be a range of different methods contained in the substance of the bill, to investigate inappropriate practice. For example, deeming provisions will apply to all consultation services on all days where the services exceed the number set out in the regulation. There will be provisions for exceptional circumstances. A finding of inappropriate practice can only be made under the deeming provisions within the committee peer review structure. These deeming provisions have been agreed to with the profession.The changes will greatly enhance the profession's ability to decide what constitutes inappropriate practice. I wish to particularly commend the medical profession for its contribution to the development of this framework. This bill will strengthen the Scheme and address the deficiencies identified by the Courts.Medicare is one of the largest programs administered by the Federal Government, costing around $7 billion this year. We need to protect this investment. The Review Committee found that both suspension from Medicare and repayment of Medicare benefits should be applied in circumstances where there has been consistent rorting. The Government endorses this view.With the improvement of natural justice principles in the bill, it is proposed that avenues of appeal to Professional Services Review Tribunals be abolished. This recognises that peer review is the basis of the Scheme. The person under review will have full rights to seek judicial review at any stage of the process.The bill also addresses the question of the adequacy of practice records maintained by practitioners under review. From 1 November 1999, a practitioner appearing before a Committee will need to demonstrate that his or her medical records are adequate and accessible.The new arrangements will be introduced in such a way as to not disadvantage any practitioner whose conduct has already been referred to the PSR. Where a referral has been made by the Health Insurance Commission to the Director under the existing legislation, the inquiry will be conducted and concluded under the rules that currently apply.This legislation strengthens a Scheme that has always enjoyed the full support of this Parliament. With such an investment in Medicare, all Governments over the last five years have agreed a Professional Services Review Scheme is necessary.PROTECTION OF MOVABLE CULTURAL HERITAGE AMENDMENT BILL 1999Australia's heritage comprises more than our built and natural environment, our traditions and languages. It is also the objects we create or collect, known as our movable cultural heritage. This might include anything from artworks to fossils, historic manuscripts to steam engines, Aboriginal sacred/secret material to Don Bradman's cricket bat.The most significant of these items are defined as `Australian protected objects' and their export is regulated by the Protection of Movable Cultural Heritage Act 1986. Without limiting general international trade in cultural commodities, the objective of the act is to ensure that our most precious heritage items are not lost to the nation.The act provides for the establishment of a National Cultural Heritage Fund to facilitate the acquisition of Australian protected objects. It was envisaged that the responsible Minister could provide grants from the Fund to assist a public cultural institution such as a museum or archive to purchase a cultural item which cannot be exported because its export would be of great cultural loss to Australia.The Fund would therefore help to provide public access to these significant cultural items and, as part of permanent collections, to keep them available for the delight and education of future generations of Australians.Further, people who own an item for which an export permit has been refused will have more opportunity to sell the item to a public museum or comparable institution for a fair market price. The act could then operate more equitably.The previous Government, however, never provided an appropriation to allow the Fund to come into operation. More than ten years after the commencement of the act, the Fund is still no more than an empty provision in the act.This Government is redressing the oversight. $0.5 million is to be allocated to establish the National Cultural Heritage Account from the 1999-2000 Budget appropriation for the administered expenses for the outcome `a cultural environment that enriches the lives of all Australians'. It is expected that the account will be maintained at that level over time.In order to operate the Account, however, it is necessary to replace outdated references to the Audit Act 1901 and to bring the financial arrangements into line with the regime established by the Financial Management and Accountability Act 1997.The bill therefore repeals section 25 of the act relating to the National Cultural Heritage Fund and replaces it with three new provisions relating to the National Cultural Heritage Account, which will be a Special Account for the purposes of the Financial Management and Accountability Act. The bill makes a number of other minor consequential amendments necessitated by this change.AGED CARE AMENDMENT (OMNIBUS) BILL 1999The commencement of the Aged Care Act on 1 October 1997 saw the implementation of legislation that guarantees an aged care system that maintains the comfort and dignity of older Australians in a way that is viable and sustainable.I am very pleased to introduce today the Aged Care Amendment (Omnibus) Bill 1999, which will introduce further resident protections, implement an election commitment and improve administration of the act.The bill is further proof of the Government's commitment to achieving excellence in care for older Australians in residential care. This commitment has been demonstrated by the increased outlays on residential care under this Government, by the growth in care places and by the recognition of the complex care needs of residents of aged care facilities. The bill further extends the work already done by the Government to improve the residential aged care system in Australia.The Government remains committed to bringing about real improvement to nursing homes, too many of which were simply not in a condition when we entered Government to provide a safe, comfortable and dignified home for older Australians. They deserve better.The accommodation charge takes account of the special circumstances of nursing home level residents, and maintains the principle of people making a contribution to improving the quality of their accommodation where they can afford to do so. Protections exist for those residents who are unable to contribute in this way.There are no changes to the quantum or the nature of the accommodation charges, which have been operating since 6 November 1997 through subordinate legislation. This bill formalises those measures in principal legislation to ensure a range of resident protection measures for accommodation charges, in line with those currently applying to accommodation bonds.The bill also ensures that where a nursing home level resident chooses to rent out a former family home to pay for the accommodation charge, the rental income earned does not affect their pension entitlements. This means that a resident can retain the full pension while earning rental income. This bill amends the Social Security Act and the Veteran's Entitlement's Act to exclude this rental income and the value of the property from the pension income and assets test.The new measures will also maintain, but through principal legislation, flexibility and choice for older Australians who move between different types of residential care. Where residents have previously paid a bond in a hostel, and would prefer to roll over this bond when they move to a nursing home instead of paying an accommodation charge, they will continue to have the option of agreeing with the provider to roll over the bond.Concessional residents, or those who qualify under the hardship provisions, will not be required to pay any accommodation charge. In addition, this bill widens the definition of concessional resident, to enable more older Australians to be classed as concessional residents and to ensure that they will not be asked to pay an accommodation bond or charge.The bill extends many of the consumer protections that currently apply to accommodation bonds to also cover accommodation charges, and requires aged care providers to meet a range of responsibilities in relation to the charge.This bill also implements the Government's 1999 Budget commitment to protect those older Australians who were in a nursing home when the Aged Care Act 1997 was introduced from paying an accommodation charge if they later move to another nursing home. Those nursing home residents who were in care at that time and who have moved or will move to another home will now be exempted from paying the accommodation charge.People who were residents of a nursing home when the Aged Care Act 1997 was introduced and who have moved and paid a charge in another home will be refunded for the accommodation charges they have already paid. These refunds will not affect their pension entitlements.Providers will not only be reimbursed for the amount lost in refunded accommodation charges but will be more than compensated through the maximum rate of concessional resident supplement.The Government also remains committed to those who devote themselves to caring for older people in their own homes. The bill reduces from 5 to 2 years the period during which a resident's home must have been occupied by a carer in order for the resident to qualify as a concessional or assisted resident. This change will make it easier for residents to qualify, and attract a higher level of Government subsidy. It will also mean that carers will be able to remain in the family home—further recognising the vital role that carers play.The bill also addresses anomalies in the Aged Care Act 1997 in relation to the revocation of approved provider status and the imposition of sanctions for breaches of provider responsibilities under the previous legislation. Provisions will be introduced which will enable the Commonwealth to take strong and decisive action against those providers, for example, who have been convicted of serious crimes, such as the abuse of residents or fraud. The Government is committed to ensuring that only those providers who meet their responsibilities will be able to provide care to the most frail and vulnerable in our society.It has also come to the attention of the Government that the responsibilities of providers in relation to the kinds of fees intending residents can be asked to pay needs to be clarified. The bill makes it very clear that intending residents cannot be asked to pay fees until after they have agreed to accept a place, following notification of a place being available.The bill makes provision for a number of other important changes to ensure better protection for both residents and providers. Concessional resident status is extended to cover residents whose home is occupied by dependent grandchildren. The bill allows for the extension of time limits for entering an agreement for those residents who wish to appoint a guardian to handle their affairs. The bill also provides for extensions to approvals in principles for additional recurrent funding, where providers need to additional time to improve their facilities.These issues are the result of the Government listening to and responding to these issues. We have acted in a sensitive way to keep the benefits of the aged care reforms flowing to residents, now and in the future.The amendments clarify and improve the current arrangements set out in the Aged Care Act 1997—the legislation that has seen the most comprehensive and significant reform to the provision of aged care services in Australia over the last decade. This legislation, that by encouraging innovation, flexibility and creativity in service delivery and planning, will maintain the provision of appropriate, responsive and quality aged care into the next century.Debate (on motion by Senator O'Brien) adjourned.Ordered that the bills be listed on the Notice Paper as separate orders of the day.Bills6635Messages received from the House of Representatives agreeing to the amendments made by the Senate to the following bills:Telecommunications (Consumer Protection and Service Standards) Bill 1998Telstra (Further Dilution of Public Ownership) Bill 1998Telecommunications Legislation Amendment Bill 1998Telecommunications (Universal Service Levy) Amendment Bill 1998 Business6636663617:20:006636Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I seek leave to move a motion in relation to the hours of meeting and routine of business for tomorrow.10000PRESIDENTThe PRESIDENT—Is leave granted?8O6O'BRIENSenator O'Brien—I seek some understanding as to whether this matter has been agreed to. I know nothing of it.6H4HARRADINESenator Harradine—Neither do I.UI4RAYSenator Robert Ray—Can I suggest that leave be granted for Senator Campbell to explain why he needs leave.10000PRESIDENTThe PRESIDENT—Is leave granted for Senator Campbell to speak to the proposition?Leave granted.10000Campbell, Sen IanSenator IAN CAMPBELL—I might say that you have a very good opposition whip. He will not let a single thing get past. Congratulations, Senator O'Brien. I could say that I am from the government and am here to help you, but you would not even trust that. I apologise to Senator Harradine because I do not think that on this occasion I have consulted with him on this, which would be a very rare exception. The motion simply allows the Senate to sit at 12.30 p.m. tomorrow instead of the normal 2 o'clock.10000PRESIDENTThe PRESIDENT—The question is that Senator Campbell have leave to move the motion he referred to earlier.Leave granted.H15Campbell, Sen IanSenator IAN CAMPBELL—I thank my colleagues. I move:That, on Tuesday, 29 June 1999, the Senate shall meet from 12.30 p.m. till 2 p.m. and the routine of business from 12.30 p.m. to 1 p.m. shall be government business only.Question resolved in the affirmative.Committees6636663610000PRESIDENTThe PRESIDENT—I have received letters from the Leader of the Opposition in the Senate seeking variations to the membership of committees.Motion (by Senator Ian Campbell)—by leave—agreed to:That senators be appointed to and discharged from committees as follows:Employment, Workplace Relations, Small Business and Education Legislation Committee. Participating member Senator Gibbs.Employment, Workplace Relations, Small Business and Education References Committee. Substitute member: Senator Mackay to substitute for Senator Crossin for the comrnittee's inquiry into the assessment of the factors that contribute to the disparity in employment levels between different regions and also between regions and capital cities, as well as the continuing high levels of regional unemployment. Participating member: Senator Gibbs.Miscellaneous663610000PRESIDENTThe PRESIDENT—I have received a letter from the Leader of the Opposition in the Senate nominating Senator Faulkner to be a member of the Advisory Council on Australian Archives.17:22:006636Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I hope that the Leader of the Opposition closely reads the credentials of the person that he has nominated. I seek leave to move a motion to appoint a senator to the Advisory Council on Australian Archives.Leave granted.H15Campbell, Sen IanSenator IAN CAMPBELL—I move:That, in accordance with the provisions of the Archives Act 1983, the Senate elect Senator Faulkner to be a member of the Advisory Council on Australian Archives for a period of three years, on and from 27 June 1999.Question resolved in the affirmative.Business66366636Motion (by Senator Brown) put:That the Regional Forest Agreements Bill 1998 be an order of the day for the first sitting day in August 1999. 17:27:00The Senate divided. (The President—Senator the Hon. Margaret Reid)33Allison, L. Bartlett, A. J. J.Bishop, T. M. Bolkus, N.Bourne, V. Brown, B.Carr, K. Conroy, S.Cook, P. F. S. Cooney, B.Crowley, R. A. Denman, K. J.Evans, C. V. Faulkner, J. P.Forshaw, M. G. Gibbs, B.Hogg, J. Lees, M. H.Lundy, K. Mackay, S.Margetts, D. McKiernan, J. P.Murphy, S. M. Murray, A.O'Brien, K. W. K. *Quirke, J. A.Ray, R. F. Reynolds, M.Schacht, C. C. Sherry, N.Stott Despoja, N. West, S. M.Woodley, J.35Abetz, E. Boswell, R. L. D.Brownhill, D. G. C. Calvert, P. H. *Campbell, I. G. Chapman, H. G. P.Colston, M. A. Coonan, H.Crane, W. Eggleston, A.Ellison, C. Ferguson, A. B.Ferris, J. Gibson, B. F.Harradine, B. Heffernan, W.Herron, J. Kemp, R.Knowles, S. C. Lightfoot, P. R.Macdonald, I. Macdonald, S.MacGibbon, D. J. McGauran, J. J. J.Minchin, N. H. Newman, J. M.O'Chee, W. G. Parer, W. R.Patterson, K. C. L. Payne, M. A.Reid, M. E. Synon, K. M.Tierney, J. Troeth, J.Watson, J. O. W.Campbell, G. Vanstone, A. E.Collins, J. M. A. Tambling, G. E. J.Crossin, P. M. Hill, R. M.Hutchins, S. Alston, R. K. R.* denotes tellerQuestion so resolved in the negative.Bills6637r8616637Motion (by Senator Margetts) put:That the provisions of the Diesel and Alternative Fuels Grants Scheme Bill 1999 be referred to the Environment, Communications, Information Technology and the Arts Legislation Committee for inquiry and report by 26 August 1999.17:35:00The Senate divided. (The President—Senator the Hon. Margaret Reid)28Bishop, T. M. Bolkus, N.Brown, B. 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.Faulkner, J. P. Forshaw, M. G.Gibbs, B. Hogg, J.Lundy, K. Mackay, S.Margetts, D. 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.42Abetz, E. Allison, L.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.Gibson, B. F. Harradine, B.Heffernan, W. Herron, J.Kemp, R. Knowles, S. C.Lees, M. H. Lightfoot, P. R.Macdonald, I. Macdonald, S.MacGibbon, D. J. McGauran, J. J. J.Minchin, N. H. Murray, A.Newman, J. M. O'Chee, W. G.Parer, W. R. Patterson, K. C. L.Payne, M. A.Reid, M. E.Stott Despoja, N. Synon, K. M.Tierney, J. Troeth, J.Watson, J. O. W. Woodley, J.Campbell, G. Hill, R. M.Hutchins, S. Alston, R. K. R.* denotes tellerQuestion so resolved in the negative.Miscellaneous6638Motion (by Senator Stott Despoja)—by leave—proposed:That the Senate—(a) notes the first statement on genetically-modified organisms by a major medical organisation, the British Medical Association's report, The Impact of Genetic Modification on Agriculture, Food and Health , launched on 18 May 1999;(b) recognises the association's concerns regarding the effects of genetically-modified foods on human health and the environment; and(c) endorses the association's recommendations, including: (i) an open-ended moratorium on the commercial planting of genetically-modified crops until there is scientific consensus on the safety of such crops, (ii) detailed research on allergic reactions to genetically-modified products and the cumulative effect of genetically-modified organisms and transgenic DNA in the environment and food chain, (iii) the segregation at source, identification and traceability of all genetically-modified products, (iv) the provision of satisfactory evidence by biotechnology companies that genetically-modified crops will not increase agricultural chemical use, and (v) an inter-governmental consultation to review the World Trade Agreement to ensure that governments rather than companies determine whether countries accept, with or without restriction, the importation and use of genetically-modified seeds, plants or foods.17:38:006638Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—by leave—Senator Stott Despoja has indicated that she is very happy to save the Senate from a long division if parties record how they vote on this. I am happy to do that on behalf of the government. We vote against her motion.8O6O'BRIENSenator O'Brien—I indicate that the opposition votes against the motion.QD4BROWNSenator Brown—The Australian Greens support the motion.DX5MARGETTSSenator Margetts—On behalf of the Greens (WA), I indicate that I am supporting the motion.Question resolved in the negative.Notices66386638Items of business were postponed as follows—General business notice of motion no. 78 standing in the name of the Leader of the Opposition in the Senate (Senator Faulkner) for today, relating to the Prime Minister and Senator Colston, postponed till 29 June 1999.General business notice of motion no. 82 standing in the name of Senator Faulkner for today, relating to Community Education and Information Program, postponed till 29 June 1999.Business of the Senate notice of motion no. 1 standing in the name of Senator Faulkner for today, relating to the references of matters to the Finance and Public Administration References Committee, postponed till 10 August 1999.Business of the Senate notice of motion no. 3 standing in the name of Senator Margetts for today, relating to the reference of a matter to the Community Affairs References Committee, postponed till 30 June 1999.General business notice of motion no. 233 standing in the name of Senator Margetts for today, relating to global capitalism, postponed till 30 June 1999.Miscellaneous663810000PRESIDENTThe PRESIDENT—From 12 to 14 May this year the fourth National Schools Constitutional Convention met in Canberra with over 125 students from 123 schools attending. I was not able to meet them on the day of their final conference as the Senate was meeting, but I subsequently accepted a communique from two of the students and a photograph of Parliament House which all of the students had signed. I propose to table the photograph and signatures and have the communique incorporated in Hansard so that all senators are able to read it.The communique read as follows—NATIONAL SCHOOLS CONSTITUTIONAL CONVENTION12-14 May 1999, Old Parliament House CanberraCOMMUNIQUEThe fourth National Schools Constitutional Convention was held in the Senate Chamber, Old Parliament House, Canberra from 12—14 May 1999.One hundred and twenty five student delegates from 123 schools from all Australian states and territories took part in the convention organised by the Constitutional Centenary Foundation.The Schools Constitutional Conventions seek to promote understanding and informed discussion amongst young Australians about the Australian Constitution and system of government.Student delegates from every Australian school in the catholic, government and independent education sectors are given the opportunity to participate regional and state/territory schools constitutional conventions, where they are either selected or elected to attend the National Convention.The Convention was opened by the Hon Trish Worth MP, Parliamentary Secretary to the Minister for Education, Training and Youth Affairs. Mr Donald McDonald, Chairman of the Constitutional Centenary Foundation welcomed delegates to the Convention. Speakers included: the Rt. Hon Ian Sinclair, Maxine McKew, the Hon Neville Wran, Mrs Kerry Jones, Chief Justice the Hon Murray Gleeson, Ms Evelyn Scott, and Mia Handshin.Student delegates were addressed by His Excellency the Honourable Sir William Deane, Governor-General of the Commonwealth of Australia, at a welcome reception at Government House. As part of the Convention program, delegates attended Question Time in the House of Representatives and met with the Prime Minister and Members of Parliament at afternoon tea.The ACT Minister for Education, Mr. Bill Stefaniak, welcomed students to Canberra at an evening function at the National Science and Technology Centre. Students were addressed by Mr John Basten QC at the Convention dinner at the High Court of Australia.The Convention was assisted by the Department of Education, Training and Youth Affairs under the Discovering Democracy program, with sponsorship from the National Council for the Centenary of Federation.The Convention delegates discussed two major issues:The 1999 Referendum and the Republic ModelCitizenshipThe conclusions of the Convention were:REFERENDUM ON A REPUBLIC1. Australia should become a republic.2. The proposed model is acceptable as the Initial basis for an Australian republic.3. The model could be improved in the following respects:. The powers of the Head of State should be codified.. The President should be automatically-returned to office if the Prime Minister's decision to dismiss is not ratified.. The President should only be dismissed by a two-thirds majority of the Parliament rather than the Prime Minister alone.CITIZENSHIP1. The Australian Constitution should recognise Australian Citizenship.2. In principle, the Constitution should recognise certain citizenship rights.3. Citizenship rights which should be recognised in the Constitution include:. To vote. Stand for public office. Hold an Australian passport. Diplomatic protection while overseas4. The Convention was equally divided on the issue whether Australian citizens who also are citizens of another country should be able to stand for parliament.5. The working groups at the Convention proposed that the community could be made more aware of the idea of citizenship by:. Voluntary citizenship affirmation for all Australians. Education. Citizenship day. Australians aged 16-17 years be allowed to vote on voluntary basisFor Convention Communique, delegates, issues papers and addresses, see: www.centenary.org.auFor further information, contact:Ms Marian SchoenExecutive DirectorConstitutional Centenary FoundationLevel 2-723 Swanston StreetCarlton VIC 3053Tel: (03) 9349 1846Fax: (03) 9349 1779Email: ccf2001@ibm.net Committees6640664010000PRESIDENTThe PRESIDENT—Pursuant to standing orders Nos 38 and 166, I present committee reports and documents which have been presented to me after the adjournment of the Senate on 22 June. The documents are listed in full on pages 6 and 7 of today's Order of Business. In accordance with the terms of the standing orders, the publication of the reports was authorised.The list read as follows—COMMITTEE REPORTS PRESENTED TO THE PRESIDENT WHEN THE SENATE WAS NOT SITTING:1. Economics Legislation Committee—Report on proposed expenditure in respect of the year ending on 30 June 2000, together with the Hansard record of proceedings (presented to the President, on 22 June 1999)2. Standing Committee for the Scrutiny of Bills—Report no. 10 of 1999 and Alert Digest no. 9 of 1999 (presented to the President, on 23 June 1999)3. Standing Committee on Appropriations and Staffing—31st Report (presented to the President, on 23 June 1999)4. Economics Legislation Committee—Report on the provisions of the Textile, Clothing and Footwear Strategic Investment Program Bill 1999, together with submissions (presented to the President, on 23 June 1999)5. Standing Committee on Regulations and Ordinances—Report on the scrutiny of Great Barrier Reef Marine Park Zoning Plans (presented to the President, on 25 June 1999, am)6. Standing Committee on Regulations and Ordinances—Report on ministerial undertakings (presented to the President, on 25 June 1999, am)7. Standing Committee on Regulations and Ordinances—Report on regulation impact statements (presented to the President, on 25 June 1999, am)8. Rural and Regional Affairs and Transport Legislation Committee—Report—Consideration of Budget Estimates 1999-2000, together with the Hansard record of proceedings (presented to the President, on 25 June 1999, am)9. Selection of Bills Committee—Tenth report of 1999 (presented to the President, on 25 June 1999, am)MINISTERIAL STATEMENT PRESENTED TO THE PRESIDENT WHEN THE SENATE WAS NOT SITTING: 1. Minister for Employment, Workplace Relations and Small Business—Report of the Australian Industrial Relations Commission: Junior Rates Inquiry conducted under section 120B of the Workplace Relations Act 1996, dated 24 June 1999, together with the report (presented to the President, on 25 June 1999, am)GOVERNMENT RESPONSES TO COMMITTEE REPORTS PRESENTED TO THE PRESIDENT WHEN THE SENATE WAS NOT SITTING1. Economics References Committee—Report entitled Review of the inquiry into outworkers in the garment industry (presented to the President, on 25 June 1999, am)2. Legal and Constitutional Legislation Committee—Report on the Copyright Amendment Bill (No. 2) 1997 (presented to the President, on 25 June 1999, am)3. Standing Committee for the Scrutiny of Bills—8 that Report of 1998—The appropriate basis for penalty provisions in legislation comparable to the Productivity Commission Bill 1996 (presented to the President, on 25 June 1999, am)10000PRESIDENTThe PRESIDENT—In accordance with the usual practice, I seek leave to have the ministerial statement and the government responses incorporated in Hansard .Leave granted.The statement and responses read as follows—REPORT OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION JUNIOR RATES INQUIRY CONDUCTED UNDER SECTION 120B OF THE WORKPLACE RELATIONS ACT 1996Ministerial Statement24 JUNE 1999OverviewA Full Bench of the Australian Industrial Relations Commission has reported on the feasibility of replacing junior rates with non-discriminatory alternatives. The tabling of the report in this parliament, and its subsequent distribution to interested parties and the wider community, should now be a catalyst for the resolution of the policy and political impasse which has dogged the future of junior wages in Australia for most of this decade.The report is an extensive body of work commissioned by this legislature, conducted over six months in an inquisitorial manner, rather than the more traditional adversarial approach of Commission litigation. It follows an independent public inquiry by the Commission that drew together oral and written submissions from all major stakeholders, including most of the historical participants in this debate. Being an inquisitorial process, the report makes no orders, decisions or recommendations, but in its own words, assists in resolving issues about the content of legislation and may serve to inform debate and future industrial policy (p. 8).The Challenge for this ParliamentThe report concludes that the Commission could not find any feasible non-discriminatory alternatives to age-based junior rates of pay. Such a finding is crucial to the central policy questions that now confront this parliament.Will the parliament legislate to permanently retain the existing system of junior rates? Will it remove the statutory scheme first introduced by the Keating government in 1993 which prima facie declares junior rates to be discriminatory and not to be made, or where made to be removed?In the light of this report, these questions must now be unequivocally answered in the affirmative. Junior rates must stay, and where appropriate be extended throughout the workforce.The opportunist political cover behind which the Labor Party and its leadership chose to hide on this issue has been its calls for an AIRC inquiry.That cover has now disappeared. The AIRC has reported. The Labor Party is exposed. Its political posturing has now been revealed as a sham. It has misread the debate and mislead the community, hoping beyond hope that an alternative would emerge behind which it could again cower in shallow opposition. Yet the AIRC has rightly repudiated each and every Labor sponsored alternative as being fundamentally flawed and in some cases even itself discriminatory.As unpalatable as it may be, Labor now has to do what the public interest dictated many months ago—to make a real decision—a choice between protecting jobs for young Australians in urban, regional and rural areas or negative opposition-for-opposition sake posturing.There is no doubt this is a dilemma for Mr. Beazley, who only this week confided to his caucus that over the coming months Labor could be portrayed in a negative position on industrial relations.If Labor repudiates this report from the independent umpire and again rejects the Coalition's legislation to rectify Labor's flawed policy to abolish junior wages then it imposes not just a self inflicted wound of negativity, but more importantly, jeopardises the jobs of tens of thousands of young Australians. The AIRC ConclusionsIn reaching its conclusions on this central issue, the report supports the core propositions that the federal Coalition government and the governments of Victoria, Western Australia, South Australia, the Australian Capital Territory and the Northern Territory have consistently advanced in this debate and before the Commission. These conclusions are:. That there is an undisputable relationship between junior rates, their potential abolition and the employment prospects of young people (pp. xiv; 157, 165);. That a discounted pay rate for entry level work continues to be necessary in the areas in which employment under junior rate classifications is most concentrated, and that well designed junior rate classifications may even create or protect employment opportunities, including in the building and construction industries (pp. xiii, xvi, 140-141, 189, 191, 201);. That the system of junior rates has been used as a wage reference for young people for decades, is simple to understand and administer, and has active employment under it (pp. x; xv, 65-66, 138);. That none of the proposed alternatives to junior rates are feasible because they either are more complex, overvalue the work of employees, are themselves discriminatory or have considerable adverse cost effects (p. ix, 168-172, 206-212);. That the removal of junior rates or the introduction of adult rates at 18 years would significantly disemploy young Australians, that is lead to large scale job losses (pp. xiv, 165, 207);. That the current legislative scheme, unless amended by the parliament, amounts to a rebuttable presumption that junior rates be removed from June 2000 (pp. xi; 88);. That, for a range of reasons, the labour force participation of young people is already relatively parlous and relatively scarce, and that changes that might have the effect of significantly increasing the relative cost of teenage labour beyond its real value to an employer may make teenage employment even more precarious, especially in regional and country Australia (pp. xiii, xiv; 151, 154, 199);. That if young people are to secure entry level employment and progress to economic self sufficiency through paid employment they more than ever need to be competitive in the labour market (pp. x, 15);. That junior rates are often a useful bridge to full time employment, especially for the educationally better qualified (p. xv); and . That the government submissions on the youth labour market and on the adverse consequences for young people on the abolition of junior rates have been broadly adopted, and that similar conclusions by bodies such as the Productivity Commission are supported (pp. xiii; 154, 163-165).The Junior Wage DebateBefore turning to the details of the report, it is necessary to put the AIRC's Inquiry into the context of the wider debate over junior rates.Junior rates have been a feature of the wages system in Australia since early this century. Age-based junior rates of pay are set as a percentage of the adult rate, and usually increase annually until adult rates are payable. Over 400,000 young people under 21 are paid junior wages—this represents over half of all employed young people in Australia.Junior rates have been under direct legislative threat since the Labor government of 1993. Under the existing provisions of the Workplace Relations Act 1996 (WRA), the continuation of junior rates in awards cannot be guaranteed after 22 June 2000.Because of the importance of junior rates for getting young people into jobs, the Coalition Government's preferred position has always been that junior rates should be allowed to continue indefinitely. In 1996 the Government agreed as a temporary measure to extend the then exemption for a further three years, and to put in place a mechanism for the AIRC to review the feasibility of abolishing junior rates of pay. This reflected a compromise position only agreed to by the Government as a way of avoiding Labor's legislated removal of junior wages. The Coalition agreed to the review on the clear understanding that our policy would continue to be for the retention of junior rates and that we would seek a mandate for this legislation at the next election, which we did—and obtained.The AIRC ReportThe AIRC report was prepared by a Full Bench of the Commission to fulfil the requirements of Section 120B of the WRA which requires a Full Bench to prepare a report assessing one primary question and three secondary questions.No Feasible Non-discriminatory Alternatives ExistThe primary question answered by the Inquiry was whether there are any feasible non-discriminatory alternatives to junior rates. The AIRC could not find any feasible non-discriminatory alternatives (Para [2] of the Summary). Those who want junior rates abolished had every opportunity to put alternatives to the Inquiry. Many tried to do so. The Australian Council of Trade Unions, the Australian Council of Social Services, the Shop Distributive and Allied Employees Association and the CFMEU all took up the challenge and put alternatives to the Inquiry. Not one of these proposals were found by the Full Bench to qualify as non-discriminatory and feasible.The first of the secondary questions considered by the Inquiry was whether it is desirable to replace junior rates with non-discriminatory alternatives. The Full Bench concludes that an assessment of the desirability of replacing junior rates would require a balance to be struck between the pros and cons of junior rates. It considered that no useful purpose would be served by the Bench making that kind of assessment in the abstract (Para 4.4.3).Significant Disemploying Effects if Junior Rates AbolishedThe next secondary question considered by the report was an assessment of the consequences for youth employment of abolishing junior rates. The Inquiry found that the removal and non-replacement of the existing wage discounts embodied in junior rates would have significant disemploying effects for young people (Para 5.6.12). The report notes that this finding was not seriously challenged by the participants in the Inquiry. The Report indicates that when given the opportunity to respond to this finding, the ACTU did not seek to address directly the finding or the substantial weight of economic opinion on which it is based.Significantly, the Inquiry then used its finding about the disemploying effects of removing junior rates to assess the consequences for youth employment of alternatives that would apply adult rates at 18. The Inquiry found that for most 18 year olds and above, the application of full adult rates would cause an overvaluation of the work performed, and would be expected to reduce the employment prospects of the 18 to 20 years old age group (Para 5.8.7).Junior Rates Have High Utility ValueThe third of the secondary questions addressed by the report was the utility of junior rates for different types of employment, for different industries, and in the school-to-work transition. The Inquiry found that well-designed junior rate classifications, framed to reduce capacity to exploit the use of them, may justifiably be used for creating or protecting employment opportunities for young people (Para [9](v) of the Summary). The Report also concluded that the role and usefulness of junior rates is best demonstrated in the school-to-work transition, and in school and work interfaces (Para 6.4.11).The Inquiry found that junior rates had high utility for the retail industry and the hospitality and accommodation industries (Para 6.3.1). Significantly, the report also concludes that an expanded application of junior rates in the building and construction industry could, with some qualifications, result in expanded opportunities for youth employment (Para 6.3.14).Additional Independent Support for Junior RatesThe AIRC also noted the existence of strong economic evidence in support of its conclusions. The AIRC Report made use of a major study by the Productivity Commission entitled Youth Wages and Employment. That found that a 1 per cent increase in youth wages would lead to a decrease in youth employment of 2 per cent in the retail industry, 5 per cent in the accommodation industry, and 2.5 per cent in the cultural and recreational services industry.This is consistent with the overwhelming body of international and Australian evidence, ranging from one of the world's leading authorities on labour demand Professor Daniel Hamermesh, to the Australian Retailers Association which estimated that 170,000 to 180,000 junior jobs would be lost from the retail industry alone if junior rates were abolished.Recently both the UK Low Pay Commission established by the Blair Labour Government and the Irish National Minimum Wage Commission recognised the need to discount minimum wages for young people to ensure they are not disadvantaged in the labour market.In fact, the Blair Labour Government not only received the recommendations of the Low Pay Commission recommending a minimum junior rate, but then proceeded of its own motion to further discount that recommended minimum out of concern for the youth labour market.Every state and territory government in Australia has the power to legislate to end the use of junior rates. None have done so. Other OECD countries that have minimum wages that provide significant protection for the low paid also typically have lower minimum wages for young people.The Government's Youth Employment BillThe AIRC Report is overwhelming evidence in the case for retaining our system of junior rates, and making junior rates more widely available. The continued existence of junior rates is essential to protect the employment prospects of young people. They help young people get that first foothold in the labour market that is critically important for their future career. With teenage unemployment above 24 per cent, everything possible must be done to assist young people into work.Of course, the preservation and expansion of junior rates is not the whole answer to reducing youth unemployment. Rather, it is an integral element of the Government's strategy that includes a well managed growing economy, initiatives to increase school retention rates and raise literacy and numeracy standards, the expansion of the apprenticeship system, and the assistance provided to unemployed youth through the job network and mutual obligation.Our response to the need to protect junior rates is the Workplace Relations Legislation Amendment (Youth Employment) Bill 1998, which the Government introduced last November. The Bill, when passed, would preserve and enhance the job prospects of young people by protecting the existing system of junior rates and, where appropriate, by extending junior rates to awards that do not currently contain them. The Bill was passed by the House of Representatives on 10 February 1999 but was rejected by the Senate on 8 March 1999.In light of the AIRC Report and because of the important role junior rates play in getting young people into jobs, the Government will be re-introducing the Youth Employment Bill.A number of members who previously spoke against the Bill did so on the ground that it should not have been brought forward until after the tabling of the AIRC's report on junior rates. Their initial opposition to the Bill appears to have been determined by timing and process issues, rather than by the merits of the Bill itself. This difficulty that some members had with the initial Bill has now been removed.And, as I said earlier, the Labor Party must now come clean with a position for or against junior wages and youth employment.On behalf of the Government and all members, I thank the Full Bench of the AIRC for its important work on this matter of public importance, as well as the participants to the inquiry.I commend the Report to this parliament and urge honourable members to use its conclusions as the basis for setting aside past policy differences, and securing the passage of the Government's Youth Employment Bill when reintroduced into this place.The Government response to the Senate Economics References Committee 1998 report entitled Review of the Inquiry into