1999-09-293914SENATE909101999-09-29The PRESIDENT(Senator the Hon. Margaret Reid) took the chair at 9.30 a.m., and read prayers.Bills9091r8889091Debate resumed from 28 September, on motion by Senator Ellison:That this bill be now read a second time.09:31:009091Conroy, Sen StephenSenator CONROY3L6VICALP00—I will take up and complete my contribution from yesterday to this debate. The second issue that Labor senators requested be fixed before passage of this bill was that some workers are being paid SG contributions on a low base, well below the surcharge threshold of $70,000, but are paying the surcharge because of allowances and overtime.The AWU gave evidence to the committee of mineworkers at Pasminco sites around Australia suffering from this inequitable situation. It is not possible for the Senate to amend the SG legislation to fix this issue, hence the need to move a second reading amendment to urge the government to take action to correct this injustice, which my colleague Senator Sherry will do shortly. I hope the government will take up the Senate's invitation to fix this unjust and inequitable situation.Labor supports the majority of the measures contained in this bill. They are sensible changes to a Keystone Cops tax which will go some way towards making it more manageable than it has been to date. However, Senator Kemp must have been watching the Keystone Cops when he considered the retrospective amendment which requires funds to recalculate their surcharge tax liabilities when they have already done so under the legislation that Senator Kemp described as sound.YW4MACDONALDSenator Ian Macdonald—Did you really write this?3L6Conroy, Sen StephenSenator CONROY—If I were wearing that shirt, tie and suit combo, Senator Macdonald, I would just get back in my box. Despite repeatedly trying, Senator Kemp cannot have it both ways. The legislation is either sound or it is broken and needs to be fixed. Labor will be opposing the move to make this bill retrospective.Finally, Labor will be moving a second reading amendment to urge the government to take action to ensure that workers around Australia are treated justly and equitably when it comes to the surcharge tax and the superannuation guarantee. Either these workers are paid SG on the amount of salary and wages they really earn, or their overtime and other penalty allowances earned as a result of a 12-hour shift are not included for surcharge tax purposes. It is the fair thing to do.09:33:009091Allison, Sen LynSenator ALLISON1M6VICAD00—It is somewhat annoying that the Senate has to deal with this bill, which seeks to reduce the compliance costs of the superannuation surcharge tax. It addresses many of the issues that the Senate superannuation committee addressed prior to the surcharge laws taking effect in May 1997, issues which the government chose to ignore at that time. If the government had taken on board the advice of the committee—advice which was unanimous across unions, employers, ASFA and industry representatives appearing before the committee—it could have avoided the problems that this bill has to deal with by implementing a better, lower cost surcharge collection mechanism.Need I say yet again that the Democrats support the principle of the surcharge. We believe it was unfair that high income earners received a tax break of 17 cents in the dollar on super contributions, while low income earners received only five cents in the dollar. The surcharge did not fix the issue, but at least it reduced the subsidies to high income earners by around $500 million a year. As such, it was a fine principle; it was just a very bad practice.It was quite clear in 1997 that the government would dump the tax if its flawed collection mechanism was not accepted. So we reluctantly supported it, seeking assurances from the government that it would respond to legitimate concerns raised by the industry. In November 1997 the first batch of amendments came to the Senate to fix problems with the original law. We raised 15 issues sought by industry to fix other anomalies, but failed to win government support for them. In this bill nearly two years later, the government concedes that the issues that we raised, the committee raised and the opposition raised were appropriate and that the compliance costs of the surcharge need to be reduced. The wheels of decision making in Senator Kemp's office turn very slowly, it seems, but at least the message is finally getting through.The most significant issue in this bill is the removal of the advance payment system for the surcharge. This was first proposed by industry back in May 1997. Two years later the argument has finally been conceded. The bill also provides for a self-assessment regime for certain superannuation providers and clarifies the definition and calculation of surchargeable contributions. Concern has been raised that some of the amendments will apply retrospectively, arguably, the government says, to ensure equity between defined benefit and accumulation schemes. The retrospectivity concerns are centred on provisions to calculate the notional surcharge contributions factor for the last three financial years according to a ruling, rather than the previous method of following actuarial practice. This would require funds to even recalculate the surcharge for members who may have already left the fund. The government argues that trustees still have the option of having their actuarial practice approved by the ATO. However, trustees will need to show that their methodology is more appropriate than the methodology in ruling SCR97/1. The Institute of Actuaries has advised that the majority of funds would already comply with this ruling, the exceptions likely to be those funds who filed nil returns because they have been on contribution holidays.Nevertheless, the provisions will add to clarity and certainty in dealing with this law. The Democrats will not be moving amendments to this bill in the committee stage. We acknowledge that the government has con sulted with industry on the development of the bill. If that had happened with the original surcharge bill and more with the amending bills, many of the administrative problems could have been avoided. But this government continues to consult too much without listening. I find the provisions of this bill with regard to the retrospective operation unsatisfactory, yet they may be the best means of dealing with a significant problem.The opposition is also to move a second reading amendment dealing with the issues of different bases for the calculation of superannuation guarantee payments and superannuation surcharges. The point that they raise is worth exploring. The Democrats will be supporting the second reading amendment asking the government to investigate how such a situation could come about whereby workers can be paid superannuation based on a lesser definition of salary, yet be charged surcharge based on a larger definition of salary.WW4KEMPSenator Kemp—This is your favourite topic, Nick; get into it.09:38:009092Sherry, Sen NickSenator SHERRYZW4TASALP00—I have got lots of favourite topics, and this is one of them. We are dealing with the third set of amendments to the so-called superannuation surcharge, more appropriately known as a tax. It is worth reminding the Senate yet again that this government gave a commitment to the Australian people prior to the election in 1996 that there would be no increase in taxes, no new taxes, and no increase in existing taxes. Subsequent to the election of the Liberal-National Party government, we had in their first budget a so-called surcharge which applied supposedly to high income earners, implementing a new tax—up to 15 per cent additional tax—with respect to superannuation.It is interesting to contrast the rhetoric with which the government surrounds its justification for this new tax. The government's arguments go that it is a fair tax because it applies to higher income earners—a new tax of up to 15 per cent—and that it will not adversely affect retirement savings, hence investment, hence employment. Of course, we look at those arguments in comparison to the government's justification at the moment for reducing company tax and capital gains tax. The government argues the total reverse—that they are reducing taxes in those two areas in order to encourage investment, encourage savings and encourage employment.So, on the one hand, when the government first took office, it broke its promise to the Australian people not to increase existing taxes and said that it was a fair tax and that it would not adversely affect investment, that it would not adversely affect saving. On the other hand, the government is now saying that the reduction in those two other taxes will be good for investment, good for saving and good for employment. I am just making the point that the government has a different argument with respect to particular taxes—and it is a contradictory argument.As has been pointed out by Senator Conroy, and by Senator Allison from the Democrats, this is the third set of changes that we are making to the so-called surcharge tax. This legislation has been dealt with in some detail in the Economics Legislation Committee hearings. It is not that the government was not forewarned about the particular problems—many problems—with the superannuation tax. It was not just I who warned the government about the particular problems when this tax was first mooted. If we go back through not just the newspaper clippings but the various correspondence some two years ago from accountants, actuaries, economists and lawyers with respect to the administration, the collection mechanism, of this tax, you cannot find anyone who supported the administration and the collection mechanism of this tax. It is extremely cumbersome. It has failed to collect the revenues that were predicted, and it has been very expensive to collect those revenues. Yet the government claimed that the original bill that was presented to the parliament was sound. Here we are, more than two years later, dealing with the third set of amendments to try to correct the problems that the government was forewarned of at the time.It is interesting that Senator Kemp, the Assistant Treasurer, in evidence to the committee hearings a couple of weeks ago, said, `We still feel the original bill was sound.' If the original bill was still sound, why are we debating this in the Senate today? Why are we debating yet the third set of amendments to this legislation?WW4KEMPSenator Kemp—That is a telling point, Nick!ZW4Sherry, Sen NickSenator SHERRY—Senator Kemp, you continue to maintain that the original legislation was sound. Why do we continue to get successions of amendments to this legislation? I think that is a very important point to make. Part of the impact of this legislation is to reimburse the so-called advance instalment. The advance instalment involved the collection of $120 million in revenue. That is a major change of policy by any government. I would like to know from Senator Kemp the policy reason for the government not collecting the advance instalment. Where it has collected the advance instalment, it is being refunded, where it can be refunded. It is $120 million; it is a substantial amount of revenue. The government cannot have it both ways. Senator Kemp argues that the original bill was sound, the policy still stands, yet we have got a very substantial departure from the original policy—the abandonment of the advance instalment.The second aspect of this legislation concerns what I think is a favourite phrase of Senator Kemp and certainly of the government—`technical amendments'. But of course technical amendments can often have profound impacts and influence, particularly with respect to this legislation and particularly with respect to tax legislation. The technical amendments to this bill relate to the notional surchargeable contribution factors in respect of defined benefit funds.I do not want to blind people with jargon in respect of superannuation, but there are two types of superannuation funds—defined benefit funds and accumulation funds. Most Australians are in accumulation funds—in other words, the money that goes in plus the interest is the money they receive; it accumulates over time and they receive it at their appropriate retirement age. There are a significant number of defined benefit funds which, regardless of the contributions that go in, if indeed any go in, define the level of benefit you would receive when you retire—defined benefit funds. Of course there have been significant problems—and the government was forewarned about this—about how you tax a benefit when you do not know what the benefit will be for possibly 20 or 30 years. That is a very important issue. It does affect a significant number of defined benefit funds in this country. The way in which the so-called surcharge applies to those funds is quite critical.The government is trying to beef up the definition of the notional surcharge contribution factor by applying—and we will deal with this in more detail in the committee stage—a SCR 97/1. This application of SCR 97/1 is supposed to clarify the particular problems for defined benefit funds. I make this point: the government is attempting to clarify this particular issue, a very important issue, retrospectively. The government says, on the one hand, there are no problems with the original legislation but, on the other hand, it is applying this clarification back to the original date of the application of the so-called surcharge. It is doing this for one reason: the government faces court challenges to the application of the surcharge or tax to defined benefit funds. Some defined benefit funds, not knowing how the surcharge or tax is to apply, have indicated they will be taking court action. This was discussed again at the committee hearings.I will just make a couple of points about SCR 97/1, which is supposedly going to make it clearer how the superannuation tax applies to defined benefit funds. The government is giving SCR 97/1 effectively the status of a law of the Commonwealth. Why the government did not do that in the first place some years ago is a question we would all like answered, Senator Kemp. So SCR 97/1 is being given effective status of law. I just make this point: if that is the case—and that is the case, that is what the government is attempting to do—why is it necessary for the Australian Government Actuary to issue a seven-page clarification about the meaning of SCR 97/1? What is the status of the clarification from the Australian Government Actua ry? If this legislation is passed, does this clear up once and for all the particular problems for working out notional surcharge contribution factors?The fact that a clarification is being issued by the Australian Government Actuary provides clear evidence that there are inherent difficulties with SCR 97/1. Why is the Government Actuary issuing a seven-page clarification? Is it appropriate to use SCR 97/1 when the government is attempting to collect tax revenue? This highlights the difficulties of coming up with a satisfactory definition of a notional surcharge contribution factor. If the superannuation tax is to be retained, if that is indeed desirable because of the administrative uncertainties and the particular problems surrounding this tax, do we gain any greater certainty by including SCR 97/1 as the basis for tax calculation, particularly when it is having to be clarified by the Australian Government Actuary? I think we may be coming back to deal with this issue again at some future time.The other issue I want to touch on in respect of my contribution on the second reading concerns yet another problem that has arisen as a result of the new superannuation tax. The superannuation tax is based on almost all assessable income—that includes overtime and a range of other forms of income. That, at first glance, might seem reasonable. However, one of the difficulties with the new tax is that superannuation contributions in this country are not based on total assessable income; they are based on ordinary time earnings. In respect of the superannuation guarantee, ordinary time earnings for the purposes of superannuation payments by employers in respect of their employees do not include such incomes as overtime, various types of fringe benefits and certainly some other allowances. So we have two different calculation bases: one for the purposes of superannuation guarantee and one for the purposes of this particular tax that we are dealing with in this legislation.This difficulty was highlighted by the Australian Workers Union in evidence they gave to the committee. They had a group of members in the mining industry who, in terms of all-up income, were earning more than $72,000 in total. They received, under the government's legislation, their assessment notices for their superannuation tax. That seems reasonable on the face of it, but these particular workers were none too happy because they were receiving superannuation contributions based on an income far, far less than the then minimum $72,000 for the purposes of this tax.In the case of these particular workers, there are groups of workers around Australia who entered into workplace agreements prior to the advent of the superannuation guarantee and who have their superannuation contribution levels based on a fixed figure which is considerably less than their average income and considerably less than their taxable income. I had the opportunity to meet and discuss this situation with this group of workers in Tasmania. To say that they were angry is an understatement.Government senators interjecting—ZW4Sherry, Sen NickSenator SHERRY—I did not have to stir them up, Senator Kemp. They were very, very angry about this situation because they were paying a tax on their correct income but were not getting the superannuation contributions. Effectively, their superannuation contributions were, in this case, about a third of their total income. This is an appalling situation. You pay a tax, but you do not get the superannuation contributions. The difficulties that these workers face is that the employer, in this case Pasminco, will not agree—without the employers' consent you cannot get agreement—to change the workplace agreements to ensure that their superannuation guarantee contributions are at least based on their ordinary time earnings. That is a very important issue which goes to our second reading amendment. They are some of the concerns that Labor has with this legislation.I also point out that in the committee hearings we continued to hear from representatives of very reputable companies about the costs of collection of this new tax. The government did not want to call it a tax. They called it a surcharge because they did not want to be seen to be breaking their promise to the Australian people about not increasing existing taxes or introducing new taxes. So they called it a surcharge. They have tried to hide the collection of the superannuation tax as much as possible but, in so doing, they have placed an administrative burden on superannuation funds who are required to do the paperwork and the extensive calculations. Mr Noel Davis of Clayton Utz said that in the first year of operation it cost $270 million to collect $340 million of additional tax revenue.It is interesting to note that this was this government's first foray into tax reform. We hear ad nauseam arguments from this government about the need to simplify the tax system and reduce tax legislation. The tax bills are getting longer and longer and more complicated. Yet here we have the government's tax—their so-called surcharge—which cost $270 million to collect $340 million in revenue. I might say that that $340 million fell short by $160 million. It was supposed to collect close to half a billion dollars. I know Senator Kemp is fond of talking about the wholesale sales tax. There is no better example of an extraordinarily costly tax—$270 million to collect a $340 million tax. There is no better example of an extremely costly tax due to the inefficient administration of the so-called surcharge.As I said earlier, this is the third set of amendments to the Liberal Party's new tax. We do not see any evidence of tax legislation getting any simpler. In fact, it is the reverse. It is getting more and more complex. I challenge Senator Kemp yet again, if he still maintains, as he did in the committee hearings, that the original bill was sound, to say why we are dealing with the third set of amendments. If everything is so hunky-dory and this is a great tax, why are we wasting the time of the Senate dealing with yet another set of amendments?WW4KEMPSenator Kemp—That's a schoolboy debating point.ZW4Sherry, Sen NickSenator SHERRY—It is a very important debating point. It is not schoolboy debating points when we are talking about this government's claims of so-called efficiency of the tax system when in fact the tax system is getting more complicated and the legislation is getting longer and more complex. I move:At the end of the motion, add:"but the Senate:(a) notes evidence given on the bill to the Economics Legislation Committee that certain workers in the mining and minerals processing industries are liable to pay superannuation surcharge because their adjusted taxable income exceeds the threshold, yet are only entitled to Superannuation Guarantee contributions calculated on a base rate of pay which is significantly lower than their adjusted taxable income; and(b) urges the Government to initiate urgent legislative action to address this unfair anomaly".09:58:009096Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I now respond to the points that have been raised in the speeches at the second reading stage. By way of introduction, I note and acknowledge the huge interest that Senator Sherry has in the superannuation surcharge. Certainly, he has more interest than Senator Conroy. I have to say that Senator Conroy, as will be revealed in my second reading speech, has made one of the biggest blunders I have seen in this chamber. I am sure that Senator Sherry would be interested to hear what that blunder is, as one of Senator Conroy's rivals.Senator Sherry touched on the history of the surcharge. I think it is useful to look at the history of the surcharge. The Labor Party supported the surcharge in the original bill in the other place. Senator Sherry managed to persuade the Labor Party to oppose the surcharge in this chamber. So we had an immediate backflip between the two houses. Then, as time moved on, the Labor Party decided it would support the surcharge. So we had another backflip. Since then, the comments that have come out of the Labor Party have been excessively confusing. Let me take one of the points that the Labor Party constantly goes on about.If I can summarise it, I think the Labor Party's current position is that it supports the surcharge, but it is worried about the collection mechanism. I point out to the Senate, to Kelvin Thomson, to Senator Conroy and to Senator Sherry that the Labor Party has had about three years to work out some alternative way of collecting the surcharge. Senator Sherry will correct me if I am wrong, but he was originally going to move in this chamber some amendments about the way the surcharge was to be collected. In the end, Senator Sherry decided, for very good reasons, not to go down that road, so that brief flurry to try to change the collection device was abandoned. Of course, we have had only about three years for the Labor Party to come up with an alternative. It is true that there are people like Noel Davis in the industry who spend huge amounts of time on the surcharge and probably do quite well out of it. It is not that Senator Sherry would be lacking help or advice on this but, despite the Labor Party's relentless complaints about the surcharge, it has never been able to come up with any alternative.The explanations could be twofold. One is that the government got it right—and I think that is the correct explanation. Another explanation is that the Labor Party is just too lazy to do the hard work. I think there is plenty of evidence in other areas of the lack of focus the Beazley Labor Party has on public policy issues. It is quite pointless for the Labor Party to go on and on about the collection and then refuse—after three years and with all the advice