Outworkers in the Garment Industry.INTRODUCTIONThe Government response to the Senate Economics References Committee 1998 Review of the Inquiry into Outworkers in the Garment Industry is in two parts. The first part responds to the review findings and the second part responds to additional comments from Government Senators. The findings and comments are numbered in accordance with the closest corresponding paragraph numbers in the review report. Where there are no paragraph numbers, page number references are used.PART ONE—RESPONSE TO THE REVIEW REPORT RECOMMENDATIONSSewing time manual1.16The committee supports the development of the sewing time manual as an essential requirement for the successful operation of the code, and recommends the Government provide the financial assistance for this initiative.Agreed in part. Following protracted and difficult negotiations, the Council of Textile and Fashion Industries of Australia (TFIA), the Australian Industry Group (AIG), Australian Business Limited (ABL) and the Textile, Clothing and Footwear Union of Australia (TCFUA) agreed in November 1997 to commit to a unified Manufacturers' Code of Practice (the code) for the employment of local outworkers in the clothing industry.The industry-driven code is designed to combat the exploitation of outworkers by specifying their entitlements and by obliging manufacturers and contractors to contractually assure outworkers that they will receive those entitlements.A Code of Practice Committee comprised of employer and union representatives oversees the successful implementation of the code, and is responsible for the accreditation of qualified manufacturers and for educating outworkers on their entitlements under the code.Through the former Department of Industry, Science and Tourism, the Government signed an agreement with the code signatories in July 1998 to provide significant funding ($302 000) to support an education campaign to help implement the code of practice. The education campaign will commence in 1999 for approximately twelve months, with the code itself to continue indefinitely. Major activities of the education campaign include the development of a licensing system for approved products and related labelling, the recruitment and training of bilingual outreach workers, a seminar program in major employment centres and provision of multi-lingual publications on the code.Another key component of the education campaign, which the grantees have agreed to undertake and for which the Government will provide significant funding, is the development of a `Product Rate Manual' (or sewing time manual). This will involve the engagement of a methods engineering consultant, the purchase of relevant software, practical testing and trialing, and the finalisation and broad distribution of the manual. The intended outcome is to establish accurate task details and fair remu neration rates for outworkers employed on the range of common garment assembly activities.Textile, Clothing and Footwear (TCF) Advisory Board1.17 The committee welcomes the Government's appointment of a new TCF Advisory Board to provide industry-based advice to the Productivity Commission. However, the committee believes a working party or committee should be established within the board to deal specifically with outworkers issues.Noted. The TCF Advisory Board was established by the then Minister for Industry, Science and Tourism, the Hon John Moore MP, primarily to act as a source of industry-based advice to him and the Government, during the 1996-97 process of the Productivity Commission review of the TCF industries and the Government's response in setting the post-2000 TCF policy framework.With that now completed, the future of the TCF Advisory Board is uncertain. In any case, the Code of Practice Committee, referred to in the response to paragraph 1.16, appears to be better-placed to address these issues.Government procurement practices1.21 The committee suggests the Federal Government follow the lead of the New South Wales Government by directing departments and agencies who deal with clothing procurement to enter into deeds of co-operation along the lines of the New South Wales code.Noted. As the purchasing of clothing is concentrated in a few agencies, and aligned with the devolution of financial responsibilities under the Financial Management and Accountability Act 1997 , it is considered more practicable to approach the top buying agencies, and encourage them to enter deeds of cooperation.Government assistance1.25 The committee recommends that only retailers and manufacturers who sign the agreement should benefit from industry assistance and support.Not agreed. The Manufacturers' Code of Practice is intended as a voluntary mechanism for encouraging fair and equitable working conditions for outworkers and has been supported by the Government on this basis. The education and information activities being part-funded by the Department of Industry, Science and Resources are regarded as the principal means by which the Government sees participation in the code being extended.The Government is of the view that it would be inappropriate to limit industry assistance and support to those manufacturers and retailers who are signatories for the following reasons: . the industry associations are signatories to the code and have undertaken to encourage full participation by their members. It would be impractical to get all 6000 plus establishments in the TCF industry to be signatories;. many firms in the TCF industry do not use outworkers and it would be inappropriate to get them to sign; and. it does not necessarily follow that because a firm is not a signatory to the code or is not a member of the industry associations which are signatories, that the firm itself is not complying with all the appropriate conditions on employee entitlements.Deeming outworkers as employees1.31 From the perspective of outworkers it is vital their employment status is resolved.Noted. The then Labour Ministers' Council (LMC) agreed, on 27 November 1998, to establish a Departments of Labour Standing Committee (DOLAC) Working Party on Outworkers to examine and provide a draft report to the Workplace Relations Ministers' Council (WRMC) on options for action to clarify the employment status of outworkers in the garment industry. The working party will develop a working definition of `outworkers' and will have regard to:. reports of the Senate Economics References Committee on outworkers in the garment industry;. existing Commonwealth and State legislation on the employment status of outworkers and other relevant issues;. Commonwealth legislative capacity under the Commonwealth Constitution; and. the scope for and merits of coordinated action.The working party will provide a draft report to the WRMC in November 1999.The award review process1.35 The committee recommends that the existing clauses regarding outwork in the TCF awards should remain when the awards are simplified. The Government should intervene and support this outcome to ensure that mechanisms continue to exist in the award to ensure that award pay and conditions are honoured for outworkers.Noted. The Commonwealth intervened in the Australian Industrial Relations Commission (AIRC) proceedings regarding the simplification of the outworker provisions in the Clothing Trades Award1982 .The Commonwealth contended that the award clauses dealing with outworkers (clauses 26, 27 and 27A) were, generally, allowable and provided a foundation of fair minimum standards for the protection of outworkers, consistent with subsection 89A(2) of the Workplace Relations Act1996 .On 12 March 1999 a Full Bench of the AIRC announced its decision that clauses 26, 27 and 27A of the Clothing Trades Award1982 are allowable in their entirety under s.89A(2)(t) and s.89A(6), and directed the parties to confer and rewrite the clauses so that they are expressed in plain English.Australian jurisdictions and the ILO child labour convention1.38 The committee recommends the Government takes a more active role to eradicate this [child labour] problem.Noted. There is federal, State and Territory legislation addressing the minimum age for certain occupations (for example work in underground mines, at sea and in licensed premises), occupational health and safety, compulsory attendance at school and child welfare, which provides an adequate framework to regulate and control the employment of young children. If governments consider that there is a significant problem in any of these areas, the aforementioned legislation should be able to deal with it. While the employment of children is primarily the jurisdictional responsibility of State and Territory governments, the Commonwealth Government is working with them, particularly on the development of international standards.The International Labour Organisation (ILO) is developing a new convention, specifically addressing hazardous and exploitative forms of child labour. Australia supports this ILO initiative, as it will more appropriately target the problem of exploitative child labour than does the current relevant standard (Convention No. 138 dealing with minimum age for employment).The Government has responded to the ILO questionnaire on the proposed new convention and actively participated in the discussions at the 1998 International Labour Conference. The texts of the new standards are expected to be finalised at the June 1999 conference.Australia is working towards the adoption of sufficiently flexible new instruments which focus on eliminating extreme or exploitative forms of child labour, and which can be ratified by all countries. The instruments will not specify a minimum age for employment (this is already addressed by Convention No. 138).ILO homework convention1.41 The committee feels the long delay in dealing with ILO Convention 177 and Recommendation 184 is unsatisfactory and the Government should undertake to resolve the matter quickly.Noted. The homework instruments and the associated report were ready to be tabled on 2 September 1998 when the federal election was called. Subsequently, Queensland advised some modifications to its position, following the change of government in that State. In light of this information a revised report was submitted to the Minister and tabled in the House of Representatives on 3 December 1998 and the Senate on 8 December 1998.This report states that the Commonwealth has determined that the new ILO instruments concerning homework are not suitable for acceptance. A preliminary examination of current Australian law and practice for the new homework instruments indicates that there are compliance difficulties. At this stage, Australia does not propose to consider ratification of the convention.Occupational health and safety issues1.47 The committee strongly recommends that the National Occupational Health and Safety Commission (NOHSC) examine Dr Mayhew's report with the view to implementing its recommendations in the very near future.Noted.(a) The Commonwealth Government recognises that Australia's occupational health and safety performance needs to be improved. The Government therefore endorses the recommendation that OHS guidance material be developed on TCF machining work. Such guidance material should help improve the OHS performance in the garment industry for both factory-based workers and outworkers.In 1998, as part of an Outworker Information Campaign, conducted jointly by the then Department of Workplace Relations and Small Business and the Office of the Employment Advocate, a publication was released entitled Occupational Health and Safety: Outworkers in the Clothing Industry . The publication contained health and safety information, relevant to outworkers, provided by the NOHSC. The publication was printed in English, Vietnamese, Chinese, Laotian, Cambodian, Macedonian and Turkish languages.One of the key priorities for the NOHSC in 1999 relates to the development of a national inventory on industry-based OHS guidance material. The Government would expect that any OHS guidance material on TCF machining work would be included as part of this development.(b) While primary responsibility for publicising and enforcement of OHS duty of care in TCF industries rests with the States and Territories, the Commonwealth Government does have an overall interest in improving OHS performance. In this regard, the Commonwealth is working with the States and Territories on a number of initiatives to address workplace safety and such measures should flow onto TCF industries. Collection of statistical data1.47b The committee still considers the information on the exact numbers of outworkers is essential for policy development, and recommends that the ABS survey scheduled for July 1999 includes specific questions on outworkers.Noted. As indicated in the Government response to the Senate Economics References Committee Report (tabled in Parliament on 3 September 1997) the Australian Bureau of Statistics (ABS) planned to investigate ways of better identifying outworkers in its Persons Employed at Home Survey (PEH). This investigation has now taken place and it has been concluded that there are only limited improvements that can be made to this survey to better measure outworkers.While the questions used in the survey are appropriate for identifying outworkers in the garment industry, the design of the survey makes it difficult to obtain an accurate measure of outworkers in the garment industry. The PEH is conducted as a supplement to the Monthly Labour Force Survey (MLFS) and will cover approximately 26 000 households. The MLFS is designed to be representative across the Australian population. However, it may not be representative for groups within the Australian population that are relatively small and/or not evenly spread throughout the general population.The cost of allocating additional sample for the PEH, or adopting targeted collection techniques to ensure an accurate measure of outworkers in the garment industry, would be substantial and is currently beyond the resources of the ABS. Without these enhancements, the PEH is unlikely to accurately capture a significantly large and representative selection of outworkers in the garment industry in its sample.Notwithstanding this constraint, an important modification is being considered for the PEH. The proposal is to expand the scope of the survey to include other persons working at locations that are not those of their employer/client. This would improve the coverage of the survey in relation to outworkers in the garment industry to the extent that they are employed at locations other than their own homes.However, initial testing of the expanded survey has not proven satisfactory and further development work is needed. As a result, the survey is no longer planned for July 1999 and will be rescheduled for some time in 2000.English language training1.50 It is essential that new migrants are targeted for language training.Noted. The two most relevant language training options for newly-arrived migrants are the Adult Migrant English Program (AMEP) and the Workplace English Language and Literacy (WELL) Programme.The Adult Migrant English Program The AMEP is administered by the Department of Immigration and Multicultural Affairs (DIMA). Under the AMEP all newly arrived migrants who are assessed as not having functional English are entitled to a maximum of 510 hours of English tuition. All new migrants must register within three months of arrival in Australia or grant of permanent residence, commence their English tuition within one year and complete the tuition within three years. Deferral can be sought, however, through applying to an AMEP service provider.Under the accredited curriculum framework used in the AMEP, English competencies are taught in the context of living and working in Australia.Arrangements for AMEP delivery include a range of measures to ensure that the program maximises its reach to those who are eligible. These measures include:. free child care provided to clients with children who are below school age;. teaching facilities close to where clients live and work;. flexible delivery, including classes in community settings and in the evenings and weekends, as needed by clients;. provisions for Distance Learning and Home Tutor options for clients who are unable or unwilling to attend classroom-based tuition; and. referral of clients to training options beyond the AMEP.Outworkers are most likely to have come to Australia under family sponsorship and gone directly into the community. Only about 57 per cent of family migrants who have an entitlement to the AMEP take up their entitlement (as compared to 87 per cent of refugee and humanitarian entrants) and the average time spent by this group in the program is 305 hours out of an entitlement of 510 hours.DIMA is working with AMEP service providers to improve reach and participation, and this work includes targeting clients by country of birth, gender and place of residence.The WELL ProgrammeThe WELL Programme is funded by the Commonwealth through the Department of Education, Training and Youth Affairs (DETYA) and targets workers who need English language and literacy assistance in the context of occupational and workplace training. In 1998 there were three WELL Programme projects which targeted outworkers. The Australian Light Manufacturing Industry Training Advisory Board (ALMITAB) conducted a project which aimed to map existing outworker vocational education and training, map various models of training, collate existing learner resources, identify gaps in the training and make recommendations for future outwork training. The project resulted in three documents:. No Sweat: A report on Outworker Vocational Education and Training;. Catalogue of Outworker Training; and. A Guide on Best Practice in Outworker Training.The TCFUA (Victorian Branch) project was a continuation of the TCFUA projects funded by the WELL Programme in 1996 and 1997. In 1998 the TCF Homeworker Education Program conducted three classes at Springvale and St Albans targeting 60 outworkers.The Adelaide Institute of TAFE Workplace Education Service project is a continuation of projects funded by the WELL Programme since 1996. It was directed at outworkers, who were almost exclusively women from South East Asia and who had low levels of literacy and English language skills. Twenty-two workers took part in courses to improve their language and literacy skills. A major part of the project involved networking and liaison with communities and organisations involved with outworkers so as to raise awareness among outworkers on accessing language, literacy and numeracy training.Taxation compliance issues1.54 The committee is pleased that the Reportable Payments System is having an impact on reducing non-compliance with taxation laws in the clothing industry. However, the committee encourages the Government to continue to develop ways to assist and encourage outworkers to become part of the legal system without reprisals for past non-compliance.Noted. The Australian Tax Office (ATO) has continued its campaign against tax avoidance in the TCF industries. In the 1998-99 financial year 87 officers have been committed to this task. Strategies are primarily aimed at tackling those people who are able to use `shell' entities. Typically, those people position themselves as `middle men' and are able to recruit and exploit outworker labour.ATO work with community representatives indicates that generally outworkers would prefer to be able to participate in the industry and meet their tax obligations, as well as receive reasonable pay and work reasonable hours. Community-based organisations have had some success in developing alternative industry arrangements that promote the benefits of legal participation in the industry. These arrange ments have the added advantage of by-passing the `middle men' in the industry who are often involved in cheque-laundering activities.The Reportable Payments System (RPS) and cheque-laundering enforcement activities play an important role in achieving and maintaining compliance. For the 1997-98 financial year the ATO achieved an increase of 12 per cent in income tax returns lodged in the TCF industries over the figure for the preceding year. Total business income returned for the period increased by 2.5 per cent.The Government has proposed that the RPS be replaced with a comprehensive pay as you go (PAYG) system supported by an Australian Business Number (ABN). These proposals offer opportunities to improve compliance in the TCF industries, including the possible application of a simple reporting system as described in the Government's `A New Tax System' document (p.146).The ATO will continue to encourage individual outworkers to voluntarily come forward and participate in the tax system. The continuing emphasis is on future compliance.PART TWO—GOVERNMENT RESPONSE TO ADDITIONAL COMMENTS FROM SENATORS FERGUSON, CHAPMAN AND HEFFERNAN.Government assistancePage 11—Government Senators do not agree that industry assistance and support should only be provided to retailers and manufacturers who are signatories to the code.See 1.25 above.Deeming outworkers as employeesPage 11—Government Senators believe that the issue of deeming provisions requires more than a partial response and it is appropriate that this issue be further considered by the Labour Ministers' Council because a coordinated approach is preferred for this issue.See 1.31 above.The award review processPage 12—Government Senators note that the commission has a statutory obligation to review awards and it is inappropriate that the committee recommends that it deal with awards in a way which is inconsistent with that obligation.See 1.35 above.Australian jurisdictions and ILO child labour conventionPage 12—Government Senators state that the Australian Government has taken an active role on this issue, and will continue to do so.See 1.38 above. ILO homework conventionPage 12—Government Senators note that there are several preconditions before ratification of a convention can be considered.See 1.41 above.Occupational health and safetyPage 12—Government Senators recommend that the National Occupational Health and Safety Commission examine Dr Mayhew's report and consider implementing strategies (a) and (b) in the future. See 1.47 above.Offshore productionPage 13—Government senators note the claims made by some manufacturers that the uncertainty relating to some of the obligations contained in industry codes and the threat of prosecution by the unions for minor technical breaches of the clothing award are forcing manufacturers to assemble the product offshore.Clothing firms' location decisions are based on a wide range of factors, not least of these being the impact of the cost of assembly labour on the final garment price. It is difficult to quantify, however, the extent of the impact—if any—of the code on the cost of labour and ultimately on local employment levels in the industry. The situation could nonetheless be monitored by the Code of Practice Committee.Importance of Clothing ProductionPage 13—Government Senators note that clothing production is conducted by ethnic minorities in South Western Sydney and areas of Melbourne and these business activities are crucial to the work opportunities of these communities.Agreed that clothing production may be crucial to the work opportunities of some sections of particular ethnic communities, and with the importance of monitoring the impacts of the code on the viability of this industry in Australia. However, this also needs to be balanced against the rights that all Australians have to a workplace where healthy, safe and equitable conditions exist.Government Response to the Legal and Constitutional Legislation Committee Report on the Copyright Amendment Bill (No. 2) 1997The Hon Daryl Williams AM QC MPAttorney General9 MAR 1999Senator Marise PayneChair Senate Legal and Constitutional Legislation Committee Parliament HouseCANBERRA ACT 2600Dear Senator PayneI write to thank the Senate Legal and Constitutional Legislation Committee for its report of 1 April 1998 on the Copyright Amendment Bill (No.2) 1997 (the Bill).The Bill received the Royal Assent on 30 July 1998 as the Copyright Amendment Act (No.2) 1998. The Copyright Act 1968 has now been reprinted incorporating the amendments in the Bill as well as those made by the Copyright Amendment Act (No. 1) 1998 and the Intellectual Property Laws Amendment Act 1998. The Government took the Committee's report and recommendations into account in proposing amendments to the Bill in the Senate to give better effect its intended operation and to respond to some of the concerns about the drafting of the proposed amendments.The Government's response to the Committee's recommendations is as follows.Recommendation 1: That the Copyright Amendment Bill (No.2) 1997 be passed.The Bill, as amended, was passed by the Senate on 12 July 1998 and by the House of Representatives on 15 July 1998.Recommendation 2: That the Government seek advice from the Attorney-General's Department confirming that there are no potential indirect effects of the TRIPs Agreement on the Bill.The Government was mindful of Australia's obligations under the World Trade Organization (WTO) TRIPs Agreement in making the reforms to remove copyright controls over importation of sound recordings. In a late submission to the Committee, the Attorney-General's Department responded to some of the concerns relating to the detail of the drafting in the Bill.The Bill was amended in the Senate to ensure that any concerns about consistency with the TRIPs Agreement were overcome. The advice to the Government by the Attorney-General's Department was that the amendments, in the form in which they were passed, were consistent with the TRIPs Agreement.Recommendation 3: That the Government examine the desirability of applying uniform laws to govern the importation of all forms of intellectual property.This is an issue that is kept under on-going consideration by the Government. It is, however, to be noted that the history of this issue in Australia has demonstrated that each of the major industries directly reliant on copyright—book publishing, sound recording, film, arts and computer soft ware—exhibit very different characteristics. This has been the main reason this issue has been considered on an industry-by-industry basis to date.Recommendation 4: That the Government consider the desirability of the Productivity Commission undertaking a comprehensive inquiry into the music industry to determine whether there is a need for an industry policy or industry assistance.The Government sees no need for such an inquiry.I mention that, in addition to existing support programs, on 28 August 1998 the Government announced a $10 million contemporary music package to support a diverse range of programs for the development, promotion and distribution of contemporary Australian music. That package includes funding for pilot projects in Tasmania and South Australia, additional funding for the Australia Council's Contemporary Music Export Development Program and funding for a national community satellite network. The package identified key areas for funding and the Government received a number of submissions on those areas from the music industry, State Governments and community organisations.Recommendation 5: That the Government examine the effect that the passage of the Bill might have on composers where a CD containing their work is imported:. from a country with no copyright law, or. a country with a copyright law that does not recognise foreign copyright owners, or. a country with a copyright law that provides for compulsory licences.The Government proposed amendments in the Senate to cover the first two of the three matters raised. The amendments were passed without change. The amendments protect the interests of copyright owners, including composers of music, by ensuring that copies of sound recordings which may be parallel imported must have been manufactured in countries which enforce copyright standards in accordance with the Berne Convention or the relevant parts of the WTO TRIPs Agreement concerning protection given to musical works. The amendments were incorporated in the definition of "non-infringing copy" in the Bill.The changes made to the Bill during its passage through the Parliament thus provide important safeguards for the interests of owners of copyright in works used on sound recordings, including composers who retain copyright in their works.Yours sincerely(signed)DARYL WILLIAMSMinister for Justice and CustomsSenator the Hon Amanda VanstoneCRL 98/40831: 182255Senator Barney CooneyChairSenate Standing Committee for the Scrutiny of BillsSuite SG:49Parliament HouseCANBERRA ACT 2600Dear Senator CooneyI refer to the letter dated 25 June 1998 from the Secretary of the Senate Standing Committee for the Scrutiny of Bills (`the Committee') to the Senior Adviser of the Attorney-General regarding the Committee's Final Report (`the Report') on its inquiry into penalty provisions in legislation such as the Productivity Commission Bill 1996. The Report makes a recommendation for action by the Attorney-General. I am responding as this is a matter within my portfolio responsibilities.I agree with the Committee that there is a need to review the penalty levels of some classes of Commonwealth offences. In that respect, the Government is moving to rationalise many of the classes of offences identified in the report as part of its program to implement recommendations of the Gibbs Committee and Model Criminal Code Officers Committee and the Government's policy of simplifying legislation. The Commonwealth Criminal Code is being progressively developed over the next few years. It will include administration of justice offences to update and rationalise offence provisions designed to protect the integrity of bodies like the Productivity Commission and other tribunals (for example, interference with witnesses). That exercise will ensure that penalties will be consistent, fair, and appropriate.When the review of penalty levels and applicable principles has taken place I will ensure that the relevant information is disseminated as recommended by the Committee.Yours sincerely(signed)AMANDA VANSTONE66506650Motion (by Senator Calvert) proposed:That the report be adopted.17:40:006650O'Brien, Sen KerrySenator O'BRIEN8O6TASALP00—I would like to move an amendment to the motion which I understand has been discussed with the government. In relation to the report of the Selection of Bills Committee, I move:That, in relation to the reference of the Copyright Amendment (Importation of Sound Recordings) Bill 1999 to a committee, the reporting date 9 August 1999 be omitted and the reporting date of 30 September 1999 be substituted.I have been asked to do this by Senator McKiernan, who has indicated that the Senate Legal and Constitutional Committee has met and is of the view that, given the references already before the committee, it will be impossible for the committee to meet the proposed reporting date in the selection of bills report. My understanding is that that matter has been the subject of some agreement with the government, and that is the basis of my moving the amendment.Also, we did seek to refer the A New Tax System (Family Assistance) Bill 1999 and three related bills to a committee. That was defeated by the committee on the vote of the government with the support of the Democrats. I believe it is unprecedented for that to occur. For the purpose of the fullness of the report of the committee I simply record that that has occurred.17:42:006650Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—According to the whip, and certainly by my recollection, this is news to us. Since the opposition has caught us unawares, I would appreciate it if Senator O'Brien on this occasion was to seek leave to give this as a notice of motion. I can guarantee that he will have a chance to action it on Wednesday, so the matter will be dealt with before the Senate adjourns and well before it would be necessary for the committee to start any work on the reference. It can then be discussed outside the chamber. There may have been a breakdown in communications, but it would assist our processes if you could perhaps treat this as a notice to us and seek leave to turn it into a notice, and we will action it on Wednesday.17:43:006650O'Brien, Sen KerrySenator O'BRIEN8O6TASALP00—Given the assurance that, if I so seek leave on Wednesday, irrespective of whether there are other orders in place, I will be permitted to move a motion with the same effect and have the opportunity to debate it and put the motion, then I will accept Senator Campbell's suggestion and withdraw the amendment—if that is the assurance that has been given.Amendment—by leave—withdrawn.10000PRESIDENTThe PRESIDENT—Perhaps we could proceed with Senator Calvert's motion, excluding the Copyright Amendment (Importation of Sound Recordings) Bill 1999 . I put the question that the Selection of Bills Committee report, without the copyright recommendation, be agreed to.Question resolved in the affirmative.66516651Motion (by Senator Calvert)—by leave—agreed to:That the report be adopted.66516651Motion (by Senator Calvert) agreed to:That the estimates report of the Economics Legislation Committee and the Rural and Regional Affairs and Transport Legislation Committee, the report of the Scrutiny of Bills Committee and the report of the Economics Legislation Committee on the provisions of the Textile, Clothing and Footwear Strategic Investment Program Bill 1999 be printed.17:45:006651Murphy, Sen ShayneSenator MURPHYFX5TASALP00—by leave—With regard to the Economics Legislation Committee report on the provisions of the Textile, Clothing and Footwear Strategic Investment Program Bill 1999 , I move:That the Senate take note of the report.I seek leave to continue my remarks later.5F4CALVERTSenator Calvert—I might just point out that that particular report is subject to the Selection of Bills Committee.Leave granted; debate adjourned.6651665117:45:006651Calvert, Sen PaulSenator CALVERT5F4TASLP10—I seek leave to have the three Regulations and Ordinances Committee reports incorporated in Hansard .Leave granted.The reports read as follows—Standing Committee on Regulations and OrdinancesSenator Bill O'CheeScrutiny of Great Barrier Reef Marine Park Zoning PlansOn 30 June 1998 the Committee reported to the Senate on its continuing scrutiny of the Great Barrier Reef Marine Park Zoning Plans , see Annual Report 1997-98, p.91. The Committee advised that there were a number of important matters of continuing concern with these instruments. The Committee can now report that it has pursued the matter and has received assurances from the Minister which it considers acceptable.The Committee's concerns related to what appeared to be an invalid subdelegation to officials of legislative powers to open or close considerable areas of the Great Barrier Reef to fishing, including recreational fishing and spearfishing, for periods of up to five years. These powers were to be exercised by instruments which were not even subject to tabling, much less to possible disallowance. In reply to the Committee's query the Minister provided advice from the Office of Legislative Drafting (OLD) in the Attorney-General's Department (AGD) that if the powers were legislative then they "certainly" should be provided directly by the Zoning Plans and thus be subject to full parliamentary control. The OLD advised, however, that the powers were in fact administrative and therefore valid.The Committee reported that it was startled by this advice, which appeared to fly in the face of what it understood to be the difference between legislative and administrative powers. The Committee then asked the Minister for advice on the matter from the Office of General Counsel (OGC) in the AGD. The OGC advice, which accorded with the views of the Committee, was that the powers in question were "clearly" of a legislative nature. The OGC advice did not refer to the earlier advice from OLD. The Committee then suggested to the Minister that the Zoning Plans should be remade as soon as possible to correct the present unsatisfactory position.The Minister responded to the Committee by providing further advice from the OGC that the powers, although legislative, would be likely to survive a court challenge to their validity on the grounds of subdelegation. The Committee replied that it did not accept this advice but that in any event it was a breach of parliamentary propriety to make legislative instruments which are not subject to tabling and disallowance. This was where the matter stood at 30 June 1998 when the Committee previously reported to the Senate on the Zoning Plans.Since then the Committee has actively continued its scrutiny and, as noted above, has achieved what it regards as a satisfactory outcome. The Committee first wrote directly to the Attorney-General for more detailed advice on aspects of the legal position, with particular emphasis on the implications for the operation of the Legislative Instruments Bill. In this latter context the Committee wanted to be quite sure that the provisions of that Bill, if enacted, would apply to the instruments for which the Zoning Plans provided. The resulting opinion from the Chief General Counsel, Australian Government Solicitor, reviewed all the previous advice from the different areas of AGD and concluded that the provisions in question should be properly regarded as legislative. The Chief General Counsel also concluded, however, that the subdelegation of legislative power was not invalid. Nevertheless, the Chief General Counsel noted that, even if valid, there may be quite proper policy issues as to whether it is appropriate in all the circumstances to confer the delegated power. The Attorney-General advised that, in relation to the Legislative Instruments Bill, this latest advice would be drawn to the attention of the relevant officers.Following this reply the Committee again wrote to the Minister asking that the decisions under the Zoning Plans be made subject to disallowance. The letter reads as follows:2 December 1998Senator the Hon Robert HillMinister for the Environment and HeritageParliament HouseCANBERRA ACT 2600Dear MinisterI refer to the three Great Barrier Reef Marine Park Zoning Plan Amendments about which the Committee has previously written to you.As I mentioned in my letter of 30 June 1998 the Committee wrote to the Attorney-General about the Amendments and has now received an opinion of 24 August 1998 (attached) from the Chief General Counsel which confirms the view of the Committee and which indeed confirms earlier advice from the Office of General Counsel of 19 October 1997 and 16 January 1998 that the instruments are legislative. This is in contrast to earlier advice from the Office of Legislative Drafting of 2 and 5 December 1996 that the instruments are administrative.The Chief General Counsel remains of the view, however, that although legislative the instruments are not invalid. The Committee does not accept this view, but whether or not the powers in the instruments are void it is a clear breach of parliamentary authority that such significant legislative instruments are not subject to parliamentary scrutiny and possible disallowance. On 30 June 1998 on behalf of the Committee I made a special statement to the Senate to this effect. I also draw your attention to the comments in the final paragraph of the opinion of the Chief General Counsel, viz. "Of course, even if the delegation is valid, there may be quite proper policy issues as to whether it is appropriate in all the circumstances to confer the delegated power on the authority." The Committee endorses this view and would appreciate your advice that amendments will be made to make the exercise of the powers subject to parliamentary disallowance. The present position is deficient in relation to transparency, accountability, sound public administration and parliamentary propriety.The Attorney-General has advised that the OLD opinions of 2 and 5 December 1996 are subject to client privilege but that he had passed our request for copies of the opinions to the Authority. The Committee understands that the Authority would prefer a formal request from the Committee before the opinions are released and I now make such a request. The Committee notes, however, advice from the Attorney-General that the latest opinion from the Chief General Counsel will be drawn to the attention of relevant officers in your portfolio. The Committee would welcome your advice that if any of your portfolio areas have previously advised any person that these matters are administrative decisions then that advice will be formally withdrawn in favour of advice that they are legislative. In any event the Committee assumes that you have been doing this since October 1997.In particular and importantly the Committee understands that there may be matters of litigation, grievance or dispute about the exercise of the powers. Here also the Committee would appreciate your assurance that your portfolio areas have clearly informed everyone affected that it has been the formal position of the Commonwealth since October 1997 that the powers are legislative and not administrative. It should be indicated to such people that they could argue that the powers are void. It would be a serious matter if any people affected or aggrieved about the exercise of the powers were not clearly informed by your officials of the official Commonwealth position.Because of the importance of these matters the Committee would be grateful for an early reply.Yours sincerelyBill O'Chee ChairmanAlmost five months later, despite having asked for an early reply and despite reminders from the Committee staff, the Committee had not received a reply. It therefore decided that it would be helpful to discuss the matter with the Minister and Senator O'Chee and Senator Coonan did this on 29 April 1999. The Minister generously gave the Committee members as much time as they needed to state their case and in turn clarified aspects of his position. The Minister advised that the present round of closures and openings on the Reef was complete and that it was not intended to make any more until the end of the existing experimental period in 2001. However, any future determinations made after that date would be included in Zoning Plans which are subject to full parliamentary scrutiny and control. A subsequent Committee meeting agreed that this was a satisfactory outcome in all the circumstances. The Committee is therefore able to report to the Senate that all future activity in this important and sensitive area of protection of the Great Barrier Reef Marine Park will accord with parliamentary propriety.The Committee is grateful to the Minister for the Environment and Heritage, Senator the Hon Robert Hill, for his personal attention to its concerns.Bill O'CheeChairmanSenator Bill O'CheeChairman, Standing Committee on Regulations and OrdinancesSpecial statement on ministerial undertakingsOne of the most important elements of the operations of the Standing Committee on Regulations and Ordinances is the practice of accepting undertakings from Ministers to amend or to take other action in relation to legislative instruments about which the Committee has concerns. The Committee accepts such undertakings even though amendment will take place in the future, in order to ensure that the implementation of policy and day to day administration of programs continues smoothly. When it accepts such undertakings the Committee withdraws any protective notice of disallowance which it has placed on the instrument, or refrains from giving a notice if it has not already done so. The Committee therefore relies on the good faith of Ministers to implement promptly any undertakings. Prompt and timely implementation of undertakings is central to the success of the practice which the Committee has adopted. Failure to honour this principle could constitute a breach of parliamentary propriety and a breach of ministerial ethics. It is also deplorable because delay in implementation means that legislative instruments not only identified by the Committee but also accepted by the Minister as defective in relation to parliamentary propriety or personal rights, continue to be in effect and presumably be administered to the detriment of public life and to those people affected by the deficient instruments.The Committee records and monitors the progress of ministerial undertakings and each Annual Report describes undertakings implemented during the reporting period and those which are still outstanding. Also, due to the efforts of the Committee, Explanatory Statements for instruments which implement undertakings advise of that fact. The Annual Report 1997-98 listed 87 instruments in relation to which undertakings had been implemented or were still outstanding. Unfortunately 42 of these were still outstanding and the Committee decided to take further action.The Committee accordingly wrote to every Minister in whose portfolio responsibility there were outstanding undertakings, asking for reasons why the undertaking has not been implemented and for advice on when this would be done. The letter also asked for the date on which the portfolio agency had issued drafting instructions for the required amendments. The letter indicated that in the absence of a satisfactory explanation for delay the Committee intended to ask suitably senior agency officers to appear before it to explain the position in detail. The Committee asked if the matter could be given a high priority for attention.The Committee can now report that it has received replies from Ministers which indicate that virtually all of the undertakings have been implemented, or that drafting of amending instruments has been completed or drafting instructions issued. This was pleasing, particularly because sometimes undertakings are qualified by saying that they will be implemented when the principal instrument is next amended. In several other cases a review of the program or an amendment of the enabling Act or the instrument had resulted in the concerns of the Committee not being met. In cases where a review was still in progress or was about to be initiated the Minister usually expressly assured the Committee that its concerns would be accommodated. In one case the Committee was advised that regulations had not been implemented due to an oversight, but that this would be rectified as soon as possible. Overall, the replies from Ministers demonstrated an awareness of the importance of an undertaking given to the Committee and of its prompt implementation.The replies did, however, reveal one matter that was not satisfactory. In this case regulations gave an agency the power to decide subjectively which matters were relevant to arbitration of a dispute, and then to take them into account when making a determination. This provision was in contrast to two other provisions where the agency was either bound or permitted to take account of matters which are objectively relevant to the issue. In reply to the Committee's query, the Minister advised that the regulations would be amended at the next available opportunity to make them consistent. The Committee assumed that this meant that the power would be made objective, but it appears that the Minister meant that another of the powers would be made subjective. The Committee is pursuing this matter.In two cases the Minister advised that, although undertakings had not yet been implemented by formal amendment, administrative action had been taken to meet the Committee's concerns pending amendment of the respective instruments. In each of these cases this was a less than satisfactory response because the deficiencies in question involved personal rights, which is an area where problems noted by the Committee should be addressed as soon as possible. One of the cases involved a lack of mandatory notice of safeguards for administrative penalties imposed by public officials, which the Minister advised was remedied by a detailed information sheet attached to infringement notices. The other case, which was particularly relevant in the light of recent discussion of the international organisation of the Olympic Games, concerned the Australian Sports Drug Agency Regulations made expressly to enable the Agency to provide leadership in the fight against the use of prohibited drugs in sport up to and beyond the Sydney 2000 Olympics. Here, following inquiries by the Committee, administrative action was taken to protect the rights of intellectually disabled athletes and of commercial companies dealing with the Agency. In both the present cases drafting instructions have now been issued.In a number of cases Ministers had given an undertaking to amend the enabling or some other Act to meet the Committee's concerns. In one such case the required amendments had been passed by the House of Representatives but were still being considered by the Senate and consideration of another had reached an advanced stage with drafting instructions to be issued shortly. In another case the Minister advised that a particular program did not proceed and an undertaking was inadvertently overlooked. However, the Minister had asked the agency for advice on the amendments to the Act necessary to meet the undertaking and would advise the Committee when this was received. In two other cases the undertaking had been delayed due to the need to amend the enabling Act before implementation could be progressed.Other undertakings were affected by changes in the enabling Act. In two cases the Minister advised that amendments of the enabling Act resulted in the particular undertakings becoming unnecessary because the relevant legislative provisions had been superseded. In another case the Minister advised that extensive amendments of the Act following a major review had delayed implementation of undertakings, although draft amendments of the required regulations had now been received. In another similar case the Minister advised that amendments of regulations which had now been finalised had been delayed by the commencement of amendments of the Act.One particularly important area for the Committee to monitor is undertakings relating to national uniform legislative schemes. There are presently four separate undertakings outstanding to amend regulations made under the road transport reform national scheme, which provided for model laws which would then be enacted by all the States and Territories. The legislation also provided for a Ministerial Council which had to approve model laws and any amendment of them. The different Acts which set the broad framework of the scheme did not themselves include any substantive provisions regulating vehicles or traffic, but instead provided for this to be done by regulation. The Committee considered the regulations comprising the different modules of the scheme and over a two year period received undertakings to amend to remove strict liability offences, to provide for AAT review and to improve safeguards for administrative penalties. The Minister also advised that the regulations would not commence before the amendments were made. The Committee reported in detail on these undertakings on 19 September 1995, Senate Hansard p.976, and 12 March 1998, Senate Hansard p.892.The Minister has now advised that amendments have been drafted in relation to two of the four sets of regulations although final clearance still has to be obtained from the Australian Transport Council and all of the State and Territory governments. However, this was acceptable in light of the Minister's assurance that the original regulations would not commence until amendments had met the Committee's concerns. The Minister also advised that it is unlikely that the other two will commence because a review was about to be initiated. The National Road Transport Commission has advised, however, that any revised regulations will take into account the concerns of the Committee. There are a few matters arising out of this exercise which require further action, but in general the Committee can report that the position in relation to implementation of undertakings given to the Committee is broadly acceptable. The Committee intends to continue to monitor closely compliance with undertakings.Bill O'CheeChairmanRegulation Impact StatementsSenator Bill O'CheeChairman, Standing Committee on Regulations and OrdinancesOn 31 March 1999 the Chairman of the Productivity Commission, Mr Gary Banks; the head of the Office of Regulation Review (ORR), Dr Robyn Sheen; and Ms Sue Holmes, an official of the ORR, met with the Committee to discuss matters of mutual interest. The meeting followed the tabling on 10 December 1998 of the Productivity Commission's report Regulation and its Review 1997-98 .The report was the first comprehensive statement on compliance with regulation review requirements, implementing the Productivity Commissioner's obligation to report annually on the Commonwealth's new, best practice procedures for making regulations. A core element of these requirements is the preparation of Regulation Impact Statements (RIS), which are intended to ensure that regulatory action is well informed and meets intended goals, while minimising any adverse effects on business and the community. The RIS requirements apply not only to regulations, but also to Bills, treaties and quasi-legislation.The ORR, located within the Productivity Commission, has a central role in achieving the implementation of these initiatives. The two most important priorities of the ORR are to advise Commonwealth agencies on quality control mechanisms for regulatory proposals and for the review of existing regulations; and to examine all RIS prepared by agencies and advise on whether they provide an adequate level of analysis and meet the new requirements.The establishment of RIS requirements has been one of the most significant recent developments in quality control of legislative instruments. At the State and Territory level this has generally been imposed by Act, whereas at the Commonwealth level it has been implemented by administrative direction, although the various editions of the Legislative Instruments Bill have included provisions for RIS. The elements of a RIS may vary between jurisdictions but typically they include:an outline of the problem or issues which need action the desired objectives of any action. the different alternative options, including non-regulatory options, by which the desired objectives may be achieved. an assessment of the impact, costs and benefits for business, government, consumers, and the community of each option. mandatory consultation with the public and interest groups. a recommended option. a strategy to implement and review the preferred optionThe Commonwealth RIS requirements were consolidated in A Guide to Regulation , published by the ORR, which was endorsed by the Government in September 1997. Since then the Committee has scrutinised the RIS, which are tabled, in addition to the Explanatory Statement, with all legislative instruments affecting business or competition.The Committee has found the RIS to be of considerable assistance in its scrutiny of legislative instruments, despite the Committee having different priorities to the ORR. The Committee scrutinises delegated legislation to ensure compliance with high standards of personal rights and parliamentary propriety, whereas the ORR responsibilities are for the most effective and efficient regulations from an economy-wide perspective. These different objectives are by no means the same, but they are complementary and RIS have enhanced the ability of the Committee to carry out its functions.The Committee has found RIS to be particularly useful because they are more detailed and thorough than Explanatory Statements in their background information. Also, RIS are structured in such a way that may reveal areas of especial concern to the Committee. For instance, every RIS must identify a problem which needs to be addressed and these problems are often set out with admirable frankness not usually seen in Explanatory Statements. These problems have included deficiencies in personal rights which have not been remedied for inappropriate lengths of time, or questions about validity which similarly have been left to continue for lengthy periods. The other parts of the RIS may similarly disclose difficulties about which the Committee will require further information from the Minister. This is not to say that RIS should displace Explanatory Statements, because the two emphasise different matters. Explanatory Statements are weighted towards the legal authority for the instrument and the provisions of individual clauses. The RIS, on the other hand, are weighted towards the goals of the instrument in the context of the competitiveness of business and the productivity of the economy. The Committee closely scrutinises Explanatory Statements for deficiencies either in quality or quantity, taking the position that any such defects are breaches of parliamentary propriety. This view is emphasised by the fact that Ministers usually sign or initial tabled Explanatory Statements for regulations. Every year the Committee writes to Ministers about problems with Explanatory Statements. Sometimes these defects, although significant, are straightforward, with the Explanatory Statement simply not explaining or stating anything of value. Sometimes, however, the question is more serious. For instance, the Explanatory Statement for one set of regulations did not advise whether a statutory requirement to consult the Privacy Commissioner had been followed and, if so, what was the result of that consultation. Following inquiries by the Committee it was revealed that the Privacy Commissioner had indeed been consulted, but that his advice was overruled. The Committee then took action to have the Federal Executive Council Handbook amended to provide that such matters must be included, see the Committee's Annual Report 1996-97 p.73 and 81. The Committee also presented a paper to an Administrative Law and Ethics conference suggesting that there were questions about the ethical standards of the officers of the Department who had carriage of this matter, see the Committee's Annual Report 1997-98 , p.99.The position is, however, different in relation to RIS. While the Committee carefully reads all RIS and, as noted previously, finds many instances of possible breaches of its principles, it does not scrutinise the actual processes in the making of a RIS or the adequacy of the RIS in complying with the administrative guidelines. The reason for this is that the development of a RIS is essentially a policy development process and the Committee always stays clear of policy matters. The success of the Committee in its core function of scrutiny of legislative instruments is due to the fact that Ministers know that it operates in a non-partisan fashion and does not question policy. The Committee finds RIS to be a valuable source of information, but it is not appropriate for it to become involved in policy development. The ORR is a specialist agency with the mandate to oversee the entire RIS process and liaison with the ORR along the lines of our recent meeting with the Chairman of the Productivity Commission and the head of the ORR will enable the Committee to be aware of any relevant developments. Also, the Senate legislation committees would scrutinise RIS in the course of their work. For these reasons, the Committee would be reluctant to become involved in arguments about the adequacy of RIS or other merits based issues.There are several other areas where RIS are of particular value to the Committee. For instance, the scrutiny of national uniform legislative schemes presents special challenges for legislation scrutiny committees, see Annual Reports 1995-96, p.56 and 1997-98, p.83 . It is therefore encouraging that the Council of Australian Governments now has a mandatory requirement that new or amending regulations which are made by Ministerial Councils or national standard setting bodies are to have a RIS and comply with the Competition Principles Agreement. These requirements parallel these at the purely Commonwealth level and are supervised by the Committee on Regulatory Reform. As discussed in the special statements made to the Senate, the scrutiny of national schemes is difficult because of the tendency for Commonwealth, State and Territory Ministers to reply to concerns of scrutiny committees by saying that the schemes are the result of agreements between governments which cannot be changed. This has not affected unduly the operation of the Committee, which has accepted significant undertakings from Ministers to amend national scheme regulations and not to implement these provisions unless the changes were agreed to by the other Ministers. Nevertheless it is a concern.The introduction of RIS for national uniform regulations is beneficial for the same reasons as for Commonwealth regulations. The RIS enable the Committee to have a much broader perspective on the background of uniform regulations, which will often be more complex than for legislation solely at the Commonwealth level. This may lead the Committee to issues relating to parliamentary propriety or personal rights which it may have missed if it had to rely solely on the Explanatory Statement. As with other RIS, the RIS here are usually quite candid in their comments on the development of regulations and these can be a useful source of inquiry.Another function of the ORR is to supervise the national Legislative Review Program, which, like the RIS requirements, was established by administrative rather than legislative means. Along with the RIS, review and staged repeal is an important element in improving the standard of delegated legislation. Legislative requirements for this usually include the exotically named backcapturing and sunset provisions. The quantitative control of legislative instruments is important as well as the qualitative and this is another aspect of interest to the Committee.Finally, the requirements for RIS, Explanatory Statements and staged repeal may change if the Legislative Instruments Bill is reintroduced and is enacted. Different versions of the Bill, first introduced almost five years ago, included provisions on these matters, but these should not change the functions of the ORR. Instead, they may emphasise its importance. The Committee will consider its options in the light of the actual provisions of any Bill. The Committee discussed all these matters with Mr Banks, Dr Sheen and Ms Holmes and it is most grateful for the opportunity to explain its operations and to be briefed by an agency whose operations complement its own. Usually when officials of this seniority meet the Committee it is to explain some problem in a legislative instrument, but this was a more positive and welcome occasion.Bill O'CheeChairmanDocuments6657665710000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Hogg)—I present the following responses to resolutions of the Senate:Response from the Minister for Health and Aged Care to a resolution of the Senate of 28 April 1999 concerning human cloning.Response from the Minister for Health and Aged Care to a resolution of the Senate of 11 March 1999 concerning youth suicide.Response from the Minister for Aboriginal and Torres Strait Islander Affairs to a resolution of the Senate of 12 March 1998 concerning complementary medicines.665710000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—I present a copy of the latest alterations to the register of senior executive officers' interests, made between 4 December 1998 and 24 June 1999.Committees66576657665717:47:006657Ray, Sen RobertSenator ROBERT RAYUI4VICALP00—I present the 77th report of the Committee of Privileges entitled Persons referred to in the Senate: certain faculty members of Greenwich University .Ordered that the report be printed.UI4Ray, Sen RobertSenator ROBERT RAY—by leave—I move:That the report be adopted.This report is the 27th in a series of reports recommending that a right of reply be accorded to persons who claim to have been adversely affected by being referred to, either by name or in such a way as to be readily identi fied, in the Senate. On 27 May 1999 the President received a letter from Ms S. Quantrill, Registrar, Greenwich University, forwarding letters from certain faculty members of Greenwich University relating to remarks made by Senator Kim Carr during the adjournment debate of 22 March 1999. The President referred the letters to the committee as submissions under privilege resolution No. 5. The committee considered the submissions, together with a further submission received subsequently on 24 June 1999. It now recommends that they be incorporated in Hansard .As the committee always reminds the Senate, in matters of this nature it does not judge the truth or otherwise of statements made by honourable senators or persons. Rather, it ensures that these persons' submissions, and ultimately the responses it recommends, accord with the criteria set out in privilege resolution No. 5. I commend the report to the Senate.17:49:006657Carr, Sen KimSenator CARRAW5VICALP00—The Privileges Committee has tabled this afternoon a series of statements which I have only just had a chance to glance over. They are, of course, matters that have been canvassed on other occasions in this chamber, although the letters themselves have never actually been given to me to allow a proper consideration of the content. I thank Senator Ray for his tabling of this report on behalf of the Privileges Committee. I think the committee has done the Senate a great service in that it does allow for an examination of the claims being made by a number of persons associated with the staffing of Greenwich University, one of Australia's newest universities, which we would all be aware was legally established by the Legislative Council of Norfolk Island. I think it is an important opportunity for us to examine these details, and I will endeavour to do so with greater consideration later on. Like Senator Ray, I am not in the business of perniciously or gratuitously insulting people—UI4RAYSenator Robert Ray—Like me.AW5Carr, Sen KimSenator CARR—Like Senator Ray, I am of that view. I think the privileges of the parliament ought to be protected to allow the elected representatives of this country to speak about matters and to identify mistakes that have been made by government. I think it is important that these conventions be maintained so as to allow us to exercise our responsibilities.I have raised a number of concerns about the incompetence of this government in allowing a dodgy operation like this at Greenwich to ever get off the ground. I am particularly concerned, as are a number of other people in this country. I note, for instance, a letter I received from Mr Phil Honeywood, the Minister for Tertiary Education and Training in Victoria, who said:As you have correctly pointed out, I have been very concerned about the lack of rigorous processes of review comparable to those carried out by the States, before the recognition of Greenwich University was given by the Parliament of Norfolk Island.I have been campaigning to expose what are quite clearly ludicrous mistakes made by this government and made through the incredible ignorance of the Minister for Regional Services, Territories and Local Government in his abysmal handling of his portfolio. I have been particularly concerned to expose attempts by a group of shysters to circumvent the regulatory framework that exists in Australia to protect our fourth largest export industry. The education industry is entirely dependent on the maintenance of our good name and the quality of Australian education.Many people in this country are of the view that we do have a high quality education system. It is a view which I certainly support. We need to monitor that. We need to take all necessary measures to protect it. Australia is very vulnerable to the activities of a few people, given that we now have an industry worth some $3.1 billion. Australian citizens have a right to expect exactly the same level of support that US governments—state and federal—offer their citizens insofar as their concerns have been expressed. The Californian state authorities recently indicated that diploma mills manufacturing degrees based on the ability to write a cheque rather than master a curriculum will no longer be allowed to continue. That statement was put to us as a result of questions that I raised concerning these particular matters and relating to issues associated with some of the individuals who have been named.The establishment of Greenwich University under Australian legislation, courtesy of the Norfolk Island parliament, has been greeted with widespread dismay and disbelief throughout the higher education world. International cyberspace has resounded with jokes about the way in which Australia has endured one of the biggest bureaucratic bungles in recent decades, not to mention the gullibility of the good citizens of Norfolk Island and of our own federal minister for territories and his department. The Minister for Education, Training and Youth Affairs is also implicated in this affair.I raised these matters in the chamber back in March. Since that time, a number of others have also raised concerns, including vice-chancellors and state ministers for education. As a consequence, this government has been obliged to establish an inquiry into this fiasco. It has been forced to inquire into the bona fides of this institution—an institution which has not been accredited in the United States and which has made numerous attempts to get into Australia through a number of backdoor means. It has finally used the venue of Norfolk Island to achieve its objective.It is an American import, an American interloper. It is a clear example of the great diversity in the higher education system in the United States. For example, America has some of the finest universities in the world, but it also has what might best be described as degree mills or vanity universities. However, in Australia there is a wide-ranging understanding that Australia produces top quality education. In Australia in recent times there has been a series of non-traditional areas of learning. I do not think it is appropriate that we should in any way prevent the development of non-traditional areas of learning; however, we need to ensure that quality is protected.American society has a much broader understanding of what quality means. For instance, a whole lot of new ideas are uncritically accepted in the United States. There is a huge range of beliefs and ideas which we might not regard as being founded on empirical research or rigorous intellectual data. America might be the land of the free but it is also the land of Waco and the tragic Branch Davidian cult. America is a land where an astonishing 40 per cent of undergraduate science students believe in creationism, not evolution. They believe that the world was created only a few thousand years ago and they believe that `false' evidence, such as dinosaurs and fossils, was placed there as a trick by Satan. Some 15 per cent of Americans believe they have personally been abducted by aliens.The academics who provided information to the committee were concerned that I did not know the full facts. Maybe I should examine some of the full facts. For instance, I see in this report of the Committee of Privileges—which I have only just seen—that a Mr Lindgren said:Senator Carr also felt obliged to make a derogative remark regarding an Orthodox Order to which I belong. This order in fact possesses members of the Romanoff family, Princess Elizabeth of Yugoslavia and is protected (patron) by His Holiness Alexy II, Patriarch of Moscow and all Russia. Regarding this I think it was best summed up by a member of the Romanov family, who recently, stated: "I have never been attacked by a member of my own Class" . . . Enough said?What an extraordinary defence! He continues:Mr. Carr, once again true to his intent ignored my association in the Brotherhood of the Blessed Gerard which is a service branch of the Sovereign Military Order of Malta (Catholic) and my internationally recognised Knight Commander of the Order of Saint Ignatius of Antioch (under His Beatitude Patriarch Mar Ignace Anthony II Hayeck, Uniate-Syrian Catholic Patriarch of Antioch).Of course I did not go to all the detail. Perhaps I should have. Another example is the case of somatic studies. A Ms Mertz says:. . . Somatic Studies is offered to bodywork and massage therapy professionals whose intention it is to enhance the profession of touch therapies through conducting research.We can imagine the touch therapies these people are involved in! Ms Mertz continues:A distance learning program offers these students the flexibility to integrate a variety of resources from various universities and educational institutions.I look forward to seeing the detail of their touch therapies. Another case is energy medicine. In his letter, a Mr Shealy says:Functional skills developed enable students to understand and make use of techniques such as: acupuncture, kinesiology, homeopathy, and biofeedback, and spiritual healing, colour, sound, aroma, psychospiritual and relaxation therapies, therapeutic physical exercise for general health, nutritional principles for diagnosis and therapy, postural effects upon health—UI4RAYSenator Robert Ray—Sounds like one of the Democrats has got a new job!AW5Carr, Sen KimSenator CARR—Indeed! The letter continues:. . . application of modern electrotherapy, diagnostic and therapeutic applications of medical intuition—I wonder what the Australian Medical Association would say about that—for the improvement of the quality of life, and clearing the blocks that interfere with vision, creativity and intuition.What an extraordinary body of knowledge for us to be expected to accept without question. That is not the way in which Australian universities have traditionally behaved. It would be appropriate to ask questions about whether or not the post facto acceptance of this university by an incompetent and foolish minister who is behaving like a buffoon ought not be questioned. I have done so. (Time expired)Question resolved in the affirmative.In accordance with the resolution of the committee, the submissions are incorporated in Hansard.The submissions read as follows—THE ASCLEPIUMArchetypus Claudine Jeanrenaud 7190676-3844P.O. Box 19527Colorado City 81019To whom this may concern:I read the minutes from Australia's senate meeting on March 22nd 1999, and I have a few reactions. First, I must thank Senator Carr for indulging so brilliantly in insults, for this frees me to be rather direct myself. Though I don t think I'll be needing words such as shysters' to be effective.By snickering at the concepts of Alchemy or analysis of Fairytale, Senator Carr is advertising his ignorance of a whole field of psychology, namely depth Psychology. So though Carl Jung does not need defending, Senator Carr needs informing. The work of Carl Jung (a Swiss Psychiatrist, 1875-1961) consists of a 20 volume collection of his research spreading well over 50 years (1902-1960), and continued since then by scholars all over the world. This research includes the translation of Old Greek, Arabic and later European texts of alchemy, fairytales and mythology dug up from the dung heap of the past. Jung carried out a comparison of the behavioural patterns revealed in these texts with those found in contemporary mythology and shamanic traditions (he travelled to India, Africa and visited native American nations to meet with medicine people in person), as well as contemporary themes in literature, art, and films, as well as in the dreams of his psychiatric patients.Secondly, his findings made Carl Jung the father of concepts such as Extroversion/Introversion, the Collective Unconscious, and archetypal forces behind behaviour. The Collected Works have been translated in at least seven languages. He is being studied in Europe, England, the United States, Canada. South Africa, South America, and is certainly known by several Australian authors.Originally, Jung Institutes across Europe and the USA were strictly postdoctoral programs. Since the 1980's, more universities became interested in making available a course of study that, up to this point, was very elitist and hardly accessible to anyone who was not considered "analytical material". There are now Jung Institutes in every major cities of the United States, including New York, Los Angeles and Chicago, and they also include programs for the layman. Some universities have devoted entire programs to the study and application as well as augmentation of Jung's thought. The best known such university if the Pacifica Institute in California, an accredited university which holds the library of Joseph Campbell's original works.Anyone who has information about Carl Jung's work knows that, rather than "doctrinal", it is open and expansive, and subject to continuing deeper exploration. In fact its great beauty resides in the fact that it identified patterns of behaviour seated deep in the unconscious that are common to all people. This offers academics new tools with which to study human behaviour across time and cultures. Jung's findings reveal the existence of timeless interpretations of reality that are surprisingly close to contemporary quantum mechanics' or new physics' discoveries. In that sense Jung was at the vanguard of a movement towards greater unity in the world, a braking of ethnocentric barriers that are at the source of most wars, and a tool for communication among humans that bypasses local cultural boundaries. It is sad to see that, once again, an effort to apply these ideas by a brave new world (in this case, a Hawaiian university joining with an Australian university) is being attacked by outdated ethnocentric provincialism. In any case, I hope that this information will be useful in warning Senator Carr that, next time he plans to endeavour in the smashing of an entire body of academic studies, he better do his homework first, for surely he didn't intend to demonstrate his ignorance to the whole world.Sincerely,(signed)Claudine Jeanrenaud, Ph.D.Educational Consultants of MississippiEst. 1981Director: C. E. Lindgren, EdSDear Sirs:Let me say that I am honoured that Senator Carr would have so little to do as to reflect on my name and my achievements. I fear, however, that the Senator was either ignorant or perhaps selective in his remarks toward me. I felt that rather than ignore his remarks as being those of at best a misinformed individual I should address his comments not in the ignoble manner in which they were stated but as an educator, scholar and gentlemen.Senator Carr in referring to my masters felt obliged to ignore my BAE, Med, and EdS from the University of Mississippi "The University is a centre for Faulkner studies, offering one of the finest collections of the Nobel Prize winners work and maintaining his Rowan Oak home as a literary shrine. The Medical Centre surgeons performed the world's first lung (1963) and heart (1964) transplants in man, and its physiologists defined the role of the kidneys in controlling blood pressure. Medical Centre faculty also have constructed the world's most comprehensive computer model of the body, and the campus has been selected as one of five national sites to test GE's new twin magnet MRT (magnetic resonance therapy). Today, faculty, staff, and students are pushing forward the frontiers of knowledge, imagination, and expertise necessary for a productive life in an increasingly complex society and competitive world. They play a significant role in the country's research efforts through federally funded facilities on the Oxford campus such as the Jamie Whitten National Centre for Physical Acoustics, the National Centre for the Development of Natural Products, the National Food Service Management Institute, the Marine Minerals Technology Centre, the Centre for Water and Wetlands Resources, and the Centre for Computational Hydroscience and Engineering.The University also plays a crucial role in Mississippi by preparing students for leadership in the state and nation. Distinguished law school alumni include nine governors, seven lieutenant governors, 29 Mississippi Supreme Court justices, 12 U.S. representatives, and four U.S. senators.Senator Carr also felt it necessary to ignore my FCP (eg. MPhil) from the world famous College of Preceptors in Essex, England and my soon to be completed (June 1999) DEd from UNISA in Pretoria.While denouncing some of the societies to which I am proudly associated, Mr. Carr once again showed his true intent by not mentioning the Royal Historical Society (London), American Academy of Religion, Medieval Academy of America, and Orders and Medals Society of America. He also selectively ignored my fellowship in the Royal Society of Arts, Royal Asiatic Society and College of Preceptors.Senator Carr also felt obliged to make a derogative remark regarding an Orthodox Order to which I belong. This order in fact possesses members of the Romanoff family, Princess Elizabeth of Yugoslavia and is protected (patron) by His Holiness Alexy II, Patriarch of Moscow and all Russia.Regarding this I think it was best summed up by a member of the Romanov family, who recently, stated: " I have never been attacked by a member of my own Class". . . Enough said?Mr. Carr, once again true to his intent ignored my association in the Brotherhood of the Blessed Gerard which is a service branch of the Sovereign Military Order of Malta (Catholic) and my internationally recognised Knight Commander from the Order of Saint Ignatius of Antioch (under His Beatitude Patriarch Mar Ignace Anthony II Hayeck, Uniate-Syrian Catholic Patriarch of Antioch). The Vatican also recognises this order. Finally in passing, I feel it necessary to provide once again insight into Senator Carr's lack of knowledge concerning myself or my achievements. He felt it necessary to mention the Order of the King's Daughters and Sons that I believe he must have through ignorance felt was a fake chivalric order. If he had only taken 5 minutes to either look the order up on the Internet or in some reference he would have discovered that "The King's Daughters and Sons was founded on January 13, 1886 by Margaret Bottome of New York City, with a membership of ten women. It is a unit of interdenominational Christians dedicated to the development of spiritual life and the stimulation of Christian activities. Through a three-fold program of religion, education, and philanthropy, the organisation trains its members as well as others for Christian Service. Today, its thirty nine branches throughout the United States and Canada support ministries for the aging, handicapped and the underprivileged. The Order has an Indian department that encourages contributions to Native Americans, supports leprosy research, and contributes to American and Foreign Bible Societies. It owns and operates three houses at the Chautauqua Institution in New York and provides scholarships for over forty students for summer courses there." The society makes NO claims to being chivalric.Shame, Mr. Carr, why don't you get on with running the government rather than talking about things you know nothing about. . . .Carl E. LindgrenLisa A Mertz, PhDImertz@cecomet.netPO Box 125938 Vincent AvenueChautauqua, NY 14722716.357.9615April 27, 1999To Whom It May Concern:It has come to my attention that Senator Carr has voiced uncompromising criticism of Greenwich University's graduate programs on the floor of the Australian Senate. His critique included the program in Somatic Studies. As the lead faculty for this program, I am writing to clarify its importance.Greenwich University's program in Somatic Studies is offered to bodywork and massage therapy professionals whose intention it is to enhance the professionalisation of touch therapies through conducting research. A distance learning program offers these students the flexibility to integrate a variety of resources from various universities and educational institutions.Regarding massage therapy, the 1993 Harvard report, "Unconventional Medicine in the United States: Prevalence, Costs, and Patterns of Use," published in the New England Journal of Medicine, showed that possibly 12.6 million Americans used massage therapy in 1990 making 77 million visits to massage therapists. This survey has allowed the US medical establishment to become aware that massage therapy is a burgeoning health care field. As a licensed massage therapist myself, I am committed to supporting the maturation of the profession. I am a member of the Commission on Massage Training Accreditation and the editorial advisory board for the Massage Therapy Journal, published by the American Massage Therapy Association. I have been closely following developments in research, legislation, and health care policy concerning touch therapies.Somatic Studies is a graduate degree title that has been established for programs that focus on embodiment, that is, the relationships between the body and cognition, emotion, and other dimensions of the self, exploring the body in relationship to an individual's undivided experience. It is entirely appropriate for practitioners of touch therapy modalities, whether therapeutic massage, Rolfing, or the Feldenkrais Technique, to earn degrees in Somatic Studies, to contribute to knowledge concerning the human experience of embodiment with implications for health care.Sincerely,(signed)Lisa Mertz, PhDDaniel Weiss Miller, PhD106 St. Marks AvenueProspect Heights, BrooklynNew York, NY 11217April 6, 1999To Whom It May Concern,It has been brought to my attention that Senator Carr, speaking before the Australian Parliament on the morning of 22nd March 1999, has brought into question my qualifications to develop and guide a program in Consciousness Studies at Greenwich University. In reply, I wish to challenge this assertion. Certainly, my professional participation in the field of consciousness has been honored by my colleagues in academia, and as the following record of my achievements will demonstrate, I do have the curriculum vitae to support my appointment as Chair of the Consciousness Program at Greenwich University:1952—Graduated from the New School for Social Research in New York City with a BA in Psychology.1955—Graduated from City University of New York with an MA in Psychology.1960-1965—Chief Psychologist, Kings Park State Hospital (position achieved by passing a special State examination regarding knowledge about mental illness)—a hospital run for mental patients by New York State.1962—Licensed as a Clinical Psychologist by the New York State Department of Education.1965 to Present—Private Practice in Clinical Psychology in New York.1970 to 1978—Director of Mountaintop Farm in Livingston Manor, New York, privately owned and run successfully as a residential treatment center for mental patients, and continued maintaining a part-time private practice in New York City.1972 to Present—Conducted workshops by invitation from privately owned psychotherapy centers in the United States, Great Britain, France, Germany, Greece, Canada, Egypt, Brazil; Lectured at conferences as an expert on a variety of aspects of consciousness in the United States (including the New York Academy of Sciences), Great Britain, Portugal, Italy, Greece, Denmark, and Brazil; invited to India to lecture in 2000.1962 to Present—Publication of over 60 articles in a variety of popular and professional magazines and peer-reviewed journals. Self-published "The Unseen Universe: Of Mind and Matter", a favorably received, profitable first-time venture.1987—PhD degree in Psychology from The International Institute for Advanced Studies, currently Greenwich University.Honors and Listings:Who's Who in the EastWho's Who in Science and TechnologyWho's Who in Medicine and HealthcareHonorary Doctorate in Sciences (Honoris Causis) from the Open University for International Complementary Medicine, Sri Lanka, for Contributions to Science and Humanity.Further, I wish to state that I understand how difficult it must be for uninformed people to believe that the mind is relevant to and has control over physical, no less mental, illness. Education, at least in the United States, has moved people's awareness from the dark ages of slavery to an imposed medical science to an enlightened understanding that health requires the aware participation of the person being healed. This point of view is based on a growing literature of validated scientific research by experimentalists in neuropsychology, and theoreticians in physics and biology, as well as in non-scientific reports from millions of recovered ill persons.The program in Consciousness Studies is an invitation to the interested student to explore contemporary philosophic, psychologic and scientific literature on the subject of consciousness. This degree program provides the inquiring student with competent academic guides who can, through their own knowledge and experience, show the way to a professional approach to their careers. My professional history demonstrates that I have acquired an adequate level of knowledge and experience in my field to carry out my responsibilities more than competently.Yours truly,Daniel W. Miller, PhDFrancesco Patricolo, Ph.DP.O. BOX 82988 Portland, Oregon 97282April 22, 1999To Whom it May ConcernMore than 30 years ago, Marshall McLuhan coined the phrase, "Global Village" in referring to the worldwide human community because of the growing interdependence, rapid interchange of ideas and information, and the common need for planetary sustainability. Now at the threshold of the 21st Century, as you know, because of travel, television, satellites, computers and multinational corporations, a collective human awareness is rapidly developing. Greenwich University is respected as a higher education institutions because it can effectively address the emerging educational needs of this global community. For that reason, I am proud to be a member of the Greenwich University faculty.In response to Senator Carr who, as an opponent to our accreditation in Australia, cited me as an example of questionable faculty credentials, thereby casting a shadow of doubt on the whole of the University, I wish to elaborate on my background. As a college student, I had the good fortune to study under a number of enlightened professors who steered me to study with great people such as Jacob Moreno, the founding father of Psychodrama; Salvador Minuchin, founder of the family therapy model; Jerzey Gratowski, the Polish Director of the Open Theatre; George Morrison, the first person to codify improvisational skills as a body of knowledge he called Theatre Games; Theo Gimbel, himself a student of Freud and friend of Carl Jung and as a graduate of the first Waldorf School in Germany, a student of Rudolph Steiner and the founder of Hygia Institute for Color, Light and Sound Therapy in England. Following their mentorship, I helped organise and found the Oregon Biofeedback Society in 1977, as a means of building and monitoring uniform standards for the emerging technology to monitor physical and psychological responses.I earned my Bachelor of Science degree in Sociology from the State University of New York at New Paltz in 1971 and my Ph.D. in Family and Social Psychology from the Union Institute in 1993. From 1985 through 1996, I served as instructor and counsellor for the Mentat School. In private practice, I have served as a consultant to firms through the program, "Spirituality in the Workplace". I am currently Director of a theatre and music ensemble and author of a trilogy of plays entitled, "Theatre as Medicine". I have written and produced three compact discs of jazz stories and comedy and an interactive psycho-poetic workbook. I have also been facilitating a course called "Towards a Council Of All Beings—A Global Perspective" inspired by Australian Johanna Massey.All of my career work has an intended therapeutic inclination and as you can determine from my more recent work and training, I am successfully contributing to the growth of the field of cultural psychology through development and leadership of projects and research in the field of Psychodrama. My work is effective as a healing art and well respected by my fellow academics and by com munity workers within the localities where my work has an impact.Any person wishing to contact me for further information should communicate with the Office of the President at Greenwich University.Sincerely,(signed)Francesco Patricolo, Ph.D.THE SHEALY INSTITUTE8 East Evergreen StreetSPRINGFIELD MO 65803-4400April 21, 1999TO WHOM IT MAY CONCERN:I have been made aware of the accusations made on the floor of the Australian Senate by Senator Carr with regard to the worthiness and appropriateness of a graduate program in the Science of Energy Medicine at Greenwich University. Perhaps the esteemed Senator from Australia does not know the scientific basis for all of Medical Science. Medicine in the last half of the twentieth century has emphasized the principles of biochemistry and the physical principles of surgery to assist in healing. Biochemistry is one aspect of life energy; electricity is the other. Every cellular function is both electrical and chemical at the same time. Neither can work alone. The field of Energy Medicine addresses this interface, exploring the dimensions of physiology, chemical and electrical activities, of life and the multiple influences of external and internal control of physiology, and therefore, of health and disease. Thus, all research done in support of graduate degrees in Energy Medicine must withstand rigorous scientific scrutiny and be of publishable quality, suitable for the scientific journals and of benefit to medical science.Science recognizes as energy only the principles embodied in light and sound. However, in every culture throughout history there has been a constant that Life Energy, indeed cosmic or Divine Energy, may transcend our fourth dimensional concepts of light and sound, electricity and electromagnetism. Certainly bioenergy is widely discussed from a philosophical point of view. Energy Medicine considers the very broad field from Divine Energy and Spiritual Energy, as well as the most subtle effects of the electromagnetic realm. Robert Becker has considered bioenergy to be bioelectromagnetic to include all known and theoretical aspects of Life Energy. This obviously includes the mind and all influences upon the body, mind and emotions.In the last 20 years, the field of psychoneuroimmunology has demonstrated many of the subtle effects of mind upon a wide variety of neurological, endocrinological, physiological and immunological functions. During this same time, the concept of Holistic Medicine has evolved to include complementary, alternative, and Energy Medicine. It has now become quite clear that Energy Medicine will expand the science of psychoneuroimmunology, effectively contributing to one of the most important new fields in the past fifty years.Students interested in Energy Medicine study the broad field of energy, learn practical and research applications of Energy Medicine, and focus intensely on one major subdivision of Energy Medicine. The broad fields include acupuncture, reflexology, kinesiology, homeopathy, color, sound and aroma therapy, psychospiritual aspects of healing, chakra energy centers, yoga, Tai Chi and physical exercise, biofeedback and autogenic training, self-regulation and relaxation, principles of nutrition and psychoneuroendorcine immunology, and intuition. The primary audience for the degrees in Energy Medicine will be the allied professionals, including all licensed and certified practitioners such as allopathic physicians, osteopathic physicians, chiropractors, nurses, physical therapists, psychologists and counselors, massage therapists, and spiritual healers.During this last decade it has become increasingly obvious that scientific medicine with its emphasis upon drugs and surgery has failed to address spirituality, as well as the specific needs of individuals with chronic disease, which often do not respond adequately to drugs or surgery. Several surveys in the United States and one in Canada indicate that a significant percentage of patients in any given year seek therapy from alternative medical practitioners. Techniques that such individuals choose range from acupuncture to relaxation therapy, nutritional counseling and supplements, manipulative therapy, homeopathy and all of the other therapies that make up the complete field of Energy Medicine. There are no medical schools or other known clinical training programs that provide a foundation for those interested in practical applications of Energy Medicine. The post-graduate degrees in Energy Medicine are designed to fill that need.The energy Medicine Program at Greenwich University provides the core competencies, skills and knowledge required of the mid-career professional. Functional skills developed enable students to understand and make use of techniques such as: acupuncture, kinesiology, homeopathy, and biofeedback, and spiritual healing, color, sound, aroma, psychospiritual and relaxation therapies, therapeutic physical exercise for general health, nutritional principles for diagnosis and therapy, postural effects upon health, application of modern electrotherapy, diagnostic and therapeutic application of medical intuition for the improvement of the quality of life, and clearing the blocks that interfere with vision, creativity and intuition. Greenwich graduates will have the broad knowledge necessary to understand when specific tools should be applied, when referrals should be made to conventional physicians and practitioners, and they will have mastered one of the major fields of energy medicine in a way that they can apply it within their own profession.I trust this discussion has clarified for you the importance of energy medicine as an essential field of study at the university level.Sincerely(signed)C. Norman Shealy, M.D., Ph.DColumbiaEvangelical SeminaryMarch 31, 1999To the August Body of the Australian SenateRegarding comments made by Senator Carr with regard to Greenwich University in general and Dr. Rick Walston in particular.It is with deep disappointment that I note that the good Senator does not investigate into matters worthy of being presented to the Australian Senate I note with sadness that when he speaks of me, his only evidence is what he "has been told by another," as he indicates. Did Senator Carr speak to me personally? Did he communicate with me by phone, mail, fax, or email? Did he investigate the level of academic quality that our school requires? No, no and no.Without so much as checking to see if those things said were true, he stood before your great body and told you that I was the president of a degree mill. I would think that such a charge should be made only after careful investigation and the accumulation of corroborating evidence. Senator Carr did no such investigation nor gained any such "evidence": a charge that I shall prove later in this letter.Presently, I shall point out one of our more recent doctoral graduates for evidence to the contrary: James R. White earned his Master of Theology and Doctor of Theology degrees from our school. Dr. White is the author of The King James Only Controversy (which was his Master's thesis for his master's degree with our school) and The Forgotten Trinity (which was his doctoral dissertation with our school). Dr. White's academic works with our school have been published by Bethany Publishing House, a national publisher, and his books (including at least four more than the two mentioned) are being used in other, accredited, schools as text books. Now I ask you, is it common for diploma mills to require such academic work that rises to the top of the publishing world and becomes text books for other, fully accredited schools? Obviously not.And, then our most recent graduate is a woman named Elyn Schwartz. After transferring her credits to our school from other accredited universities, she had 32 credits remaining to earn her Bachelor of Religion with our school. She enrolled on May 25, 1995. She completed her 32 semester hours with our school on March 30, 1999. So, let me ask you another question, is it common for diploma mills to require such hard work as to lead a person through nearly four years of arduous study to complete 32 semester credits? Obviously not.Let me now shift to our faculty and mention that the idea that our school is a diploma mill would come as quite a shock to our faculty member R. Brinley Jones , the President of the National Library of Wales, and Chairman of the Cathedrals and Churches Commission of Wales, and who holds his D.Phil. from Oxford University, U.K. His honorary degrees include the D.Litt. from Potchefstroom University, South Africa. And, it would also come as a shock to these other distinguished faculty members:Samuel G. Andreasen, Ed.D. from Arizona State University, Tempe, AZRodney J. Crowell, D.Min. from Dallas Theological Seminary, Dallas, TX.Larry V. Crutchfield, Ph.D. from Drew University, Madison, NJ.Carl Judson Davis, Ph.D. from the University of Sheffield U.K.Richard Brian Davis, Ph.D. from the University of Toronto.Oliver Rice, Ph.D. from Trinity Theological College, Bristol, England.Joel Berry Robertson, Ph.D. from the University of California, Los Angeles, CA.I could go on but, let me ask, is it normal for degree mills to employ such fine academicians as faculty? Again, obviously not.Let me point out the quality of recommendations that our school has gotten. Obviously Mr. Carr has his source, and I happen to know who is source is, and I also happen to know that his source is in the minority when it comes to issues academic. However, Dr. John Bear is the undisputed expert in non-traditional education. Dr. Bear's guide on distance learning education (Bears' Guide to Earning College Degrees Non-traditionally) has sold more than 300,000 copies. He also served as the diploma mill consultant to the FBI from 1979 to 1992. When the FBI brought diploma mill operators to justice in Federal Court, Dr. Bear appeared as the expert witness for the FBl. He has also worked with or been on the news shows 60Minutes, 20/20, American Journal, and Inside Edition helping them in their efforts to expose diploma mills.With that background, please read the letter of recommendation that Dr. Bear wrote for placement on our web page:To whom it may concern:My books on non-traditional higher education have sold more than 300,000 copies, and are widely regarded as the standard reference works in this field. For more than twenty years, I have been researching and writing about degree granting institutions, both accredited and unaccredited.Some people argue, in effect, that if a school is not accredited, then it is a degree mill. This is nonsense. For one thing, every school is unaccredited when it begins. For another thing, there are schools which, by their very nature, are academically sound, legitimately and sincerely run, appropriately licensed, but unlikely ever to gain "traditional" accreditation because of the innovative or experimental or non-traditional nature of their programs. Some such schools succumb to the lure of the many unrecognised (and thus useless) accrediting associations (some of which will accredit anyone who pays the fee), and, thankfully, some like Columbia Evangelical Seminary do not succumb.In evaluating an unaccredited school, the two crucial questions that must be asked are these: who are the people behind it (and what are their credentials), and what is the quality of work being asked of, and done by, the students. On both of these criteria, in my opinion, Columbia Evangelical Seminary looks good. Fortunately, this is something that can be independently verified. Look at the credentials of Dr. Walston and his colleagues. And look at the work of the students. If this is done fairly, I think most people would agree that Columbia Evangelical Seminary is true to its mission statement, and offers its students both an education and a credential of which they can be justly proud.- John B. Bear, Ph.D. (Michigan State University, 1966).Oh, by the way, it might also be of special interest to you that Dr. Bear is a contributor to the guide Country Education Profiles of the Australian National Office on Overseas Skills (NOOSR). Dr. John Bear wrote 15 of those 87 profiles, including the United States profile.Yes, it is beginning to appear that the one who has "sneaked up on unsuspecting people" is Senator Carr. All of the information that I have given you above is public record.Now concerning me in particular, Senator Carr notes that my Ph.D. comes from Greenwich University. This is true. I earned my Ph.D. with Greenwich University under the mentorship of Stanley M. Horton, Th.D., renowned Assemblies of God theologian and author of about thirteen books. However, what Mr. Carr failed to mention is that I also hold a Bachelor of Arts degree, a Master of Religion degree, and a Doctor of Ministry degree all from accredited institutions here in America. Also, I am presently a Ph.D. student with Potchefstroom University of South Africa (a significant school founded in 1896).My last point is to prove my charge above that " Senator Carr did no such investigation nor gained any such `evidence.'"How can I possibly prove that Mr. Carr simply repeated information "told" to him and that he did not investigate the charges himself? Simple: the name of our school has not been Faraston Theological Seminary for well over a year. For more than one full year, on all of our literature, on our web site, and in our advertisements, the name of our school has been Columbia Evangelical Seminary (Faraston being our former name). A very simple phone call to this office would have turned up such "deeply hidden" information. A quick stop at our world wide web page would have yielded this obvious information. If Mr. Carr had taken the time within the last 15 months to contact me, or even one of our faculty members, or just one of our students, he would have known better than to refer to our old, out-of-date name.In conclusion, I cannot vouch for any other person that Mr. Carr so demonises in his speech; however, if he did comparable "research" on the others he mentioned, then I would certainly caution anyone from simply accepting his charges at face value.Thank you for this opportunity to respond.Sincerely,(signed)Rick Walston, B.A., M.Rel., Ph.D., D.MinPresident of Columbia Evangelical SeminarySOME RESPONSES TO SENATOR CARRGreenwich University adopted the name Greenwich in 1989 as it desired a shorter name which was unique and had not been used before. Nearly 4 years later (when Greenwich University and its School of Theology had achieved a high level of recognition in the United Kingdom) the Thames Polytechnic in Woolwich petitioned the Privy Council to allow itself to be known as Greenwich University. It was refused as there was already a respected Greenwich University (albeit American). It was allowed to rename itself as the University of Greenwich to avoid confusion with the established Greenwich University.Greenwich was established in 1972 and was originally known as the International Institute for Advanced Studies. Since its founding the name International Institute has been adopted in various guises by a number of schools around the world.The International Institute for Advanced Studies still exists as a division of Greenwich and is still in good standing in the State of Missouri. Its headquarters are now on Norfolk Island.The State of Missouri does not accredit schools or universities (including its own state university).The State of Hawaii does not accredit schools or universities (including its own state university).Accreditation in the U.S.A. is quite different from that in Australia. In the U.S. accreditation is a voluntary process undertaken after a university has been operating and awarding degrees for a number of years. It enables universities to receive federal funding. Greenwich does not receive government funding: it never has; it never will: it would return it if it was ever sent. Greenwich has been properly established in the U.S.A. since 1972. It has an excellent reputation.There has never been any irregularity in any state or country.It is no more a mail order school than the Australian National University in Canberra (which sent a Postgraduate Diploma in Law in the mail to the Chancellor of Greenwich University last year) or the University of Melbourne which also mails out degrees. (Both of these, like Greenwich, require that the students complete the course requirements beforehand.)Greenwich has not been refused, nor did it apply, in Victoria. It has had a representative office in Victoria since 1990. Its registration was renewed for a further three years by the Victorian Government earlier this year.Prior to the Greenwich University Act being passed the university requested both the Higher Education Division of DEETYA and the AQF (MCEETYA) if its courses and curriculum could be submitted for evaluation and accreditation so it could have an external and independent assessment of its programmes. It was told quite clearly and firmly that the AQF and MCEETYA did not accredit courses or universities, and that the other universities resisted any form of external accreditation.(These facts are known by Senator Carr, who has been supplied with documentation to that effect and whose own electorate office is nearby to the AQF and MCEETYA). Greenwich was told by DEETYA and the AQF that it would be self-accrediting and that there was no procedure for it to have its courses evaluated by the AQF or anyone else.The Chancellor received all his degrees at accredited or state approved universities. He has never met a Shoshone Indian. The American schools from which he graduated were in California and Pennsylvania—not Nevada.Its legislative establishment by way of a company and subsequent legislation is the same process as that used by Bond University. The Greenwich University Act is similar to that establishing Bond and Notre Dame.There is no Brimeyer organization.Prince Alexis (who died in January 1995) was the hereditary Head of the House of Anjou. He was a client of the Chancellor (a barrister at law) who acted for Prince Alexis and his family for a number of years.The Chancellor is not an academic (although he has done some teaching many years ago, and has teaching qualifications including being a registered teacher in the State of Victoria). He does not teach nor instruct nor write curriculum at Greenwich University. He does not run Greenwich University. Greenwich is a community of scholars run by the President, the Vice-President, the deans, the faculty and the graduates. The Chancellors position is an honorary one, and always has been. (Though one must say that if the Labour Opposition continues to use parliamentary privilege to defame in a cowardly and deceitful fashion university chancellors there will be very few people willing to accept such roles.)If Senator Carr really believes what he said under parliamentary privilege then he should repeat his statements outside the Senate and in a public forum. This would then allow the university, its staff, its faculty, its students and its graduates take both individual and collective legal action in the courts of Australia, the United States of America and in the other countries of the world where the university community is situated.Dr John Walsh of BrannaghGreenwich UniversityTaylors RoadNorfolk IslandSouth Pacific 2899AustraliaFax Number (6723) 23547Telephone (6723) 22834Committees66676667666718:00:006667Denman, Sen KaySenator DENMANFY5TASALP00—In accordance with the Senate resolution of 17 March 1994 about the declaration of senators' interests, I present a copy of the latest Register of Alterations to Senators' Interests, containing declarations of interests and alterations of interests made between 4 December 1998 and 24 June 1999.Ordered that the document be printed.Miscellaneous6667666718:00:006667Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I table a corrigendum to the Portfolio Additional Estimates Statements for the 1998-99 Defence portfolio. Copies of the corrigendum are available from the Senate Table Office.Committees66676667666718:01:006667Calvert, Sen PaulSenator CALVERT5F4TASLP10—On behalf of the chairs of various legislation committees, I present supplementary information received in respect of the inquiry into the GST and a new tax system; and transcripts of evidence and additional information received relating to the additional estimates 1998-99.Delegation Reports6667666718:01:006667Denman, Sen KaySenator DENMANFY5TASALP00—On behalf of Senator McKiernan, I seek leave to table the report of the Australian parliamentary delegation to the 101st Inter-Parliamentary Conference.Leave granted.FY5Denman, Sen KaySenator DENMAN—I present the report of the Australian parliamentary delegation to the 101st Inter-Parliamentary Conference held in Brussels and a bilateral visit to Norway which took place between 10 and 21 April 1999, and I seek leave to incorporate a brief statement in relation to the visit in Hansard .Leave granted.The statement read as follows—I am mindful of the time constraints that we have in this the last week of this session. However, I think it important to place on the record some brief comments on the report that I have just tabled on the Australian Delegation to the 101st IPU Conference and also a bi-lateral visit to Norway.Firstly—the IPU: As one of the two new continuing delegates to the IPU Council I found my first Conference, at first mystifying but by the end of the week very rewarding. Even with extensive oral and written briefs, the workings of the IPU are not easy to understand. Unperturbed, my colleagues and I confronted the challenge and I believe we made a significant contribution on behalf of this Parliament. The report presents in detail the work of the IPU and highlights the individual contribution made by each of the Australian delegates. In this regard, I would commend to the Senate the meeting of the Speaker of the House, Neil Andrew and Senator Jacinta Collins with the Yugoslav delegation at which he made the strongest possible representations for the release of the Australian aid workers being detained in that country.I was pleased to participate in the IPU debate on:Parliamentary action to encourage all countries to sign and ratify the Comprehensive Test Ban Treaty prohibiting all nuclear testing, to encourage universal and non-discriminatory nuclear non-proliferation measures and to work towards the eventual elimination of all nuclear weapons .and was appointed to the drafting committee that is charged with the responsibility of preparing a final resolution for adoption by the IPU as a whole. I was then privileged to be elected President of that drafting committee—this was a formidable task that required over five hours of negotiation between the nine members of the drafting committee in order to finalise the draft.. I was most gratified when this resolution, with some minor amendments, was adopted by the overwhelming majority of the plenary session of the IPU.Secondly—to NorwayBi-lateral visits give parliamentarians a unique opportunity to appreciate different political systems, cultures and societies, as well as meeting a diverse range of interesting people.In Norway, the Delegation was honoured to meet with. The Prime Minister;. The Minister for Foreign Affairs;. Presiding officers of the Norwegian Storting and members of the Norwegian parliament; and. Representatives of business and industry.The Delegation's report records in detail these meetings and the extent to which aims and objectives of the visit were met.Although meetings of this type are important and let me say the visit was highly successful, there are other special occasions that characterise the visit and remain with you.I well remember the Delegation, having travelled by bus and ferry through a snow-covered landscape, meeting with Mr Ole Oskal, his mother, his wife and children. We sat cross-legged on sticks around the perimeter of a Sami tent, with a warming fire in the centre, sipping reindeer soup, discussing indigenous affairs, the Sami people and traditional culture and lifestyle. As Senator Collins will attest I failed miserably in my attempts to lasso a reindeer, notwithstanding that it was tethered to a pole six feet away from me.In conclusion, I record my thanks to Mr Speaker for the excellent way in which he led the Delegation—and as Deputy Leader I very much appreciated the co-operation and goodwill of the other delegates.There are always many people who contribute to our work. Foremost among these, was Ambassador Stephen Brady and his staff who did a superb job in coordinating and advising the Delegation during its visit to Norway.Committees66686668666818:03:006668Cooney, Sen BarneySenator COONEYSF4VICALP00—On behalf of the Joint Standing Committee on Treaties, I present report No. 22, entitled Five treaties tabled on 11 May 1999 , together with submissions, Hansards and minutes of proceedings. I seek leave to move a motion in relation to the report.Leave granted.SF4Cooney, Sen BarneySenator COONEY—I move:That the Senate take note of the report.I seek leave to have my tabling statement incorporated in Hansard .Leave granted.The statement read as follows—The Report I have just tabled is the latest in the Committee's reviews of groups of treaties tabled in the Parliament from time to time.This is the fifth report we have tabled since March of this year. In the 39th Parliament, the Treaties Committee continues to deal with a heavy workload.The five treaties tabled on 11 May 1999 were:. a proposed Investment Promotion and Protection Agreement with India; . a proposed Investment Promotion and Protection Agreement with Lithuania;. a proposed Trade and Economic Relations Agreement with Fiji;. amendments proposed to the Constitution of the World Health Organisation; and. a proposed Mutual Recognition Agreement with Iceland, Liechtenstein and Norway.Our review of these five treaties followed our standing practice: they were advertised nationally and we held two short public hearings, taking evidence from officials in the appropriate Government agencies.Two treaties in this group raised some significant issues.The proposed Investment Promotion and Protection Agreement with India is an important agreement with a significant trading partner. The obvious comparison is- with the IPPA with Pakistan, considered by the Committee in its Fifteenth Report which was tabled on 2 July 1998.In that Report, we drew attention to nuclear tests in South Asia 1998, adding that these tests had added `a considerable irritant' to the bilateral relationship with Pakistan.Since then, there have been further missile tests and, more importantly, fighting in Jammu and Kashmir between India and Pakistan. In spite of a number of earlier and more positive indicators this shows no signs of resolution and may in fact become.the fourth major conflict between the two nations.Unfortunately, there are domestic reasons on both sides that explain why such a conflict has continued and could develop from a conflict in the disputed territory.We support our Government's approach towards nations in this region, and believe that the Australian position in dealings with these two nations must be absolutely even-handed.Last year, we recommended that ratification of the IPPA with Pakistan should be delayed until Ministerial and senior official contacts resumed. The Department of Foreign Affairs and Trade advised during our review of the proposed IPPA with India that there had been some movement, by both India and Pakistan, to comply with some of the elements of the UN Security Council's resolution about nuclear testing.In the current situation, where the outcome of the fighting is not yet clear, we believe that little purpose would be served by delaying implementation of the proposed IPPA.During the negotiation of IPPAs, Australia uses its own Model text. In the case of this proposed IPPA with India, there were a number of changes to this text because India also has its preferred version. It was necessary to reconcile the two texts and, while some minor changes were required to the Australian version, the proposed IPPA is consistent with our requirements to protect investments.The other significant agreement tabled on 11 May 1999 was the proposed Mutual Recognition Agreement (MRA) with Iceland, Liechtenstein and Norway.In Report 20 , the Committee reviewed the proposed MRA with the European Community. We expressed some concerns about the understanding of the EU rules of origin, and hoped that the efforts of Australian companies to export goods assembled here would not be hampered by the new arrangements.Implementation of this Agreement has not been very smooth, with considerable delays in finalising it after signature.In conjunction with the MRA for the EU, the proposed Agreement will ensure that uniform conformity assessment provisions apply between European Economic Area countries. New examination requirements are intended to ensure free movement of Australian goods from particular product areas into and between those countries. The MRA deals with competence to test and certify a specified range of products to meet domestic regulatory requirements. It will provide alternative mechanisms for importers/exporters to comply with regulatory requirements while avoiding delays and costs. Thus, when the proposed MRA is operating, one examination in Australia by conformity assessment bodies will suffice for both domestic and export markets.We have concerns about this proposed Agreement which are highlighted by the position in which a company, Nulite Systems International Pty Ltd. found itself in connection with the MRA with the European Community.This firm found out the hard way that in the area of its products, non-metallic, bio-material dental restoratives and associated products, the EU's standards for these products were considerably higher than Australia's. The firm incurred additional costs to have another audit done of its manufacturing process and, as a result of its experiences, will not be involved in exporting to the European market.We are not in a position to adjudicate in detail one way or another on this matter, but we believe that the attitude taken by the responsible agencies towards Nulite has been dismissive and that the firm is right to feel aggrieved about its treatment.During the public hearing on 7 June into this matter, we were told that the proposed Agreement will provide additional benefits at minimal cost by extending the number of countries covered by MRAs. Since regulations for these three countries are identical to those applying in the EC, we were informed, Australian conformity assessment bodies will not have to incur additional costs or burdens in being designated under the proposed Agreement.We trust that our concerns are groundless, and that other firms do not find themselves in the same unhappy situation as Nulite Systems International.The amendments proposed to the Constitution of the World Health Organization are routine. They seek to increase representation on its governing body in line, with increases to membership in its various geographic regions.The proposed Trade and Economic Relations Agreement with Fiji seeks to strengthen the bilateral trade and economic relationship between Australia and Fiji. We are an important market for that Counter, and the proposed Agreement could play an important role in that relationship.While Australia has strong ties with all the three Baltic States, there is little trade with any of them. The proposed IPPA with Lithuania should encourage more bilateral trade and economic activity. This matter has been under negotiation since 1995. During our inquiry, we were told that resource constraints had prevented negotiation of IPPAs with Estonia and Latvia.We were not totally convinced by all of DFAT's views on Lithuania's position as an entry point to Russian, CIS and other former Soviet Bloc countries in that region. If there are opportunities for Australians exporters in this area, however, IPPAs will assist them in their efforts.I commend the Report to the Senate.I seek leave to continue my remarks later.Leave granted; debate adjourned.Bills6670r800Billsr799Billsr836Billsr8356670Debate resumed from 24 June and 22 June, on motions by Senator Ian Campbell:That these bills be now read a second time.18:04:006670Evans, Sen ChrisSenator CHRIS EVANSAX5WAALP00—I rise tonight to speak on the A New Tax System (Family Assistance) Bill 1999 and the three related bills. I rise to speak a bit earlier than I planned but I am glad to see we are making good progress. First of all I want to indicate at the outset that the Labor opposition supports the thrust of the major bill in that it seeks to consolidate 12 existing family payments into two and to simplify two child-care payments by creating one single regime. Labor supports those measures as being a step in the right direction in terms of simplifying it and making it more understandable for Australian families to access social security payments.I remember lobbying the then Labor social security minister about that issue some years ago. I know he was committed to a similar process of finding a way to make things more simplified but of course the difficulty always with those sorts of processes is to make sure that, in going for simplicity over complexity, you do no erode the very important basis on which a number of those payments were erected; that is, to reflect the needs of different types of families and their different types of problems. We have a very diverse and complex set of families with a diverse and complex set of needs and so, while I think we all support the need for simplicity, transparency and the least complicated system possible, clearly we also want the system to reflect and accommodate those different needs. That is always a task and a challenge, one that has bipartisan support as we try and work our way through these sorts of issues.So, while simplification is laudable, the test will be whether or not we meet the needs of all Australian families and move into a more simplified and hopefully more transparent social system. I know one of the concerns always in this area is making sure that families get their entitlements. There has been a whole range of measures over the years, introduced by both sides of politics, that have not been as successful as they should have been because people have not been able to work out that they are entitled to them or how to access them, so that will be one of the tests for this measure. So, as I say, we do support the general thrust and we hope that, as well as rationalising the system, there are rational outcomes as well.I do want to say that it is unfortunate that these measures have been linked to the goods and services tax debate. The Labor Party's fundamental proposition is that the goods and services tax is a regressive measure that will impact unfairly and harshly on families. To have this measure tied up with the goods and services tax legislation, from our point of view is unfortunate and tends to prevent us from focusing properly on the measures contained in these bills. But, if nothing else, I am a realist. We have had the debate on the GST and, while there are other measures to go, it is quite clear that this parliament is going to carry those bills.I am pleased to say that these bills will be far more beneficial and will make some contribution to ameliorating the worst impacts of the GST, but they will not provide the sort of protection that I believe is necessary for Australian families, because the GST will be regressive in its impact. It will impact on families more harshly than the current taxation regime, it will have a disproportionate impact on low income families, and it will have a disproportionate impact on people like disability pensioners and others who rely a great deal on services which currently are not taxed. So, while we are prepared to support this measure, its linkage with the GST is highly unfortunate and means that it has not had the sort of attention that the measure deserved. But, as I say, we are prepared to take a rational view of these things and, because we think it is generally a beneficial measure, we will be supporting the bill.I want to address a couple of other measures in the related bills. As a result of the agreement between the government and the majority of Democrat senators, we have not really had proper time to look at the consequential bills that are included in this package. I have a couple of concerns which are the subject of amendments I will be moving in the committee stage, but I have a more general concern that the speed with which these bills have been introduced—pushed through the House of Representatives and then into the Senate without any committee inquiry process or any great public consultation—is a very poor process and leaves me concerned that there may well be aspects of these related bills that have not received the scrutiny that they need and that we will not make properly informed judgments on these bills.I know there is always a bit of time pressure, but these bills have been introduced at very short notice and with very scant consideration. I think we would all agree that in terms of process that is not desirable, and so I have put a caveat on my support for some of the measures in these bills because I do not think either the parliament or the community more generally have had a chance to get on top of some of the issues. As they go to questions of administration, they are quite complex and there are potential problems that have not been considered, so I have some concern about that.Of particular concern is the approach taken in these bills in relation to child-care matters. When we were briefed by the minister's staff on the family assistance package as it related to child care, we were told that the details of the child-care issues at stake in the new regime—the questions of how people would be paid, who would be a qualified carer and all those sorts of things—would all be contained in the A New Tax System (Family Assistance) (Administration) Bill 1999 . In the last couple of days I have been able to have a look at the bills, and I have found that the child-care issues have not been included. Today I received the Library's Bills Digests on these bills. It quite rightly makes the same point—that the treatment of child-care regulation or child-care arrangements under these bills is quite different. I quote the Library's Bills Digests:Rather than set out the requirements in the bill concerning claims, determinations and payments, new division 4 basically provides for the making of regulations about how individuals in approved child-care services can become entitled to have payments of child-care benefit made and how such payments are to be made.So, rather than the bill containing, as we were assured, the details of the regime in terms of child care, it has been treated quite differently from the approach in the more general social security matters, and the matters will all have to be dealt with by way of regulation. I know many of those will be disallowable instruments, and the parliament will have the opportunity to consider those regulations in due course, but I do think that that is not a proper way to go. It is a case of giving too much authority and too much content in regulations and not enough in the primary legislation.There has always been a tendency or a temptation on behalf of government to adopt that sort of approach because it does mean that parliament has less scrutiny of the detail and less ability to influence the detail. I am sure that was not the case on this occasion—maybe it was the speed with which things were done—but