available to it—to come up with an alternative.Senator Conroy reminded this chamber once that Senator Sherry spends about 96 per cent of his waking hours thinking about the surcharge. Senator Sherry, why not sit down, do some work and, if you want to relentlessly get up and complain, think of some alternative? But that is not the case. Senator Sherry, in trying to lead the Labor Party to oppose the surcharge, made some astonishing statements that there would be a lack of confidence in superannuation. In fact, I remember that famous quote from Senator Sherry. He was discussing superannuation with his hairdresser. Johann, Stefan or whatever his name was indicated to Senator Sherry that—ZW4SHERRYSenator Sherry—Barry.WW4Kemp, Sen RodSenator KEMP—Thank you for telling me that, Senator Sherry. Barry then advised Senator Sherry that he lacked confidence in the surcharge, so Senator Sherry came back into the chamber and said he was going to oppose the bill. Senator Sherry, you have to widen your net of advice and recognise that the advice you gave the Labor Party that particular time was dead wrong. In fact, superannuation, as we all know, has continued to be one of Australia's fastest growing industries, as it should be. This attempt by Senator Sherry, and a whole range of other arguments that Senator Sherry put against the surcharge, fell over.The government does not support the second reading amendment moved by the Labor Party. As I said, one of the effects of the amendments to be moved by the Labor Party in the committee stage will be that contributions of high income members of defined benefit funds, including every politician in Australia, will not be surchargeable for the 1997, 1998 and 1999 financial years, effectively giving these people a retrospective pay rise for each of those years. That is the effect of what the Labor Party will be moving today. It is an astonishing thing, because we have been seeking Labor Party amendments. I think my office was misadvised that the Labor Party amendments had been faxed through to our office for us to look at—of course they had not been—and now when we look closely at the amendments, which were thrown on the table overnight, we see what their true effect is.As I said in the debate yesterday, Senator Conroy was doing a Nick Sherry—in other words, trying to defeat the surcharge. This is in essence exactly what these particular amendments do. They are the most appallingly drafted amendments. The explanation for the amendments that was given by Senator Conroy and touched on by Senator Sherry was extremely misleading to this chamber. I am sure that we can go through them in detail in the committee stage. Let no-one forget that the effect of these amendments is to get politicians out of paying the surcharge for the last three years. That is what Kelvin Thomson and Senator Conroy have done. In other words, they are proceeding exactly down the Nick Sherry road.The bill that is before us contains amendments that the government has decided to undertake after very extensive consultation with the industry.Senator Quirke interjecting—WW4Kemp, Sen RodSenator KEMP—Don't blame me. Your people drafted the amendments. Mr Kelvin Thomson drafted these amendments. They were presumably properly explained to your party room, but they were certainly not properly explained to this chamber. I think the Labor Party—Senator Quirke interjecting—WW4Kemp, Sen RodSenator KEMP—Senator Quirke, I know you probably feel offended because Mr Kelvin Thomson and Senator Conroy have put you into a very difficult position with these amendments. Believe me, I will not be allowing the Labor Party to forget this. I will constantly remind you of this particular effort. After all the nonsense we have had in this chamber in question time and all the rest of it and how much the Labor Party has reversed its position on the surcharge, it produces these particular amendments. It is an absolute disgrace.We have consulted very extensively with the industry in the preparation of this bill, including bodies like the Association of Superannuation Funds of Australia, the Investment and Financial Services Association, the Australian Institute of Superannuation Trustees, the Australian Society of Certified Practising Accountants, the Australian Taxpayers Association, the Institute of Actuaries of Australia and so on. All the feedback I have received on these consultations says that they were very successful.The legislation before the Senate has benefited considerably from the many suggestions received from industry players. In particular, suggestions from the private sector on how the legislation could be made clearer have been taken on board. In short, the suggestions raised in the consultations about how the law could be made clearer or more effective were taken on board by the government. As I have often said in this chamber, we are a consultative government. Senator Sherry asks, `Why are you bringing this bill before this chamber?' We are bringing this bill before the chamber because we are a government that goes out and listens to people. We are a government that goes out and talks to people and, if we can sensibly respond to those consultations, we do. We make no apology for doing that.Senator Watson interjecting—WW4Kemp, Sen RodSenator KEMP—Senator Watson, unlike Senator Sherry, takes an exceedingly constructive role in relation to superannuation. Senator Watson is always interested in how the legislation governing superannuation can be improved. Senator Watson, unlike Senator Sherry, gets down, does the work and consults. The feedback from the industry on this bill—and this was at least acknowledged by the Labor Party—has been very positive. The suggestions raised in the consultations about how the law could be made clearer or more effective were taken on board by the government where we could.As a result of these consultative processes, the Superannuation Contributions and Termination Payments Taxes Legislation Amendment Bill 1999 was introduced into the parliament on 30 June 1999. The bill was referred to the Senate Economics Legislation Committee, which reported on 15 September 1999—the same date that the ATO was advised by Arthur Robinson and Hedderwicks that they had been requested to commence proceedings as soon as possible on behalf of Rio Tinto. The government are concerned and disappointed that this action has been instituted in view of the very extensive consultations that we had with the industry and the types of assurances that were given to us as a result of those consultations. Some put forward the argument that the law needed to be clarified in certain areas. From the government's point of view, the legislation was sound; however, if it assisted the industry to make some amendments, then those amendments were made. That is precisely what the government did.However, the government have always been of the view that the legislation is sound. The amendments before the Senate make the law even clearer. The ATO has advised the government that the Australian Government Solicitor agrees the legislation is sound. I am advised that the ATO would not accept the contributions holiday argument, for example, as a basis for reporting nil contributions. The government are moving these amendments because the industry wants us to do so.Let me now turn to the Labor Party amendments that change the commencement date. Senator Conroy's proposals—or are they Kelvin Thomson's; who knows—UNKNOWNThe ACTING DEPUTY PRESIDENT (Senator Knowles)The ACTING DEPUTY PRESIDENT (Senator Knowles)—Senator Kemp, could you please refer to Mr Thomson as either Mr Thomson or the member for Wills.WW4Kemp, Sen RodSenator KEMP—I thought I was referring to Mr Thomson as Mr Thomson or the member for Wills. I am not sure who is taking responsibility for these amendments, but someone had better take responsibility, because they are the most ill-conceived, illogical, unworkable and poorly drafted amendments that we have seen proposed to come before this chamber. They would create more uncertainty and confusion because they have not been formulated in the context of the legislation as a whole. The effect of Senator Conroy's proposals—or are they Mr Kelvin Thomson's proposals—is that the contributions of high income earning members of defined benefit funds will not be subject to the surcharge for the financial years 1997, 1998 and 1999.Let me repeat: the amendment proposals drafted under the guise of removing perceived retrospective aspects of the bill ensure that the superannuation contributions of high income earning members of defined benefit funds—including every politician in Australia—are not surchargeable for the financial years 1997, 1998 and 1999. This effectively gives all these people, including politicians, a retrospective pay rise for each of those years. That is why I said that Senator Conroy has done a Nick Sherry. Nick Sherry wanted to defeat the surcharge.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Please refer to Senator Sherry as Senator Sherry.WW4Kemp, Sen RodSenator KEMP—Senator Conroy is heading down exactly the same road that Senator Sherry attempted to encourage the Labor Party to head down. Senator Conroy's—or are they Mr Kelvin Thomson's—amendments would introduce great inequity into the surcharge. The proposals mean that the superannuation contributions of high income earning members of accumulation funds would be surchargeable from 20 August 1996 while the contributions of their peers in defined benefit funds would become surchargeable from only the 1999-2000 financial year. This is clearly inequitable, particularly for all those high income earning funds members who have been subject to the surcharge. This is the advice that I have received from the Taxation Office after a careful analysis of these amendments which were produced at the last moment before this bill came before the chamber.The government is introducing the bill to provide certainty and clarity for trustees and to ensure that all high income earning members of superannuation schemes are treated the same for surchargeable purposes. The amendments proposed by the Labor Party would create more confusion and ensure that high income earning members of defined benefit funds get an advantage, and politicians are typically in defined benefit funds. This is what the Labor Party's amendments will do. This is the road that the Mr Kelvin Thomsons, the Senator Conroys and the Senator Sherrys are leading the Labor Party down.How the Labor Party could get themselves into such a mess over this bill completely eludes me. As always, the government were happy to consult with the Labor Party, but we got the amendments at the last possible moment—probably in the hope that they could be flicked through before people could appreciate the full impact of these amendments. Fortunately for us, the debate ended last night, and officers from the Taxation Office were able to closely analyse the full consequences of this particular set of amendments.So we will be opposing these proposed amendments for all the reasons I have indicated. I am appalled that these amendments are proposed to come before this chamber. As I said, they are incredibly poorly drafted and they are unworkable. I am perfectly aware that there are people in the community who are opposed to the surcharge bill. I think it would be far better if the Labor Party consulted more widely, recognised that the surcharge is an equity measure, threw away this approach that was started off by Senator Sherry on the surcharge and worked with the government, as other parties are doing. Where the industry has particular concerns about the surcharge, the government will address those concerns—if they can be addressed. So we are certainly opposing the amendments that will be moved by the Labor Party.In conclusion, the measures in this bill will improve the operation and overall efficiency of the superannuation surcharge. They will also significantly reduce the compliance costs on superannuation funds and provide greater certainty. We will be opposing the second reading amendment which has been proposed.Senator Sherry interjecting—WW4Kemp, Sen RodSenator KEMP—I am not aware that anybody else wishes to divide. I am aware that the second reading amendment is being supported by the Democrats, so I presume that the motion will be decided on the voices. In relation to the second reading amendment, the superannuation guarantee legislation requires employers to make compulsory contributions to a superannuation fund for their eligible employees at a certain level, calculated on the employees' earnings base. These contributions are generally based on the award earnings base for award employees. The earnings base for employees not covered under award arrangements would be the superannuation guarantee default earnings base. This is the ordinary time earnings as defined under the superannuation guarantee legislation.The government does not see a need to change the existing arrangements, which a Labor government put in place. The surcharge applies in a proper manner to high income earners and the existing superannuation tax concessions for high income earners, such as those mentioned by the opposition, are more favourable than those applying to lower and middle income owners, reflecting the different marginal rates of income. The surcharge means that superannuation tax concessions enjoyed by such workers are more comparable with those enjoyed by workers on lower incomes.We urge the Senate to pass the bill. The government will be moving a number of amendments of a technical variety in the committee stage and we urge that the bill, as amended by the government, be passed.Amendment agreed to.Original question, as amended, resolved in the affirmative.Bill read a second time.9100The bill.10:18:009100Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—by leave—I move government amendments (1) to (5) together:(1) Schedule 1, item 3, page 6 (line 14), omit "by an eligible actuary".(2) Schedule 1, item 3, page 6 (line 31), omit "takes into account contributions", substitute "excludes contributions made by the member".(3) Schedule 1, item 3, page 7 (line 7), omit "by an eligible actuary".(4) Schedule 1, item 3, page 7 (line 9), omit "takes into account contributions", substitute "excludes contributions made by the member".(5) Schedule 1, item 3, page 7 (line 15), omit "takes into account contributions", substitute "excludes contributions made by the member".I also table the supplementary explanatory memorandum. These amendments remove the requirement for an eligible actuary to work out the actuarial value of the benefits accrued to, and the value of the administration expenses and risk benefits provided in respect of, a member of a defined benefit superannuation scheme. Using the formula set out in the bill or the method set out in the regulations, these amendments also remove any doubt that the method approved by the Commissioner of Taxation for working out the actuarial value of the benefits accrued to, and the value of the administrative expenses and risk benefits provided in respect of, a member of a defined benefits superannuation scheme excludes personal undeducted contributions.10:19:009100Sherry, Sen NickSenator SHERRYZW4TASALP00—When were these amendments circulated around the chamber?10:19:009100Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I have received advice that it was mid-afternoon yesterday.10:20:009100Sherry, Sen NickSenator SHERRYZW4TASALP00—I thank the minister for that clarification. I might make some reference to Senator Kemp's diatribe in his speech in the second reading debate alleging that Labor circulated its amendments late and that there was some sort of subterfuge. Labor circulated its amendments—and we will go on to those amendments a little later—at the same time as the government circulated its amendments; that is, yesterday afternoon. So Senator Kemp's allegation that there was some subterfuge or lateness about Labor's amendments should be compared with the time when the government circulated its own amendments—that is, yesterday afternoon. That is the point I would make about the timing of the circulation of the government amendments.Just so that no-one takes in some of the nonsense that Senator Kemp contributed in his speech in the second reading debate about the circulation of amendments, I would emphasise that it is common practice in the Senate to circulate amendments right up until and in fact during debate on bills. That is a common practice, as Senator Kemp well knows. So I just make the point again: Labor's amendments, which we will get to shortly, were circulated yesterday afternoon—that is normal practice—and they were circulated at a similar time to the government's amendments. With respect to Labor's amendments, their circulation and the time, there was no holding back and no subterfuge. If you accept Senator Kemp's argument about the timing, why were Senator Kemp's amendments, on behalf of the government—with all its support, bureaucracy and advice—circulated yesterday afternoon? Why didn't we get them 2½ years ago, Senator Kemp? I will turn now to the government's amendments. The government's amendments are technical in nature and result from consultation with experts from the Institute of Actuaries and William M. Mercer. So the Labor Party, being a responsible opposition, will not be opposing them. But amendments Nos 1 and 2 apply to clauses that Labor wants to excise out of the bill because they are retrospective. Again, the government is moving amendments to its own retrospective amendments. Amendments Nos 3, 4 and 5 apply prospectively and are appropriate for that reason. I have a further question for Senator Kemp: shouldn't these same amendments be moved to schedule 2 of the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997?10:23:009101Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—The advice I have received is that yes, they should apply. I regret to report that Senator Sherry again has put his foot in it and again has possibly been poorly advised. He got up and purported to make the point that the technical amendments that the government moved, which everybody wants, were circulated at the same time as the Labor Party's amendments. Let me put on the record the advice I have just received: the government's amendments were circulated at 1.45 p.m. yesterday and the Labor Party amendments were circulated at 6.15 p.m. yesterday.ZW4SHERRYSenator Sherry—So what?WW4Kemp, Sen RodSenator KEMP—It is a very significant difference in the timing. The Hansard will be interesting reading. `They were circulated at the same time,' says Senator Sherry. `At the same time' is very broadly defined. As I said, the technical amendments that we moved—which everybody supports—were circulated at 1.45 p.m. and the Labor Party's amendments, which are hugely complex with a number of unintended or intended consequences, were circulated after 6 p.m. We just put that on the record. Again, Senator Sherry, you have put your foot in it.10:24:009101Sherry, Sen NickSenator SHERRYZW4TASALP00—In terms of circulation time, we made our points. As Senator Kemp, Senator Allison and people familiar with the operation of this chamber would know, the way in which the circulation of amendments was carried out is part of the normal circulation of amendments in this chamber.WW4KEMPSenator Kemp—It was late.ZW4Sherry, Sen NickSenator SHERRY—This is an important issue. I did ask you, Senator Kemp, and you seem to be acknowledging, that the government should be moving amendments to schedule 2 of the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997. It seems to us that the provisions in that act are essentially a mirror of the provisions in the Superannuation Contributions Tax (Assessment and Collection) Act 1997. If you are changing the main act then the supplementary act should require the same change. Your amendments do not reflect that.WW4KEMPSenator Kemp—I am advised that we will also be moving amendments to that schedule. The ATO has recognised that there is a difficulty there. We will be moving them.ZW4Sherry, Sen NickSenator SHERRY—So the Labor opposition is right: your circulated amendments are incorrect.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Knowles)—Senator Sherry, could you please direct your remarks to the chair.ZW4Sherry, Sen NickSenator SHERRY—Through you, Madam—10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—To the chair, not through the chair.ZW4Sherry, Sen NickSenator SHERRY—To you, Madam Temporary Chairman: Senator Kemp has just acknowledged that the Labor opposition is right. Thank you, Senator Kemp. The Labor opposition is right. All your advisers, all your tax office—10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Could you please address your comments to the chair.ZW4Sherry, Sen NickSenator SHERRY—To you, Madam Temporary Chairman: with all the government's advice, the tax office advice and all the experts, 2½ years down the track Senator Kemp has just acknowledged that the amendments that have been circulated are incorrect. Is Senator Kemp now moving an amendment to his amendments that he has circulated to correct this particular problem that the Labor opposition has identified?10:27:009102Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Senator, this may surprise you. When someone identifies a problem, and we will have plenty of problems which will be identified in the amendments which are coming up, Senator—10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Senator Kemp, could I ask you to please address your comments to the chair.WW4Kemp, Sen RodSenator KEMP—Thank you, Madam Temporary Chairman. It is not surprising that if an issue is raised—an issue that the ATO became aware of very recently—this government will fix it up. So what is the big deal? We will fix it up. That is what this government is about.10:28:009102Sherry, Sen NickSenator SHERRYZW4TASALP00—To you, Madam Temporary Chairman: Senator Kemp has just indicated a problem with the government's amendments that the Labor Party has picked up, and he has had it acknowledged by his advisers. Is Senator Kemp proposing to move an amendment to the amendments that we have before the chair?WW4KEMPSenator Kemp—Yes, we will be moving equivalent changes. My understanding is that they are being prepared now.ZW4Sherry, Sen NickSenator SHERRY—To you, Madam Temporary Chairman: when are the government going to move these amendments? Do they want time to adjourn the debate and correct their amendments to pick up this important issue? The Labor opposition are happy to give some time to them. We are now going to go to a vote on these amendments—the Labor opposition supporting them—and apparently there needs to be a change to them.10:29:009102Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—There is no point in tirelessly repeating this: the fact is we are going to change it. We are proposing to make this change. I think, in order to expedite the debate, we should defer the debate on this particular section and move on to the Labor amendments.10:29:009102Sherry, Sen NickSenator SHERRYZW4TASALP00—To you, Madam Temporary Chair: the government is indicating we should not now deal with the government amendments; is that what Senator Kemp is suggesting?10:29:009102Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I am saying that some changes are required of a technical nature to cover the points which we have covered in the debate so far. It seems to me that the sensible way to move forward is to defer the debate on this particular set of amendments and move on to the Labor Party amendments.ZS6QUIRKESenator Quirke—So the amendments are not ready.WW4Kemp, Sen RodSenator KEMP—The issue has been raised, the issue has been recognised by the government and we are moving to deal with that. I think the best thing to do, until that particular amendment is ready, is to move on to the Labor Party amendments.