it does leave the parliament with less ability to properly scrutinise and determine how those arrangements are put in place.While I have received assurances from the government about the new regime that there will be very little change to the current regime that is in place, I do have some concerns about this method. I put the government on notice that the Labor opposition will scrutinise those regulations very carefully and will not hesitate to use the power to block those regulations if they are not in accordance with both proper practice and the assurances given to us. I am sure the Democrats will also take a fairly critical look at them because we are not getting the opportunity on this occasion to examine them because of the way this has been structured. As I say, I hope there is nothing more sinister or devious involved in this approach.As the opposition child-care spokesperson, I will be taking a very keen interest to make sure that the industry receives reassurance about the concerns that it has about some of the options the government was considering. The government has given commitments on a number of those matters, such as payment in arrears rather than in advance and a couple of other issues. I do want to note that, while the government has lived up to its election commitment to provide that parents should be able to choose to be paid directly, I think the reality of the bill's measures is that the current system will stay in place for the majority of families. For people to take the annual payment option, I think they would need to be very high income earners; otherwise they would not be able to carry the cost of their child care each week.While I am sure the government will be keen to claim that this measure meets its election commitments, I think good sense has prevailed and most families will continue to operate under the regime currently in place. That will provide much more security to child-care providers who, I think, felt very threatened by the move to an alternative regime, because they thought that they could end up with substantial bad debt problems. As we all know, bad debt is a constant threat to small businesses at the best of times. Child-care centres have some problems in that area, but I think they were most concerned that that would be exacerbated. So I am pleased that the regime in place within this legislative framework will prevent that becoming a more significant problem for the sector.The other thing to note about the level of child-care assistance is that, while the extra assistance for child care will be welcomed, it does not apply until July 2000. I think, then, it will basically go only part way to compensating for the cap that the government has imposed on child-care assistance for the last two years and does nothing to address the real structural issues at stake in the child-care industry in this country. The affordability problem is driving closure of centres and forcing families to remove children from formal child care. I am afraid the beneficial measures contained in this bill will come too late to halt that process and, I think, come too late for many families in terms of them accessing the formal child-care sector. Any assistance will obviously help, but I do not think it will be enough. It will be very much a case of too little, too late. When combined with the government's other measures of reducing funding for child care and the other structural changes made by this government over the last couple of years, I think we will continue to see enormous pressure on families' capacity to afford child care and enormous stress on the industry's ability to cope, given that significant drop in demand.But with those comments, I wish to reiterate that we will be supporting the bills. I have circulated a couple of amendments to the A New Tax System (Family Assistance) (Administration) Bill 1999 , and I see that Senator Bartlett has moved what I suspect are similar amendments—at least in one respect. I hope those are supported, because they raise very serious issues about people's access to review of decisions. I will address those concerns in the committee stage.18:19:006673Bartlett, Sen AndrewSenator BARTLETTDT6QLDAD00—The Senate is debating in the second reading stage the A New Tax System (Family Assistance) Bill 1999 , the A New Tax System (Family Assistance) (Consequential and Related Measures) Bill (No. 1) 1999 , the A New Tax System (Family Assistance) (Consequential and Related Measures) Bill (No. 2) 1999 and A New Tax System (Family Assistance) (Administration) Bill 1999 . This legislation contains a number of improvements to family assistance measures to lighten the burden placed on many families by the government's youth allowance package last year and, as the previous speaker indicated, has been linked to the overall package of changes as part of the A New Tax System package.The Democrats certainly support measures which give greater financial support to families and measures that raise the income test threshold to a more realistic rate and address the poverty trap caused by the current 50 per cent taper rate. The impact of poverty traps under existing legislation is certainly one of the biggest disincentive measures, and the Democrats welcome the moves in this legislation to mitigate that, as we did other measures relating to pensions. We certainly hope that the government does consider acting in the future in the area that I believe is perhaps the one most in need of action, which is the poverty trap or taper rate applying to unem ployed people. We certainly welcome this improvement in the taper rate contained in this legislation.I would like to put on the record the Democrats' continuing concerns with definitions of age of independence. Defining the age of independence for a student as 25 and for a young unemployed person as 21 is inconsistent with definitions of adulthood and independence in other legislation and perpetrates an irrational view of young people's circumstances and real responsibilities. Senator Harradine, as senators would be aware, in debates over the youth allowance legislation last year put on record his concerns at the pressure that would be put on lower and middle income earners who would be hit harder because they face the financial burden of supporting young adult children up to the age of 21 for young unemployed and up to 25 years old for students. The Democrats are still of the belief that 18 should be the recognised age of independence, whether people are unemployed or students. It provides a more accurate reflection of the realities of society and also the reality of financial burdens that young adults face.This legislation provides some relief for families who were impacted by the youth allowance measures implemented last year. At that time, the government gave the following undertaking to Senator Harradine with respect to support for those families. They assured Senator Harradine that:. . . in restructuring the Australian taxation system, to which this government is committed, the government will give further recognition and help to Australian parents concerning their responsibilities in . . . raising sons and daughters, Australia's future taxpayers.While this concern was not initially honoured by the government, this bill finally makes good that commitment by increasing the family tax benefit part A to $50 per fortnight and by increasing eligibility for it. Certain young persons aged 21 to 25 who are engaged in full-time study and young unemployed persons aged 18 to 25 will be eligible for the family tax benefit part A. Where they would attract a higher rate of income support as a family tax benefit child than they would as a youth allowance recipient, they will be able to opt for the former, with the payments going to an adult. This measure involves an additional $50 million in expenditure per year by the government, and that will address some of the financial hardships suffered since the implementation of the youth allowance last year.Of course, there is still some way to go in this area. I note concerns raised within the welfare sector that these amendments will benefit higher income families while less relief will be afforded families where the young person is eligible for a higher rate of youth allowance. These are measures that the Democrats believe do need ongoing attention; however, we welcome the financial relief contained in this bill as an important first step to redressing some of the other anomalies contained in the provision of family and youth income support. There are some significant advances here and, as always when advances occur, the Democrats are quite happy to acknowledge them and support them, as we will do. As Senator Evans indicated, there are a couple of areas where there are some amendments, which we will address in the committee stage, and I will outline my rationale for those at the time. In closing, Madam Acting Deputy President, I would like to check whether there any other speakers on this bill present in the chamber.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Reynolds)—It appears not.DT6Bartlett, Sen AndrewSenator BARTLETT—In which case, I could wax lyrical for another five minutes or we could have an early dinner break; I thought I would spare you the trauma and let you have dinner four minutes earlier. I do have one sentence left. Whilst it is important that the measures in this bill help address the financial needs of families—and the Democrats welcome those—I would like to emphasise that one of the growing areas of poverty in society is that of young single people. The needs of single people is an area of society which I think, perhaps in the rush to try to address the very real financial needs of families, has been a bit obscured by that. It certainly does appear from recent research that young single people are often amongst the biggest growing group in society in terms of poverty levels, and it is an area that I think we do need to pay more attention to when we are looking at income support and other forms of financial assistance and legislation of that type. So I would like to certainly flag the Democrats' interest in ensuring that that group in society is not forgotten. That is not to say, of course, that families are not important or that they do not have extra financial burdens; we are pleased that this legislation does go a long way towards addressing some of those burdens. It is legislation that the Democrats support.Sitting suspended from 6.26 p.m. to 7.30 p.m.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Chapman)—Order! The question is that the bills be now read a second time.Question resolved in the affirmative.Bills read a second time.6674A NEW TAX SYSTEM (FAMILY ASSISTANCE) BILL 1999The bill.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Chapman)—We are dealing now with the A New Tax System (Family Assistance) Bill 1999 .19:30:006674Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—I table a supplementary explanatory memorandum relating to the government amendments and requests for amendments to be moved to the A New Tax System (Family Assistance) Bill 1999 . The memorandum was circulated in the chamber on 22 June 1999. I seek leave to move the amendments.Leave granted.BE4Newman, Sen JocelynSenator NEWMAN—I move:(1) Clause 3, page 5 (line 22), after "rate", insert "for an FTB child who has not turned 18".(2) Clause 22, page 23 (after line 25), after subclause (5), insert:Individual aged 21-24 undertaking full-time study (5A) The individual is an FTB child of the adult if: (a) the individual has turned 21 but is aged under 25; and (b) the individual is in the adult's care; and (c) the individual is an Australian resident or is living with the adult; and (d) the individual is undertaking full-time study.(3) Clause 31, page 31 (lines 18 to 21), omit subclause (3), substitute:14 weeks reduced in certain circumstances (3) The period for which the individual is eligible for family tax benefit under subsection (2) does not include: (a) if the child was undertaking full-time study at the time the child died—any day on which the child would have been aged 25 if the child had not died; or (b) in any other case—any day on which the child would have been aged 21 if the child had not died.(4) Clause 34, page 34 (line 21), omit paragraph (a), substitute: (a) the individual: (i) is aged under 21; or (ii) is aged under 25 and is undertaking full-time study; and(5) Clause 65, page 67 (line 30) to page 68 (line 2), omit subclause (2), substitute: (2) For the purposes of the method statement in subsection (1), a day in the lump sum period is an excluded day in relation to the child if: (a) where the child was undertaking full-time study at the time the child died—the child would have been aged 25 on that day if the child had not died; or (b) in any other case—the child would have been aged 21 on that day if the child had not died.(6) Schedule 1, page 81 (cell at table item 3, column 1), omit "21", substitute "18".(7) Schedule 1, page 81 (at the end of the table), add:4FTB child who has reached 18, but is under 25, years of age$1,306.70(8) Schedule 1, page 95 (line 7), omit subclause (2), substitute: (2) The FTB child rate for the purpose of subclause (1) is: (a) for an FTB child who has not turned 18—$956.30; or (b) for an FTB child who has turned 18—$1,306.70.(9) Schedule 4, page 119 (cell at table item 3, column 1), omit "21", substitute "25".(10) Schedule 4, page 119 (cell at table item 3, column 2), omit "16-20", substitute "16-24".(11) Schedule 4, page 119 (cell at table item 3, column 3), omit "item 3", substitute "items 3 and 4".(12) Schedule 4, page 119 (cell at table item 6, column 3), omit "subclause 26(2)", substitute "subclause 26(2)—all amounts".(13) Schedule 4, page 122 (cell at table item 3, column 1), omit "16-20", substitute "16-24".(14) Schedule 4, page 131 (cell at table item 2, column headed "Amount specified in"), omit "table", substitute "items 1 to 3 of the table".(15) Schedule 4, page 131 (cell at table item 6, column headed "Amount specified in"), omit "subclause (2)", substitute "paragraph 2(a)". The amendments that I have moved in essence extend eligibility for Family Tax Benefit Part A to young persons of age 21 to under 25 if they are undertaking full-time study, and will also increase the fortnightly rate of family tax benefit to $50 in respect of a family tax benefit child who is of age 18 to under 21 or who is undertaking full-time study and who is of age 21 to under 25. These amendments will take effect from 1 July 2000 and correspond to amendments which are to be made to Family Allowance with effect from 1 October 1999 and which are contained in the Social Security (Family Allowance and Related Matters) Legislation Amendment Bill 1999 currently before the House of Representatives.Amendments agreed to.Bill, as amended, agreed to, subject to requests.A NEW TAX SYSTEM (FAMILY ASSISTANCE)(CONSEQUENTIAL AND RELATED MEASURES) BILL (No. 1) 199910000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—The question is that the A New Tax System (Family Assistance) (Consequential and Related Measures) Bill (No. 1) 1999 stand as printed.Question resolved in the affirmative.A NEW TAX SYSTEM (FAMILY ASSISTANCE) (ADMINISTRATION) BILL 1999The bill.DT6BARTLETTSenator Bartlett—Mr Chairman, I seek your guidance as we do not have an amendment sheet circulated for the family assistance administration bill.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Yes. It is appropriate now to move those amendments to the A New Tax System (Family Assistance) (Administration) Bill 1999 , having dealt with the first two.AX5EVANSSenator Chris Evans—I am just clarifying that we are in committee on the A New Tax System (Family Assistance) (Administration) Bill, are we?10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—That is correct.19:33:006676Bartlett, Sen AndrewSenator BARTLETTDT6QLDAD00—There are a few amendments here. I seek leave to move the first two together.Leave granted.DT6Bartlett, Sen AndrewSenator BARTLETT—I move:(1) Heading to clause 107, page 90 (line 21), omit "time limits and" .(2) Clause 107, page 9 (line 22) to page 91 (line 4), omit subsections (1), (2) and (3).These amendments deal the section of the legislation to do with review applications and time limits that are set on that; these are internal reviews rather than appeals to the SSAT. I did have brief discussions with the minister's office today about this and the subsequent amendment, which has also been circulated and also contained in Senator Evans's circulated amendments.The issue this seeks to address is basically the component of the act which, in this case, seeks to limit the amount of time in which people have the ability to appeal a decision. As I understand it, currently the Social Security Act provides that a person can appeal a decision from the original decision maker at any time, although there are some limitations. The person is entitled to back-payment only to the date on which the original decision was made, if their application for review is made within three months of receiving the written decision.As I think Senator Evans indicated in his speech in the second reading debate, this was part of a package of legislation linked in with a large number of tax bills. From the Democrats' perspective, we have not really had adequate time, given our limited resources and focus, to examine the desirability or otherwise of this measure. I know the government does have some arguments as to why it is a good idea. However, if it is as good an idea as the government thinks, it can spend the intervening couple months convincing either us or the ALP of that when we get to the Social Security (Administration) Bill 1999 later in the year. I am certainly quite willing to be open to arguments and revisit the issue then, if there are suitable arguments for proceeding down this path. At the moment I am a bit sceptical about the desirability of that and, for that reason, at this stage at any rate I have moved these amendments to remove those sections from the legislation.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Senator Bartlett, you indicated that you were moving two amendments initially. We have three amendments listed on the running sheet. Could you just clarify which two you have just spoken on.DT6Bartlett, Sen AndrewSenator BARTLETT—They are amendments Nos 1 and 2. Amendment No. 3 is in opposition to a clause.19:36:006676Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—I see that Senator Evans is also wanting to address this issue. I know that he has an amendment which would be following on or in lieu of this. I take up briefly the challenge put out by Senator Bartlett. If you are going to be considering your position in the longer term, the Social Security (Administration) Bill 1999 comes before us later in the year and it would be worth while having on the record why the government is not happy with the amend ments being proposed by both the Democrats and the opposition.Section 107 establishes a 52-week time limit following the notification of a decision within which an application for review of a decision must be lodged. Dame Margaret Guilfoyle, a greatly respected former social security minister whose proposal this is, suggested that the administration of a mass decision making system requires some finality in dealing with applicants and that a period of 12 months would be appropriate for a person to seek a review of a departmental officer's decision. This provision will ensure that the family assistance review and appeals system compares more consistently with other systems in which time limits apply. For example, the Refugee Review Tribunal and Migration Review Tribunal both allow a total of 35 days for application for review by the tribunal of a decision made in Australia. There is no internal review and they have no special circumstances exemption to the time limits.The Archives Act permits destruction of a file 12 months after a customer ceases to receive payment, and it is no advantage to have to deal with a request for review where the papers have been destroyed and there is virtually no other available evidence. In such cases as present, it is common for the AAT not to grant extensions of time. The bill provides a capacity to extend the time limit where there are special circumstances. If you like, Senator Bartlett, I see that as being the necessary fall-back or protection for individuals' rights. I will address your next amendment when you move it.19:39:006677Evans, Sen ChrisSenator CHRIS EVANSAX5WAALP00—On behalf of the Labor opposition, I indicate that we are inclined to support these first two Democrat amendments in much the same sort of frame of mind as Senator Bartlett brought to this issue. The chamber will notice that we did not seek to amend this section ourselves. Our main concern is with the next measure, which was the 28-day limit on appeals to SSAT. But I think the same general concern that I expressed in the second reading debate pervades our approach to all of this—that there has not been a great deal of consideration of what has been in the administration bills.There is a bit of nervousness on our part that there has not been proper consideration of the implications of some of these measures. From a quick chat I have had with the opposition spokesman on social security, Mr Wayne Swan, while he was not necessarily inclined to oppose, our general approach is to be a bit cautious about some of these proposals till we are able to discuss what they mean in more detail with those who represent people who could be adversely affected.On balance, while our main concern is with the next section, which we will be opposing, we are inclined to support the Democrat amendments on the same basis that we think there needs to be a bit more light and air applied to these measures. They are part of an approach to social security that will be dealt with more fundamentally, I gather, in a bill coming before us a bit later. In the short term, we are inclined to err on the side of caution. For that reason, we will be supporting these two Democrat amendments.19:40:006677Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—I respond briefly to Senator Evans. I respect the concerns of the Democrats and the opposition about these measures in the legislation. I just want to make it quite clear that this is the way the government is intending to take the entire social security system—retaining a fair system, which it is, but making it slightly more efficient without removing people's rights. As I mentioned to Senator Bartlett, there would still be the opportunity for people to get the time limit extended where there are special circumstances. So the government is very ready to have other parties have a look at this over the break and be ready to come back after having given the issue greater thought. I urge you, though, to come on board and support it when it appears again in the Social Security (Administration) Bill 1999 .There were a number of things that needed attention. Dame Margaret, as a former social security minister, is widely respected for how well and widely she consulted prior to prepar ing her report on the system. It was not done lightly and it was not done in any mode of slash and burn; it was trying to be fair to the taxpayer and fair to the person needing assistance. With that encouragement to spend the break—AX5EVANSSenator Chris Evans—After a week's holiday.BE4Newman, Sen JocelynSenator NEWMAN—You cannot have a week's holiday. With that encouragement to spend the break in worthy pursuit of an even better social security review system, I do urge that you give attention to the matter.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Chapman)—The question is that amendments Nos 1 and 2 moved by Senator Bartlett be agreed to.Question resolved in the negative.19:43:006678Bartlett, Sen AndrewSenator BARTLETTDT6QLDAD00—We intend to oppose clause in the following terms:(3) Clause 112, page 94 (lines 1 to 7), TO BE OPPOSED .As indicated, the Democrats wish to oppose clause 112 of this legislation—for similar sorts of reasons. This one limiting appeals to the SSAT to only 28 days is particularly problematic. As I said previously, we are willing to examine it in more detail over the longer period of time. Partly in response to some of the minister's previous comments, it would be preferable to look at all of the issues that were raised in the Guilfoyle report as a group rather than in a piecemeal way, with some aspects of it coming in here and some aspects coming in other legislation. A lot of different proposals have been put forward there, and I think they need to be looked at in detail. That is not a reflection on their appropriateness or not—I am sure there are lots of good ideas in there.With something as complex as a social security act, if measures are introduced that do have unforeseen effects it does tend to mean that people at the bottom end of the scale are negatively affected. From the Democrats' perspective, it is something we are keen to examine in detail to make sure that what we are doing is not going to unfairly impact on the less well-off. For that reason, particularly in this area, the Democrats would be keen to remove this section from the bill at this stage, examine it more fully and the rationale behind it when we get to later legislation and do that as a whole. That is a more appropriate way to go and certainly what we would prefer to do.19:45:006678Evans, Sen ChrisSenator CHRIS EVANSAX5WAALP00—The Labor opposition have a similar amendment to that of the Democrats, which is to oppose clause 112. Our opposition is based on the short consultation time we have been able to have and the fact that some concerns have been raised by people who represent people in appeals before the Social Security Appeals Tribunal as to the process suggested. We are concerned that the effect of the limit proposed by the government is to effectively cut off the right of appeal to the Social Security Appeals Tribunal and then the Administrative Appeals Tribunal, because one flows from the other. As Senator Bartlett has said, we anticipated these measures being part of the Social Security (Administration) Bill 1999 , to be dealt with when we considered that bill. We are most concerned that they do not go through the chamber today without the concerns being raised and, hopefully, that we do not end up with such a precedent being included.We are not at all convinced that the measure is necessary. I will be interested to hear what the minister has to say, but our view is that this has the potential to impact on those who are most vulnerable in our community because of their lack of language skills, their non-English speaking background or other difficulties they might have, such as intellectual disabilities. These people are the ones less likely to be able to cope with the system and to be able necessarily to exercise their rights within that time frame. They may well be in a position of crisis when they have to look to exercise those rights. There are a range of reasons why people might well be at that time homeless, recently unemployed or going through a family crisis and who are not necessarily in a position to fully understand or advocate their own rights within a 28-day time limit. The Labor Party is most concerned that that might have an impact on their ability to exercise their rights. We do not think that would be a desirable outcome.It has also been put to us that in some cases we might see an increase in the number of appeals as welfare rights advocates encourage people to make appeals to protect their rights if they are uncertain about the final outcome of their overall situation. I know the minister has already referred in a previous debate to the question of special circumstances, but we are concerned how that provision might be applied, in the sense that it is another hurdle for people to get over to prove that their circumstances are somehow special.We do not see the justification for the 28-day time limit. We think that in the regime the government is putting in place people have the real potential to be disadvantaged and that the special circumstances test may provide a hurdle that is too high for people genuinely in need of exercising those appeal rights. My major concern is that those who are least able to look after themselves and who are most vulnerable will be those for whom the rules will not work. Clearly, we want a social security system that allows all those people to access their full rights. For those reasons we think it would be inappropriate to include the 28-day time limit and we will be opposing it.19:49:006679Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—I thank senators for their contribution to this aspect of the legislation. I do think that perhaps their fears are unfounded. Clause 112 establishes a 28-day time limit following the notification of a decision for application to the SSAT for review. Dame Margaret pointed out that in most jurisdictions there is some period during which an appeal against a decision may be lodged. That of itself is not an untoward provision.This provision sets a time for lodging an appeal that is consistent with that which currently exists under the Social Security Act for lodgment to the Administrative Appeals Tribunal. It has not been seen to be an unfair time limit for appeals to the AAT. I do not understand why it could be seen as being an unfair time limit for application to the SSAT for a review. By the time we get to that stage in the system, the customer will have received a letter from an authorised review officer explaining the adverse decision in plain English and, accompanying the letter, an application for appeal to the SSAT and information on how to lodge an appeal. With this level of information and assistance, I do not think it is unreasonable for a customer to decide to lodge an appeal within 28 days.Having said that—and Senator Evans has just emphasised the issue of special circumstances—capacity is provided in the bill for the period of appeal to be extended where there are special circumstances. I would remind senators that Centrelink and the social security system have for many years been accustomed to dealing with people who are particularly vulnerable. It may be people with mental illness or intellectual incapacity or who are perhaps addicted to alcohol or drugs and are therefore not well able to represent their own interests. The need to protect the people for whom the special circumstances provision is provided is well understood by both the Department of Family and Community Services and Centrelink. I believe that in the circumstances the time limit is not unfair, but even if people had some vulnerability which precluded them from getting in application in that 28 days, the special circumstances provision would be a safety net to protect the most vulnerable.19:52:006679Bartlett, Sen AndrewSenator BARTLETTDT6QLDAD00—In brief response to that, from my point of view, on behalf of the Democrats, before agreeing to such a time limit—which on the face of it seems a fairly short period of time in my experience—I would certainly like to be able to examine the reality of the current situation in a bit more detail: how long people currently take to appeal the SSAT, and what percentage of people take longer than 28 days and what the reasons might be in those circumstances. Certainly, there is a category here of special circumstances that gives some flexibility, but I am concerned that that is a little bit arbitrary. I realise that you need to have some space for flexibility in any area of administrative law but, in something that is dealing with people's basic welfare and ability to get some basic income support, I think arbitrariness is a bit of a dangerous component to have too much of. So that does give me some concern.I would again indicate to the minister that the Democrats and I am sure the Australian Labor Party—reasonable folks that they are—are quite willing to examine this and be convinced, once we have had the opportunity to look at it in a bit more detail. The Democrats, as the government and indeed the nation as a whole are well aware, are quite willing to cooperate with the government on the odd occasion. I am sure that we can extend that cooperativeness to an area such as this, if the arguments are good enough, but certainly I am also keen to ensure that we have enough time. I do not see it as being a major problem to the administration of government or the finances of the nation for us to consider this at a bit more length and re-include this as part of the overall system when we do the Social Security (Administration) Bill 1999, if enough of the Senate have been convinced that that is the way to go.I do think that particularly with this bill, certainly on the surface, that a 28-day limit seems to be quite a short period of time in which to enable people to appeal. Whilst there is the special circumstances exemption, it is not particularly clearly defined and leaves some room for arbitrariness, which again would be of concern to the Democrats. So I would indicate that we would press this issue, at this point in time, to seek to remove this clause from the bill. Once we have looked at it more closely over the next couple of months, we might be persuaded to go down the path that the government is suggesting across the board in the Social Security Act.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Chapman)—The question is that clause 112 stand as printed.19:59:00The committee divided. (The Chairman—Senator S. M. West)34Abetz, E. Boswell, R. L. D.Brownhill, D. G. C. Calvert, P. H.Campbell, I. G. Chapman, H. G. P.Coonan, H. Crane, W.Eggleston, A. Ellison, C.Ferguson, A. B. Ferris, J.Gibson, B. F. Heffernan, W.Herron, J. Hill, R. M.Kemp, R. Knowles, S. C.Lightfoot, P. R. Macdonald, I.Macdonald, S. MacGibbon, D. J.McGauran, J. J. J. Minchin, N. H.Newman, J. M. O'Chee, W. G. *Parer, W. R. Patterson, K. C. L.Payne, M. A.Reid, M. E.Synon, K. M. Tierney, J.Troeth, J. Watson, J. O. W.35Allison, L. Bartlett, A. J. J.Bishop, T. M. Bourne, V.Brown, B. 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. Faulkner, J. P.Forshaw, M. G. Gibbs, B.Harradine, B. Hogg, J.Lees, M. H. Lundy, K.Mackay, S. Margetts, D.McKiernan, J. P. Murphy, S. M.Murray, A. O'Brien, K. W. K.Quirke, J. A. Ray, R. F.Reynolds, M. Sherry, N.Stott Despoja, N. West, S. M.Woodley, J.Alston, R. K. R. Bolkus, N.Tambling, G. E. J. Schacht, C. C.Vanstone, A. E. Hutchins, S.* denotes tellerQuestion so resolved in the negative.20:03:006680Evans, Sen ChrisSenator CHRIS EVANSAX5WAALP00—On behalf of the opposition, I move:Clause 126, page 103 (lines 2 to 6), omit subclause (1), substitute: (1) The Executive Director may direct that a hearing be conducted without oral submissions from those parties that may make oral submissions if: (a) the Executive Director considers that the review hearing could be determined fairly on the basis of written submissions by all the parties to the review; and (b) all parties to the review consent to the hearing being conducted without oral submissions.This amendment to clause 126 deals with the issue of the right of a party to make oral submissions to a Social Security Appeals Tribunal review. The government is proposing a new section which codifies the powers of the executive director and effectively allows for that person, on certain occasions and within certain guidelines, to rule that all social security appeal matters are heard by way of written submission and not orally. The amendment seeks to insert the option of all parties needing to consent to the matter being conducted without oral submissions.We are concerned that this might create a dangerous precedent whereby parties are not allowed to make oral submissions in support of their claims by a decision of the executive director. I am sure the minister will say there are appropriate guidelines and restrictions on that power, but we are concerned that parties may not have that opportunity. That may well be the best way for them to put forward their case and, if they are restricted from articulating their case in this way, that may limit their right to a fair hearing and to seek the benefits of a favourable decision from the tribunal.Again, this is one of these measures that I understand will be in the Social Security (Administration) Bill 1999, which will come before the parliament again in August. It may well be that there is some way of making progress on this measure other than this, but at this stage we are very concerned that the government's policy direction would not necessarily allow people the right to make oral submissions. We think the amendment we are moving, which basically requires the consent of all the parties to obviate that requirement to have oral hearings, is a better approach. I urge the Senate to support that amendment. 20:05:006681Woodley, Sen JohnSenator WOODLEYHX5QLDAD00—I want to speak briefly on this and to support strongly the proposition put by Senator Chris Evans, because this whole issue has a long history. It is interesting that Dame Margaret Guilfoyle has been mentioned here tonight. I was a member of the Social Security Appeals Tribunal in the days when she was the minister. There was a big debate about oral hearings as opposed to written submissions. It is interesting to note that, in those days, one of the strongest supporters of oral hearings was Senator Mal Colston.In that debate, one of the issues was that a very small percentage of appellants' appeals was upheld, particularly by the Social Security Appeals Tribunal in Brisbane. I believed, as others did at the time, that one of the reasons was that people were discouraged from making appearances and giving oral evidence. I remember wading through acres of paper, and often the people who were appealing were not aware of the detrimental reports which were given from time to time in writing and which were then used by the tribunal against the appeal. I often felt that if only people could appear and give oral evidence, then the determination would have gone the other way.When there was a review by the minister of the Social Security Appeals Tribunal's operation, I spoke strongly about this. It is interesting that, a little later on, I was invited to step down from the appeals tribunal. At the time I was strongly supported by Senator George Georges, who took up the case. But that is all history; you do not really want to know about that.What I do want to underline is that I believe this measure is important. It is important to preserve the right of people to an oral hearing and that that right will not simply fall over because of a decision by the executive director without people being aware of their rights and agreeing to the abrogation of their right to an oral hearing. The amendment does that. It determines that there should be consent, and if there is consent then the determination can be made on the basis of written submissions, but there should be some safeguard to that. Because of that debate of some years ago and how important it was for people to exercise the right to an oral hearing, I would urge the Senate to support the Labor amendment.20:09:006682Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—Mr Chairman, I was interested in that history. When I first came into the Senate, it was George Georges that opened my eyes to the ALP treatment of one of its own when he voted against the party. I was quite shocked. But that is history, as Senator Woodley said.I draw this to the Senate's attention: the bill actually provides that the executive director `may direct' a hearing `without oral submissions', if the executive director considers the review hearing `could be determined fairly on the basis of written submissions'. The word is `may', not `have to' or `compelled to'; he or she may direct it, if he or she considers that the hearing `could be determined fairly on the basis of written submissions'. Clause 126 goes on to say in part (4), subsection 1: `The tribunal may, after considering those written submissions . . . ' So if the director says that it would be fair to all the parties to go on the written papers to the SSAT, the SSAT, after reading the submissions, can still say, `We believe that the parties should be permitted to make oral submissions.' I am sure Senator Woodley would recognise that that does put in that balance what you are concerned about—that is, of people being excluded from being heard. I understand that concern, but I think subsection (1) and subsection (4) of clause 126 do protect and look after the concerns that Senator Woodley was referring to.In addition, I am concerned at the drafting of the ALP amendment. I do not know whether Senator Evans has had a really hard look at the drafting. To me it looks a bit nonsensical. I will demonstrate why. The ALP's second amendment is:Clause 126, page 103, (lines 2 to 6), omit subclause (1), substitute:(1) The Executive Director may direct— there it is, `may', but he or she directs—that a hearing be conducted without oral submissions . . . if . . .et cetera. Part (b) says:. . . all parties to the review consent to the hearing being conducted without oral submissions.So, on the one hand, the executive director is being given the power—the discretion, if you like to put it that way, because it is `may' direct—to direct. That is what subsection (1) says: `may direct'. Then in 1 (b), it says if:. . . all parties to the review consent to the hearing being conducted without oral submissions.So on the one hand he has the power to direct and on the other hand it has to be with the consent of all the parties. So what is direction if it cannot be exercised without the consent of all the parties? I think somebody took their mind out of gear between the drafting of the second line and the last line. From that point of view, I do not think your amendment is a very good one. Quite apart from whatever you were trying to achieve, the drafting is not all that crash-hot.I will not delay the Senate any longer. For both those reasons—that there is sufficient protection within the government's legislation and that the ALP's attempt to amend it is not a very satisfactory attempt—I would urge the Senate to oppose the opposition's amendment.20:13:006682Evans, Sen ChrisSenator CHRIS EVANSAX5WAALP00—I do not want to delay the Senate unduly, but certainly the minister's last point was lost on me. The wording is exactly the same as in the government's bill, except that we say the executive director `may direct' that a hearing be conducted and then we set down the provisos. The first is they have to be satisfied that it can be determined fairly and the second is that they have consulted the parties and gained their consent. It seems to be quite straightforward, but I admit that, unlike the minister, who is one of 19 lawyers on the front bench of the Liberal Party, I am not a lawyer. But it seems to me that the wording is exactly the same as that used in the bill. The direction, though, can only be issued once they have satisfied the two criteria; one of those is getting the consent of the parties. Otherwise, the wording is in exactly the same language as is in the govern ment's bill. Anyway, I do not think we want to delay with an unduly long debate.It seems to me that that objection does not have a great deal of substance. The wording is much the same. What we are inserting is that, before they make that direction, they seek the consent of the parties. Obviously the intent of the thing is to make sure they have that consent rather than exercise that purely on their own view. But I urge the Senate to support the amendment.Question put:That the amendment (Senator Chris Evans's ) be agreed to.20:19:00The committee divided. (The Chairman—Senator S. M. West)32Allison, L. Bartlett, A. J. J.Bishop, T. M. Bourne, V.Brown, B. 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. Faulkner, J. P.Forshaw, M. G. Gibbs, B.Harradine, B. Lees, M. H.Mackay, S. Margetts, D.McKiernan, J. P. Murphy, S. M.Murray, A. O'Brien, K. W. K.Quirke, J. A. Ray, R. F.Reynolds, M. Stott Despoja, N.West, S. M. Woodley, J.31Abetz, E. Boswell, R. L. D.Brownhill, D. G. C. Calvert, P. H.Campbell, I. G. Chapman, H. G. P.Coonan, H. Crane, W.Eggleston, A. Ellison, C.Ferguson, A. B. Ferris, J.Gibson, B. F. Heffernan, W.Herron, J. Kemp, R.Knowles, S. C. Lightfoot, P. R.Macdonald, I. MacGibbon, D. J.McGauran, J. J. J.* Minchin, N. H.Newman, J. M. Parer, W. R.Patterson, K. C. L. Payne, M. A.Reid, M. E. Synon, K. M.Tierney, J. Troeth, J.Watson, J. O. W.Bolkus, N. Macdonald, S.Hogg, J. Vanstone, A. E.Hutchins, S. Alston, R. K. R.Lundy, K. Tambling, G. E. J.* denotes tellerQuestion so resolved in the affirmative.Bill, as amended, agreed to.A NEW TAX SYSTEM (FAMILY ASSISTANCE) (CONSEQUENTIAL AND RELATED MEASURES) BILL (No. 2) 1999Bill agreed to.A New Tax System (Family Assistance) Bill 1999 reported with amendments and requests; A New Tax System (Family Assistance) (Administration) Bill 1999 reported with amendments; A New Tax System (Family Assistance) (Consequential and Related Measures) Bill (No. 1) 1999 and A New Tax System (Family Assistance) (Consequential and Related Measures) Bill (No. 2) 1999 reported without amendment; report adopted.6683A New Tax System (Family Assistance) (Administration) Bill 1999, A New Tax System (Family Assistance) (Consequential and Related Measures) Bill (No. 1) 1999 and A New Tax System (Family Assistance) (Consequential and Related Measures) Bill (No. 2) 1999 (on motion by Senator Newman) read a third time.Bills6683r811Billsr812Billsr8136683Debate resumed from 21 June, on motion by Senator Ellison:That these bills be now read a second time.20:24:006683Cook, Sen PeterSenator COOKRF4WAALP00—I rise to speak on the A New Tax System (Closely Held Trusts) Bill 1999 and two other bills relating to non-disclosure—A New Tax System (Ultimate Beneficiary Non-disclosure Tax) Bill (No. 1) 1999 and A New Tax System (Ultimate Beneficiary Non-disclosure Tax) Bill (No. 2) 1999 . The issue of tax avoidance through family trusts is one that we on the Labor side of the chamber have been concerned about for a long time. We have been calling on the government to take action and, most recently, to abide by its undertaking to provide consistent treatment of tax entities so that trusts are taxed in the same way as companies.In announcing that it intends to do this, the government has claimed a positive budgetary impact of $1.67 billion in the year 2000-01, declining to $650 million in the year 2002-03. However, we have not yet seen those bills. We have only seen the ones that are now before the chamber. It is a small measure to deal with some of the abuses of tax structures for the purpose of tax avoidance and evasion. It requires the disclosure of the ultimate beneficiaries of income from trusts. That is so that the Commissioner of Taxation can check whether each beneficiary has properly disclosed the net income of their net assets, including the receipt of any tax preferred amounts. Failing that disclosure, the income of the trust will be taxed at the top marginal rate, plus the Medicare levy.However, these requirements apply only to closely held trusts, which are defined in the bill—and I will not read the provision—and discretionary trusts, which are also defined in the bill. I will not read that provision either, except to say that a discretionary trust is a trust that is not a fixed trust—that is, one where persons have fixed entitlements to all the income and assets of the trust. A fixed entitlement is an indefeasible interest in a share of the income or assets of a trust.The bills before us specifically exclude unit trusts with units listed on the Stock Exchange—complying superannuation funds, deposit funds, pooled superannuation trusts and deceased estates until the fifth anniversary of the death. The fact that it is only expected to raise an additional $30 million a year is a demonstration of how limited this measure is. There are many greater tax avoidance and evasion issues associated with trusts. The government's reluctance to come to grips with these avoidance and evasion issues shows how uninterested it is in real tax reform that protects the revenue and makes everyone pay their fair share.There is every sign that the government wants little more than a few measures it can point to to deflect criticism about its lack of action. The lack of speed and commitment in this area has now reached the dimensions of a scandal of such proportions that, in the context of this bill, it requires a second reading amendment. I was going to apologise to the chamber for not being able to circulate this amendment because we have been moving faster than I anticipated, but the Clerk has acknowledged that it has been circulated. I move:At the end of the motion, add:"but the Senate is of the view that: (a) in relation to tax avoidance: (i) the Government has failed for three years to take adequate action to deal with major tax avoidance and evasion by high wealth individuals using complex trust structures; (ii) lack of action is causing major ongoing losses of revenue; (iii) at the time these aggressive tax avoidance and evasion schemes were first identified by the Australian Taxation Office in late 1995 and early 1996 an amount of $800 million was being evaded by 80 high wealth individuals; (iv) some of the high wealth individuals participating in these schemes were manipulating their taxable incomes to declare as little as $20,000 a year and so claim various government benefits; (v) the legislative action required to eliminate these schemes is well understood by the Australian Taxation Office; and (vi) the lack of adequate action on tax avoidance and evasion using trusts is an indicator of the Government's failure to provide proper and fair tax reforms; and (b) in relation to so called taxation reform, of which this bill forms a part as a component of the New Tax System: (i) the government has not achieved real tax reforms in Australia, it has merely agreed to introduce an unfair GST; (ii) the new Howard/Lees GST will involve a massive tax mix switch which will hurt ordinary families, which is directly contrary to the balloted policy of the Australian Democrats; (iii) the Howard/Lees deal will actually increase the tax on food in Australia; (iv) ordinary people will now face a GST on top of state indirect taxes on bank accounts; and (v) the amended tax package is still unfair and will also damage the environment".It is obvious to anyone with a serious interest in tax policy that there is scope for tax avoidance and evasion using tax structures. Throughout 1994 and 1995 the Treasurer's office pressed Treasury for advice on the extent of the problem and the possible remedies. It was raised on an almost weekly basis in meetings with the department. Nothing was forthcoming until 9 November 1995 when the Australian Taxation Office, not the Treasury, advised that they had uncovered a significant problem using multiple trust structures. They had been using new software which was capable of finding patterns in large amounts of seemingly unrelated information. They had found that large numbers of seemingly unrelated trusts were in fact related and a range of techniques were being used by high-wealth individuals to reduce tax liabilities to low or negligible levels.Treasury and the tax office worked on the issue over the next three months, eventually advising the Treasurer that it would be appropriate to make a public announcement that the government would act to end these practices. The press release issued by Treasurer Ralph Willis on 11 February 1996 accurately set out the issues. It was entitled, `High-wealth individuals: taxation of trusts.' I have indicated a copy of this press release to the minister, who is not at the table but is in the chamber. I would seek leave to incorporate the text of this press release because it does set the record straight. The minister did indicate to me that that was an acceptable action.Leave granted.The document read as follows—On November 9, 1995 I was informed by the Australian Taxation Office that as part of the Compliance Enforcement Strategy authorised by the Government, it had conducted analysis of the accumulation of wealth by certain individuals and the taxes paid by them. That analysis revealed that some high wealth individuals were employing strategies which allowed them to accumulate wealth, enjoy a lavish lifestyle, but pay little or no tax. The analysis was in its early stages but the ATO believed the revenue implications might amount to several hundred million dollars.At my request, the ATO and Treasury provided more extensive advice and analysis on December 20 1995. It revealed that in the 1993 financial year, 80 individuals each with a net work of over $30 million had returned taxable incomes of $20,000 or less. This enabled some of them to qualify for low income rebates, Medicare exemptions, deferral of HECS payments and reduced child support payments. The tax minimisation techniques employed by these individuals mainly involved the use of trusts.By January 19, 1996, the ATO and Treasury were able to advise that on the basis of the work undertaken to date in respect to 100 wealthy individuals alone, appropriate measures to deal with a range of specific tax minimisation techniques using trusts would produce additional revenue of at least $500 million. Later at a meeting on January 23, 1996, Treasury gave me verbal advice raising that estimate to $800 million. Some amount could be forthcoming in 1996-97, but the first full year effect would be in 1997-98.The January 19, 1996 advice also included separate revenue estimates in addition to the $800 million for techniques involving thin capitalisation and abuses of the provisions for payments by trusts to foreign charities.The ATO has identified a number of complex tax planning arrangements used by some wealthy individuals to avoid tax, these include:- the characterisation of income as capital by the use of multiple trust structures to conceal a common controlling mind. If the activities of the various trusts and associated companies were viewed as a whole, the profits of the group could be treated as trading income. The ATO has found a number of cases of wealthy individuals operating over 100 trusts;- the creation of artificial losses (revenue as well as capital) to neutralise otherwise taxable profits, particularly through the use of related party transactions;- distributions to wealthy individuals and family members being disguised as loans and other benefits which are claimed to be non-taxable. In relation to companies this includes exploitation of alleged weaknesses in section 47A and 108 of the Income Tax Assessment Act 1936, of the deemed dividend provisions;- the continued use of offshore trusts to hold significant funds which seem to be applied for the benefit of wealthy individuals and their families; and- the use of Australian charitable trusts and overseas organisations to disguise benefits provided by family trading trusts to family members.Obviously, these are not techniques which are practised by the overwhelming majority of trusts operated by and for Australians. Trusts provide an appropriate structure to meet a range of legitimate needs such as for charities, education and non-profit organisations, deceased estates, a variety of family purposes, and for solicitors and other professionals. The Government will not interfere with these arrangements. The Government undertakes that the measures it will adopt will ensure that activities not involving tax avoidance are not adversely affected.No responsible government could stand back and let blatant abuse of the tax system by extremely wealthy individuals continue. The ATO is undertaking action to test the effectiveness of the existing law to deal with some of these practices. However, it is not expected that an outcome will be achieved by these means in the near future due to the long time frames involved in testing issues before the courts. The ATO has advised that it is particularly difficult to run test cases in these areas because the individuals concerned will settle at the end of the day rather than have their private affairs or practices exposed to the public.On January 29, 1996, I wrote to the Secretary of the Treasury and the Commissioner for Taxation, asking them as a matter or urgency to develop a legislative response to cover income from the 1996-97 financial year. The new tax measures which the Government will introduce to deal with these specific areas of tax avoidance will be prospective not retrospective.One of the most important things this Labor Government has given Australia since it was elected in 1983 is a tax system based on the principle of integrity and fairness. Maintaining that basic integrity and fairness requires stamping out tax avoidance wherever and whenever it emerges.The reason these measures are being announced today is because the Government is seeking a mandate to deal with this area of tax avoidance. We call on the other parties in this election to support these reforms. I am offering Mr Howard a briefing this afternoon from the Commissioner of Taxation.The TreasurerRalph Willis11 February 1996 When you read that press release you will see a very clear case for reform and the proposals that the Labor government—had it been returned—would have carried through. The press release also refers to the shadow Treasurer. I understand he received a briefing the very next day.More than three years have passed and the two substantial things that have changed are the government and the fact that Australia no longer has a government that will do anything about the scandal. If the Howard government had any interest in the fairness and integrity of the Australian tax system, it would have legislated in its first year to put an end to this abuse. Two weeks before the 1998 election, when the government needed money to fund the tax cuts contained in its ANTS package and when it knew Labor would raise this issue, it came out with a plan to tax trusts as companies. Eight months later, we have still not seen the legislation. But it is not just eight months since the task was put in front of it; it is three years, three months and 25 days. Perhaps the Treasurer is shooting for the record on inaction on major tax fraud. Former Fraser government Attorney-General Peter Durack left the prosecution files of the bottom of the harbour schemes in his bottom drawer for seven years. If the Liberal government—surprisingly to all of the critics—were to win, for example, the next election, the Treasurer has a chance of beating the Durack record on inaction.We are now being told that the government will produce its solution to this problem in the Ralph Review of Business Taxation. It is a bit more urgent than that. It has been a bit more urgent than that for more than three years. In the 1998 federal election, Labor indicated its preparedness to tax trusts as companies, so it is not a matter of political debate between the Labor and Liberal parties. The remedies on trusts are clearly set out in the ANTS package by the Treasurer. Labor wants them implemented as quickly as possible, but now the election is out of the way and the issue has been put off. Why has a policy which was clear enough to be included in the government's election policies been too difficult? Why is this the case when we have been hearing regularly over a year from the Prime Minister and the Treasurer about their determination to stamp out abuse in this area? On 30 September 1997 the Australian Financial Review reported:The Prime Minister ruled out an attack on the abuse of trusts for taxation purposes on the spurious grounds that such a move would hurt small business.The Prime Minister was sufficiently incensed by this to make a personal explanation to the House the same day. He said:Can I say that I have done no such thing. What I have said, and I am happy to repeat it today, is that I have assured the members of the government parties that in any taxation changes we make we will not be acting in a manner that would seriously damage, or indeed damage at all, small business. But at no stage have I said that my government would never take action against the abuse of trusts. We will always take action against abuses within the tax system.On 24 February 1998 the Treasurer was reported in the Herald Sun announcing that family and company trusts would be taxed at the same rate as company profits as part of the government's crackdown on tax loopholes. The Australian Financial Review quoted him on the same day as saying:In an ideal tax system, taxes would relate to the economic activity that is being carried on, rather than the legal vehicle which houses that activity.The Prime Minister and the Treasurer are very adept on this issue. They say one thing but they do nothing. Any move to stop tax evasion and avoidance always meets resistance. Someone will try to characterise the measures as draconian or claim that their activities are legitimate or essential. According to the Australian Financial Review of 30 September 1998, the coalition's policy was being undermined by the Leader of the National Party even before election day with his letter of 22 September 1998 in political doublespeak to the Australian Cane Farmers Association:I can assure you that whilst the National Party is committed to stopping any practice of `rorts' through FBT or trusts, it will take all necessary action to ensure that genuine use of distributions of capital from family trusts to beneficiaries will not be subjected to fringe benefits tax.This contradicted the government's tax policy which said FBT would be:. . . extended to benefits in excess of $1,000 a year provided by companies to their shareholders or by trustees to trust beneficiaries, where the benefits were not taxed currently.There was a report in the Australian Financial Review on 30 March this year, following a National Party meeting, that Senator Winston Crane was focusing his attention on preserving the rights of `legitimate' business trusts. Senator Crane claimed he had received a lot of support from his coalition colleagues. The next day AAP reported that Queensland state opposition leader Rob Borbidge had announced that the Queensland National Party would oppose any attempts to tax trusts like companies and that both the Prime Minister and the Deputy Prime Minister had been told of the Queensland Nationals' position.On 25 May 1999, the Sydney Morning Herald reported that National Party concerns that the Review of Business Taxation proposals would reintroduce death duties on family farms by cracking down on discretionary family trusts had been given a sympathetic hearing among coalition parliamentarians. The report said it was understood the cabinet secretary, Senator Bill Heffernan, was investigating the matter further following a presentation from Queensland solicitors Cleary and Hoare—more about Senator Heffernan in a moment—who were representing more than 200 farmers. The National Party is apparently hoping the Review of Business Taxation will not pursue proposals to tax trusts as companies.On 24 May, Glenn Milne reported in the Australian that the Deputy Prime Minister had said, `We'll kill this in Cabinet.' Parliament has sat for several weeks since then, but there has been no personal explanation like the Prime Minister's. On the Sunday program about a month ago, the Deputy Prime Minister was again trying to characterise taxing trusts as companies as a death duty. His exact words were:But, at the end of the day, are we about to retrospectively reintroduce death duties by a some approach to trusts? No.And:The Government's made no decisions, and we still haven't got the Ralph report, and it will be a little while yet. This was immediately contradicted, first by Mr Ralph, reported in the Australian Financial Review as saying:We can't see where there is any negative effect arising out of proposals being considered that would give effect to an inheritance tax.It was then contradicted by the Treasurer when he responded to a question from the Deputy Leader of the Opposition in the House, who asked him to:. . . confirm that full implementation of the proposal to tax trusts as companies outlined in your original GST package had been factored into the budget surplus projections?The Treasurer replied:The government's policy as announced in A New Tax System, ANTS, stands. The government is proceeding to implement that. In relation to those matters that are fully costed as part of ANTS, they have of course been taken into the budget position.The noise was coming from the National Party even before the election was over, and it is still coming today. That explains the last eight months procrastination. The Prime Minister and the Treasurer are going to have to decide very soon whether their position is best summed up by an incisive comment made by the Minister for Sport and Tourism in her backbench days. On 2 October 1997, she was reported in the Sydney Morning Herald as saying:Carmody should stop attacking Australians for not paying tax.That sums up where the Liberal Party have been coming from for the last three years. Nor should we forget in the context of this debate that there are 20 members of the government frontbench who have trusts themselves. We saw today how this government treats conflicts of interest. We can only wait and see what the next excuse will be. Which interest groups and what misrepresentation will we see next? Meanwhile, the tax evaders and avoiders are using Australia as a tax haven and treating the rest of the community with contempt. The tax commissioner can have a good enforcement regime, but he will not be effective if the government fails to give him the tax law to do his job. Any government that lets tax avoidance and evasion of this magnitude go unchecked can never be taken seriously on tax reform.I made a reference in my remarks to the Parliamentary Secretary to the Cabinet, Senator Bill Heffernan. We do know that about 20 out of 27 of the government frontbench have trusts. We do know that, in the last government, Senator Warwick Parer had a web of deceit that outlined his involvement in trusts.WW4KEMPSenator Kemp—Mr Acting Deputy President, on a point of order: to suggest that a colleague, Senator Parer, has a web of deceit is outside the standing orders and should be withdrawn. It is untrue and should not be said.UNKNOWNThe ACTING DEPUTY PRESIDENT (Senator Sherry)The ACTING DEPUTY PRESIDENT (Senator Sherry)—I would ask you to withdraw that comment, Senator Cook.RF4Cook, Sen PeterSenator COOK—I withdraw. We do know, however, that Senator Heffernan is the Parliamentary Secretary to the Cabinet, that he is the self-professed cardinal or the eyes and ears of the Prime Minister, John Howard, in the New South Wales Liberal Party and that he is a holder of six family trusts and one unit trust which he says he needs for succession planning in his family. If, under his proposal, he distributes $5,400 to each of 10 beneficiaries, due to the tax-free threshold no tax would be paid on $54,000. That should be compared to what a wage earner would have to pay on $54,000—$16,000—in tax. Not many ordinary Australian battlers get access to this level of tax avoidance.The issue of the use of family trusts and the interlocking nature of family trusts to split income and to lower levels of taxation are matters of considerable concern in Australia. It is about time that the government followed what the Labor government would have done had it been re-elected in 1996 and legislated in the form that Ralph Willis had announced in, as I recall, February of that year. The fact that the government sit back, fail to act and refer to it in their ANTS package but do not carry it through in their legislation giving rise to the ANTS package—flip it off to the Ralph inquiry—indicates a degree of massive insincerity. We will be watching very closely when the Ralph inquiry reports. We will expect the Ralph inquiry to take up the issue of tax evasion and avoidance through the use of family trusts and, if it does, we will then expect this government to act quickly. We do not hold much hope that it will. While it should, in the interests of the Australian community, we are aware of the vested interests of many members of its own frontbench. This has been one of the reasons, I believe, why it has failed to police this matter up until now.WW4KEMPSenator Kemp—You had 13 years.RF4Cook, Sen PeterSenator COOK—I take the interjection. I go back to the facts. It is very rare that we are able to nail the Assistant Treasurer in a debate, because he is so slippery—he trades in platitudes and argues whatever is the platitudinous version of the truth. The facts are that a former Treasurer of the Commonwealth of Australia, Ralph Willis, a highly respected Australian and a well-regarded Treasurer, sought from Treasury—and finally got from the Taxation Office—advice on what was occurring with family trusts and, upon receipt of that advice, acted promptly to do something about it.The other fact is that the election intervened, and the advice has been sitting there for three years—unaddressed by this government and now the subject of consideration within the Ralph review. I think what says it all is that 20 members of your own frontbench are potential beneficiaries of this inaction, and that is a disgrace. However, we will wait and see what the Ralph inquiry puts, and we will be expecting the government to move promptly to end tax avoidance by the use of trusts in this manner.20:45:006689Murray, Sen AndrewSenator MURRAY3M6WAAD00—In rising to speak on the A New Tax System (Closely Held Trusts) Bill 1999 and related bills I think I should begin, as is appropriate, by a declaration of interest. I have an interest in a family trust, as has been previously outlined, and I think that it is appropriate to disclose that with each bill which affects trusts coming through.The Bills Digest No. 189 of 1998-99 indicates that, in 1993—which was the year that Paul Keating, the previous Prime Minister, won his first election in his own right—there were 331,000 trusts. By 1996—which was the first year that John Howard, now the Prime Minister, won his first election in his own right—the number was 427,000. Those figures indicate that the number of trusts and the nature of trusts have been with us a very long time under both Labor and coalition governments, and the problems attached to them have been with us for that same period of time.The Bills Digest also outlines the fact that, while the number of trusts and companies have both risen, the annual growth rate for trusts has increased while the growth rate for companies has decreased relatively. They go on to say:The Australian Taxation Office has stated that the relative rates of growth of trusts and companies could reflect the different tax treatment of trusts and companies.I think the `could' is a bit of a qualifier, because they do. The reason that so many Australians are in trusts is they get tax advantages as a result, and it is that area which needs serious attention. In the Ralph review preliminary report No. 2, produced, I think, by Arthur Andersen, they illustrated the fact that, in internationally comparative terms, Australia and New Zealand have a remarkably high number of trusts which operate as business entities, as opposed to the other categories of trusts, and that is because of the development in Australian law under the Labor government and continued under the coalition government of advantaging trusts in that regard. Trusts are now very much a part of many Australians' lives. Ordinary Australians invest in unit trusts, property trusts or investment trusts. There are many varieties of trusts. Of course, we all know about family trusts and the reasons for which they are constructed. But the fact is that trusts of all kinds are very heavily used by Australians.It is the opinion of the Democrats that the A New Tax System (Closely Held Trusts) Bill 1999 is a good advance in the direction of ensuring that trusts are appropriately taxed. These days it is often shorthand to say that trusts should be taxed as companies, but it is my opinion that we should rather say that like business activities, whether in trusts, companies, partnerships or individual operations, should be taxed alike. That is probably one of the major issues—that, depending on the legal entity, business activity is in fact taxed differentially—and is something to which we hope the government will attend. The government, and everyone else, is aware that the way in which trust activities end up being taxed is at the beneficiary end and not within the entity. By and large, most trusts are not taxed at all; taxation is in the hands of the trustee or the beneficiaries, and the trust itself is a throughput mechanism. Nevertheless, I think it is still appropriate to say that business activities, regardless of the entity, should always be treated similarly.This particular bill imposes an obligation on the trustees of closely held trusts to disclose the identity and tax file numbers of the ultimate beneficiaries of net income and tax preferred amounts. People who are not attuned to these things can sometimes skip over the meaning of that, but the ultimate beneficiary is in fact clearly defined in the closely held trust as an individual or up to 20 individuals who, between them, directly or indirectly have fixed entitlements to a 75 per cent or greater share of the income or capital of the trust. Identifying the ultimate beneficiary is in fact a great march forward in tax law, because the ultimate beneficiary in a trust has quite often, in my view, been able to slide past their tax obligation.I notice from the financial impact statement that the Treasury calculate that this measure `is estimated to raise revenue of $30 million in each of the following financial years'. I note that the Treasury advisers are sitting in the chamber. Through you, Minister, and Mr Acting Deputy President, I say to them: I am going to guarantee to you that your estimate of $30 million is way short of the mark, and what you are introducing will in fact pinch a lot more people than that $30 million implies. I look forward to the statistics being produced in a couple of years time. I think this is going to be one of the great underestimations of how much revenue is earned, because the fact is that, through this device, you are going to be able to pin who the ultimate beneficiaries are—they are going to have to be declared. It is always worthwhile, Minister, as a govern ment and as a Treasury to underestimate your future revenue stream. I think you are pretty safe on this one. I think this bill goes a lot further than people have woken up to.To continue with the nature of the bill itself, the bill does provide that, if the trustee fails to notify the tax department of the ultimate beneficiary or if there is no ultimate beneficiary—and such a thing is hard to conceive—it can provide for taxation at a penalty rate or for offences under the Income Tax Act. Those penalties and offences are outlined in the bill and include the trustee being liable to pay the tax or, if the trustee is a company, the directors being also jointly and severally liable to pay tax. I notice there are fines under section 8C of the TAA `not exceeding $2,000 for the first offence, increasing to $5,000 or imprisonment for a period not exceeding 12 months for subsequent offences'. So there are some quite sharp penalties for failure to disclose these things. We then notice that, within the content of the bill, the ultimate beneficiary characteristics are defined quite tightly. The various mechanisms are carried through in consequential amendments to other bills.I do not choose to say much more, Minister, other than I think that this is quite an effective bill. I think there is lots more to come on the trusts area, and the government has indicated that in the ANTS package. It is the opinion of the Australian Democrats that this bill should be strongly supported as one of the first tranches of legislation which will tighten up an area which badly needs tightening. Accordingly, as you will have recognised from my remarks, we will support the bill.20:54:006690Conroy, Sen StephenSenator CONROY3L6VICALP00—I rise to speak to the Labor Party amendment on sheet 1460, as circulated. It sets out a range of issues that, unfortunately, are not dealt with in the bill. I appreciate that the Democrats are in a situation where they have reached an agreement with the government on a tax—Senator Murray interjecting—3L6Conroy, Sen StephenSenator CONROY—I am supporting my own amendment, thank you, Senator Murray. It is, I appreciate, quite late in the day. Sena tor Woodley, I am pleased to see you with us today.HX5WOODLEYSenator Woodley—Don't provoke me.3L6Conroy, Sen StephenSenator CONROY—I am disappointed. Many in the media have commented on the fact that they thought the deal reached between the government and the Democrats—as the Prime Minister put it—reflected 85 per cent of their desires. There would be many in the broader community, as well as in their own group—as we witnessed in Friday's voting—who felt that the Democrats did not drive a hard enough bargain. This is probably an area where, I feel, they were absolutely right. There are some who have described the deal between the Democrats and the government as akin to that between the Americans and the Indians over Manhattan Island, where the government got away with beads and blankets for Manhattan Island. I would have to say that I think that is a fair description of the willingness of the Democrats to accept the limelight at such a small price. This is an area where there has been massive avoidance and growth in avoidance—HX5WOODLEYSenator Woodley—During the previous government.3L6Conroy, Sen StephenSenator CONROY—Thank you, Senator Woodley. I am glad you want to contribute to one of the debates; I am hoping you might speak on this one.HX5WOODLEYSenator Woodley—Yes, I would like to.3L6Conroy, Sen StephenSenator CONROY—I wish you would, because I know what you truly believe. I know what is in your heart on these issues, Senator Woodley, as opposed to how you have been voting.WW4KEMPSenator Kemp—What a shocking thing to say!HX5WOODLEYSenator Woodley—He picks on me, you know.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Sherry)—Order! Address interjections and speeches through the chair.3M6MURRAYSenator Murray—Don't impugn his motives.3L6Conroy, Sen StephenSenator CONROY—I am not impugning his motives at all. I am just suggesting that Senator Woodley knows deep down that, in a few years time, when he goes back to work for the Uniting Church in the charity area, which I know he will do once he leaves the parliament, and he is face to face with the consequences of how he has been voting, he will look back and regret what he has done. I think that is what will happen, Senator Woodley.WW4KEMPSenator Kemp—You can get a two per cent return on your super fund.3L6Conroy, Sen StephenSenator CONROY—Thank you, Senator Kemp. I can report to you that the TWU super fund for this financial year is going to have one of the highest returns among the industry funds, which I know you will be pleased about. I know you have been concerned about the returns for TWU members.Honourable senators interjecting—10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Order! Senator Kemp, let us have a reasonably orderly debate.3L6Conroy, Sen StephenSenator CONROY—I will happily take them on one at a time; I just wish they would interject one at a time, not both at the same time. This is an area which, as Senator Murray knows, I am very passionate about. We have clashed in the chamber on the issue of trusts in the past, and harsh words have been exchanged on this issue.WW4KEMPSenator Kemp—I'm surprised you're off the mat.3L6Conroy, Sen StephenSenator CONROY—You should just stick to barracking for your footy team, Senator Kemp. Notwithstanding the interjection from Senator Woodley about it happening under the Labor Party, it is acknowledged that avoidance was happening under the Labor Party. The Labor Party had the tax commissioner, Mr Carmody—before he became a poodle to this government—come forward and say, `This is a growth area. This is a problem and here is what I recommend you do about it.' That is what happened. We went to that 1996 campaign highlighting the sorts of revenue losses that were being gouged out of the government's tax base. I think Senator Cook has already described how individuals have not just one but 10, 20, 30 or 40 artificially organised trusts, just for the purposes of spreading it around and creating maximum confusion.This is the sort of issue which this government has been loath to tackle. We have seen reports of the National Party and what they think about this issue. They have made it clear from day one that they will not be in it. They will not be in any meaningful addressing of the tax avoidance trust issue. The Deputy Prime Minister is on the record as saying, `We will roll it in cabinet.' What about you, Senator McGauran? You have been attending those meetings. You have been prepared to make sure, in joining in that sentiment, that there is no way that you are willing to face up to it. I am pleased that Senator Kemp is still here and is still actively participating in the debate and interjecting from the other side, because we will be looking to Senator Kemp—WW4KEMPSenator Kemp—This is one of your weakest efforts.3L6Conroy, Sen StephenSenator CONROY—I appreciate—as always—your support, Senator Kemp; but, if you can control yourself a little longer, we have a situation where this government has not been serious about trusts. That was evidenced by the trafficking in trust losses where, in actual fact, this government widened the loophole for trafficking in family trust losses. I know that that was a matter of some debate.The Battlers of Brighton staged an enormous write-in campaign to the Senate committee that was investigating the issue. We had hundreds of letters from the Battlers of Brighton about the implications of trust losses and trafficking in them—notwithstanding that every person who appeared before the committee denied that they had ever seen any trafficking in trust losses. This bill had an opportunity to address a variety of the issues at stake in this debate. And we unfortunately have seen the Democrats squib it. I am disappointed that Senator Murray is briefly out of the chamber. I know he likes to stay—HX5WOODLEYSenator Woodley—He is coming back.3L6Conroy, Sen StephenSenator CONROY—I am sure he is coming back and I am hoping he will, be cause there are a couple of comments that I would like to make with him present.HX5WOODLEYSenator Woodley—I will pass them on.3L6Conroy, Sen StephenSenator CONROY—Senator Woodley knows that just taxing trusts at a company level, which is what the National Party committee is stopping, does not in actual fact fix this particular problem. It is not the panacea that the government have tried to pretend that it is. It is an important step; it will at least see a greater level of taxation of the distributions but it does not actually stop the complex avoidance arrangements that the rich end of town has practised, and continues to practise. We have not seen cries of outrage from the Battlers of Brighton with this particular bill, because it does not really address what they get up to.GB6COLLINSSenator Jacinta Collins—Where do you live, Senator Kemp?3L6Conroy, Sen StephenSenator CONROY—Senator Kemp lives very close to Brighton, thank you, Senator Collins—very close indeed. It is probably a coincidence that his brother is actually the member representing that area. That could be one of the reasons. I do not think that whenever we have had a declaration of interests on these sorts of votes, Senator Kemp, you have ever had to disclose that you have a family trust. I think that is right.HX5WOODLEYSenator Woodley—Have you disclosed that you have a brother?3L6Conroy, Sen StephenSenator CONROY—He has disclosed that he has a brother. He has snuck onto the political scene every now and then. Senator Kemp is, in actual fact, not one of those who has ever had to disclose, from recollection, this question of potential conflict of interest over trafficking in trust losses. But we are looking forward to the vote shortly on this issue—where, once again, the Liberal Party will be forced to fess up and forced to confess why they are not really dealing with this issue in this bill. We will see members and senator after senator get to their feet to declare that they are in actual fact involved in trusts. There were 19 in the last parliament, I think.We have not bothered to go through and collect the list of names again for this debate but what we do know is that Senator Heffernan has some trusts—as we discovered recently. Senator Heffernan, the Cardinal—the `eyes and ears of the Prime Minister', as he likes to be known in New South Wales—is one of those people who have indicated that they are prepared to take up the concerns of the National Party. And that is why this is such a squib of a bill and why I say to Senator Woodley that, unfortunately, it is such a disappointment that the Democrats have signed up to a bill that does not actually deal with one of the core issues that I thought the Democrats represented in this chamber.WW4KEMPSenator Kemp—Are you supporting this bill?3L6Conroy, Sen StephenSenator CONROY—I am a strong supporter of this bill. It just does not go far enough. And I am supporting the amendments. Perhaps you would be willing to support the amendments, Senator Kemp, just to indicate that you were fair dinkum. Do not be stood over by the National Party. Do not be stood over by Bill Heffernan, just because he is the Prime Minister's hatchet man. Do not be intimidated by him. Do not be intimidated by Senator Parer and his web of trusts. Do not let them stand over you. Indicate your support for these amendments.As I said, Senator Woodley, it is disappointing that the Democrats have seen their opportunity go to waste for meaningfully addressing massive amounts of tax avoidance by the big end of town. The second biggest furphy about the GST package, and this bill as part of it, is that we will get those tax avoiders and make those people who do not pay their tax pay it. That has been one of the cruellest hoaxes in this debate, because the big end of town, because of weak tax trust laws like this, will still exploit and rip off, and we will still see many people paying minimal tax.How does it work? I think Brian Toohey probably summed it up. Maybe some people in the chamber at the moment have read his articles. Maybe some people are familiar with this particular one. He said let us find out how fair dinkum these people are about trusts by abolishing the tax-free threshold and seeing how long all those people involved in family trusts actually stay in trusts—because once you abolish the tax-free threshold, you take away the incentive to be in them.Then you would find out who is fair dinkum, who is about structuring their arrangements to pass on to the family the family farm that Senator Heffernan loves to talk about or that some of the other Liberals and Nationals love to talk about. Let us see what happens after you take away the ability to split income—because that is all this game is about when it comes to trusts and family trusts. It is about spreading your income among as many non-income earners as possible, to use their tax-free threshold. There are some people in this room who know that. Take away the capacity to access that tax-free threshold and let us see how fair dinkum they are. Take away the monetary incentive to be in a trust, and let us find out.These are the sorts of issues that Treasury should have been putting up as part of the package. These are the sorts of issues they know they would have been run out of town on. They know that this is the sort of issue on which they could have made meaningful tax reform. The Democrats had the opportunity, but the blankets and beads from Manhattan Island were too much for them. It was all too much for them: having all the national media following them around for a few days saying, `Will you? Won't you?'; being invited into 4 Treasury Place and sitting around the table with the fine china out; the prime ministerial charm being on; the chockie bikkies being out instead of the Milk Arrowroots—HX5WOODLEYSenator Woodley—I wish I'd been invited.3L6Conroy, Sen StephenSenator CONROY—I wish you had been invited too, Senator Woodley, because I might have had more confidence in where your party ended up. If I had known you were in the debate, if I had known you were reflecting what you truly believe—HX5WOODLEYSenator Woodley—I am reflecting on chocolate biscuits at the moment; I did not get any.3L6Conroy, Sen StephenSenator CONROY—I would feel sold out too. But I tell you what: the rest of your party fell for the Tim Tam.ZS6QUIRKESenator Quirke—They couldn't have taken Senator Woodley. He'd carve his initials in the table.3L6Conroy, Sen StephenSenator CONROY—That is absolutely right. I do not blame you for being disappointed, Senator Woodley. I would be disappointed, too. I know Senator Kemp did not get any of the chockie biscuits either, because they did not invite him to the negotiations. We all saw who was there, and we know Senator Kemp was not.WW4KEMPSenator Kemp—I was in here listening to you.3L6Conroy, Sen StephenSenator CONROY—Hopefully, you would have learnt something, Senator Kemp.WW4KEMPSenator Kemp—No, I learnt nothing.3L6Conroy, Sen StephenSenator CONROY—Treasury have failed this country. Treasury have championed the GST and this package for 10, 15 or 20 years. Treasury officials who have been involved in this know what needs to be done in the taxing of trusts area. And where is it? They fight a constant battle to shore up the tax base as the accountants get more and more complicated and the lawyers find new ways to get round the system. Treasury and the tax office are left struggling, trying to fill in the loopholes. Here was their chance for a bit of integrity in the tax package. Here was the government's chance to say to the Labor Party, `You will never be able to taunt us about family trusts again.' It was your big opportunity, Senator Kemp, and you have left it to the Heffernans of this world, the Parers of this world, the national parties of this world. Julian McGauran has stood over you on this issue—Senator Brownhill interjecting—10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Sherry)—Order! It is Senator McGauran.3L6Conroy, Sen StephenSenator CONROY—Sorry; Senator McGauran has stood over you on this issue. And here he comes now, the eyes and ears of the Prime Minister, the Cardinal. Senator Heffernan has come in to make sure Senator Kemp does not weaken on this issue, to make sure Senator Kemp votes the way he is supposed to. He is not going to allow—C16HEFFERNANSenator Heffernan—He is God's gift to the Grange women. Grow up, you dope!3L6Conroy, Sen StephenSenator CONROY—Senator Heffernan, you need to be careful. If you want to get down in the gutter, Senator Heffernan, it is a two-way street—C16HEFFERNANSenator Heffernan—Grow up, you dope. Get to the Grange.3L6Conroy, Sen StephenSenator CONROY—If you want to get down in the gutter, Senator Heffernan, you will regret it.C16HEFFERNANSenator Heffernan—Is that a threat or a promise?3L6Conroy, Sen StephenSenator CONROY—No, I am just saying that you will regret it.