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Knowles)—Minister, do you wish to postpone consideration of the government's amendments now?10:30:009102Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Yes, Madam Temporary Chairman, I wish to defer consideration of the government's amendments until we have the revised draft ready. I suggest that the Senate now proceed with the Labor Party amendments. I move:That further consideration of the amendments be postponed.10:30:009102Sherry, Sen NickSenator SHERRYZW4TASALP00—Madam Temporary Chairman, this is unsatisfactory. We had a diatribe from Senator Kemp earlier about circulation of amendments when he made the point that yesterday afternoon the government's amendments were circulated. Now—the next day—we have moved on to the legislation, and the minister has moved the government's amendments, but we have to put them off until the government corrects its amendments. I might say that this is not an extraordinary situation. It does happen from time to time. But the Labor Party has pointed out a flaw—Senator Kemp refers to it as a technical problem; it is a fairly important technical problem when you are dealing with tax issues—in the government amendments that were circulated yester day afternoon. Senator Kemp, in one of his more honest and reflective moments, has acknowledged the government have got it wrong yet again on the surcharge tax legislation, and we cannot now deal with the government's amendments because they have got to go away and rewrite them.It is hardly an aspiring and encouraging performance in respect of this very complex legislation—the debate and the continual corrections, year after year, to deal with the issues that Labor has raised. Labor will agree to go on to its amendments. We will come back to the government's amendments because they have to be rewritten. I hope that the government is able to rewrite them in time, otherwise, as I indicated earlier, the Labor Party, always cooperative in opposition, will have to agree to put off consideration of the legislation until the government gets its amendments right. So, yes, we are quite happy to go on to our opposition amendments.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Murphy)—The question is that consideration of the government amendments be postponed.Question resolved in the affirmative.10:33:009103Sherry, Sen NickSenator SHERRYZW4TASALP00—by leave—I move:(1) Schedule 1, item 1, page 3 (line 20), after "scheme", insert "in the 1999-2000 financial year or a later financial year".(2) Schedule 1, item 3, page 6 (line 3), omit "a financial year", substitute "the 1999-2000 financial year or a later financial year".(3) Schedule 1, item 3, page 6 (lines 8 to 34), omit subsection (4), substitute:Surchargeable contributions—financial year earlier than 1999-2000 financial year (4) The surchargeable contributions for a financial year earlier than the 1999-2000 financial year of a member of a defined benefits superannuation scheme are taken to be the amount worked out using the formula: Annual salary Notional surchargeable contributions factor where: annual salary means: (a) if paragraph (b) does not apply—the amount that is the member's annual salary for the financial year; or (b) if another amount is taken to be the member's annual salary for the purposes of the scheme as it applies to the member for the financial year—that other amount. notional surchargeable contributions factor means the notional surchargeable contributions factor applying to the member for the financial year.(5) Schedule 2, item 1, page 28 (line 21), after "scheme", insert "in the 1999-2000 financial year or a later financial year".(6) Schedule 2, item 3, page 30 (line 14), omit "a financial year", substitute "the 1999-2000 financial year or a later financial year".(7) Schedule 2, item 3, page 30 (line 19) to page 31 (line 11), omit subsection (5), substitute:Surchargeable contributions—financial year earlier than 1999-2000 financial year (5) The surchargeable contributions for a financial year earlier than the 1999-2000 financial year of a member of a defined benefits superannuation scheme are taken to be the amount worked out using the formula: Annual salary x Notional surchargeable contributions factor where: annual salary means: (a) if paragraph (b) does not apply—the amount that is the member's annual salary for the financial year; or (b) if another amount is taken to be the member's annual salary for the purposes of the scheme as it applies to the member for the financial year—that other amount. notional surchargeable contributions factor means the notional surchargeable contributions factor applying to the member for the financial year.Senator Kemp made a number of incorrect—indeed I think deliberately false—allegations in his second reading speech about these amendments. I will just outline the nature and the true intent of our amendments Nos 1 to 3 and 5 to 7. Put simply, Labor's amendments are designed to prevent this bill imposing a retrospective penalty on superannuation fund members. With this bill, the government wants to cut the retirement incomes of Aus tralian workers in defined benefit funds even more than it has done to date with this inefficient and ineffective tax. In speaking to our amendments I would like to first quote the Parliamentary Secretary to the Minister for Finance and Administration, who said in the other place on this bill:The government also rejects any suggestion that the legislation before the chamber includes any elements of retrospectivity. The Labor Party suggested that there is retrospectivity. The simple fact is that that is quite wrong. This government does not support retrospectivity and in fact we have always been of the view that the superannuation surcharge legislation is clear and unambiguous.I make the point again: if it is clear and unambiguous, why are we dealing with this legislation in the chamber today, some 2½ years after it was originally passed?Both the parliamentary secretary and the Assistant Treasurer are dreaming if they think this bill is not retrospective. Existing section 8(3) of the Superannuation Contributions Tax (Assessment and Collection) Act imposes a surcharge on the trustee of a fund which is determined in respect of defined benefit funds by using a notional surcharge contributions factor. The notional surcharge contributions factor is defined in section 43 of the act as a factor certified by an actuary following Australian actuarial practice, that is, the liability for the surcharge is a factor of Australian actuarial practice.There has been much debate in the wonderful world of actuaries about what Australian actuarial practice means in relation to the tax we are considering. Many have argued there is no Australian actuarial practice in the first place. In fact, this argument was drawn to the attention of the Assistant Treasurer back in August 1997 when the second bungle-fixing surcharge legislation was examined by a parliamentary committee. However, the Assistant Treasurer, in his usual highly waffly and highly misleading way, chose to ignore the advice put to him by some of the best superannuation minds, and he ploughed ahead with the flawed surcharge legislation. That meant that actuaries have had to make up their own definition of Australian actuarial practice. Given that actuaries use a range of assumptions to determine an actuarial calcula tion in the first place, that meant that several different definitions were developed of what a notional surcharge contribution factor was. The result is that some defined benefit funds, on a contributions holiday, did not report any surchargeable contributions in the first two years of the operation of this Keystone Cops tax.This is the same legislation which Senator Kemp says is sound, and it is the same legislation which Mr Slipper in the other place says is clear and unambiguous. The legislation was so clear, unambiguous and sound that some months before its passage in 1997 the Australian Taxation Office issued a draft ruling, which has been referred to as SCR97/1, which was designed to give some guidance to actuaries calculating notional surcharge contributions factors. Now the government wants to give SCR97/1 the force of law by effectively inserting it into the act which it claims is sound, clear and unambiguous. I just repeat that: the government originally argued and has continued to maintain that the original legislation was sound and clear and there was no ambiguity. In order to correct the quite justifiable criticism by actuaries and many others of this legislation, the government has now decided to insert SCR97/1 and claims that this will make it unambiguous.So the government has changed its position. We still do not know why. Senator Kemp is fond of saying, `We consult extensively, we listened to people and we have responded.' But if the original bill was sound, why are we dealing with the amendments today? We just do not listen to people in the community and change legislation for the sake of changing legislation; there has to be good reason for changing legislation and for dealing with amendments to legislation. The time of the Senate is precious, as we all know. We still do not know why the government has changed its position and is now acknowledging the earlier criticisms.The government is inserting SCR97/1 into the act, but is not doing it prospectively—SCR97/1 is not to apply from the passing of this legislation and its declaration—it is applying it retrospectively. Effectively, the government is asking the Senate to retrospectively move the goalposts in respect of the surcharge tax superannuation legislation. Under the proposed sections 8(4) and 9(5) of the bill before us, for the years 1996-97, 1997-98 and 1998-99 the definition of notional surcharge contributions factor is to be altered to mean the method set out in SCR97/1. It is a retrospective change. That means that for those years before 1999-2000 the definition of notional surcharge contributions factor will have changed, as—unlike the current so-called sound, clear and unambiguous legislation—SCR97/1 does not reflect Australian actuarial practice. This is a significant change that the government is applying retrospectively. Why isn't the government honest about wanting to apply a new definition, SCR97/1—whether it is sound or not is another matter—retrospectively. I hope the Senate will support our amendments.Certainly it has been mentioned by a number of contributors—and Senator Kemp has acknowledged them in his second reading speech—that the notional surcharge contributions factor is now the subject of court proceedings. So we have court proceedings that the government has been warned about which, apparently, are now taking place in response to the original government legislation, which the government still claims is sound and clear. Here we have the government bringing in amendments in respect of SCR97/1 retrospectively. We believe that is, at least in part, to defeat the court cases that have been initiated. In terms of tax principle, that is a very undesirable practice, particularly when the government claims that the original legislation is right. What is wrong with leaving the original legislation, if it is so sound?While it is the right of the government to amend laws when they see fit to do so, the Senate should carefully consider whether this provision before us should be passed in its current form. It would be a shame for us to have to come back here yet again to fix the government's surcharge tax mess if it were given the thumbs down by the courts. The government should accept that there should not be retrospective application of SCR97/1.Senator Kemp made a number of false allegations in his second reading speech. Our amendments go to ensuring that the current basis of notional surcharges is kept in place for the last three years and that the government's retrospective change should apply prospectively. That is the intent and the effect of our amendments. If the government got it right in the first place, then what is the problem with Labor's approach? There should be no problem with Labor's approach. It is entirely false—and I would argue inappropriate—for Senator Kemp to say that it is our intention that the tax for those three years should not be collected. It should be collected, but it should be collected on the basis of the government's original legislation that it says is sound. Senator Kemp continues to maintain that the original legislation is sound. Labor is saying, `If you say the original legislation is sound, collect the tax on that basis. If you want to change your definition of notional contributions using SCR97/1, do it prospectively; do in the future.' I reject the claim by Senator Kemp that it is Labor's intent to see that the tax that applies over the last three years is not collected. That is not our intent.Senator Kemp made some comments about politicians. I have had my assessment and I have accepted it. As I understand it, that has occurred for everyone in this place. It has absolutely nothing to do with politicians, Senator Kemp. The only place where the surcharge and the tax is outstanding for politicians is in Victoria, Senator Kemp's home state. Senator Kemp smiles because he knows the situation in Victoria. The Victorian parliament has not passed on the tax to the members of the fund, as has occurred with all of us. I do not have any problem with the payment of the tax. We have all been assessed and we all make our contributions. That has occurred, as Senator Kemp well knows—certainly for those who are not challenging the so-called surcharge—with respect to every other defined benefit fund in every other parliament in Australia, except in Victoria. That is the one exception. If Senator Kemp wants to make those sorts of allegations, which are false, he would be better pursuing the current government in Victoria—ZS6QUIRKESenator Quirke—While it is still there.ZW4Sherry, Sen NickSenator SHERRY—While it is still there—that is true. He would be better to get them to ensure the surcharge is paid by politicians in that state. That is a complete furphy from Senator Kemp. It is not true; it is inaccurate. It is yet another inaccurate claim that Senator Kemp has made in order to cover up the government's bungling on this issue. We have had bungle after bungle. Why are we debating the third set of amendments on this tax if everything is hunky-dory? If the original legislation is sound, and the tax is being collected, why are we here, yet again, dealing with further amendments?Labor's position is clear. Our amendments go to ensure that the basis for the collection of the tax for those three years is maintained. If the government wishes to change—it says clarify—the collection of the tax using SCR 97/1, fine, so be it. If the government has a new approach for the basis of the collection of the tax, that should apply prospectively not retrospectively in order to get the government off the hook from the current court challenges.If people challenge this tax in the courts, as has occurred, it will run its course, based on the government's legislation. We should not now be interfering with the judicial process and passing retrospective amendments. That is unsound in principle, particularly given the government continues to claim that its original legislation was sound and should not need changing. Why the retrospectivity? Why a new basis for tax ruling? It has nothing to do with politicians, Senator Kemp, as you well know. You are just trying to put a spin to cover up the government's very inadequate dealings with respect to this regulation tax.10:48:009106Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Senator Sherry attempted to explain the Labor Party's intention with these amendments, but let me briefly summarise the advice I have received from the tax office on the effect of these amendments. Amendments (1) to (5) would limit the surcharge to the 1999-2000 financial year and later years for defined benefit funds. If the amendments were adopted, there would be no simplified outline for earlier financial years. Amendments (2) and (6) suggest that, for a member of a defined benefit superannuation scheme, the surchargeable contributions for the 1999-2000 financial year and later financial years are the amounts that constitute the actuarial value of the benefits that accrue to and the value of the administrative expenses and risk benefits provided, with respect to the member, for the financial year.The important point to note about Senator Sherry's amendments—and this goes to the nub of the amendments—is that if they are adopted the legislation will not set out the surchargeable contributions for the 1997, 1998 and 1999 financial years. Effectively, there will be no surchargeable contributions for these financial years which means there can be no surcharge on the contributions of high income earning Australians of defined benefit funds. That is the blunder, Senator Sherry, and it includes every politician in Australia for those financial years.Amendments (3) and (7) attempt to set out what the surchargeable contributions for the 1997, 1998 and 1999 financial years are taken to be—that is, the amount worked out using the formula annual salary by notional surchargeable contributions factor. Under the proposals, the notional surchargeable contributions factor means the notional surchargeable contributions factor applying to the member. The proposals also remove the reference to superannuation contributions ruling SCR 97/1, and the ability of the commissioner to approve an alternative method. Clearly, these proposals rely on the circular proposition that a notional surchargeable contributions factor is the notional surchargeable contributions factor.The removal of the reference to SCR 97/1 means there is no guidance for actuaries to calculate the notional factors for the 1997, 1998 and 1999 financial years, if there is indeed any requirement to calculate these factors, given that the surcharge will not apply to the contributions of high income earners in defined benefit funds in these years. I do not know whether this is the intention of the Labor Party. Senator Sherry has said that this does not have that effect. The advice I have received is that it does have that effect, and that is one of the reasons we are opposing the Labor Party amendments. The removal of the reference to SCR 97/1 also makes items 28 and 40 of schedule 1 and item 22 of schedule 2 meaningless. Removal of the reference to the commissioner's ability to approve another method means those funds that have approval to use another method will be required to use the circular method now proposed. The problems just mount up and up with these amendments.Amendment No. 4 and, to some extent, amendment No. 8 remove the ability to make regulations that apply from the date of the original legislation. Amendment No. 8 only indicates that the measure will be opposed. The ability to make regulations from the date of the original legislation will not be needed under the amendments as there will be no surchargeable contributions for the 1997, 1998 and 1999 financial years. That, again, is the advice that I have received.These are very poorly drafted amendments. They have consequences which the Labor Party is appropriately backing away from now, maintaining that they do not have this effect. This is the advice that I have received. Let me take Senator Sherry through some of the history of this. Some issues have been raised with the government in relation to the workability of the surcharge legislation, and the government is always keen to improve the legislation, which it has, and to see whether we can respond to the requests of industry. This bill before the chamber, above all, reflects that consultation.It is clear that, in relation to some members of the industry, there was some uncertainty as to how the law would apply. They received advice which clearly did not gel with the advice that the government has received. In order to provide the certainty which they wanted, we were prepared to listen to them. That is why this bill was brought before the chamber.We accept the retrospectivity arguments that Senator Sherry has put forward. The advice that I have received indicates that these proposed amendments by the Labor Party have consequences about which maybe the Labor Party did or did not know, but they would have quite savage effects. Particularly, they would lead to great inequities, as I pointed out in my second reading speech, and, in the years 1997, 1998 and 1999, Senator Sherry, despite your protestations, high income earners, including politicians, would not be liable for the surcharge.I am astonished that the Labor Party has moved such an amendment. If there was a mistake in this amendment and if you say that that is not the Labor Party's intention, you should stand up and clearly state that because the advice that I have received from the tax office is that that is the effect. I urge the Senate to reject these amendments which the Labor Party has put forward.10:55:009107Sherry, Sen NickSenator SHERRYZW4TASALP00—I will make just a couple of points. The minister says that he is advised. I point out to the Senate that the persons advising the minister are the same people who advised the minister about the government's amendments, which they have withdrawn and had to rewrite. I ask the Senate: how reliable is the minister's advice? Labor maintains that the minister is on yet another of his sojourns to try to cover up the government's inadequacies with respect to this new tax.WW4KEMPSenator Kemp—Go through the points I made.ZW4Sherry, Sen NickSenator SHERRY—I am going to go through the points, Senator Kemp. Senator Kemp, as is his wont with respect to this particular tax matter, inherited a poisoned chalice. It was the idea of Mr Costello, the Treasurer, and Senator Short, his predecessor. The only glimmer of possible sympathy that the opposition can have for Senator Kemp is that he did not start the mess. He did not implement this policy. He was not a minister at the time, and he would not have been consulted. That is the only glimmer of possible excuse that the minister can have for the ongoing saga of the superannuation tax.Labor's amendments put back in the legislation the government's original provisions. Senator Kemp says the government's original bill was sound, yet Labor, through its amendments, is putting back in the government's original position. If your advice is correct, Senator Kemp, and I do not believe it is, and if your argument is correct, you are the ones who made the mistake. Again, I say to the chamber: why are we dealing with this third set of amendments to the tax bill today if the original legislation is sound? Labor is putting back into the legislation the government's so-called sound provisions. Effectively, if Senator Kemp wants to maintain this line about Labor's amendments, he is acknowledging a fault in his own so-called sound provisions in his own so-called sound bill.Labor does not agree with the retrospective application of 97/1. The government is proposing a new basis for the calculation of the tax, and that is its prerogative. It is acknowledging that it wants to change the basis of the tax, but it does not say why. Senator Kemp keeps saying it has consulted, but why has the government accepted the advice from industry? Why has the government accepted the advice if its original position is sound?WW4KEMPSenator Kemp—I'll say it for the third time if you'll sit down. You don't listen.ZW4Sherry, Sen NickSenator SHERRY—You still have not given us a reason why you have accepted the advice if the original position, as you continue to maintain, is sound. If everything is clear, if there are no problems, if everything is so great, why are we wasting the Senate's time even considering these amendments? We reject Senator Kemp's assertions with respect to our amendments. The government is effectively trying to get itself off the hook by retrospectively changing its own basis for the tax collection because it is worried about the court challenges that have been mounted and it is worried about losing possible revenue.I can accept the government's worry about court challenges to legislation, but what the Labor opposition finds very difficult is that the government did not listen to all in industry about the problems of this legislation some 2½ years ago. The government did not listen and still maintains the original bill is sound. It is being done retrospectively in order to minimise the problems that result from the legal challenge.The government proposed this new tax. It says it is fair. It says it is being collected and there are no problems. If it is all so great, then let's see what the courts decide based on the government's original provisions, not on retrospective provisions. It has nothing to do with politicians, as Senator Kemp purports to argue. That is just a furphy to cover up this government's incompetence on this particular issue.11:01:009108Allison, Sen LynSenator ALLISON1M6VICAD00—The Democrats will not be supporting this group of ALP amendments. It is very difficult when we receive amendments as late as we did and when there are disagreements across the chamber about the effect of those amendments. That is the first point I want to make. There is very little opportunity for us to check them out and to verify which position is correct.In spite of that, on balance we would like to support what the government has done in this respect. There is a need for certainty in law and there was a need, acknowledged by the industry, for there to be a ruling one way or the other. For us the question is the balance between certainty and retrospectivity, which is always a concern to the Democrats. In this instance, and given that there is some doubt about the effects of the ALP amendments, we will not be supporting them.11:02:009108Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I listened very carefully to the comments by Senator Allison and, of course, the government appreciates support for this bill and its position on the bill. I would have to say as politely as I can that Senator Sherry is in fantasy land. Senator Sherry did not go through the arguments which I put. He retailed this argument that, if the original bill is so perfect, that seems to be why these amendments have been put.The way I have responded—and I will say this for the third time—is this: we believe the bill is sound. The advice that we have received is that the bill is sound. A number of funds have received advices that make their trustees uncertain and have put their trustees in a difficult position. The genesis of this bill essentially came from a desire to provide the certainty which I think Senator Allison referred to. In providing the certainty that the trustees were seeking, we entered into discussions with them. They were very widespread consultations and this bill has emerged from those consultations. It provides that certainty which they say they needed. Hence, we were happy to respond to that and this is one of the reasons why this bill is now before the chamber.That is the argument that we put and—for the third time—that is why we have this bill. It is not a bad thing for the government to respond to community wishes. This government is a consultative government and, if we can provide additional certainty which some trustees felt they did not have, we are happy to respond to that. That is why we have brought in these particular amendments and why we reject the amendments proposed by Senator Sherry.11:04:009109Sherry, Sen NickSenator SHERRYZW4TASALP00—I say to the Australian Democrats, Senator Allison and her adviser, who I note is in the Senate, that we discussed this issue, amongst many others, when the original legislation was put through. I can recall the words of Senator Allison, and I will paraphrase the view that she expressed at the time. Her view was that the government has been warned about the potential problems with legislation and the responsibility is now on the government to let it fall. That was the attitude of the Democrats to the original legislation.This is now the third set of amendments to this tax to fix up problems that the government says do not exist because the original legislation is sound. Senator Kemp maintains that they have consulted and listened, and that the industry says there is a problem, so the government is responding. I put this to the Australian Democrats: governments do not respond unless there is some validity to the argument. We do not just come in here and consider amendments to legislation for the sake of it. We all know the difficult timetable and the pressures of this place with legislation. We are taking up valuable Senate time for a piece of legislation that Senator Kemp still maintains is very sound. We do not need the changes if the legislation is sound. Why are we here wasting our time?I will conclude on this point. Again I draw to the attention of the Democrats and the chamber Senator Kemp's letter in appendix 3 of the Senate Economics Legislation Committee report. In his letter, which is addressed to the Chair, Senator Gibson, at the bottom of page 1, Senator Kemp says:Provisions that are to apply from commencement of the original legislation.The government has always been of the view that the legislation applying to the surchargeable contributions of high income earners from 20 August 1996 is unambiguous and sets out what is required to be reported and what is surchargeable.Labor's amendments go to picking up and holding the government to its claim. Labor's amendments go to ensuring that, for those critical three years, the government's original definition is maintained and that if the government—which retrospectively wants to introduce a new definition, 97/1—wants to correct its original base for calculation and change it, it should do so prospectively.11:07:009109Allison, Sen LynSenator ALLISON1M6VICAD00—Just before we finish, I wonder if I could ask the minister about the rate of compliance with the ruling. As I understand it, most funds had in fact calculated the contributions in accordance with SCR 97/1, and I wonder if it is possible to respond.11:08:009109Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Yes, the advice I have is that the majority of funds have complied with that ruling.11:08:009109Sherry, Sen NickSenator SHERRYZW4TASALP00—On this issue, which I think is an important issue, that Senator Allison has raised, how many funds and how many members in those funds have not complied?WW4KEMPSenator Kemp—There were some 1,237 defined benefit funds which reported nil.ZW4Sherry, Sen NickSenator SHERRY—Just to further follow this issue, because I think it is important, how many defined benefit funds are there in Australia?WW4KEMPSenator Kemp—We do not have that figure, Senator.ZW4Sherry, Sen NickSenator SHERRY—I just make the point that 1,237 defined benefit funds is a substantial number. I accept that the minister does not have the figures on the total number of defined benefits funds. But 1,237 defined benefit funds—in the context that there are not substantial numbers of defined benefit funds in the country—is a very substantial number that have got problems with the original government legislation, which the government says is sound. Senator Kemp may not have this information now, but I would like to know how many members in these 1,237 funds have incomes for which so-called surchargeable tax payments are due.11:10:009110Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—As the funds have reported nil, it is difficult to answer that question, but I will look closely at the nub of the question and see whether we can provide Senator Sherry with any additional information.Amendments not agreed to.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Murphy)—We now return to the postponed government amendments, given that there has now been circulated to those people relevant in the chamber a set of further amendments.11:11:009110Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—We have circulated some further amendments which will be moved by the government. This picks up the issue which we debated earlier and I think it deals with those particular concerns. I seek leave to move those amendments together:Leave granted.WW4Kemp, Sen RodSenator KEMP—I move:(1) Schedule 2, item 3, page 30, (line 25), omit "by an eligible actuary".(2) Schedule 2, item 3, page 31, (line 8), omit "takes into account contributions", substitute "excludes contributions made by the member".(3) Schedule 2, item 3, page 31, (line 18), omit "by an eligible actuary".(4) Schedule 2, item 3, page 31, (line 20), omit "takes into account contributions", substitute "excludes contributions made by the member".(5) Schedule 2, item 3, page 31, (line 26) omit "takes into account contributions", substitute "excludes contributions made by the member".11:11:009110Sherry, Sen NickSenator SHERRYZW4TASALP00—As I said in my original comments, the opposition is supporting these amend ments. I would just say again, for the record, that it was the Labor opposition that pointed out the particular flaw in the government's amendments, that it only applied to one bill and not the other. The Labor opposition is always pleased to be cooperative with the government.WW4KEMPSenator Kemp—That would be the first time I have heard that, Senator. You are not misleading the Senate, are you?ZW4Sherry, Sen NickSenator SHERRY—Senator Abetz and Senator McGauran, who are now in the chamber, were not here. We had the saga, unfortunately, that the government's amendments were incorrectly drafted. The Labor opposition pointed it out and the government then had to defer consideration of its own amendments. As I said, on this issue of the surcharge tax on superannuation, the opposition is always happy to advise the government. We have been advising you for the last 2½ years and warning you about the difficulties. You have rarely listened; you have rarely listened to industry. There was one comment from Senator Kemp—I think it was an unfair comment—about my hairdresser. I want to make it clear for the record—WW4KEMPSenator Kemp—It was not about the way he cut your hair; his view on superannuation was our problem.ZW4Sherry, Sen NickSenator SHERRY—As I have said from time to time in the Senate chamber, the Labor opposition consults and listens to actuaries, lawyers and accountants, and we have got many of them on the record who have criticised this tax. I think it is important for politicians to listen to people in the community who have wide public contact. I listen not just to my hairdresser, Barry, but to the local storekeeper in Burnie and to the local taxi drivers, who all report to me and give feedback. On my trip down to the pub in Devonport, when I was testing out the public's knowledge of superannuation, all of these people reported to me—including my hairdresser, Senator Kemp—that there is a lot of confusion about superannuation out in the community. It has not been made any easier by the changes this government has made. That is the context in which I listen to the concerns of my hairdresser and of many other people in the community. I hear about the general confusion and concerns about superannuation and the difficulties people have understanding superannuation. They do not provide technical advice about legislation, nor should they. But apparently on this occasion it probably would have been more appropriate to ask my hairdresser rather than the tax office. So who gets it right and who gets it wrong? We listen to people in the community, particularly when we have continuing and clear evidence of the government's incompetence in respect of this new tax.Amendments agreed to.11:15:009111Sherry, Sen NickSenator SHERRYZW4TASALP00—I seek leave to move opposition amendments Nos 4 and 8 together.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Murphy)—We will probably need to put 4 and 8 separately.ZW4Sherry, Sen NickSenator SHERRY—I move amendment No. 4:(4) Schedule 1, item 28, page 22 (lines 26 to 31), omit subsection (3).It is not my intention to be repetitive, given the Senate's legislative program. If it is not enough for the government to have asked the parliament to pass a retrospective bill—and we have been dealing with that previously—it is now asking the parliament to pass amendments that will allow it to continually amend SCR 97/1 by regulation whenever it wants to, with effect retrospectively if desired. So the government is introducing a new basis for the calculation of the tax—97/1. So just in case the government has it wrong yet again—and as if you could ever get an admission out of Senator Kemp!—the government wants to be able to retrospectively change 97/1 whenever it wants by regulation. In other words, it does not want to have to front up to the parliament yet again and correct the problems that may emerge from this, the third set of amendments.WW4KEMPSenator Kemp—But regulations do go through parliament, Senator.ZW4Sherry, Sen NickSenator SHERRY—They do go through the parliament, but you know that the voting process is just a touch different, Senator Kemp, and it can be very significantly different. Dealing with regulations, Senator Kemp, is very different from dealing with bills, particularly in respect of tax matters. The government acknowledges that it retrospectively wants to change 97/1 by regulation whenever it wants to and if it needs to, and we suspect the government will need to change SCR 97/1. It is seeking to override subsection 48(2) of the Acts Interpretation Act to allow it to retrospectively amend regulations whenever it desires to do so. It is there on page 22 of the bill at item 28 of schedule 1 and again on page 40 of the bill at item 14 of schedule 2.Why does the government want to give itself the power to retrospectively apply a tax penalty through regulation whenever it desires? It is quite simple. It is not confident or certain that the tax legislation will finalise the particular difficulties it faces. It wants the flexibility to change the law via regulation whenever it runs into a snag. The government wants to sneak a retrospective tax through via regulations. They are a disallowable instrument, as Senator Kemp pointed out, but they cannot be amended by the Senate. It is a very important difference. Is that open government? More importantly, is it fair? Is it just? Is it right?Labor argues that this is not an example of an open, fair government, and it is not just and it is not right. The government is asking the Senate to allow it to override the Acts Interpretation Act. That is even more fundamental than the issue of retrospective tax legislation. The Acts Interpretation Act is a very important component of the democratic system in this country, yet the government wants to override it. Labor is utterly opposed to this approach. Our amendments will remove the provisions in the bill before us which seek to override subsection 48(2) of the Acts Interpretation Act so that it is not possible for the government to retrospectively amend by regulation SCR 97/1.I conclude with this point: Senator Kemp continues to maintain that the original legislation is sound. Why are we here correcting what is sound legislation?WW4KEMPSenator Kemp—This is the fourth time, Senator.ZW4Sherry, Sen NickSenator SHERRY—Well, the point needs to be made. It is a very important point, Senator Kemp. The legislation is sound. Do not give us a lecture when you have to get legislation through the Senate in what is a difficult timetable when we are dealing with amendments to legislation which is sound. Why are we wasting the Senate's time in dealing with amendments that, according to you, are unnecessary? But we have had a debate and we have voted on the retrospectivity of SCR 97/1, the new basis for notional surcharge contributions for defined benefit funds, and regrettably that was passed. As if that is not enough, the government is now asking us to agree to override the Acts Interpretation Act. So just in case the government got it wrong it can via regulation, which the Senate cannot amend, retrospectively make further changes to SCR 97/1, which the government argues we do not need in the first place.I have not struck this before in the Senate in my nine years here. I think it is a very dangerous precedent to be setting. I understand the Democrats' position, although I do not agree with it, in respect of the previous amendments we have dealt with, but this is a very important issue that we do not believe should be supported. If the government has made mistakes in its latest batch of changes and if there are further problems in respect of a tax matter, it should front up to the Senate and bring legislation before the Senate to fix them.11:21:009112Allison, Sen LynSenator ALLISON1M6VICAD00—I indicate that at this stage at least the Democrats are inclined to support these last two amendments. I look forward to an explanation from the minister as to why we should not do that and why it was necessary to bring in those provisions.11:21:009112Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I wish to respond. There are, as I indicated, a number of funds which reported nil but which will now have to report—that is, defined benefit funds. In relation to those defined benefit funds, the government may want to address concerns of some trustees who may need to submit new reports. This measure provides a flexibility for the government to deal with any particular concerns which may be brought forward to us by trustees. The defined benefit funds are often quite complex. They are often very different to each other. We want to make sure that the surcharge applies in a fair and equitable manner. In order to provide the government with the flexibility, we want to be able to address some of these concerns through the regulation making process.I point out that the regulations have to come before this chamber, and we do not have the numbers. If this chamber does not accept any changes that we may make to regulations, the Labor Party and the Democrats combined have the capacity to defeat those regulations. Senator Sherry may have given the impression that this provides untrammelled flexibility for the government. It does not. We have to come back and we have to convince the Labor Party and the Democrats that any change to the regulations is appropriate and justified. As you and I know, we do not have the numbers here, Senator. We have to convince either the Labor Party or the Democrats in order to ensure that the regulations can go through. On that basis, I would urge you to rethink.My understanding is that this would be supported by the industry because it would provide the flexibility they need. I have just been advised by my advisers that the industry would support it, but it does have that protection which Senator Sherry did not spell out. We are not seeking to come in here and suddenly provide an untrammelled power to the government. We do not have that untrammelled power. We would have to convince you and we would have to convince the Labor Party that any changes to the regulations were justified. Frankly, it provides us with the flexibility to deal with some of the issues which defined benefit funds may put forward. As I said, I think this particular clause is welcomed by the industry. With those remarks, I would ask you to defeat the amendment proposed by Senator Sherry.11:25:009112Sherry, Sen NickSenator SHERRYZW4TASALP00—I would like to draw this to Senator Allison's attention on behalf of the Democrats. What Senator Kemp is effectively saying is that the government is anticipating more problems with its changes to this legislation. If the legislation is sound, as Senator Kemp has continued to maintain, why is the government anticipating more problems? Senator Kemp says that they want flexibility, but should the parliament abrogate its responsibility, particularly in respect of tax matters, to a government that have got it wrong time and time again in respect of this superannuation tax? If the government get it wrong, and apparently Senator Kemp and the government are anticipating more problems, then let them come into this chamber and into the parliament and fix it up with legislation.Regulations are not the same as legislation. Certainly, the Australian Democrats know that. Regulations are a disallowable instrument, but they cannot be amended by the Senate. If we allow the government to make amendments via regulation, we cannot take into account the concerns of those in industry who object and who may have quite a legitimate objection and grievance. I find it a little ironic and somewhat concerning that we are heading into the Centenary of Federation—WW4KEMPSenator Kemp—That's what happens when time passes. We are moving into the next century.ZW4Sherry, Sen NickSenator SHERRY—Time does pass. It has been a long hundred years. The point I was about to make, Senator Kemp, is that on the threshold of the next century and the next millennium what you are asking for is a substantial shift in power on a tax matter almost 100 years after the original passing of the Acts Interpretation Act. I think it was passed in 1901, shortly after Federation. There may be circumstances where a substantial shift in power is warranted from a government, but does a government deserve this power when it introduced a new tax in breach of its election promise, when it argued that the new tax was sound when it was introduced, and when it ignored all suggestions and all criticisms at the time from a considerable range of people in the financial and superannuation community? The government is still hiding and saying, `Look, the original legislation is still sound.' I continue to pose the question to the chamber: why are we dealing with the third set of amendments to sound legislation?But, if that is not enough, the government is saying to this chamber—it is treating it in a contemptuous way—`Just in case we've got it wrong again, we want flexibility to change via regulation important tax matters.' I do not believe that the government, on its performance on this legislation and on the arguments so far advanced, deserves consideration in respect of overriding the Acts Interpretation Act. No strong and compelling argument has so far been advanced to override the Acts Interpretation Act. It may be a different situation if we were dealing with the first set of amendments to the government's tax legislation. If the government had honestly dealt with the problems in this legislation, it may be that we could consider such a request.But on this important issue, in the context that has been outlined, Labor is emphatically opposed to overriding the Acts Interpretation Act. I really do ask the Democrats to think very long and hard about the context in which this request from the government is being made. Think very long and hard about it. There have to be very sound reasons for overriding the Acts Interpretation Act. I do not believe that Senator Kemp has presented anywhere near an adequate case. It should be only in fairly extraordinary circumstances that we consider the breach of that particular principle. It is a particularly important issue.11:30:009113Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I wish to clarify the situation on which Senator Sherry has gone off on yet another frolic. The situation—and I put this to the Democrats—is simply this: trustees may seek that the ATO vary 97/1 because of the peculiarities of their fund. As I said, many defined benefit funds are quite complex and quite different. They may come to us and say, `Because of the peculiarities of our fund, we would like you to have the opportunity to vary 97/1.' These variations can be accommodated only by the regulation making power. If this is defeated, the ATO will not have the flexibility to deal with requests from trustees. That is the position.The advice I have received is that this has been put in the legislation to accommodate the concerns of trustees. If this is defeated, 97/1 will have to apply regardless. A fund may well come to the ATO and say, `This is a fund which is atypical. It was developed in the 1930s. It has provisions and regulations which are not similar to other funds. Therefore, we believe the application of 97/1 wouldn't be appropriate.' If it were appropriate, that would allow us to deal with those particular concerns.In dealing with those concerns, we would have to bring the regulation before the parliament and explanations would be sought. As I said, we do not have the numbers. If this amendment goes through, it will take away the flexibility that will be of assistance to the funds. It is not a detriment to them. Of course, this provides the flexibility to deal with possible one-off issues which may occur from time to time. We do not know whether they will occur but, if they do, this provides the flexibility to deal with them. I urge the Democrats to think very long and hard before accepting this particular amendment from the Labor Party.11:33:009114Allison, Sen LynSenator ALLISON1M6VICAD00—I would like to finalise my remarks. The bill gives the government the ability to modify rulings. They can insert, omit and alter a provision in the ruling. That seems to me to give adequate flexibility under these circumstances. The ALP amendment seeks to remove the provision which allows it to take effect before being notified in the Gazette . This parliament is capable of handling such changes to regulations in an expeditious manner. I see no reason not to support the ALP amendment.Question put:That the amendment (Senator Sherry's ) be agreed to.11:38:00The Committee divided. 