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Order, please, Senator Heffernan and Senator Conroy! No more interjections, please, Senator Heffernan.3L6Conroy, Sen StephenSenator CONROY—I am pleased that I have excited some interest in the chamber tonight and I am pleased that some senators have come in to join in the debate. I look forward to them standing and giving a speech about some policy. I look forward to them breaking their duck. I look forward to them giving a speech on a bill about a policy, a tax policy—I would not mind it being any policy. There are 27 bills that we have been debating here today and over the last week or two, and you have had ample opportunity to pick one you knew something about and stand up and talk. And what happens? You leave the chamber again after coming in for a few gutter interjections. There is an opportunity to debate the substance of the bill for 20 minutes tonight, and what happens? You come in, you make a few gutter interjections, and then you leave.Senator Kemp often says it is 10 steps to courage. In the case of some senators in this chamber, it is as much courage as standing up in front of your microphone and talking on a bill. It is disappointing that they come in, they hurl the gutter insults around, and then they turn round and walk out of the chamber. But I guess we are used to it from some of the senators in this chamber. If you have managed to clock up an entire 15 minutes since you became a parliamentary secretary—15 minutes in eight months—I guess you are entitled to just wander in and out of the chamber and be the eyes and ears. But no, you reckon you are an expert on an issue, you are lobbying behind the scenes, you have more family trusts than you can count on one hand—you are entitled to lobby privately. But I just wish you would come in and lobby publicly and have the debate. Don't come in and stand over Senator Kemp like that and make sure he knows that the eyes and ears of the Prime Minister are bearing down on him. Come in and have the debate.They are the sort of people you are associated with now, unfortunately, Senator Woodley: the sort of people who do not want to disclose where they have these sorts of interests, who do not want to meaningfully address the question of taxing trusts, who have allowed the deluge to get bigger and bigger till the drip has become a deluge. Then, when you get meaningful opportunity, Treasury squibs it and government squibs it. The last hope in the line here was the Democrats, and they squibbed it as well. It is disappointing. I know that many of the people listening tonight will be shaking their heads and saying, `Well, what happened to the Democrats? They used to believe in social justice. They used to believe in meaningful tax reform. They used to care about the people downtrodden in our society. They used to represent those sorts of values.' But for a few trinkets, a few beads and blankets, the Democrats were willing to give it up. The microphones are available any time any senator wants to come back into the chamber. Rather than stick their head in the door and run away again, they have the microphone here. Twenty minutes is available for any senator who wants to come into the chamber right now, after I sit down.It is a great disappointment to see where the Democrats have got to on this. They still have one last chance. There is an amendment here that will be about meaningfully taxing these tax avoiders and putting meaning into the Prime Minister's words that we will get some of these people to pay tax at last. (Time expired)21:15:006695Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I have been a member of parliament for about nine years and, to be quite frank, I do not think I have ever heard a worse speech. Senator Conroy rambled on, constantly repeating himself and filling up time, I might say, on the totally mistaken assumption that this debate was being broadcast. Didn't anyone tell Senator Conroy that it is not being broadcast? Had they done so, we might have saved ourselves a 20-minute ramble. It is useful to have a debate about some substance, but Senator Conroy's speech was utterly devoid of substance. He has adopted a style of constantly attacking the integrity of his political opponents, including my two colleagues Senator Bill Heffernan and Senator Parer.Senator Conroy, you were given a challenge the other day. If you felt so strongly about these people and the personal attacks you made on their integrity, the challenge was there for you to repeat your accusations outside this chamber. But as always happens when people wish to use the cowards' castle, this chamber, to defame other people, you failed to repeat outside the accusations you made. It reflects rather badly on you, Senator Conroy. We know that you have your eye on Senator Faulkner's chair. After his performance in recent years there is clearly a vacancy going for the leadership of the opposition in the Senate. But even you will have to up your game, Senator, before you are able to achieve that prize. I thought there was some chance that you might have achieved this in the short run. I think that after tonight's speech you have to say that your ambitions will have to be put back on hold, at least for a while.Senator O'Brien interjecting—WW4Kemp, Sen RodSenator KEMP—Senator, I do not have any ambitions. I am just here to do my duty and to make sure that good public policy is put into effect. From what I could ascertain from the Labor Party position, they are supporting this bill. That is excellent. There was very strong support from the Democrats for the bill. There was a lot of waxing on about trusts and Senator Conroy's concern. I guess Senator Sherry, who has been a member of the Senate a little longer than I have, would recall that Labor was in office for 13 years and did absolutely nothing.The trouble is that the Labor Party has got form on so many issues. Labor stands up in debates and attacks the government for this and that and people say, `Hey, what's the Labor Party policy?' No-one knows what the Labor Party policy is, to be quite frank, because an absolute prohibition has been put on Labor Party people making serious policy statements. It is absolutely pathetic. You say, `They were evincing enormous concern about trusts' and we say, `Well, they were in government for 13 years. What did they do about it?'GB6COLLINSSenator Jacinta Collins—Not a GST.WW4Kemp, Sen RodSenator KEMP—No, there wasn't a GST. That is true. There was no tax reform under the Labor Party. Looking back on those 13 wasted years, it was a great pity that we did not have a government that was prepared to take a lead and pursue difficult policy positions for the good of the country. The trouble is that the Labor Party has got form. Even worse, from your point of view, Senator Collins, the Labor Party is completely irrelevant to major policy in this country. You ducked the challenge on tax reform. We are all waiting to see your approach to the Ralph reforms. Given Senator Conroy's performance today—I think he is your leading spokesman in this area—you would not hold out any hopes. You would not hold out any hopes at all that a sensible policy position will emerge from the Labor Party. That is a great pity for the Labor Party, but it is a sad reflection on what was once a party that enjoyed some community respect. Now it is just a joke. It has a leader who is a joke. It has a shadow minister for financial services who rambled on for 20 minutes.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Sherry)—Senator Kemp, that comment should be withdrawn. It is unparliamentary.WW4Kemp, Sen RodSenator KEMP—Which comment?10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—The comment about the joke. It should be withdrawn. It is unparliamentary.WW4Kemp, Sen RodSenator KEMP—I am always one to ensure that my comments are of a parliamentary nature. If I stray to an unparliamentary phrase, I certainly withdraw it.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Thank you.WW4Kemp, Sen RodSenator KEMP—You would have to agree that that was a very gracious withdrawal.Mr Acting Deputy President, the measures before us are part of a tax reform package. These measures are meant to counter practices where entitlements pass through a series of trusts. For instance, part or all of the net income of a trust may be passed through a series of trusts with no ultimate beneficiary being assessed on that income, either because there is no ultimate beneficiary or because the ultimate beneficiary cannot be identified. Other assets of a trust may be said to be distributed through a series of trusts, yet the assets may never be reflected in the assets of any ultimate beneficiary, or there may be taxpayers whose assets are said to reflect trust distributions which cannot be traced back to the succession of trusts to which they are ascribed.To control the use of such trusts to avoid tax, these bills require trustees of closely held trusts with trustee beneficiaries to disclose to the Commissioner of Taxation the identity of the ultimate beneficiaries of a trust net income and taxed preferred amounts to which another trust is entitled. The commissioner needs this information to check that the beneficiary who should do so has included his or her share of the net income of the trust in his or her assessable income for the year and to make sure that a beneficiary's assets include any tax preferred amounts which should be included. To reduce compliance costs, a certain number of closely held trusts, such as compliant superannuation funds and deceased estates, have been excluded from the measure.Furthermore, a trustee need trace an entitlement to net income no further than any range of listed persons, including exempt bodies, charitable trusts and widely held trusts. This also reduces compliance costs. Where a trustee does not give the necessary information in relation to net income of the trust, the bills will impose tax on the trustee in relation to that part of the net income at the top marginal rate plus Medicare levy. If a trustee of a closely held trust does not give the required information about a tax preferred amount, the trustee may be guilty of an offence. We will of course not be supporting the second reading amendment moved by the Labor Party. I commend the bill to the Senate.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Sherry)—There is a second reading amendment moved by Senator Cook on behalf of the opposition. I intend to put the amendment. Question put: That the amendment (Senator Cook's ) be agreed to.21:26:00The Senate divided. (The President—Senator the Hon. Margaret Reid)26Bishop, T. M. Brown, B.Campbell, G. Carr, K.Collins, J. M. A. Conroy, S.Cooney, B. Crossin, P. M.Crowley, R. A. Denman, K. J.Evans, C. V. Forshaw, M. G.Gibbs, B. Hogg, J.Lundy, K. Mackay, S.Margetts, D. 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.41Abetz, E. Allison, L.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.Gibson, B. F. Heffernan, W.Herron, J. Hill, R. M.Kemp, R. Knowles, S. C.Lees, M. H. Lightfoot, P. R.Macdonald, S. MacGibbon, D. J.McGauran, J. J. J. Minchin, N. H.Murray, A. Newman, J. M.O'Chee, W. G. Parer, W. R.Patterson, K. C. L. Payne, M. A.Reid, M. E. Stott Despoja, N.Synon, K. M. Tierney, J.Troeth, J. Watson, J. O. W.Woodley, J.Bolkus, N. Macdonald, I.Cook, P. F. S. Vanstone, A. E.Faulkner, J. P. Tambling, G. E. J.Hutchins, S. Alston, R. K. R.* denotes tellerQuestion so resolved in the negative.Original question resolved in the affirmative.Bills read a second time, and passed through their remaining stages without amendment or debate.Adjournment6697Motion (by Senator Kemp) proposed:That the Senate do now adjourn.669721:32:006697O'Brien, Sen KerrySenator O'BRIEN8O6TASALP00—Last week I advised the Senate of the circumstances that led to the appointment of Mr Laurie Foley to the position of Assistant Director, Air Safety Compliance, with the Civil Aviation Safety Authority. Mr Foley, as a CASA board member, had participated in the development and approval of a new management structure for the authority. That process created a number of new senior positions. Mr Foley participated in the selection of a recruitment agency to assist CASA in filling those positions. He was also a candidate for one of those positions, but he did not declare an interest.As I told the Senate last week, at a board meeting on 15 May the process to be followed in interviewing candidates for these jobs and the role of the board in that process were discussed. The process was to involve a number of panels with a member of the board sitting on each panel. Mr Foley told the board he was not able to participate in that process but did not advise his fellow board members as to why he was unavailable.In fact, Mr Foley did not advise the Chairman, Mr Smith, that he was a candidate for the position of Assistant Director, Air Safety Compliance, until 4 June. That was several months after he had discussions with Spencer Stuart about a possible job—Spencer Stuart being the headhunter consultant being used to fill the vacant positions. It was one month after he had met with the CASA recruitment firm to discuss his candidacy and one month—less two days—after he told Spencer Stuart he was an applicant for the position of Assistant Director, Air Safety Compliance. It was nearly three weeks after he had declined to participate in the staff selection process but had omitted to tell anyone he was a candidate in that process. Mr Foley then waited a further three weeks before he formally tendered his resignation to the minister.This process is in sharp contrast to the Auditor-General's corporate code of conduct. The Auditor-General said the behaviour of the board affects the integrity, ethics, values and other aspects of corporate culture. What sort of integrity, what sorts of ethics and what sorts of values are conveyed to CASA employees by the manner in which Mr Foley conducted himself?The CASA board has been quick to criticise some staff for being too close to the industry they regulate. Dick Smith and Mr Toller used terms like `mateship' and `cronyism' when talking about their own staff at the February estimates committee hearings. I do not have to ask what CASA staff think of the manner in which Mr Foley was appointed to a job worth at least $150,000 a year. I do not have to ask what they think of the role played by Mr Willoughby, Mr Smith and possibly others in the creation and filling of a senior management position with one of their own. I know what they think of it.I now wish to advise the Senate of the actual selection process followed that led to the appointment of Mr Foley. Spencer Stuart advertised these positions in the national press on 1 and 2 May last year. They received 61 applications. Five applicants were short-listed and, according to Mr Toller, three candidates were interviewed. Two were interviewed on or before 24 May—which was a Sunday—and Mr Foley was not interviewed until 1 July. Mr Toller told the committee he interviewed one of the candidates, and possibly both, prior to receiving a report from the recruitment firm. He did not explain why he chose to do the interview prior to getting expert advice from Spencer Stuart. He did say he was asked by Mr Smith to interview one candidate and he did so.Although Mr Toller alone interviewed the three candidates for the Foley position—at his initiative—he did not look at the original list of applicants or even at an intermediate list. He only received the short list of three candidates. He did, however, see an intermediate list for all of the other positions. I think there were at least three other positions being filled at the same time. The selection panel for the other positions consisted of Mr Toller, a board member, Mr Willoughby and Mr Wheatley from Spencer Stuart.Despite the fact that Mr Toller had interviewed two of the three candidates for the Foley job on or about 24 May, it was not until 17 June—three weeks later—that Mr Willoughby provided the board with a list of all candidates for all positions and summaries of the leading contenders. Mr Foley was not included in that mail-out. As I said, Mr Toller interviewed Mr Foley on 1 July. Mr Foley was advised on 1 July—the same day—that he had been successful in his application. That appointment, and Mr Foley's resignation from the CASA board, was announced on 3 July.Despite earlier advice from Mr Toller that there were only three candidates on the short list for the Foley position, there were in fact five. It is not clear who the other short-listed candidates were or why they were not interviewed. There were also two other candidates for the Foley position. Mr Toller thought they were not on the short list of five but Mr Wheatley and Mr Willoughby interviewed them both on the afternoon of 26 June. One was a senior CASA officer from Darwin and the other a senior CASA officer from Adelaide. Both, before they attended the interviews, sought a clear statement that they were being considered for the job. Neither wanted to spend hours in an aircraft—one was flying from Darwin to Canberra—if they were only going to be used to legitimise the interview process.But that is exactly what happened. Both candidates flew in for the interview. One was interviewed at 2.30 p.m. and the other at 3 p.m. and that was it—half-hour interviews. Mr Toller said the headhunter advised that neither candidate was up to the mark. The committee was told these candidates were interviewed as a result of a decision of the CASA board. I asked whether that decision was minuted. I was assisted at the estimates hearings by Mr Elder, an officer of CASA, who told me that he did not think it was. He said that the decision was possibly taken in a closed or private session. He said:It would not always be minuted.Somewhat surprised by that answer, I then asked, `If the board makes a decision, it is a decision, and presumably the board decisions are minuted.' Mr Toller replied:No, not all decisions. The board makes formal decisions and the board makes informal decisions. All resolutions of the board will be minuted, but informal decisions will not necessarily be minuted.I then asked what status informal decisions had. I was told that, if they were board decisions and all board members abided by them, they had the power of the board—whatever that means. Mr Elder said that, as far as board decisions taken outside the formal process are concerned, if the board wished to have a decision minuted for the formal record they would advise him and he would record it.The CASA board has a two-tier system of decision making: a formal decision making process that is minuted, and an informal decision making process that is not minuted. This sits very awkwardly with Mr Barrett's rules. Based on the evidence from both Mr Toller and Mr Elder, minutes from CASA board meetings do not accurately record outcomes from meetings; those minutes only record some decisions. Under such a system, how can the board be properly held accountable for decisions it takes if they are not all recorded? My own recent experience allows me to illustrate this point very simply. On 21 July last year I asked a question on notice—question No. 1248—about Mr Foley's application for, and appointment to, the position of Assistant Director. An answer to that question was never provided to me through the normal channels. I actually received a copy of the answer via a freedom of information request. Clearly, the answer was held back in the minister's office. The answer that was prepared contained an error. The error was detected by CASA and corrected. Mr Elder, then General Manager, Corporate Relations, wrote to Carol Boughton, Assistant Secretary, Aviation Industry Division of the department, on 13 October.The first version of the answer stated the recruitment firm Spencer Stuart had approached Mr Foley on 5 June 1998 and that Mr Foley had agreed to be considered for the position on 7 June. Those dates put the contact between Mr Foley and the recruitment firm one day after he told the board of his intention to apply for the job. Mr Elder advised that the dates should read 5 May and 7 May—a month before the board was advised of his intention. An ungenerous person might conclude that this answer was designed to deceive. A generous person might conclude that CASA's records were inaccurate or incomplete.In the estimates hearings Mr Toller was also forced to correct another error in that answer No. 1248. The answer claimed that Mr Toller and Mr Willoughby conducted interviews for the Foley position. As we know, Mr Toller alone conducted those three interviews. The same ungenerous person might see this as another attempt to mislead and the same generous person might conclude there were further inaccuracies or omissions in CASA records. Mr Elder was also forced to write to the committee to correct an answer about the timing of the board meeting at which Mr Willoughby proposed a process to select candidates. The original date was given as 15 April; the new date was 15 May.On 1 June Mr Toller emailed all staff a memo. The subject was a code of conduct and ethics. In a covering note Mr Toller said:Research has shown that ethical standards of an organisation impact on staff job satisfaction, commitment to the organisation, turnover and levels of stress.He said that management is about leading by example. He might also like to send a copy of his code of conduct to the board.670021:42:006700MacGibbon, Sen DavidSenator MacGIBBONYH4QLDLP10—Before I move to the topic I wish to raise on the adjournment tonight, I would like to thank the Senate for the pleasure and the fellowship it has given me over the years. It has been a very great privilege to serve this chamber and through this chamber to serve the nation. I want to thank sincerely those senators who mentioned me for their words the other night. As we go through life we learn by experience and many views change. One idea that I had when I entered the Senate still remains with me, though, and that is that there are more than enough good men and women in this parliament to form a very able government. The problem is that they are not concentrated in any one party.I would also like to thank all the staff of the parliament for the courtesy and support they have unfailingly shown me over the years—the clerks, the secretariat staff, the attendants and everyone else. Their dedication to this institution is beyond reproach.The subject I want to raise tonight concerns the performance of some officers in the Department of Defence at the recent Senate estimates hearings. Several points need to be addressed, and they are all serious. The first point relates to the way Defence has handled safety measures in relation to the Collins submarine. I raised a question on this in the previous hearings in relation to the V31 valve incident. It must be emphasised that this is a question, not a statement of fact. This valve is a valve which connects the interior, the bilge of the submarine, to the outside ocean. Naturally it is closed when the submarine has dived. For safety reasons, it is controlled by two systems. Beyond a certain depth a depth sensor, or transducer, prevents the valve being opened, and that system cannot be overridden by human control. At a shallow depth it can be overridden by human control. The internal side of the valve is connected to pipes. It is not simply just a hole through the hull, as a somewhat hysterical officer tried to infer at the hearings.My question is very simple: was there ever a fault in the fail-safe mechanism, as has been alleged? The parliament is entitled to an answer to that question, and a clear answer of yes or no has never been given. We hear a lot of bluster from Navy about how stringent their submarine safety procedures are. If that is so, why the difficulty in giving a simple answer to a simple question? While on the subject of safety, can I put on the record another safety question, again not a statement of fact. I ask: was the sub safe system completely bypassed in 1997 when HMAS Collins went to sea and dived with the fore planes inoperable due to a hydraulic fault? Did the Deputy Chief of the Naval Staff have to order Collins to surface and return to harbour? Again the question requires a simple yes or no: did it happen? With only two hydroplanes on the fin and with both locked in the neutral position, if this did happen, it could only be described as a reckless and foolhardy action. Again, if it did occur, how did it get past the sub safe process?I want to make it clear in public that I have no hesitation at all about being concerned for the lives of service personnel. I deplore very much the policy of Navy to attack anyone who raises safety issues on the grounds that it causes needless emotional distress to crews' families. I will not be silenced by such crude methods. Had those of us who knew the operational shortcomings of Army aviation prior to the Black Hawk tragedy been more vigorous in our criticism in public, perhaps that tragedy may never have occurred, and that is a matter that is on my conscience.Finally, let me turn to another act of Defence that was quite unworthy of them. That is the assertion that we cannot have any leading edge technologies, and we cannot therefore have the best military equipment in the world, unless we take high risks, and risks mean that we have the situation we are in with the Collins program at the present time. It is quite wrong to use ambition as a cloak for inadequacies and inefficiencies in management. Yes, we do want the best technology, and we all recognise and accept that there are risks involved in going down that path. There is simply no way of making progress in human affairs without taking risks. What critics object to is that the Defence acquisitions department have no risk management strategy in place. In fact, they do not even recognise that they do not have a policy. When troubles come, they do not take the appropriate action at the time. They pretend it is not occurring and hope it all goes away. When it becomes public, as it always will, they move belatedly into damage control. We have potentially a good submarine in the Collins class submarine. The problems we have with it are real, and they demand real management skills to overcome them.670121:48:006701Carr, Sen KimSenator CARRAW5VICALP00—This afternoon we were discussing a Privileges Committee report concerning complaints from a number of academics who had written to the Privileges Committee concerned about statements that had been made involving Greenwich University. These are the same academics who on Monday, 17 May, wrote to the Prime Minister about some of the remarks that I had made.O15TIERNEYSenator Tierney—Have you prepared an apology?AW5Carr, Sen KimSenator CARR—Two of them suggested that the matter be referred to the United States State Department in Washington so that the matter could be referred to at an intergovernmental level with the Australian government. Senator Tierney asks me if I have prepared an apology. I indicate to Senator Tierney that, given the investigation that is under way as a result of the concerns that have been expressed by me, by vice-chancellors and by state governments, and given the concerns expressed by the Minister for Tertiary Education and Training in the state of Victoria—who said on 6 May that he was very concerned about the lack of rigorous processes of review, compared with those carried out by the states, before recognition was given to Greenwich University by the parliament of Norfolk Island—I would have thought that the only apology that is going to be prepared is one by the Prime Minister to the people of Australia concerning the incompetence and buffoonery of his ministers in allowing this disgraceful episode to go on for as long as it has.I indicated this afternoon that in America there is a view that a thousand flowers ought to bloom in higher education, but in my judgment we might not want some of these to take root in Australia, or we might never want to plant them here in the first place. I have expressed the concern that our university system guards its reputation jealously, for very good cause. It has a reputation built up on the basis of an intellectual tradition of academic rigour built on the well-established empirical, rational and historical intellectual frameworks of science, letters and the arts. While there are important differences between our universities, what holds them together is this common sense of quality assurance and this commitment to rigour.What is established here is a tradition which generalises the reputation for quality, which reaches right across the Australian higher education system. I think this is why we have been so spectacularly successful in developing an education export industry worth over $3 billion a year. On a per capita basis it is probably much greater than that of the United States. Even though here in the antipodes we are latecomers to the international education arena, we nonetheless have streaked ahead as a result of this commitment to quality. What I am concerned about is that prospective students from overseas should know that an Australian degree will be recognised worldwide—that a professional qualification from an Australian university will open doors wherever it is used. It will be held up everywhere that because it is an Australian university degree it is a matter of substance and quality.I suggest that this has now changed, and this is the question that is brought into stark relief by the actions of the Norfolk Island legislature that were directed and approved by the Minister for Regional Services, Territories and Local Government, Senator Ian Macdonald. He has brought an intruder of doubtful provenance into our midst. This one act has the potential to bring down the entire edifice of Australian higher education in terms of its international reputation. It is unfortunate that Australia's lack of a robust standard of accreditation procedures has left us as what can be described as sitting ducks for the interlopers from cyberspace, for these so-called virtual universities. We simply do not have a regulatory framework to deal with this problem. The Internet has managed to elude the many safeguards that currently exist for the rest of the university system.The ACCC has prosecuted the case of another charlatan institution in recent times—that is, the Australasian Institute, which is registered on the Caribbean island of Grenada. The institute has been found guilty of misleading and deceptive conduct. The court has ordered this institution to cease advertising its web based degree and to stop making false claims. It can no longer seek student enrolments.Australia's laws leave us wide open under the present arrangements. Our company law and education regulation measures are woefully inadequate to deal with these contemporary problems. By means of the Trade Practices Act, the Federal Court can take retrospective action, but it cannot stop shonky outfits from setting up in the first place. The government is trying to repair the damage done by the establishment of Greenwich University itself. It is worth while asking how this entity managed to slip through the safety net so easily.O15TIERNEYSenator Tierney—Where's your proof?AW5Carr, Sen KimSenator CARR—It would seem that we have an answer. We heard in the last round of estimates just what that answer is. When speculating on matters such as this we can see that, as is so often the case in politics, this is another example of a stuff-up rather than a conspiracy—a stuff-up of monumental proportions. The territories department and its minister, Senator Ian Macdonald, were misled by unscrupulous operators who played on their ignorance about matters of higher educa tion in general and Internet universities in particular.Greenwich University apparently gave assurances to the Norfolk Island Administrator that it would operate only on Norfolk Island. Only a fool like the Minister for Regional Services, Territories and Local Government would accept such assurances.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Crowley)—Order! I ask you to withdraw that reference to the minister.AW5Carr, Sen KimSenator CARR—I will withdraw whatever you ask me to. At the same time, it has made no secret of the fact that it is a virtual institution to which the national and physical borders of the island and its coastline are absolutely irrelevant. It took our bureaucrats and our worthy ministers for complete mugs. That is how we have allowed an institution which has already been hounded out of America and New Zealand to set up as a duly legislated Australian university.We have been told that these matters were handled at the junior officer level within the department. How could such an important matter be dealt with at a junior officer level within the Department of Education, Training and Youth Affairs? When the department of territories wrote to the department of education and asked about the processes for the approval of an external studies university, one would presume that the minister would have thought that something was wrong when he got assurances that the university would operate only on Norfolk Island. However, none of these problems seemed to occur to this minister.Australia is now being treated as a happy hunting ground for unscrupulous operators. Our legislative framework is crumbling under the encroachment. Island havens, offshore operations, sneaky company structures and so on are all part of their arsenal. Greenwich University has operated as a trojan horse to breach Fortress Australia. The rest of the mob of corporate spivs and Dodgy Brothers are all claiming to run universities and they have been allowed to enter through this process. Reputations are important, and apparently some of those involved in Greenwich University feel that their reputations have been besmirched. They have written to the Prime Minister about my concerns.O15TIERNEYSenator Tierney—They have, and they have written to the Privileges Committee about you.AW5Carr, Sen KimSenator CARR—They have threatened to create an international incident of the whole affair. I wish them well. There are reputations, and there are others who have reputations. Some unsuspecting academics, whose qualifications and credentials are beyond approach, have got themselves mixed up with this untrustworthy lot. I hope these persons, should they exist, can extract themselves from their embarrassment.O15TIERNEYSenator Tierney—You're the one who should be embarrassed!AW5Carr, Sen KimSenator CARR—The details of these individuals have been provided to the Senate and are all on the web site, as is the prospectus of Greenwich University itself. These simple research tools are available to any senator and they ought to have been available to the departments within this government.Senator Tierney interjecting—AW5Carr, Sen KimSenator CARR—We have been able to establish accreditation by an Indian tribe. We have seen courses in do-it-yourself space travel and degrees from universities with names like New Utopia. Does that sound far fetched? This is the pattern which is emerging with regard to this university. I say to Senator Tierney and all those who wish to defend these sorts of shonky outfits: if you make your bed, you have got to lie in it.O15TIERNEYSenator Tierney—You're the only shonky one, mate.AW5Carr, Sen KimSenator CARR—I look forward to seeing Senator Tierney come in here and apologise when his own government's inquiry demonstrates that this university has not been able to measure up to the standards of the Australian Vice-Chancellors Committee and to the time when his own minister has to acknowledge the incompetence of his colleague Senator Ian Macdonald. A lot more is at stake here than just reputations. The welfare of students is at stake. When you weigh up the issues, the sensitivities of a few individuals are of relatively minor significance in the general scheme of things.I expect to receive criticism, but I intend to pursue this question and I seek to clean up this mess. It is not about the small niceties of a few Americans who are claiming that the particular institutions in which they have worked are above reproach. We know about American universities: some of them are very good; others are nothing more than Weet Bix packet operations. The university on Norfolk Island is one of those X-Files operations. I think it is appropriate that it be identified as such.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—I call Senator Bartlett.O15TIERNEYSenator Tierney—Madam Acting Deputy President, on a point of order: Senator Bartlett is not on the list.