0Allison, L. Bartlett, A. J. J.Bishop, T. M. Bolkus, N.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.Gibbs, B. Greig, B. A.Harradine, B. Hogg, J.Hutchins, S. P. Lees, M. H.Ludwig, J. W. McKiernan, J. P.McLucas, J. E. Murphy, S. M.Murray, A. O'Brien, K. W. K.Quirke, J. A. Ridgeway, A. D.Sherry, N. Stott Despoja, N.West, S. M. Woodley, J.0Abetz, E. Alston, R. K. R.Boswell, R. L. D. Brownhill, D. G. C.Calvert, P. H. Campbell, I. G.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. Mason, B. J.McGauran, J. J. J. *Newman, J. M.Parer, W. R. Patterson, K. C. L.Payne, M. A.Tchen, T.Tierney, J. Troeth, J.Vanstone, A. E. Watson, J. O. W.Forshaw, M. G. Reid, M. E.Lundy, K. Hill, R. M.Mackay, S. Chapman, H. G. P.Ray, R. F. Minchin, N. H.Schacht, C. C. Tambling, G. E. J.* denotes tellerQuestion so resolved in the affirmative.10000CHAIRMANThe CHAIRMAN—The question now is that schedule 2, item 14 stand as printed.11:41:009114Sherry, Sen NickSenator SHERRYZW4TASALP00—This deals with the same issue we have been debating for the last half an hour. I do not want to waste the time of the chamber. We just had a vote on our previous amendment; the arguments still stand. We hope the chamber will support this amendment.11:42:009114Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Senator Sherry is right: the arguments have been well canvassed. Unless there is a sudden shift in the numbers, I think this amendment will get through. The overriding point is simply that the regulations allow the flexibility prospectively. My advice is that Senator Sherry's amendments do not allow any change in the financial years 1997, 1998 and 1999. The flexibility which the government has prospectively is denied to us in dealing with the particular concerns of trustees about those earlier years. People will have different views—and I am very much aware that this is a diverse industry where different views are put forward—but I do not think what Senator Sherry has done today will be regarded by the industry as a favour; it will be quite the contrary.When a defined benefit fund comes to us and says, `Can we discuss with you the application of 97/1?' we will have to say to them, `We can deal with this issue prospectively but, as a result of Senator Sherry's amendment, we cannot deal with this issue for the first three years.' This is another very bad amendment. Fortunately, the first series of Labor Party amendments was defeated—and rightly so—because of the effects it would have. This is a bad amendment, and it does not help the industry.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Lightfoot)—The question is that schedule 2, item 14 stand as printed.Question resolved in the negative.Bill, as amended, agreed to.Bill reported with amendments; report adopted.9115Bill (on motion by Senator Kemp) read a third time.Bills9115r904Billsr9039115Debate resumed from 2 September, on motion by Senator Alston:That these bills be now read a second time. 11:46:009115Cook, Sen PeterSenator COOKRF4WAALP00—Appropriation (Supplementary Measures) Bill (No. 1) 1999 and Appropriation (Supplementary Measures) Bill (No. 2) 1999 seek to appropriate moneys from consolidated revenue funds for initiatives flowing from the deal that the government made with the Australian Democrats to secure passage of the GST—known as `the dirty deal, done dirt cheap'. The measures are, firstly, for the Book Industry Assistance Plan and, secondly, for additional funding for the Supported Accommodation Assistance Program. These measures are contained in Appropriation (Supplementary Measures) Bill (No. 1) 1999. There are also a number of environment initiatives contained in Appropriation (Supplementary Measures) Bill (No. 2) 1999. I will deal with each of these in turn.Appropriation bill (No. 1) provides $60 million for each of the four years from the 2000-01 financial year through to the 2003-04 financial year. The main aims of the plan are to provide financial assistance to those producing books in Australia, Australian creators of books and retailers of textbooks in Australia. I point out to the Senate that this is needed only because of the GST and the impact it will have on those involved in producing, creating and retailing books in Australia. We point this out, and we question the adequacy of the measure. The opposition are of the view that this is an inadequate response to what is, in the first place, a most unsatisfactory decision to impose a GST on books. We believe it has the potential to create an administrative nightmare for every bookshop in Australia. Indeed, bookshops will have the administrative problems that every small business will have with the GST, but now they will also have a whole new complex rebate to administer, which has not been properly worked through. This represents a potential nightmare for bookshops.In our view, this measure represents small and inadequate compensation to the industry in general for a tax that will be a direct attack on what Australia needs to be—that is, a knowledge nation. This represents perhaps one step forward but certainly two steps back for the knowledge nation. The government knows that the GST is bad for the book industry, for consumers of books, for bookshops and for education and knowledge in this country. It had to be embarrassed and shamed into a promise that it would do something in this regard and we now see it in the form of this legislation, which represents just a few crumbs off the table to the book industry when what we really needed to be saying was that we were not going to be imposing a GST on knowledge at all.In our view, it is a totally inadequate measure. It would have been unnecessary but for the government's determination to impose a GST on books and the Democrats' capitulation on this issue, where they were quite happy to roll over and be done over by the government and that great Democrat negotiator Senator Lees. One of the core promises of the Democrats, when they went to the last election, was that they would not allow, in any way, shape or form, a GST to be imposed on books, but after the election we saw the Democrats caving in—capitulating to the government on this issue. Now they walk around saying, `We have done wonderful things for the book industry,' when in fact the opposite is true. They had it in their power to prevent a GST being imposed on books in this country and they did not do it. Who is keeping those bastards honest?We have here legislation which effectively says to the book industry, `We have struck you a dreadful blow and you are bleeding, but here is a bandaid.' Certainly, the bandaid is better than nothing, and we will not be opposing it, but our view is that this is a small and inadequate response. Those book publishers who have indicated that they welcome the measure say it goes some way to compensating for the GST, but that that is the best you can say for it—that it does go some way to compensating them. Australians ought to be aware that this plan is not good news. Despite its meagre compensation, come 1 July 2000 people involved in this area—authors, bookshop owners, students, parents and Australians purchasing books—will be worse off. It would have been better, if we had to proceed down the path of a GST, to exempt books, as the Democrats had pledged, rather than to introduce these complicated arrangements. I further point out to the Senate that it is quite hypocritical for the government to be talking about literacy—we have heard from the Minister for Education, Training and Youth Affairs, from time to time, on this front—when this tax will make books and therefore knowledge and learning more expensive.The second provision in this legislation provides an additional $15 million for the Supported Accommodation Assistance Program for each of the four years to the year 2003-04. The processes for distributing this money to the states are not clear, and we would like some more information about this. Indeed, in the lead-up to the renegotiation of the agreement of the Supported Accommodation Assistance Program, we would like to hear more from the government about how it intends to distribute this money to the states.I should point out that we believe the government has failed to take real action to address homelessness issues. The government's negotiations with the Democrats have led to this $15 million per year being provided for youth homelessness. We think this is trying to solve a major national crisis once again, as with the books, with just a few crumbs from the table. The government failed in its budget to address Supported Accommodation Assistance Program funding at all. The $45 million over six years amounts to a meagre $7.5 million a year. It has been instituted merely to ensure that the staff employed in the Supported Accommodation Assistance Program agencies have and enjoy award conditions. Not one dollar of that amount will actually go towards expanding the Supported Accommodation Assistance Program services to the needy.Last year the government sponsored a review by the Australian Housing and Urban Research Institute. That review recommended, at a minimum, a 25 per cent funding increase to the SAAP in order just to service current unmet demands. The national evaluation of the program, released by the Department of Family and Community Services some three weeks ago, concurred with that analysis and requested that recurrent funding for the first year of the new agreement reach a total of $285 million. Against that background, the extra $15 million—which was reannounced by the government as part of this deal with the Democrats—is, frankly, nowhere near the 25 per cent increase recommended by the government's own review and by the government's own Department of Family and Community Services.The demand for services for the homeless is ever growing. Figures which were released in budget week showed that the number of people accessing these services had risen from 110,000 in 1996-97 to 160,000—that is a 66 per cent increase—for the financial year 1997-98. This is a matter of considerable concern. The government said that it was a good thing it was providing more services, but we say that it is illogical for the government to be treating, as a sign of success, evidence that there are more and more homeless people in our society. We are concerned that what is proposed here simply will not address these problems in any serious way at all. Appropriation (Supplementary Measures) Bill (No. 2) 1999 provides for the environmental initiatives agreed with the Democrats, and I will go through those initiatives now. Those initiatives are: support conversions to compressed natural gas or liquid petroleum gas for commercial vehicles and buses that have a gross vehicle mass equal to or greater than 3.5 tonnes—and that also applies to trains and ferries; support a product stewardship system for the reuse and recycling of waste oil; support the utilisation of photovoltaic systems on residential buildings and community reuse buildings; support the development and commercialisation of renewable energy; support the use of renewable energy from remote power generation; support the development and implementation of in-service emissions testing capabilities for diesel patrol vehicles where the diesel emissions testing is in connection with the making and/or implementation of a diesel national environment protection measure; and, finally, provide for a greenhouse gas abatement program. Mr Acting Deputy President, as you can see, as far as they go, those initiatives are welcome and we will certainly not be opposing them.It is appropriate at this time to re-emphasise the environmental consequences of a goods and services tax, of which this legislation forms a consequence, and the reduction in economic incentives to use alternative environmentally friendly fuels and technologies. The overwhelming body of evidence presented to the Senate committee inquiry into the impacts of the GST on the environment reinforced the view that the government's package was ill-considered and fundamentally flawed. Indeed, the Senate committee's report highlighted negative impacts on a great number of areas which it examined in some detail, including impact on the urban environment, impact on public transport services, impact on emerging technologies and impact on exports. All the evidence that the Senate committee considered tended to point to disastrous and long-term damage to the environment which would occur through an increase in diesel fuel pollutants and greenhouse gases and a reduction in economic incentives to use alternative environmentally friendly fuels and technologies.The diesel fuel excise cut will result in economic incentives to use diesel fuel transport—to switch from petrol to diesel fuel vehicles and to switch from more fuel efficient rail transport to less efficient and high polluting road transport—and a reduction in incentives to switch from diesel to gaseous fuels and to new technologies, such as solar. We want to continue to express the concern that the greatest environmental effects as a result of this measure will be in urban areas and that increased diesel fuel consumption will lead to an increase in highly dangerous particulates in our urban environments. We note that the Australian Medical Association has warned of the increased risk of lung cancer and a variety of respiratory disorders as a consequence.The direct effect of the cut in the diesel fuel excise will be to make it difficult for the government to meet even those watered-down Kyoto greenhouse gas targets. One of the clear losers will be the emerging alternative energy sector; the impact on emerging tech nologies could cost many jobs. Australia is currently a world leader in the development of new technology and the renewable energy sector, including solar energy. It is clear that the government's taxation package will be highly detrimental to this critical and developing industry; it will undermine the industry's huge export potential. The measures in this bill simply do not adequately address that issue.Evidence to the Senate committee expressed deep concern that removal of the diesel fuel rebate would also impact on what I have to describe as the already fragile economics of the Alice Springs-Darwin and Melbourne-Darwin railway proposals. The evidence on the environment, as with the evidence on books, is that the GST will impact very adversely and that the government's compensation measures will not be adequate. It is worth pointing out that the Democrats went to the Australian people with a non-negotiable set of changes to the government's GST proposals. Looking at what they have achieved in this bill, we can see that they have achieved none of those changes at all. First, in relation to the diesel fuel rebate, they said that it would be payable only to trucks over 20 tonnes, except for those carrying farm produce. In the end, they gave it to all trucks over 4.5 tonnes.Second, they said that they would not allow trips within cities to qualify for the grant. But when you see what they have ended up with, there is no apportionment at all for diesel used in the city. As long as a journey crosses a city boundary, wherever it is, then all the journey qualifies for a grant, even if the overwhelming proportion of the journey is within a capital city. So journeys commencing outside a metropolitan area but ending up in a metropolitan area and journeys commencing in a metropolitan area but ending up outside a metropolitan area will all qualify for a grant for the complete journey. What we will now see is the redesign of intracity transport routes to ensure that they briefly leave the metropolitan area in order to qualify for the rebate. Worse still, since there will be no way to ensure the integrity of the scheme, there will be claims based on fictitious routes which involve a brief time outside the city. This will not discourage fossil fuel use; it will encourage fossil fuel use. No wonder the Democrats' expert environmental consultant, Dr Clive Hamilton, resigned in despair when he understood where the deal was going. These changes are, I think, a massive invitation for tax avoidance.We can see from this legislation before the Senate that the Democrats have been absolutely naive in their negotiations with the government and have been played on a break. They have in fact achieved a system where a lot of the diesel fuel used in cities will qualify for the grant system. That is a most unsatisfactory situation, as is the situation where we do not have an indication of the boundaries for the metropolitan areas. We have the prospect of a plethora of anomalies and unfair outcomes depending on whether, in the Melbourne context for example, you describe Whittlesea or Werribee or Craigieburn or Kilmore or Seymour or somewhere else as being part of the urban area or part of the rural areas. We regard this as a very unsatisfactory situation.We certainly do not think that what the government has put forward, with the support of the Democrats, in Appropriation (Supplementary Measures) Bill (No. 2) 1999 will address those problems. Having said that, as I indicated before, we are not proposing to oppose these measures. We note that there is some $60 million of expenditure for each of the four years in relation to the book industry assistance plan, and some $15 million of expenditure for each of the four years concerning supported accommodation assistance. We also note that the environmental measures are said to involve expenditure of $214 million in the first year, $222 million in the second year, $227 million in the third year and $233 million in the fourth year. On that basis we will be supporting these measures. But we certainly put the government on notice that we do not think that the measures are adequate to address the adverse effects that its GST package will cause in the area of books, in the area of housing and accommodation and in the area of environment protection. We will be monitoring very closely the impact of this legislation, as well as the impact of the government's GST proposals more broadly, as we proceed towards implementation. I will conclude on this point, Mr Acting Deputy President—it is nice to see you in the chair.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Lightfoot)—Thank you, Senator Cook.RF4Cook, Sen PeterSenator COOK—It is obvious that the Democrats have once again been dudded. That great negotiator Senator Lees has, after a cup of tea and a biscuit, sold out the book industry, book consumers and the environment. But we know what the Democrats do support. They support a $10 million tax break for casino high rollers that goes straight into the pockets of the likes of Lloyd Williams and Ron Walker. Only last week we had Senator Allison crying crocodile tears over the evils of gambling. But when the going got tough she and her four colleagues got going. We now know about the infamous chicken run straight out the Senate doors, thus ensuring that the government's $10 million casino handout got up.We also have heard in recent weeks in the chamber allegations about Democrat concern for youth wages. Indeed, they launched a motion in this chamber against the Australian Labor Party on that subject. Their arguments on that occasion were symbolic in their significance. A huge number of unpaid or low paid workers are found among the young. The imposition of a 10 per cent GST on almost everything young workers buy and almost every service they consume will impose on them higher material costs than anything the Democrats could ever have stood up for in their resolution on youth wages. That resolution was, as I said, symbolic. The net effect of the real impact of costs on young workers is that they will be worse off as a result of the Democrats, as a party, breaking their electoral commitment, not keeping themselves honest and ensuring that in this chamber we gave assent to a package of tax measures which impose a GST tax on Australia. (Time expired)12:06:009119Allison, Sen LynSenator ALLISON1M6VICAD00—I want to address the Appropriation (Supplementary Measures) Bill (No. 1) 1999 and particularly the book industry appropriations. This bill allocates $240 million to assist the Australian book industry to cope with the GST, and there is a further $60 million in extra funding for the Supported Accommodation Assistance Program.I have to say that the Democrats would have preferred that books were GST free, and we will continue to lobby for that position whenever the opportunity arises. But the government could not be brought to agree to that position. Rather than risk the substantial benefits which we had won on the social and environmental side of the tax package and the modest economic benefits flowing from tax reform, we agreed to support the package with an agreement on a compensation package for books.The composition of the books industry assistance package has been agreed now between the government and the Democrats—just last month, in fact. The key measure was $117 million to provide an eight per cent subsidy on books for students. This scheme will be run through book stores and will provide a subsidy that is twice the Treasury estimate of the likely impact of the GST on textbooks. It represents an overall cost reduction for students. This is important, as research from Canada showed that the educational books sector was the most price sensitive to the GST.The second measure is $48 million for an innovation, infrastructure and development fund and a skills development program to improve the competitiveness of the Australian printing industry. It provides a level of grants that is equivalent to the level of the former Labor books bounty scheme. The third measure is $38 million to establish the education lending right for Australian authors. This measure has been long sought after by the Australian Society of Authors and will provide royalties or compensation to authors for the use of their books held in Australian educational libraries. As the Senate will be aware, there is a similar scheme in place for public lending institutions. This extends that program to libraries which are in schools and universities and so on.The fourth measure is $28 million in grants to primary schools to increase their holdings of Australian books—that is, books which have been authored and published in Australia. This measure will boost the sale of Australian children's books and provide a great boost to child literacy by providing a wider range of books in school libraries. The fifth measure is an $8 million sum for books marketing initiatives to promote reading and literacy—this scheme has also been used successfully by the Blair government; it was called the Books Day marketing program, and it boosted book sales and interest in reading considerably in the United Kingdom—a scheme which has been promoted strongly by the Australian Booksellers Association. The final measure is $1.2 million to improve the collection by the Australian Bureau of Statistics of statistics on Australian publishing performance.In summary, I think it is fair to say that we have achieved a good outcome. It is not perfect but, in terms of minimising the impact of the GST on literacy, learning and literature, we have developed a good plan. I wish to thank not just the government but the representatives of the Australian Publishers Association, in particular, the Australian Society of Authors, the Australian Booksellers Association and the Printing Industry Association, for their assistance in helping to get us to this point.As a result of this package, around 40 per cent of all books sold to schools, colleges or businesses will be tax free, and the 16 per cent sold to students will receive an eight per cent rebate. So 56 per cent of books will be cheaper than they currently are. The direct grants to schools represent a five per cent increase in sales of children's books, so the negative effect on a further nine per cent of books has been reduced. That is a total of 65 per cent of book segments not adversely affected by the GST. The remaining 35 per cent will benefit from the book marketing initiative—which, as I said earlier, was very effective in the UK—and cheaper Australian printing costs. In short, whilst we might not have got GST-free books, the consolation prize goes pretty close to achieving our original objective of promoting learning, literacy and literature that underpinned our call for GST-free books.Finally, I want to deal with the $60 million of extra funding for supported accommodation won by the Democrats. The Supported Accommodation Assistance Program provides services to some of the most disadvantaged people in our society. People who benefit from SAAP services include homeless youth, women who are fleeing from abusive relationships and those who have lost their homes and other assets due to serious gambling problems, for instance. SAAP services provide a pathway out of homelessness for people who find themselves with no-one else to turn to. Sadly, the need for SAAP services has been increasing in recent years. However, SAAP funding has not increased in line with this growth in demand. This has resulted in SAAP services having to turn away people who are in urgent need of accommodation, people whose only other alternative is to go back to their abusive situation at home or to expose themselves to the dangers of living on the streets.That is why the Democrats insisted on this $60 million increase in SAAP funding, which will significantly assist SAAP in meeting the growing demand for its services. I understand that it is the largest single increase in funding since SAAP began, and I hope that it reflects a new commitment on the part of the government to fully fund and support this important program.The Democrats have also won a seven per cent increase in rent assistance payments and the exclusion of compensation from the formula for calculating public housing rents. These two measures combined are worth about $100 million a year. We have also insisted on $50 million of GST concessions for credit unions and mortgage providers to ensure that they remain competitive in the home mortgage market against the banks. That is on top of the $800 million first home owners grants scheme, which provides a $7,000 cash grant to first home buyers.We are continuing to pursue the issue of the GST application to not-for-profit housing organisations through the charities committee which we have assisted in establishing within the Taxation Office, particularly focusing on the definition of non-commercial suppliers of residential accommodation by charities. The 50 per cent of cost rule is far too low and needs to be raised. These measures combined will alleviate much of the impact of the GST on the housing sector, particularly for low income earners and for first home buyers.In conclusion, the Appropriation (Supplementary Measures) Bill (No. 1) 1999 and the Appropriation (Supplementary Measures) Bill (No. 2) 1999 are an important down payment on spreading the benefits of tax reform. They ensure that the environment, learning and low income earners are all clear winners from the tax package. We believe we have achieved that, and we are pleased to support these two bills.12:15:009121Bolkus, Sen NickSenator BOLKUSXE4SAALP00—And now we come to the pay off. Appropriation (Supplementary Measures) Bill (No. 2) 1999 does not merely appropriate supplementary measures. It represents the crumbs that fell off the table when the Democrats were conned by the government to pass the goods and services tax package. It represents very much the Democrats switching constituency priorities and ditching the environmental movement for small business. It is not just a one-off; this deal has taken the Australian Democrats down a road which has meant almost a monogamous relationship with the government when it comes to doing deals in this place.Time and time again, since the GST arrangement made between the Democrats and the government, we have seen the Democrats come in here—from time to time for some reasons but, quite often, without excuse or reason—and ditch long held positions protecting environmental issues, protecting the disabled, protecting long striven for and long fought for rights. We have a new coalition in this parliament. It is not a coalition between the Nationals and the Liberals, it is a three-way coalition—a tripartite arrangement. We will remind the public, day after day, once they have to suffer the goods and services tax, that it is not just a Costello tax package, not just a Howard tax package, but a Howard-Lees tax package and a Costello-Allison tax package. We will remind them of that.Senator Allison may sit there shaking her head but the reality is that those long cherished constituencies of yours do not understand what you are doing. They cannot understand what you are doing and they do not like what you are doing. They do not like at all the fact that you have passed into law an unfair tax, a goods and services tax, a tax that will apply not just to the things people expected but to so many other areas of services and goods that people were not expecting at the time this package went through. We will make sure that the public see this tax as the product—Senator Allison is leaving the chamber now, as the Democrats always do when they do not like being argued with—of a deal between Howard, Costello, Lees, Allison and Murray, and we will remind them of it.There is no doubt that we are talking about an unfair tax but also, in this package, a bribe to try to buy off environmental concerns in our community. That is all it was; the Democrats were trying to con their constituency. To ensure that the constituency was conned, they have come up with this token trade-off against the diesel fuel rebate. This rebate, which is a huge subsidy, encourages greater use of fossil fuels which will directly increase our levels of greenhouse emissions, and impact on human health and the environment. It is not just the Labor Party that says that: time after time, day after day, Senator Allison, in a committee she chaired, made those points about the diesel fuel rebate. She made points sincerely to those witnesses who were before her, witnesses that she in fact orchestrated, in some instances, to come before the committee to give evidence. But, with one flick of a switch, with one push from Senator Murray, senators Allison, Bartlett, Stott Despoja and Woodley—the whole lot of them—were rolled in this quite historic shift of priorities for the Australian Democrats.Even when you analyse the package before us, you can see that not only were the Demo crats conned to support the goods and services tax but also the government has in effect pulled the wool over the Democrats' eyes on the so-called environmental GST package. It is becoming clear that what we have here is not just a package with an environmental objective but a package which does not in its essence, in its fundamentals, have spelt out the specific objectives. We have here bad public policy. We have here allocation of funds which are not being well directed nor well thought out.In relation to the $400 million Greenhouse Gas Abatement Program, the Australian Greenhouse Office has written to environmental groups and other organisations asking not for submissions under program headings, under particular objectives, but for ideas on how to spend the money. This is a reversal of the normal process. It is a debunking of the normal process. The usual process is that you develop the programs and the objectives and then seek ideas and submissions in accordance with those objectives. But what you have here is the government and the Democrats coming up with a token figure—and it is a token figure when you compare it with the enormous amount of subsidy going to the diesel fuel rebate—and then screaming out across the country for ideas about how to spend it.I am sure the Auditor-General, at the appropriate time, will take an interest in the way that moneys are being allocated with respect to this deal. As I said, usually you have detailed proposals developed, then budgets allocated for programs and then submissions put in to fit in with those program objectives. What we have here is a concern, which will increase as this program develops, in the parliament that we do not have much confidence that the money will be well spent, that the taxpayer will get value for money or that the money will be properly accounted for.We have a precedent in the environmental area under this government which gives us concern that this program will go the way of the National Heritage Trust. We are concerned that there is a lack of outcomes, that the objectives for which that trust was set up are not being realised. Decisions are continually being made by the minister, over and above local committees and a more national structure. Basically, there is a distortion of the objectives of that trust and a lack of outcomes with respect to those objectives.We are concerned that the money for this program will also be frittered away through a lack of any strategic plan or any genuine attempt by the government to address the greenhouse issue. The public must be concerned to have details as to how this money will be spent, how it will be allocated and who will make those decisions. Which departments will be administering each of the amounts appropriated? Will the Australian Greenhouse Office have a decision making role? If it does, for how much of the allocated funds will it be able to make decisions? Will any of this money be used on vegetation initiatives, initiatives that would effectively assist farmers rather than address a reduction in greenhouse emissions?At this particular stage of this debate, we also see a greenhouse policy which in many ways is exposed as being in shambles. It has been exposed this week as being in shambles, and this government has been exposed as a government with no strategy or clearly identified priorities when we consider the Australian greenhouse inventory, which was released only in the last week. This inventory shows an 11 per cent increase in emissions between 1990 and 1997, excluding land use clearing. We are, therefore, nowhere near meeting our 108 per cent Kyoto target. There is no doubt now that, despite the government's massive allocation of funds in the Natural Heritage Trust and despite rhetoric and commitments from Senator Hill, our objectives with respect to the Kyoto target are not being met—in fact, we are going in the wrong direction.These bills show the Democrats' naivety in negotiating with the government. As I said earlier, it is not a one-off; it is becoming consistent. I see Senator Brown is in the chamber and he, I am sure, has other points to make with respect to both the naivety and the sell-out nature of this deal. It is becoming more and more apparent that the Australian Democrats entered into their GST package deal with the government with reckless indifference to its environmental impact. One could not be more generous to them than to argue that there was reckless indifference.The more we look into this issue, the more evidence we find that the Democrats have been dudded by the government. They have agreed to a massive taxpayer funded price cut for diesel and they have got, as I say, this sort of package in return. They listed the environmental benefits at the time of the announcement of the package. They made great noise, great clamour, about how they were acting to protect the environment. They argued that they achieved tighter standards on emission controls, but we have now found out—as we found out then, and we are finding out more—that those controls, despite being presented as a breakthrough, were already being developed.Much of what the government and the Democrats have agreed to was already in the pipeline. The moves, for instance, to phase in tighter standards to clean up dirty diesel engines that were announced as part of the agreement were already agreed to by the Commonwealth, states and even industry. The Democrats then talked about the abolition of the diesel fuel rebate as being a major gain for the environment, yet it has not been abolished.The Prime Minister promised the Leader of the Democrats that the government would look at applying a greenhouse trigger within the government's Environment Protection and Biodiversity Conservation Bill in relation to new projects that would be major emitters of greenhouse gases. Debate continued on the bill. A trigger was proposed by the opposition, supported by Senator Brown and rejected by the Australian Democrats. It was rejected on the basis that the Prime Minister promised that the government would look at a trigger in the context of that legislation. Twenty-four hours passed—maybe not even that—and the minister for environment then admitted that this trigger may be achieved by regulation but `only following consultation with the states, and only then if all the states agreed'. Within that same period, we had a message very clear and direct from Premier Court in Western Australia that his state would not agree.So the trigger will not be realised. The preconditions to achieving the trigger cannot be met—state Premier Court has made sure of that. That trigger will not be realised. The diesel fuel rebate has not been abolished, and the tighter emission standards that were being crowed about were going to take place in any event. In some respects, those standards have been brought forward from the timetable that was being talked about between government, industry and the states but, in some other respects, the timetable agreed to by the Democrats has been deferred.So basically we have a deal done by the Australian Democrats to pass the GST, and three of the four achievements—tighter standards of emission controls, a diesel fuel rebate and a greenhouse trigger—are no more than a sham. With respect to the package for greenhouse emissions, we see a program that really has no structure, a program whose objectives are not being set and a program which will probably go down the road of the Natural Heritage Trust in not achieving what needs to be achieved.These are just some examples of how the Democrats were dudded in this particular package, and this is the package reflected in this legislation. Since that day, we have seen a cementing of the relationship, a closing of the ranks, between the government and the Australian Democrats. The Democrats claim that they have not lost interest in their prior constituencies, but Senator Murray gave the whole show away on the Sunday program just a few weeks ago when he made it very clear that they had to move from one constituency to another and that the preferred constituency was in fact the business constituency. That is a bit of a shock to Democrat supporters.It was interesting this morning that Newspoll showed concern for the environment as one of the important issues in the Australian public—I think it ranked third or fourth as an issue of concern. That poll was analysed in terms of who can be trusted with the environment and, when it came to the Australian Democrats, the letters `NA' appeared. Basically, Senator Brown, I think they have vacated that left of centre environmental field and left it to you totally and exclusively, and their supporters have come to that realisation and conclusion as well. In speaking on these bills, I indicate to the Senate that they represent a package that will deserve and get greater scrutiny from this parliament as it is implemented—scrutiny through the estimates process and scrutiny through other forums of the Senate.12:29:009124Brown, Sen BobSenator BROWNQD4TASAG00—I want to concur with the speech Senator Bolkus has just given on the Appropriation (Supplementary Measures) Bill (No. 1) 1999 and the Appropriation (Supplementary Measures) Bill (No. 2) 1999 . This legislation is providing taxpayers' money for certain purposes, including the book subsidy deal which comes nowhere near meeting the Democrats' commitment that a GST would not be placed on books. A wide range of other financial arrangements are also coming out of the government's deal on the GST, which went through this place with the support of the Democrats to give us the Democrats-government GST package.Firstly, on the books, it is important for those out there who believe it is a good result to be getting a subsidy from the government for the promotion of book sales and production in this country to realise that it only goes for four years for starters. Once the GST is in, that goes on forever. This is neatly tailored to give those people concerned in the book industry some succour through until after the next elections, and the Democrats bought that.But the book industry will now have to depend on future governments for future subsidies. History ought to tell everybody in that industry that they are not going to have their wishes met further down the line, with competing interests being as they are. By abandoning the ironclad commitment to protecting books from the GST, the Democrats sold out that industry, education and the importance of the purveying of information in Australia by Australians to Australians. There will be no recovery from the economic impact of the GST as we go down the line. In fact, I predict things will get much worse as the subsidies are racked back in the future— particularly by governments who are not part of the current deal being made by the Democrats.The Democrats are currently absent from the chamber, and I am sorry about that because one issue I want to concentrate on in the minutes available to me is the one Senator Bolkus referred to—that is, the environmental consequences of the package that the Democrats signed. In Appropriation (Supplementary Measures) Bill (No. 2), there is provision for certain remedial actions to be taken under the Lees-Howard deal, the Democrats-government deal, to push along some matters which will be seen to be helping the environment. Let me say at the outset that they go no way to redressing the environmental negatives of the GST package—in particular, the massive rebate, and therefore stimulus, to the burning of fossil fuels in this country, the so-called diesel fuel rebate.Let us look at that for a moment. Estimates by ministers have been that the mining industry alone will benefit to the tune of more than $2 billion per annum. This is a massive sum. Listening to the radio this morning, I noted the warning to taxpayers and service providers in Australia that the nation, which has currently embarked on a massive effort to establish and structure East Timor, may be out of pocket for that help to our neighbour to the tune of somewhere between $500 million and $2 billion per annum. The comment is that the nation is going to have to find that money through new taxes or through cutting services, and those services include education, health, social welfare and hospitals—the whole range of services which Australian citizens depend upon. That is a pretty bleak prospect in an era in which government spending has already been cut.But here we have a measure—the Democrats-government GST package—which hands $2 billion a year to the mining industry, the mining mates. That may sound like a trite term, but it is not. The mining industry has got this largesse from the Howard government and the Senator Meg Lees-led Democrats through the package we are incidentally dealing with here. It is a massive amount of taxpayers' money.The estimate of $2 billion per annum going to the mining corporations is a conservative one. It is enough to pay for the maximum currently planned operations in East Timor but, with the passage of this legislation, we close the option of leaving the mining corporations with pre-existing taxation set-ups, the cost of diesel and inputs. They have been able to deal with that and make good profits.Here we are asked by the Democrats to hand across to the mining corporations $2 billion per annum—well, we are not asked; we are being told that that is what we are going to have to fund. I am sure we are going to hear from the same people a lot in the coming years as we debate in this place how we are able to fund our peacekeeping operation in East Timor, let alone government measures coming down the line as a result of that operation to cut services to Australians. Those services are going to be cut because of the Democrats' compliance with the government's GST package. If that package did not include its attendant huge largesse to the mining corporations through the diesel fuel rebate, if that package had been trimmed to a GST package leaving out that rebate—that bag of goods to the big corporate sector—we would not be looking at massive cuts down the line in education, health and general service deliveries or, alternatively, increased taxation.When we are talking about increased taxation here, we are not talking about increased taxation to the corporate sector. As we know, that sector is about to get a tax cut. It will get it because it is supported, I would presume, by the new players at the government table—the Democrats. If we look a little further into this, we see that there are measures in the second bill to cut back greenhouse gas emissions—a series of measures which are designed to aid the environment. I would ask the Democrat spokespeople to give to this chamber an estimate of the impact on the environment of their own GST package, particularly this massive subsidy to the burning of fossil fuels in this country.I have just come from the National Youth Round Table, a presentation by young people in Australia—clear thinking futurists—which is being held in the main committee room of this parliament. They have spoken about the demoralisation of young Australians, because they do not believe that those in power—that includes this government—are taking the environment seriously. How much more demoralising it must be for them when a party that has claimed for the last 20 years to have been at least light green becomes part of the problem. That is what has happened with the Democrats. I do not make this assessment of their role lightly, because it has tipped the balance in this country very heavily against the environment, with an anti-environmental government in office at a time when young Australians consistently show the environment to be at the top of their concerns. Their concerns are not only being ignored but are being uncleverly left out, because the government and now the Democrats are not giving the environment the priority that it deserves. It is their future that we are dealing with here.When it comes to global warming, there is a growing sense of despair amongst young Australians and young people right around the world. This issue is being left on the sideboard. Senator Hill, our minister for the environment, went to Kyoto and signed off on Australia increasing pollution as far as global warming gases are concerned by eight per cent from the 1990 levels to 2010. The estimate of the people on the youth forum is that that target has already been overdone; there has been a nine per cent increase in global gas emissions already on 2010 figures, and there is no evidence of any national plan—this would require laws that have teeth in them—to implement the Kyoto target. The issue becomes all the more concerning when the scientific literature, written by people who have been thinking about the global warming issue for decades now, says that it is not a consistent output of global warming gases as of 1990 levels that is required, let alone an eight per cent increase; a 50 per cent plus decrease on 1990 levels is required if we are going to come anywhere near to achieving a sustainable environment. The figures keep coming in and keep being ignored.It is interesting that in my home state of Tasmania, where we can expect there to be 16 winter days each year when the temperature does not reach 10 degrees, this year there were just four such days. That is not a one-off statistical aberration. As everybody listening to this debate knows, year after year, we are notching up world record high average temperatures—not just in our region but right around the globe. Since human recordings of weather began, at least 10 of the hottest years have occurred since 1979, last year being the hottest on record and this year looking very likely to overtake that.As