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Senator Bartlett is speaking in lieu of Senator Stott Despoja. I should have called Senator Bartlett prior to this, based on his explanation to me, so I am calling him now.670321:58:006703Bartlett, Sen AndrewSenator BARTLETTDT6QLDAD00—I wish to put on the record the reasons why I was unable to support the package of taxation legislation which passed through this chamber earlier today—without reflecting on the vote of the Senate, of course—as I did not have the opportunity to do so during the debate on that package of bills. My opposition was not about whether or not I have a philosophical objection to a GST. I have always willingly supported the platform which the Democrats took to the last election and the position and recommendations that the party put forward in its Senate committee report on that package of bills.My basic concern is that the final legislation still risks making our tax system more regressive than it currently is, despite the significant improvements which have been made to it by the Australian Democrats. Changing the structure of our tax system so that it relies more heavily on indirect taxes makes it more difficult to ensure just outcomes. I recognise that some of my colleagues genuinely believe differently on this matter, and I note the very significant improvements in both fairness and environmental outcomes which have been negotiated by people within the parliamentary wing of the Australian Democrats.This package passed regardless of my vote of course but I do take my responsibilities as an individual member of parliament and as a Democrat very seriously. I cannot vote for something that I am fundamentally opposed to and it is obviously up to the voters of Queensland and to Democrat members to pass judgment on my actions on this issue. I am appreciative of the repeated statements from my parliamentary colleagues and from the Democrat membership respecting and supporting my right to vote in accordance with my beliefs on this matter. I had certainly consulted widely with Democrat members and supporters, particularly in Queensland, prior to reaching this decision. I do urge all members of the Democrats to recognise that the party's core principles have not changed and to recognise that the Democrats still represent the strongest vehicle in Australian politics to achieve significant social, economic and environmental advancement.Voting separately from my parliamentary leader is not something that I do lightly, nor something that I expect to do often. Despite the views expressed by some political commentators, I do not believe the taxation agreements should be seen as signalling an ideological shift by the Australian Democrats. Every change that the Democrats forced to the original tax package was driven by concern for greater social equity or environmental protection. This demonstrates very clearly that the Democrats have used and will continue to use our balance of power role to pursue the party's core aims as strongly as ever.As a Queenslander I had some specific concerns about the employment impacts of the GST, especially on the tourism industry, a major employer in my own state. I was also concerned about the potential loss of extra revenue in the clearly identified revenue stream which would have been provided to local government in Queensland. I recognise and understand the concerns that many people have about the large increase which will be provided in subsidies for fossil fuel usage. However, I would urge environmentalists to examine the package as a whole and to consider just how significant some of the changes which the Democrats have forced will be. The significance of the long-term improvements which the Democrats have gained in the environmental area should not be underestimated, and I urge all people to look at the detailed analysis that has been provided by all different sources.The Democrats have forced the coalition government to take environmental concerns seriously and have made environmental issues a central component of the national political agenda for the first time in many years. This is a significant achievement, one which, as the party's environment spokesperson, I look forward to building on in coming months. Any government—and indeed any party—which takes environmental issues seriously and seeks to achieve constructive and positive moves forward is more likely to receive the Democrats' support.I have already expressed my concern about the potential impact of the GST on non-profit organisations. As I am sure all senators would acknowledge, the non-profit sector plays an invaluable role in the community both socially and economically and it is already considerably underresourced. I know work is ongoing to minimise and eliminate the potential threat to that sector. I know all of my party colleagues will be focused on ensuring that outcome and I will certainly be working along with them to achieve that goal. I have also expressed concerns in this chamber about the potential impact of the tax changes on housing costs, an area I have had some involvement in over many years and again one that I will certainly continue to monitor.I have spent most of the last nine or more years of my life holding a variety of senior positions within the Democrats, encouraging the party to be more pragmatic. I have never been someone who believes the party should only support initiatives that represent 100 per cent of party policies and should refuse to support anything that does not go the whole way. I am happy to support anything that moves, in even a small way overall, towards achieving Democrat policy and principles. I urge all those who do have concerns with what the Democrat parliamentary party has negotiated with the government to recognise that those in the party who are able to support the package do so because of a genuine belief that it is best for Australia and it meets the basic aims and direction of Democrat policy and principles.In my first speech to the Senate, I spoke at length about the central and crucial role which the members of the Australian Democrats play in sustaining and building the party and the broader social movement which it represents. Perhaps more than any other party the Democrats rely on member input and involvement and celebrate that. As I said in that first speech, few us from any party in this chamber and certainly none of us in the Democrats would be here in parliament without the `selfless dedication and commitment of countless people who contribute so much of their own time, money and energy simply because they believe in the ideals and policies of the party'.It is no secret that some members of the Democrats are unhappy with the taxation legislation. People holding different views is not unusual in any sizeable organisation and the Democrats have always recognised and promoted the importance of diversity. I make a special plea to those members who are concerned to recognise this fact and to stay with the party. Our core principles remain and only by those members' continued involvement will we be able to ensure that the goals, objectives and principles of the party are retained. As I said in this chamber last week, if one were to follow the rationale of Senator Bob Brown and resign from a party every time one disagreed with a decision, one would soon end up—like him—in a party of one.The Democrats have always believed in accommodating and encouraging a diversity of views within the framework of our overall principles. Those core principles have not changed and we need all our members to stay on board and to increase their involvement to ensure that they do not change. The party is now moving into a position of greater power and we need even more involvement and support from our members to ensure we exercise that power responsibly and effectively. Now is the time for even greater member input to take advantage of the extra power and responsibilities which the Democrats hold. I call on all members not to drop out but to pitch in even further.In the brief amount of time left, I would like to mention briefly—and pay tribute to—a Queensland member, a typical example of the people I mentioned previously who gave so much of their own time and energy because they believed in the party—a person called Steve Hunter, who tragically died a week ago. Steve was the Secretary of the Democrats' Logan Branch, just south of Brisbane, for a number of years. Steve put a great deal of effort into keeping that branch going through a low ebb in that branch's history, certainly ensuring that the branch was able to go on to stronger things since. I pass on my commiserations to his family and I say thank you to Steve for all he contributed to the party.I would also like to wish well all those senators who are retiring from this place in a couple of days time. Although I have not had a great deal to do with Senator Sandy Macdonald and Senator Synon, I certainly wish them well. Four senators from Queensland are moving on—a significant proportion of my state's representation will be changing over in a few days time. Senator MacGibbon, who spoke before, is well recognised for his contribution over many years in the areas of defence and foreign affairs in particular. Senator Reynolds is widely respected amongst many Democrat supporters for her strong stance on, particularly, indigenous issues, environment issues and women's issues, among others. I wish Senator Colston well. He is certainly someone who contributed a lot in the area of procedure within the Senate and in some of those less well-known committees such as the Regulations and Ordinances Committee which still play an important role. Senator O'Chee is someone whom I have also had experience with in the Regulations and Ordinances Committee and I got a clearer insight into the importance of that committee. Whilst I do not necessarily agree with a lot he says, I certainly feel that the way he says things is a helluva lot better than I will ever manage. He is one of the better public speakers I have seen. Finally, farewell to Senator Margetts. These days it is probably not as great a comfort to a Green party person to get a tribute from the Democrats as it might have been a few weeks ago, but I do acknowledge the very considerable contribution she has made. I have great respect for the quality and the integrity of her work, and she is certainly an example I will look to into the future. I wish her well in her future endeavours.670622:08:006706Tierney, Sen JohnSenator TIERNEYO15NSWLP10—I rise tonight with the second speech relating to Greenwich University. It is a great pity that in this Senate we have now reached a very low point in its history in terms of the denigration of people and institutions that have very little chance to redress this on the public record. I speak particularly of Senator Carr's criticisms of the institution of Greenwich University, its staff and its courses. Through four speeches in this chamber plus on one occasion—AW5CARRSenator Carr—Six, and five questions.O15Tierney, Sen JohnSenator TIERNEY—Six speeches, five questions and four hours in one estimates committee. Senator Carr, you have chalked up and wasted the time of this chamber on a totally useless pursuit in which you have denigrated people's good names. You have put on the public record the besmirching of an institution which does have, as I will prove yet again tonight, on a second occasion, quite a good reputation overseas with the students who are graduates—to whom I will refer to in a minute—with associated staff of the university, and with those who have been subject to the work of that university.Tonight I want to focus in particular on Senator Carr's comments on curriculum. His speech more recently related to the staff, and I did respond to that. The staff have written to me, greatly dismayed that their names have been dragged through the mud in this place and have been besmirched. That is causing them great trauma and problems in their own lives, and they have written to me about that. I also commend them for taking matters into their own hands by writing to the Privileges Committee of this Senate and have referred Senator Carr to the Privileges Committee. The Privileges Committee today directed that the letters which these people have used to defend their own reputations be incorporated in the Hansard record, something which I did try to do during the last speech but was denied by Senator Carr. I was going to try to incorporate them tonight, but that has already been done by the Privileges Committee, and I thank the committee for that.Tonight I want to focus on the curriculum of Greenwich, something that Senator Carr, through his various questions speeches and comments in estimates, has chosen to denigrate. Senator Carr, what do you think of these courses, and do you think they have an appropriate place in a university: comparative approaches to mysticism, history of tourism and travel, Confuscian politics in a rocky mountain world, sex and scandal, post-colonialism, gender and sexuality, and—one that is right up your alley, Senator Carr—socialist law?I ask Senator Carr: in the proper role of universities, are these proper academic studies? I wonder what your response is. Is this the curriculum of Greenwich University I am reading out? No. What I am reading from is the curriculum of the University of Sydney—a university with a top reputation in this country. I am not denigrating the University of Sydney; I am trying to prove to you that you cannot judge the academic rigour of a course by its title. That is exactly what Senator Carr has sought to do on a number of occasions in this Senate—he has taken the title and poked fun at it. The reason is that he does not understand the leading edges of knowledge, particularly the leading edges of interdisciplinary knowledge, in modern academic study.Rather than my making a statement here in judgment of the programs of the university, I think we should hear from the people involved. From Ian Mackechnie, we have this comment on the debate in the Senate on Greenwich University:Congratulations to Senator Tierney for his outspoken response to Senator Carr's continuous lies and falsehoods peddled under the privilege of parliament.As both a graduate of Greenwich and one who has been closely attached to the university, its staff and its faculty over many years, I can assure Senator Tierney, Carr, Kemp, the Prime Minister and anyone else who is willing to listen to the facts that Greenwich has a reputation, credibility and standards that would exceed most Australian universities. And I can say that through personal experience, having studied through several Australian universities.A comment from a student:As a September 1998 Ph.D. graduate of Greenwich, I am compelled to offer the following as it relates to my educational experience as a Greenwich student:First, I am a retired U.S. Navy Captain and, for the last 8 years have been involved in the education of adult learners . . .He says that he has degrees from three universities in the United States and enrolled in the PhD course at Greenwich University. He continues:. . . I did a considerable amount of research before deciding to enrol in a non-traditional degree awarding institution. Since my workday is routinely a 10-12 hour one, with a considerable amount of travel required, coupled with the fact that . . . I had 3 children at home under the age of 16, it was impractical for me to pursue a Ph.D. in a traditional institution. My research involved review of Greenwich's program by several respected educators. Each of these individuals stated that short of a residency requirement, the university met the standard for most doctoral degree requirements. In addition to the favourable comments of these individuals, the credentials of Greenwich University adjunct faculty particularly impressed me.. . . . . . . . .All three courses in my dissertation were completed in my own time in 18 months. The writing of my dissertation took an additional 27 months. Two additional readers reviewed my dissertation and, although not then a course requirement, I conducted an oral defence of my dissertation with Dr MacDonald.. . . . . . . . .In summary, my Greenwich University experience was academically challenging and intellectually rewarding. Through its flexible self-paced program, I can say without reservation it was academically more rigorous than the programs I experienced at the Naval War College, Regina University and Old Dominion University. Finally, I would like to turn to comments that I think sum up Senator Carr's appalling ignorance of the academic world and how you judge standards. I will allow his words to deliver the coup de grace on this matter. This is from Dr Claudine Jeanrenaud. He is well-read in the field of depth psychology. Do you know what that is, Senator Carr? I doubt it. Senator Carr has advertised his ignorance of this field of psychology. That psychology is based on the work of Carl Jung. Do you know who Carl Jung is, Senator Carr? He is the famous Swiss psychologist, second only in the world to Freud. He writes on 5 April:Next time he, Senator Carr, plans to endeavour in the smashing of an entire body of academic studies, he better do his homework first, for surely he didn't intend to demonstrate his ignorance to the whole world.670722:17:006707Gibbs, Sen BrendaSenator GIBBS6L6QLDALP00—I rise tonight to speak on the issue of racial discrimination. All senators in this place are aware of racial discrimination. We have read about it in the newspapers or have heard about some form of discrimination based on the colour of a person's skin, the language they speak or their country of origin. But how many of us have ever experienced it first-hand? How many of us have ever personally known somebody who has been a victim of racism? I am sure most senators have. I would like to share with the Senate tonight an experience I had recently which upset me greatly.A friend of mine who, by the way, has white skin—not that it matters at all; of course, it should never matter—and speaks English as her first language became aware that the differential treatment she had received for the past few years in her workplace was actually racially driven. It was based purely on her country of origin and the way she spoke. Throughout the years of her employment, she always gave 150 per cent effort in whatever she did, because that is the kind of person she is, but she was very rarely ever given the recognition her work deserved.She was always denied access to any pay rises, even though she knew that many of her colleagues had received pay increases on a regular basis. When she finally asked for a pay increase, she was told, `You were not worth what you were getting when you started, but you are now; so forget it.' Even with four years experience behind her, she was still getting the same rate of pay as a new starter and, even two years further down the track, she remained on that same level. Even though this was always a puzzle to her, she got on with the job because she loved what she did so passionately. Ironically, she worked in a job that was for the benefit of others.The simple fact of the matter was that the person at the top of the organisation had a problem with her accent and the confidence that women from her country of origin portrayed. Recently all was revealed by one of her colleagues at her farewell function, where she was told that the problem between her and the boss had always been that he could never get over the way she spoke and that he regarded the women from her country of origin to be all the same—to his way of thinking, aggressive and forceful. This simple statement cut right to the core of her very soul, as the truth of the matter began to sink in. Looking back over the years at the barriers and obstacles she had had to deal with on a constant basis with this job, the true realisation that she had been the victim of racial discrimination was almost too much to bear.Then the final blow came when she confided in another of her colleagues as to what had been said and discovered that it was common knowledge amongst the workplace but that no-one would dare say anything to her because they did not want to hurt her feelings. For many years she had been the brunt of jokes from many of her coworkers about the way she pronounced certain words, but had just laughed along with everyone else in the hope that, if she did not react, it would soon stop, all the while secretly wishing they would stop and had even attempted to alter the way she spoke. But even through all of this, she never suspected that this could be racially driven or that her so-called friends and coworkers could be aware of what was happening and actively partake in such demeaning behaviour.As we sat there having a quiet drink she told me what had happened. I could visibly see the pain it caused her, as the tears began to well in her eyes—it had all become too real. I was horrified to think that someone I knew had been the victim of such disgusting behaviour. She was being discriminated against not only on the basis of how she spoke but also because she happened to come from a country where the women are taught to be confident in their own abilities.It brings to light the ugly realisation of how deeply entrenched racial discrimination has become with regard to some people's behaviour in today's society. I think the worst part of all this is that these people are all good people and probably do not even realise what they have done. I am quite sure that, if you asked many of them, they would claim they were not racist. We pride ourselves in this country on the fact that we live in a multicultural society, and we like to think that we are civilised and tolerant of all newcomers to Australia, who come here because they want a better way of life. Indeed, I myself am a migrant, as most senators would know, and I believe that I have had a better life and far more opportunities in Australia than I would have had in the country of my birth. I very much doubt that, if I had stayed in the country of my birth, I would today have been in the House of Lords. I am damn sure I would not be.This is a disturbing story. I do not believe the majority of Australians are racist or intolerant, even with the rise of the One Nation Party, which I believe did attract as their followers many of the rednecks in our society. Let's face it, in all societies there is this redneck element. I would hope that this is an isolated incident. If we encounter this sort of disgraceful behaviour I think it is up to all of us, in any job or from any walk of life, to point out to the perpetrator the hurt he or she is causing because of his or her personal bias. Probably this sort of person should not have been in a position of authority. Surely an employee should be judged on the merit of their work, not on their accent.Senators, I ask you to consider this: if a person who looks the same and speaks the same language as any average Australian can become a victim of racism, what must it be like for a person who has a different skin colour or differently shaped eyes or who has difficulty with the English language? What must that person have to put up with? What my friend encountered was discrimination not only towards her nationality but also against her gender. There is no place for this in a civilised society. Thank goodness it is not widespread, otherwise many of us in this chamber today would not be in the positions of employment that we currently enjoy.670922:25:006709Ferguson, Sen AlanSenator FERGUSONEP5SALP10—I rarely speak during the adjournment debate; I think it is almost three years since I have done so. I come to this adjournment tonight only because I think there are a couple of important things that need to be said, particularly in relation to the fact that a number of the government's reform agenda items have been pushed past 30 June because of the intensity of the legislation presented to the parliament in this first session.I want to talk particularly about superannuation and the choice of funds in superannuation. Superannuation fund choice is an important public reform agenda item. Contrary to the views of some parties that would wish the issue to go away, it is still on the agenda. It is important that those who make legislation in Australia not be distracted by those who are in the business of protecting their own patch. It is always more instructive in these matters to look to what dispassionate players have to say about issues.Let us take, for example, the Wallis inquiry into our financial system. Wallis was given the task of reporting on how our financial system could be better regulated and more able to achieve economies and cost savings. It reported that the cost to the users of the financial services industry is about $41 billion, or a little under 10 per cent of GDP. They presented to the government a package of reforms that will ultimately have the impact of driving down the cost of savings and investment in Australia. Wallis has made far-reaching recommendations, many of which have already been the subject of legislation that has passed through this Senate.Superannuation fund choice was one of the areas pursued by Wallis. The inquiry found that, in relation to superannuation consumers, over half were in funds where members were unlikely to have been offered full choice. In fact, Wallis was advised by the then ISC that about 24 per cent of fund members have no choice of fund at all. This position is surely at odds with other services and goods that are chosen every day by consumers—for example, banking and home loans. Individuals can go to a bank, a building society, a credit union or a mortgage originator and choose a service that suits their needs. The choice of home mortgage funds is one of the reasons behind the dramatic reductions in housing interest rates.If a mortgage provider is charging interest rates that are above the market rates, the consumer can switch to another mortgage provider. In superannuation the position for the consumer is dramatically different. If, for example, the superannuation consumer is experiencing rates of return that are poor under the current regime, they like it or lump it. There are certain players in the superannuation industry who continue to mouth paternalistically that consumers are not ready to choose where their retirement savings should be directed. Is it that they want to continue their monopolistic control of the complexities of superannuation? Or is it that they are just protecting existing commercial interests?If their logic were consistent, they would be saying that individuals on the receiving end of employment benefits amounting to hundreds of thousands of dollars should be denied the right to choose an annuity or a rollover vehicle. Could you imagine the outcry if this were government policy? The opponents of choice have not taken and do not take this stand, because the prudential and disclosure controls that we have are sound and have not given rise to market failure. These controls are almost identical to those which would be applicable if fund choice were to proceed. So it is rather refreshing to read and take note of the more independent observers and what they might have to say about choice. In its 88th recommendation the Wallis inquiry said:Employees should be provided with choice of fund, subject to any constraints about administrative costs and fund liquidity. Where superannuation benefits vest in a member, that member should have the right to transfer the amounts to any complying fund. Where a member chooses to exercise that right, payments should be transferred to the chosen fund as soon as practicable, subject to controls necessary to maintain orderly management for the benefit of all fund members.Transfer costs, including those incurred as a result of regulatory requirements, should be transparent and reasonable.However, Wallis is now two years old, and we still do not have any semblance of choice in our superannuation fund arrangements. As I said at the beginning, the opponents of choice would no doubt want the issue to die, but it will not if the consumer movement has its way.Could I advise the Senate that earlier this month the Consumer Policy Research Centre released its `Keys to Superannuation Choice' discussion paper. What did it say about fund choice and whether superannuation should continue to be paternalistically dispensed or whether there should be mandatory investment choice prior to moving down a fund choice route, and what proactive mechanisms would be needed if the choice route were followed? Time does not permit me to go into the report in detail, but I will advise that this group of consumers sends a clear and unequivocal message, and that is this: the centre supports the concept of superannuation fund choice. It has said at page 50 of its document:The Centre believes that the development of a legislative regime for superannuation choice must proceed in a staged manner subject to the resolution of the major issues affecting its introduction such as education, disclosure, consumer protection, alternative dispute resolution mechanisms and life insurance. However, the Centre also believes that these tasks must be undertaken quickly, as superannuation choice is already beginning to take place in the market.Interestingly, the centre has been reported as saying that the argument about investment choice and fund choice is irrelevant. It says that we should have both, and soon. We on the government side of the chamber look forward to working with consumers and others in achieving an optimal choice outcome. We hope that senators sitting on the non-government benches will move soon to review their positions and not leave themselves open to a charge that they are ignoring the needs and wishes of consumers.There have been a number of letters to the papers in recent times, letters which go to the heart of the choice of super funds, and in fact there was one letter which I would like to table, if the Manager of Opposition Business will allow me, after I have shown it to him—if I could get his attention, which I cannot. This letter talks about the choice of super fund benefits to consumers and comments about a letter about superannuation choice which is misguided, and about a choice of fund regime that is linked to a consumer package, such as the Corporate Law Economic Reform Program, having the potential to greatly enhance consumer rights. I would like to table the details of that letter.I can only stress to the Senate that in fact the issue of choice of super fund is one that will be dealt with in, hopefully, the latter part of the year. It is of interest to consumers. As I said earlier in my speech, we have a situation where people are allowed to choose whether they go to a bank or a building society or any number of other organisations to get a house loan or to fund something else in that regard but where, when it comes to the choice of super funds, a vast number of people in Australia who are in superannuation funds have no choice and no right to choose any fund of their own for their investment. I hope that the Senate will see the sense of the recommendations of the Wallis inquiry and that the issue of superannuation fund choice is one that will be dealt with positively before the end of the year.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Bartlett)—Are you seeking leave to table that document?EP5Ferguson, Sen AlanSenator FERGUSON—I seek leave to table the document.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—There being no objection, and it being agree able to the Democrats' Acting Deputy Whip as well, leave is granted.671122:34:006711Stott Despoja, Sen NatashaSenator STOTT DESPOJA3I6SAAD00—Tonight Four Corners on the ABC ran a program on the Australian Democrats. One of the areas they chose to highlight was the so-called tensions within the party. Due to speculation in the media and a potential leadership petition, I wish to put on record my position. This leadership spill is not about whether I challenge or become leader, nor about my position as deputy. It is not about my behaviour or my perspective on the GST—although, of course, I recognise that the leadership spill was interpreted by the national president, as is his right, to include my position as deputy.Nevertheless, in relation to speculation about a leadership challenge, I adhere to my recent statements. Two weeks ago, I said I would not challenge our leader, Senator Meg Lees, and I am sticking to that position—even allowing for extraordinary events, such as those that have occurred in the past week and, of course, for a degree of pressure and support. My reasons for not standing include the fact that I meant what I said two weeks ago—those reasons remain the same—and also because I do not wish current tensions within the party to be exacerbated further.I also recognise that minimising tension is a two-way street. It means that the members have to respect the rights and decisions of the members of parliament, the senators; but, on the other hand, we also have to respect the will and the decisions of our members. That is a fundamental philosophy and value to which the Democrats adhere. I also recognise that we cannot afford as legislators, as members of our party room, to dismiss the concerns or the dissent among our members—or, indeed, to dismiss any suggestion that there is discomfort among the membership. My decision to not stand for the leadership is not about my not being ready or about a lack of support. It is because it is inappropriate, and I think it may lead to further party unrest.What is true is that I differ from my party in relation to its decision on the GST package. Today, indeed, I exercised my right as a Democrat senator, a right that is part of our constitution, to exercise my vote according to conscience, as you did, Mr Acting Deputy President Bartlett. I will continue to work hard as Deputy Leader of this party, with a solid commitment to its principles—principles of accountability, democracy, social justice and ecological sustainability. I will also encourage our members to work for the good of the party, to work together in order to bring about the progressive policies that we stand for. I do not dismiss the concerns that have been aired, the frustrations to which attention has been drawn.I echo the sentiments tonight of my colleague Senator Bartlett in relation to his plea to the membership. I know that some of our members—perhaps many of our members—will be disappointed by today's vote on the GST, but the answer is not to leave the party or to spill the leadership positions; it is to work hard, to commit ourselves to the party, the processes and the policy work, and to influence the party by remaining involved, by participating in the process. As Senator Bartlett has said on record tonight, the decision today does not have to represent an ideological shift in our party. All senators, all the party room, remain committed to and united in our pursuit of social justice, ecological sustainability and democracy.Of course, there has always been debate and discussion in our party about the role of the party and the parliamentary wings of the Australian Democrats. Tonight's Four Corners program did highlight the fact that some of our members are frustrated on this occasion by the actions of the parliamentary wing and they have chosen to exercise their right to complain through one of the mechanisms available to them, which is a ballot on the tax agreement. My message tonight is for our members: you determine our policy and you ensure that the party room is guided by the party's principles. I believe we are a true grassroots party, a participatory and democratic party. These are values we all cherish. We will listen to our members and act on their concerns, but they must stay involved. This is what makes the Australian Democrats differentI have watched tonight—indeed, over the last couple of weeks—with amazement as the media have grappled with this notion of direct participation and with the notion of a conscience vote. Clearly, many observers have a lot to learn about how the Democrats work, what sets us apart from the old parties. Hopefully, the media, other commentators and the legislators will learn quickly about the ways of our party, a party that has always prized conscience and direct participation in processes and policy.As you well know, Mr Acting Deputy President, it is not easy to vote differently from your colleagues. So I thank the many branches, members and divisions that have sent messages or motions of support. I also acknowledge the positive comments for the work that my leader, Senator Meg Lees, has done in negotiating improvements to the package. I hope that this process is not going to destabilise our party, but that we will emerge from this healthy debate stronger and as always the real alternative to the old parties in this place.671222:40:006712Abetz, Sen EricSenator ABETZN26TasLP10—That sounded more like a policy speech to me than anything else. It is interesting just to reflect that the party that tries to say that the other parties are old parties is in fact now 22 years old. So it has been around for a couple of decades. I think the term `old parties' is now being used because the Democrats cannot bring themselves to say `major parties'—like the major parties that have major support.The purpose of my rising tonight was to invite Senator Carr to consider the way that Senator Gibbs conducted herself tonight in the adjournment debate. I have to say to you that Senator Gibbs's speech was very good. I think it did credit to her and to the Senate. That is in stark contradistinction to Senator Carr's contribution, which is a continuation of his unprincipled and unsustained attack on Greenwich University.Over the months now, we have had to listen in this place to these unprincipled and unsustained attacks. Senator Tierney, to his great credit, has done a welter of research on this and has completely exposed Senator Carr's lack of intellectual integrity and indeed the bankruptness of his arguments in relation to the allegations he has been making against Greenwich University. Indeed, one of the things that Senator Carr has been accusing Greenwich University of in recent times is that they had people of no real academic repute. I think that has been absolutely and utterly laid to rest. A Privileges Committee—dominated, as I understand it, by the Labor Party and chaired by Labor senator Robert Ray—has agreed that certain statements, for want of a better term, of self-defence by people from Greenwich University ought to be incorporated into Hansard. These are statements, as I understand it, that—AW5CARRSenator Carr—Expose them for what they are.N26Abetz, Sen EricSenator ABETZ—I suggest that, after the adjournment debate, Senator Carr ought to take himself to Labor senator Ray's rooms and just ask him why it was that Senator Ray and the Labor Party members on the Privileges Committee considered themselves constrained to suggest in their report that the statements from seven people from Greenwich University be incorporated in Hansard to set the record straight in relation to the heinous allegations made by Senator Carr.AW5CARRSenator Carr—That is just drivel, and you know it. It is their right of reply, that is all.N26Abetz, Sen EricSenator ABETZ—It is their right of reply, Senator Carr, and I am very pleased that that is now on the record, because the Privileges Committee, as I understand the rules, only considers that a right of reply ought to be given in very special circumstances. It would not give it to just anybody.AW5CARRSenator Carr—Nonsense! What a complete lot of nonsense.EU4O'CHEESenator O'Chee—Mr Acting Deputy President, I raise a point of order. I did not think it was possible for a senator to make two adjournment contributions in the one evening. Failing that, it is quite clearly disorderly for Senator Carr to continue carrying on in the way he is doing. I beg you, Mr Acting Deputy President, so that we can conduct the debate in some decorum, to ask him to come to order.UNKNOWNThe ACTING DEPUTY PRESIDENT (Senator Bartlett)The ACTING DEPUTY PRESIDENT (Senator Bartlett)—I ask Senator Carr to cease interjecting.N26Abetz, Sen EricSenator ABETZ—I think those few people who would still be listening at this late hour and those who might read the Hansard would not be aware of the volume of Senator Carr's interjections. It has been one of those tactics that we have become used to with Senator Carr. When there is a deficit in his reasoning, he becomes a lot more voluminous to try to make a point. He becomes a lot more repetitious in the hope that that deficit of reasoning will somehow be overcome by volume and repetition. The senator ought to take the tip that it will not work. Senator Tierney, through very reasoned debate and considered contributions to this chamber, has now exposed Senator Carr's contribution as being intellectually lacking in rigour—and in fact some people would say `bankrupt'. Other words spring to mind which may well be unparliamentary, so I will not use them.In relation to the allegation of mickey mouse courses being available at Greenwich University, it seems very strange for a leading figure of the socialist left to make such allegations. I remember that about 20 years ago when I was at university, even at my home university, the intellectually bankrupt of the Left would run courses on campus that some of us would describe as mickey mouse courses. Senator Tierney has assisted us in reading out a list of courses that are, or were, available at Sydney University. Confucian politics in a rocky modern world may well take the cake—or indeed comparative approaches to mysticism, or Senator Carr's favourite socialist law. I think there are only one or two regimes left in the world that would describe themselves as socialist and that would be Cuba and North Korea. That is the modernity, I suppose, that Senator Carr brings to intellectual rigour.AW5CARRSenator Carr—You believe Malcolm Fraser was a socialist, don't you? Do you still hold that view about Malcolm Fraser?N26Abetz, Sen EricSenator ABETZ—I do not know what you are alleging that I have ever said about Malcolm Fraser, other than that I think he was a great Prime Minister. I do happen to know what a former Labor premier said about Senator Carr. He did not say it only once; he said it many a time. Senator Carr take the tip: it was not too flattering. When the Labor Party was in government, it gave postgraduate grants of over $25,000 to two people—one to do a thesis on tourism in fascist Italy and another to do medieval witchcraft. That is the basis on which the Australian Labor Party, through Senator Carr, comes to this debate. I note that that gem that was contributed to this debate was provided to me by one Senator Bill O'Chee, whom we will sorely miss.AW5CARRSenator Carr—It will be his last effort.N26Abetz, Sen EricSenator ABETZ—It may well be his last effort, but let me simply say to the Senate and therefore to Senator Carr, because unfortunately he is part of the Senate, that Senator O'Chee's contributions during his period in the Senate will always outdo Senator Carr's contribution no matter how many decades Senator Carr remains in this place.It is with a tinge of sadness that I again note Senator O'Chee's departure from this place as of 30 June. I suppose that is the great contradistinction between Senator O'Chee and Senator Carr, in as much as Senator O'Chee has been a man of principle. We on this side would argue that he was the victim of One Nation in his own state of Queensland. However, he took a very principled stance against One Nation, for which I happen to take my hat off to him. If Senator Carr was not so busy not thinking and had listened to the contribution by Senator Gibbs, he would feel, like so many other senators, that Senator O'Chee's departure from this place is a matter to be greatly regretted.In this game of politics, from time to time very genuine individuals make allegations or assertions that, on further reflection or further analysis, cannot be sustained. Then the onus is on those senators to come into this place and correct the record. Unfortunately, what we have seen from the Labor Party time and again are unsubstantiated allegations. When they have been exposed as being completely without foundation, like the allegations against the Baillieu family when certain people supposedly involved in this intrigue had been dead for 30 and 50 years and were unable to have performed this activity—unless, of course, you believe in the Labor Party's view of medieval witchcraft—the Labor Party should have apologised, but they never did. The challenge to Senator Carr is to apologise. (Time expired)22:51:006714Senate adjourned at 10.51 p.m.Documents67146714The following documents were tabled by the Clerk:Australian Meat and Live-stock Industry Act—Australian Meat and Live-stock Industry (High Quality Beef Export to the European Union) Amendment Order 1999 (No. 1).Australian Prudential Regulation Authority Act—Australian Prudential Regulation Authority (Commonwealth Costs) Determination 1999.Authorised Deposit-taking Institutions Supervisory Levy Imposition Act—Authorised Deposit-taking Institutions Supervisory Levy Imposition Determination 1999.Authorised Non-operating Holding Companies Supervisory Levy Imposition Act—Authorised Non-operating Holding Companies Supervisory Levy Imposition Determination 1999.Christmas Island Act—List of applied Western Australian Acts for the period—21 March to 30 September 1998.1 October 1998 to 19 March 1999.Civil Aviation Act—Civil Aviation Regulations—Civil Aviation Orders—Instrument Nos CASA 295/99 and CASA 297/99.Cocos (Keeling) Islands Act—List of applied Western Australian Acts for the period—21 March to 30 September 1998.1 October 1998 to 19 March 1999.Defence Act—Defence Force Remuneration Tribunal—Determinations Nos 6-8 of 1999.Determinations under section 58B—Defence Determinations 1999/23 and 1999/24.Export Control Act—Export Control (Fees) Amendment Orders 1999 (No. 2). Financial Management and Accountability Act—Financial Management and Accountability Orders (Amendment) 1999.General Insurance Supervisory Levy Imposition Act—General Insurance Supervisory Levy Imposition Determination 1999.Health Insurance Act—Accredited Pathology Laboratories (Approval) Principles 1999 (No. 1).Life Insurance Supervisory Levy Imposition Act—Life Insurance Supervisory Levy Imposition Determination 1999.Migration Act—Direction under section 499—Direction—Visa Refusal and Cancellation under section 501—No. 17.National Health Act—Determination under Schedule 1—IHS6/1999.Navigation Act—Marine orders—Orders Nos 13 and 14 of 1999.Public Service Act—Locally Engaged Staff Determinations 1999/16 and 1999/17.Public Service Determination 1999/3.Retirement Savings Account Providers Supervisory Levy Imposition Act—Retirement Savings Account Providers Supervisory Levy Imposition Determination 1999.Safety, Rehabilitation and Compensation Act—Notices of Declaration—Notices Nos 5-7 of 1999.Superannuation Act 1976—Superannuation (CSS) Additional Employer Component Payment (Telstra Superannuation Scheme) Determination No. 1.Superannuation Supervisory Levy Imposition Act—Superannuation Supervisory Levy Imposition Determination 1999.Telecommunications Act—Telecommunications (Due Date for Annual Carrier Licence Charge) Determination No. 1 of 1999.Telecommunications (Late Payment of Annual Carrier Licence Charge) Determination No. 1 of 1999.Telecommunications (Carrier Licence Charges) Act—Determinations under paragraph—15(1)(b) No. 1 of 1999.15(1)(e) No. 1 of 1999.Telecommunications (Annual Carrier Licence Charge) Determination No. 1 of 1999.Veterans' Entitlements Act—Instrument varying the Treatment Principles under section 90—Instrument 1999 No. 1 (Treat ment Principles (Time Limit for Health Provider Payment Claims) Variation 1999 (No. 1)).Instruments under section 196B—Instruments Nos 42-59.