legislators we have a responsibility where we see unfolding a process which is enormously damaging not just to the environment but to the economic prospects of people around the globe in the future. The youth round table this morning, using very conservative figures, said that in the next century 20 million people will lose their places of living due to rising sea waters. That is an extraordinarily conservative figure. When we see this unfolding into the future, into the lifetimes of our present Australian young people, and we have before us in this Senate legislation which actually adds fuel to the fire, we can understand why young Australians get disillusioned.You cannot bring tax legislation, appropriation legislation, into this place without debating the environment. Giving some dollars to programs like those that have been announced here in the second reading speech for the second bill pales into insignificance when you look at the diesel fuel rebate going to miners and others. It shows how short of the mark the government and the Democrats are in facing up to their responsibilities to meet the environmental concerns of young Australians who seem, on the whole, to have a lot better sense of the future with regard to the environment.Debate interrupted.Matters of Public Interest912610000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Sherry)—Order! It being 12.45 p.m., I call on matters of public interest.912612:45:009126Tierney, Sen JohnSenator TIERNEYO15NSWLP10—I continue today a series of speeches I have been making on regional development in Australia and the key theme of these speeches is related to the role of government and, in particular, the need to shift from being a doer and a director to being a `change leader'. What we need very much for effective regional development in this country is to have an approach very much in line with what McKinsey suggested in his 1994 report on regional development—that is, a bottom up approach where government encourages leadership that is vital for regions and business at the local level.The region of Australia that best exemplifies this is the Hunter region. This is a very historic week for the Hunter as it stands at the crossroads of its development with BHP, the major steel producer, shutting down steel smelting. Historically, BHP has been synonymous with Newcastle. So is the end of BHP the end of Newcastle? Is massive government assistance needed? If what is happening now happened back in the 1960s, then the answer to both these questions would be yes. But at the edge of the new millennium, Newcastle and the Hunter region are very different from what they were in the 1960s. The Hunter has a very bright future but it does need to shift gears. Government does have a role as a change leader, and the Hunter is a case study on how government's role in this process should be carried out.First, let us put the problem in some perspective because there have been some wild figures thrown around about the scale of this problem. It is a big problem but it is not an insurmountable problem. The Hunter has a population of over 500,000 people, which is three per cent of the Australian population. But we certainly pull our weight in the Hunter, with that three per cent of the Australian population producing five per cent of the GDP. It is an economy larger than Tasmania's. The biggest employer in the Hunter—and this might surprise a lot of people—is the Hunter Area Health Service: the health industry is the biggest industry. The second biggest employer is the University of Newcastle with over 14,000 students and over 3,000 staff. The third biggest employer is BHP—until tomorrow—which employs less than 3,000 people.One per cent of the Hunter work force is employed by BHP and tomorrow 2,100 jobs will go in steel smelting. This is the filthy end of the steel making process—those jobs go tomorrow. But there will be no change in the product that comes out the gate. People are under the misapprehension that steel making is ceasing completely in Newcastle. That is not the case. Steel smelting is ceasing in Newcastle. The billets from Whyalla are being railed to Newcastle and the rolling operations, the rod and bar mill and the new wire mill, which employ over 1,000 people, will continue.BHP have introduced world best practice in downsizing by case managing all 2,100 people who are going from steel smelting. They have set up a job employment centre and they have linked this to Centrelink. They have set up a transition committee to manage this downsize and they have created a Job Pathways Program. On these pathways, workers have been streamed into five different directions: the first path is internal redeployment within BHP; the second path is moving on to other businesses; the third path is starting their own business; the fourth path is further education and training; and the fifth path is retirement.On BHP's estimates—and I was out there two weeks ago talking to senior management and their transition and employment people—900 people in the work force at BHP's plant who will lose their jobs have not yet worked out their future. BHP's estimate is that 300 of the 900 will probably find jobs. So the scale of the problem—and this is the important thing to get in our minds—is that 600 people will have difficulty finding employment.In addition to the direct work force, there is also a subcontracted work force. There have been some wild figures thrown around about this, and I want to publicly correct particularly the ABC who, on their national TV two nights ago, said that 2,000 subcontractors were going to lose work. This is wrong. Even the local figures show that this is a wild exaggeration. The University of Newcastle has done a modelling study which shows that probably 900 subcontractors are going to be affected. But this was modelling; it was not a count of actual people. So that is also probably an exaggeration.But even assuming it is right, most of the subcontracted work is done by very large companies. Most of the subcontracting is done by groups like Brambles, Transfield and ABB. These are very big companies who have a variety of contracts and whose work force moves up and down over time: they move people internally across the organisation depending upon where the work is. They have seen this coming for 2½ years when BHP announced this, and they have made their adjustments.Another group that will be affected are the small subcontractors, people who rely totally or almost exclusively on BHP at Newcastle for their work. Minister Abbott, the Minister for Employment Services, has identified all these firms—there are 25 of them. They employ, on average, four people. Therefore, that brings the total to 100. So the scale of the problem is: 600 jobs at the plant and 100 subcontractors—a total of 700. To put this in perspective, that figure of 700 is about what the Hunter economy generates in new jobs in a good month.BHP, to their great credit, gave everyone a lot of notice of what was going to happen 2½ years ago. At that time, the Prime Minister came to Newcastle. He has returned three times since. That is a record for any Prime Minister of this country. I think it is more visits than all the other prime ministers put together.3L6CONROYSenator Conroy—No black tie dinners for John Moore.O15Tierney, Sen JohnSenator TIERNEY—It was a sign of maturity, Senator, of the work force in Newcastle that, at that time, there was not one placard and not one demonstration.3L6CONROYSenator Conroy—They'd given up.O15Tierney, Sen JohnSenator TIERNEY—No, they had not, Senator. They had a very mature reaction, much more mature than yours at the moment, to this event. They realised that the city needed a cooperative arrangement with the federal government to bring about this change in a cooperative way. The Prime Minister set up a structural adjustment package of $10 million and established the Prime Minister's task force. He took a personal interest in this downsize. There are no politicians on this task force. It is all local community and business leaders. The Prime Minister has returned three times to meet personally with that task force—of course, he has had his ministers meet more often with them—and he always has his meetings in the boardroom of the Ironworkers Centre.The Prime Minister has been in the region listening directly to the leaders of the community, which include the head of the Ironworkers Union, the head of the Hunter Business Chamber, the Bishop of Newcastle and a range of other concerned people operating in the area of welfare. They have also given us advice on the Hunter structural adjustment package. It is this package that we have been rolling out over 1999 in particular. The key projects that have been funded are basically infrastructure projects. We see the role of government in this sort of exercise as one of providing the basic infrastructure from which private enterprise can generate a range of new jobs. Each project has been assessed carefully in terms of the jobs it will create directly and indirectly.For example, the Maitland transport hub was funded by the government to the tune of $1½ million. Already, Daimler/Chrysler, the old Mercedes Benz company, has set up its trucking operation in the area. It is going to become a centre for trucking in the whole of Australia with trucks being brought directly in from overseas. Blue Ribbon Coaches have also put their business there. There are a whole set of other related industries who service buses and trucks. That means new business for the Hunter Valley area.Another example is the Hunter water pipeline. It is quite amazing, given that this is an area that produces the best wines in Australia, that it has not had a secure water supply in its 130 years of grape production. We have now provided that by seeding the funding for pumping stations. The rest of the $10 million has been borrowed commercially. That will deliver a secure water supply to the Hunter, increase the yields in the vineyards and create more vineyards. Wineries will be created. Other tourist industries will then flow on, such as resorts, accommodation and restaurants. For the $1½ billion worth of projects already approved in the Lower Hunter Valley for this sort of thing, the secure water pipeline is the key bit of infrastructure which will give it the boost.Another example is the Hunter Call Centre. With the new information age technology, call centres are one of the big developing industries of the information age. The Hunter Call Centre, which we have funded with $2.5 million, will add to the critical mass of call centres which already exists in the Hunter. That gives a new direction for Hunter business. Yet another example is the Hunter Stock Exchange. We have the opportunity with $600,000 of seeding funding to create a second board which will make it easier for businesses to set up a new business in the Hunter without the high charges of the Sydney Stock Exchange. We will be able to accumulate small amounts of capital and provide support for smaller businesses than those which usually list on the Sydney Stock Exchange. It will become the hub of regional finance not only in the Hunter but also right across the country as it will be the only regional board getting up and running in Australia. One of the big developing industries in the Hunter relates to air travel and aerospace industries. Yet another example is the $1½ million we have given for the Hunter regional airport. We have extended the terminal and the runway aprons and provided the necessary infrastructure to lead to the next boost in air travel. Usage at that airport has doubled in the last seven years. It is set to take off again. We have also given $1 million to business incubator projects like the Cycleway project at Lake Macquarie to again seed infrastructure which will then fund small business, and that of course is the hope of the future for the Hunter.Over the next few weeks we will be announcing the rest of the projects which are being rolled out under the Hunter structural adjustment package. All up, they are expected to generate 1,000 direct jobs and 4,000 indirect jobs. This is targeted assistance for the region—essential infrastructure that small business can build on and prosper from. It is an excellent example of government acting as a change leader and setting the stage for regional leaders and regional businesses to allow the Hunter economy to grow in new and diverse ways. No longer will the Hunter be so dependent on iron and steel. As well as the vineyards and resorts and related tourist industries, the Hunter has a very high-tech future with the development of the call centre, the development of the stock exchange and the growth of the high-tech aerospace cluster at Williamtown.There are also exciting proposals in the Steel River project. This is BHP's legacy to Newcastle where they have taken old industrial land and redeveloped it, not for standard smokestack industry but for new high-tech information industries. Already the CSIRO have committed to moving a site to the region which will develop alternate energy resources. The university proposes to build a high-tech business incubator, turning the university's leading edge research into medical biotechnology, engineering and information technology business products. As the world moves from the smokestack age to the information age, and the biotechnology age beyond that, the Hunter will be one of the regions leading this change.912913:00:009129Conroy, Sen StephenSenator CONROY3L6VICALP00—I would like to talk today on an issue I have raised on a number of occasions in the past, the circumstances surrounding Mr John Elliott. I would like to commence with Ken Jarrett's statement of 1994 where he outlined what happened in relation to the Swiss convertible bond transactions. Paragraph 12 of his agreed statement says:In about June 1984, IXL through a subsidiary, Elders NB, made an issue in Europe of convertible bonds having a face value of US$160m. The motivation for the issue was partly a need for IXL to raise capital and partly to enable executives of the company to take up financial interests in the company in a manner which would be self funded. I believe the scheme to finance executive participation was proposed initially by Bankers Trust. It was attractive to the intended beneficiaries in that it was expected that the bonds would increase in value as IXL prospered and it would enable them to maintain some control over the company.Paragraph 13 says:I became involved in discussions relating to the proposal initially with Wiesener and Elliott. By the time that issue was made Elliott, Scanlon, Wiesener, Cowper and Lord were to my knowledge aware of the executive participation.Mr Ken Jarrett is saying that Mr John Elliott knew about the transaction but Mr John Elliott is saying he has no idea who the beneficial owners of the bonds are except that he thinks they may be Belgian dentists.If that is the case, a few questions arise. Is it reasonable to believe that in 1986, during a period when Elders IXL could have been taken over, that the chairman, Mr John Elliott, would not have known the beneficial owners of approximately 15 per cent of the Elders IXL stock? If Mr John Elliott had no interest in the convertible bonds, why is it that he and his lawyers have spent nearly 10 years and a great deal of money trying to prevent the NCA from finding the names of the beneficial owners? Why did he not cooperate with the NCA's inquiries if he had nothing to hide? How did Mr Graeme Samuel know where to go when he decided to purchase the bonds on behalf of BHP? How did he know who to purchase them from? Who put him in contact with the alleged Belgian dentists? The fact is, of course, that the bonds were sold to Graeme Samuel by the owner, Mr John Elliott.I return to the statement by Mr Ken Jarrett. Paragraph 14 says:Of the US$160 million issue, a sizeable parcel of, to the best of my recollection, around $105 million, was taken up by or on behalf of executives of IXL or associates of those executives. Wiesener organised the structure of the placement so that the fact of executive participation could be concealed. I do not presently have access to much of the relevant documentation. However, I was aware that funding was provided by the Hong Kong and Shanghai Bank, Bankers Trust and Credit Agricole. I believe I was told this by Wiesener. Elders entered into an interest rate swap arrangement with Bankers Trust, and Bankers Trust entered into a back-to-back swap arrangement with entities representing the investors. My understanding from what Wiesener told me is that the structure that he established involved use of a number of offshore jurisdictions and a Bank Cantrade in Switzerland. The object was to enable a small group of people, which I understood included Elliott, Scanlon, Wiesener, Cowper and myself to benefit from the investment and at the same time keep the identity of the true beneficiaries secret. From my conversations with Wiesener and Elliott, I understood that it was Elliott who determined how profits arising from the $105 million placement would be apportioned amongst the intended beneficiaries.As Richard Gluyas pointed out in an article in the Australian on Tuesday, March 10 1998:The National Crime Authority's seven-year investigation into John Elliott's business dealings has been reactivated after the return to Australia late last year of a key potential witness in the investigation.The NCA obtained undertakings of all directors of public prosecutions, State and Federal, that the witnesses would not be charged with any offence.What we now know is that the key witness who has been so reluctant to return to Australia for so many years was in fact Mr Richard Wiesener. What we also now know is that in his evidence to the NCA, given under oath with legal representatives present, was a statement in support of the evidence provided by Mr Ken Jarrett.The key point to note here is that Mr Elliott is slowly being abandoned. First it was Ken Jarrett; then Peter Scanlon and Ken Biggins abandoned their cases against the NCA for damages, leaving John Elliott on his own; and now it is Richard Wiesener seeking an indemnity before providing a statement to the NCA.What we are witnessing is the sad spectacle of thieves falling out. The only question that remains is for how long the Liberal Party will cling onto John Elliott as one of their own, a standard bearer of all they believe in and hold dear.I return again to the statement by Mr Ken Jarrett. Paragraph 16 says:On the 10th and 11th of April 1986, IXL, through a subsidiary, purchased 18.56 per cent of the issued capital of BHP. On the same dates BHP purchased a $105 million parcel of Elders NV convertible bonds at a price which represented a profit to the beneficial owners of the bonds totalling tens of millions of dollars. By my own calculations the total profit amounted to about $78 million. After the sale to BHP I was told, I think by Wiesener, that a share of the profit had been allocated to me. I was later told by Elliott that my share had been reduced in favour of Scanlon, because Scanlon felt he deserved more than his original allocation for the pivotal role he had played in generating the profit.This is $78 million profit on bonds that they owned—not, as they now try to pretend, that they knew nothing about them.It should be recalled that Mr Ken Jarrett spent six months in jail in 1994 for not disclosing his beneficial interest in the profits from the convertible bonds. Why should Mr Ken Jarrett do time for an offence when the architects and major beneficiaries, Elliott, Scanlon, Wiesener and Cowper, are wandering around with the money in their pockets and Elliott is saying the NCA should be sued for damages?What do the documents obtained from Switzerland last week reveal? Firstly, the documents reveal many millions of dollars going into the Swiss bank accounts. Secondly, the documents reveal that Mr John Elliott and associates Scanlon, Jarrett, Wiesener and Cowper identify themselves as the beneficial owners of the bank accounts. Thirdly, the documents reveal that millions of dollars went into the bank accounts at or around the time that BHP purchased the convertible bonds. That is what is in the documents. The transaction occurred after Peter Scanlon told Graeme Samuel that Wiesener is the spokesperson for the beneficial owners of the bonds.How did Graeme Samuel know where to go to buy the bonds for BHP? Did the key figures of BHP at the time, Balderstone and Loton, know what was going on and were they prepared to be party to it? The answer, on balance, is that they probably were and condoned it.Earlier documents in the NCA's possession reveal that when the money was paid by BHP it went into Wiesener's account in the Chase Manhattan Bank in Monaco. It is likely that from there it went into other bank accounts before reaching the bank accounts at Bank Cantrade. How long did it take for the money to be paid by BHP and then arrive in the Swiss bank accounts at Bank Cantrade? The answer will be found in the documents and the presumption is that they will show that this all happened within a few days of the transaction.What action can be taken now that the documents are available? The NCA needs adequate resources to ensure that it is able to process the material and hand it up in an admissible form to the DPP in Victoria. The NCA already has a statement prepared in admissible form from Mr Ken Jarrett. The NCA has a statement from Mr Richard Wiesener, sworn under oath, that confirms what Jarrett has said. It is worth noting that the company that set up this transaction and arranged the interest rate swaps between Elders and the Hong Kong and Shanghai Bank was Bankers Trust and the chief executive was Mr Chris Corrigan.In order to try to avoid prosecution in the future, Chris Corrigan sought and obtained from Wiesener a document to say that Wiesener was not doing this on behalf of Elders directors. So why did Mr Peter Corrigan seek such a reassurance? There is no doubt he knew all along who the beneficiaries were and was seeking the assurance to protect Bankers Trust.It is worth noting that Elliott, Scanlon and Jarrett assured the Elders board that they had no beneficial interest in the convertible bonds, right throughout that period. It can be reasonably assumed that Peter Scanlon and Peter Corrigan were in on this scam from the start and could well have been the architects of the concept executed by Wiesener and Jarrett.What offences have been committed? The offences at a state level include: conspiracy to defraud Elders; paying secret commissions; and obtaining financial advantage by deception. The offences at a federal level include: dishonest conduct as a director—it has to be remembered this is the offence that Ken Jarrett has already pleaded guilty to; directors' duties offences from here to Albury and back; and the most serious breaches of the takeover code ever.Mr John Elliott's damages case against the NCA got some publicity recently. On Mon day, 27 September, the NCA called on the Federal Court to throw out the damages case after Elliott produced a seventh statement of claim. For the first time, Mr John Elliott asserted that the foreign exchange transactions were a sham. In doing so, he perjured himself. What he is unable to do is to detail any transactions to which the payments were related. In other words, he has been unable to document in detail what happened in the sham $66.5 million foreign exchange transactions. Why, after having been acquitted by Mr Justice Vincent, is Mr John Elliott having such difficulty in reconstructing events? The main reason is that in his evidence under oath before the NCA, which is on the public record in a public document, John Elliott lied and in doing so perjured himself.How do we know this is the case? The public record shows that he knew of the H fee transactions, spoke to Ken Jarrett about them and, in his own words, allegedly hit the roof when he found out that one transaction would involve a loss of $39 million and the second $27 million. Consider the following excerpts from the Elliott testimony before the NCA. On page 663, Elliott:And so I agreed with him that he ought to take the 120 million pound cover, but that it ought to be done through a bank.On page 665, Elliott says:I said, that is fine, do it.Again on page 665, Elliott says:Well, the next time I really remember having anything to do with dealings about that transaction was in January when I suppose I hit the roof.On page 667, Elliott says:I said you cannot leave this thing over this cash exposure all the time to meet the other side of the hedge transaction so I said close it out.This resulted in a loss of $39 million. On page 675, Mr Rozenes, on behalf of the NCA, put the following question:What about the second transaction?On page 676, Elliott says:and I do recall that we got it wrong, so we decided to close it out pretty quickly.So it is clear from his evidence that Elliott committed himself to two foreign exchange transactions; that he knew all about them; and that he said they were legitimate transactions. When he was questioned by the Elders auditors—again these are public documents now—he defended these transactions. He said they were legitimate and demanded that they be accounted for in the Elders accounts in the way he described. After the NCA exposed the evidence as a pack of lies, Elliott left the court following the Vincent ruling and said that: `Of course they were fraudulent, but we did not know anything about them'.John Elliott did not tell the truth when he appeared before the NCA under oath. He did not tell the truth after the Vincent judgment and now he has admitted in his seventh admitted statement of claim that the H fee was a sham. He has perjured himself. The Prime Minister and the Attorney-General need to ensure that the NCA is adequately resourced so that a brief can be prepared for the DPP and the matter brought before the courts as soon as possible. The Victorian electorate showed on 18 September that the days of using government to protect mates are over. The only question remaining is whether John Elliott is entitled to naming rights for his private prison cell, which he deserves. If he does not want to end up there, Chris Skase has a spare room for him in Majorca.913213:13:009132Bourne, Sen VickiSenator BOURNETW4NSWAD00—In 1950 Sir Robert Menzies established Radio Australia as part of the ABC in order to ensure the broadcasting of a reliable source of news and current affairs to our neighbours in this region. I cannot think of a time when we have had a greater need to broadcast accurate news and current affairs to the people of Indonesia. Unfortunately, the Cox Peninsula transmitter, which would provide this service, was closed by the government in 1997.We have heard various reasons for closing the transmitter. One is that the cost of keeping it open was too high. In fact, it is a spectacularly cost-effective way of projecting Australian views and attitudes as well as accurate news and current affairs and information into our region.Another reason was that short wave is a dying technology and we might as well close down our short wave facilities now and start concentrating on emerging technologies. Unfortunately, the opposite appears to be the case. Short wave has huge currency in our region. Every country in the region, except Burma, broadcasts in short wave and there is spectacular interest from a very large number of overseas broadcasters to broadcast in short wave out of Australia. The only government which does not seem to be able to grasp the importance of short wave broadcasts in our region is our own.My personal favourite reason for not broadcasting from Cox Peninsula—and the most outrageous reason seriously given for closing down the transmitter—is that we should not be telling people in other countries facts that their own governments do not want them to hear. If any government senator still accepted that one, I would hope that the information currently being touted as fact in much of the Indonesian media about the activities of Australians in the multinational force, would have convinced them otherwise.Over the past couple of days I have asked Senator Hill, as Minister representing the Minister for Foreign Affairs, a couple of questions about the Cox Peninsula transmitter. Senator Hill explained that there was a problem of dead zones. Of course, the issue of dead zones is not a new one; the Cox Peninsula dead zone has always affected transmission to East Timor, and no-one disputes that. The Shepparton transmitter is able to transmit there. It is good that it is doing it. That is not an either/or arrangement, though. We need both transmitters. The Cox Peninsula transmitter is able to reach central and western Indonesia, including Jakarta, where a large proportion of the Indonesian population resides.From an economic point of view, it seems ridiculous that we are leasing transmitters from Taiwan and Singapore when we have our own state-of-the-art transmitter sitting there idly gathering dust. I have not been able to get an exact costing on the leasing arrangement, but I believe it is about twice the cost of running Cox Peninsula. Leasing transmitter time for a few hours a day is like paying for a hotel room by the day rather than renting a place for six months and, of course, the ABC has to meet those expenses out of its already very constrained current budget.I know that to reinstate Cox Peninsula can be done relatively cheaply and quickly. We must understand this is not a short-term problem. We need to be broadcasting into Indonesia for the long term, even if it does cost, as the government says, $5 million a year. Spending that money, rather than leasing daily air time, has to be the sensible economic choice.On Monday Senator Hill confirmed that central and western Indonesia are receiving Australian transmissions for two hours a day—one hour in the morning and one hour in the evening; one hour in English, one hour in Bahasa Indonesia. Does the government honestly believe this is enough, when our flags are being burnt in Jakarta and our embassy is being shot at? There is an obvious, simple, relatively inexpensive remedy. We are not taking it.The other obvious problem with the timing of transmission is that we have no control over it. We are not able to target our audience; nor are we able to control who broadcasts before or after us. This could lead to the problem of an undesirable broadcast being identified with ours. Currently, we are just being slotted into the transmission schedule where it suits the owner of those two transmitters.Radio Australia is trying to lease more time, but this has been a slow process and it opens up problems of diplomatic pressure. We are clearly vulnerable if we have to hire transmission facilities from other nations, who may feel that it is not in their best strategic interests to allow us to continue to do it. When Cox Peninsula is reopened, this will not be an issue.Radio Australia does have a relay arrangement with the Jakarta radio station Delta FM to relay half an hour of news each day. During this time it is common to have a question and answer session, to try to explain some of the inconsistencies of information that is being presented to the Indonesians. However, this radio station is under intense pressure currently to cease carrying Radio Australia. They are being intimidated by threatening phone calls and faxes to abandon the relay. It is probably only a matter of time before they do stop carrying that half hour of Radio Australia on FM.Over the past few weeks, my office has received many examples of the kinds of so-called facts that the Indonesians are hearing about Australia and Australians. Today my staff looked at the website of the official Indonesian news service, Antara, for their latest news. Here is a sample. One story is of a pro-integration militia leader, Joao da Silva Tavares, accusing the INTERFET forces of not only taking sides with pro-independence groups, but also torture. I quote:He made a plea to the United Nations to review the participation of some troops, especially those of Australia, who have tortured, murdered, or even set aflame a number of pro-integration East Timorese.He then went on to say that pro-integration supporters would be setting up guerilla strongholds throughout East Timor. On Monday, Antara reported that Australian personnel of INTERFET detained and tortured six civilians.Another article, by Rosihan Anwar, a `senior journalist', starts with the line:Indonesia and its military are now being unfairly targeted by a Western media conspiracy.He went on to emphasise that:After the Portuguese irresponsibly left the territory in 1975, causing a bloody civil war that followed suit, where thousands were killed, it was the Indonesian military that came to stop the war.According to this journalist, even the scorched earth policy is understandable as UNAMET was unfair in the ballot and caused `disillusionment' among the militia.These kinds of claims do nothing to enhance our future relationship with Indonesia. There are many other examples, but I think the point has been made that until the people of Indonesia hear another side of the story—in fact, hear the facts, hear the truth—it will be very hard to reconstruct a future relationship with Indonesia based on honesty and trust. We have been careful in Australia to ensure that those protesting and calling for action acknowledge that our disagreement is with the military in Indonesia, not with the people of Indonesia. Whilst we have seen some intense emotion and perhaps some unwise flag burning, generally Australians are keen to place blame where blames lies, and they are also interested in hearing the facts, not in hearing propaganda. I believe Indonesians are the same.We must also remember it is in the elite's interests in Indonesia to put a slant on Australia's involvement and motivation for involvement in East Timor. The ABC on Friday reported President B.J. Habibie as saying that our role, Australia's role, has been excessive and unhelpful as well as emotional. Not all Indonesian commentators agree with him. Dr Soehastro of the Centre for Strategic and International Studies made the comment that:Irresponsible statements to some extent, also by some of our own officials on this, will create an environment in which the resentment, the hostilities, towards Australia on this, tend to increase.Of course, I am not implying that everything uttered from the mouths of our own leaders is always helpful. But I believe Indonesians need to hear the facts, clearly and in an unbiased fashion, so that they can form their own opinions freely and intelligently.Once again, I implore the government to open the Cox Peninsula transmitter. This is not an issue of the ABC; it is a foreign policy issue. I have not heard any commentator say that our involvement in East Timor is likely to be short term; in fact, of course it is not. We will be there for some time to come.Indonesia and Australia will also always be neighbours. Our relationship is obviously ongoing and, obviously, from time to time, it will be up and down. We cannot afford on any level not to have our point of view heard in Indonesia. I fear it is only pigheadedness that is preventing the reopening of the Cox Peninsula transmitter. Antara is propagating the absolutely outrageous claim that our soldiers are torturers and murderers. Most Indonesians are hearing or reading this dis gusting propaganda as if it were fact. If the Cox Peninsula transmitter were reopened, Australia could directly transmit the truth to the Indonesian people. Surely our soldiers deserve at least the protection against deliberate defamation by Indonesian media that that would afford. Surely Australians living and working in Indonesia, including our embassy staff, who have been shot at, deserve to have the truth about Australia's views and actions made public inside Indonesia.I have campaigned for years now to have Cox Peninsula transmitter reopened and Radio Australia transmitted in strength to our region. Of course, I am not alone in this parliament. Committee after committee of the Australian Parliament has urged the government to reopen Cox Peninsula and transmit Radio Australia directly into our region. Anybody who knows anything about foreign affairs agrees. The report of the Senate Foreign Affairs Defence and Trade References Committee in May 1997, when that committee looked into the role and the future of Radio Australia, and of course of Australia Television, made some very interesting points. I would like to read out a few of them. Paragraphs 19, 20 and 21 of the report read:19. Radio Australia and Australia Television project images of Australia to Asian and Pacific countries. There is no other viable and cost-effective means of projecting and promoting Australia to tens of millions of people in the Asia Pacific region and beyond. Without Radio Australia and Australia Television there would not be an effective Australian voice . . . to inform the region about our country.20. As the audiences of the two broadcasters include many of the political and business decision-makers of the region, Australia must benefit from the knowledge and understanding about Australia which the two broadcasters disseminate.21. Whether it is in international diplomacy, business, education, tourism, the arts, sport or any other human endeavour, the goodwill engendered by Radio Australia . . . provides a basis for Australia's relationships with regional countries. What Australia puts into the region, other than in a mercenary way, Australia will get out of it. The two broadcasters provide services to the region from which Australia benefits.That has not changed. That is still exactly the same. The same things apply now. Still we do not have Australia's voice going into our region; still, as one of the people who came to speak to this committee said to us, Australia is whispering to our neighbours. They are not even whispering. We cannot even hear Australia's voice in Indonesia at a time when it is most desperately needed. I fear that the fact that I, so many government members and so many opposition members—so many members of this parliament—believe it is absolutely essential to reopen Cox Peninsula transmitter and it was a mistake in the first place to close it may be why the government now refuses to do the only sensible thing. Someone in the government cannot bear to admit they may have been wrong.If that is the case, they will just have to get over it. Australia's relationship with the Indonesian people is too important not to have Australia's voice heard throughout the entire region. The cheapest, most efficient and easiest way to do that is to reopen the Cox Peninsula transmitter. All we have to do is replace a couple of parts, set up the computer and flick the switch. It is that easy to get the truth about Australia into Indonesia. It would take less than a week. Do it.913513:26:009135Coonan, Sen HelenSenator COONAN2M6NSWLP10—As we enter the second decade of globalisation, it is abundantly clear that in the wake of progress there are economic, social and political casualties. In his book The Lexus and the Olive Tree , Thomas Friedman describes the dislocation faced by those least likely to make the necessary transition:This includes entrepreneurs and cronies who were anointed with import or export monopolies by the Government, industrialists who are protected by the Government through high import tariffs on the products they made, big labour unions who got used to winning fewer work hours with more pay with each new contract, workers in state-owned factories who got paid whether the factory made a profit or not, the unemployed in welfare states who enjoyed relatively generous benefits and health-care no matter what, and all those who depended on the largesse of the State to protect them from the market and free them from its most demanding aspects.If he is correct, he has identified an emerging phenomenon in our socioeconomic landscape—that is the division in society between those who have benefited from the forces of globalisation and those who perceive themselves as having missed out.In Australia we have seen the political backlash of One Nation and we continue to see the anger of rural and regional Australia, expressed in the ballot box, most recently in the Victorian state election. Although the problems of regional Australia are at least in part the product of long-term economic trends beyond the control of any government, there is an expectation that government can solve these difficulties and there is a loss of confidence when it plainly cannot.However, the need remains for a national strategy which will address the infrastructure needs of all Australians and, in particular, rural and regional Australia. This is significant demographically, because one-third of our national population lives in non-metropolitan areas.This of course prompts the question: What is rural and regional Australia? The draft Productivity Commission report examining the impact of competition policy reforms on rural and regional Australia has interpreted rural and regional Australia to include:farms and rural towns . . . important regional centres (eg Tamworth and Whyalla), and mining towns (eg Mount Isa and Kalgoorlie).It considers that the terms of reference were not generally intended to include capital cities or major urban-coastal agglomerations such as Geelong, Wollongong and Newcastle.And I suppose added to that, simply because of its location, you would have to say that some major centres such as Darwin may truly qualify as regional.So why do we need regional development? It is easy to dismiss the arguments in favour of regional development by merely saying people will go wherever there are jobs and jobs are found in cities, but this approach fails to recognise the many advantages of a more dispersed population. Those Australians living in Sydney and Melbourne in particular know that traffic congestion and the cost of provision for infrastructure for housing and pressure on facilities are excessive. Indeed, in recent New South Wales local government elections, significant numbers of candidates were judged based upon their position with regard to the implementation of the State Labor government's unpopular policy of medium density housing in government areas. In the Ku-ring-gai local government area in the northern suburbs of Sydney, seven out of 10 councillors were elected on the Ku-ring-gai Preservation Trust ticket, with six of them displacing existing councillors. Such is the depth of feeling against the increasing pressure of population growth on Sydney.As the pressure on urban infrastructure grows, increasingly a solution to the pressures of concentrated population growth will have to be found. The obvious answer, I suppose, is to entice some of the population to settle elsewhere to encourage—and perhaps this is most relevant—those who already live in rural and regional areas to stay there, rather than drift to the city or coastal fringes and simply rip the heart out of the little communities that currently exist.There are advantages, of course, in settling in regional Australia. People will settle in rural and regional areas if there are employment prospects, community facilities and business opportunities. They are not different from anywhere else, I suspect. However, regional development is dependent upon the provision of large scale infrastructure, road, rail and air links, access to technology and affordable communication, energy supplies and water. And, of course, the underlying thrust of competition policy has been to open up public utilities to the market to make the provision of these services more affordable.In the 1970s, the United States embarked on a massive project of decentralisation, often referred to as `snow belt to sun belt'. It was designed to reduce the pressure on cities such as Washington and New York by enticing businesses and consequently the population to settle in the Mid-West states of Colorado, Arizona and most famously Nebraska. As a policy it was highly attractive. It offered tax incentives for businesses willing to relocate and the opportunity for a cleaner and healthier lifestyle for employees. Land prices were also considerably cheaper. Obviously not all businesses are suitable for such relocation, but those businesses founded on communications and technology, by the very nature of their operation, are able to function literally anywhere, as long as there is a telecommunication system they can access and afford.In the 1980s, Sydney saw a similar, although much smaller, trend of many industries relocating to semi-rural areas such as Macquarie Park, Castle Hill and Dural and Ryde, nearer the city centre. The challenge then for the next decade is to take these principles and adapt them to regional Australia. I am pleased to acknowledge there has been some progress.Just one small example that I have come across: in a recent meeting with Maitland City Council, I was advised that there was a possibility that a major communications company would be relocating its call centre to Maitland, attracted by the relatively cheap land and the proximity of the Newcastle and Williamtown airports. Other major business opportunities are in the pipeline, based on Maitland's strategic location, it having a major highway and major road arteries.So what can government do to assist regional development? The success of regional strategies, of course, depends on cooperation between government at all levels and the private sector. The Howard government's approach has been to begin restoring our regional communities and begin restoring to them the tools they need to find the best way forward.First, we have to get the macro settings right. I think we have done a pretty good job on that. Four responsible budgets have laid the basis for low inflation, low interest rates and a relatively strong economy, strong enough to withstand, as we have said, the economic contagion in Asia. Reforms to the tax system for individuals and business have also served to create an economic climate conducive to growth and investment across all regions and for all industries.Secondly, we have facilitated the return of many of the services which regional communities lost during the 1980s and 1990s. The $1 billion Telstra sale social bonus for rural and regional Australia has seen many communications, health, environmental and community services returned to the bush. These include 30 new regional health service centres; up to 600 Medicare Easyclaim facilities; an incentive program to keep long-serving doctors in country towns; and a support program for the prevention of suicide in rural and remote areas. I am not suggesting this is enough. I am simply saying that we as a government are addressing these problems.Thirdly, we have sought to address concerns that important national policy decisions do not impact disproportionately or unfairly in regional areas. I have served on a committee with my colleague Senator Quirke, and we are currently in the course of doing just that. And Senator Boswell, who is in the chamber, recently has been part of a committee which looked at the concentration of supermarket power in regional areas. One of the challenges governments now face is to facilitate a levelling of the playing field to ensure all Australians have access to the same employment, educational and lifestyle opportunities.Fourthly, we have been rebuilding the skills base in our communities. A more educated and highly skilled community is better placed to take advantage of opportunities in new industries, particularly in information technology. More importantly, if you can get jobs into local communities, you might have some prospect of stopping the drift of young people from the country to the city looking for jobs.Fifthly, and the issue upon which I wish to spend a few minutes, is the need for communities to get the infrastructure they need to develop new business opportunities. Both governments and the private sector have a contribution to make here. The greatest challenge may be the proper coordination of such development between all levels of government and private enterprise.Technology advances and what might be described as the inexorable shift from manpower to machine power and technology means the traditional industries alone cannot stem the population drift away from the bush. New industries are required to revitalise regional Australia, and it is here that government has an important role to play. And, of course, there are great possibilities for the private sector. With a land mass the size of the United States or Europe and a population base only seven per cent that of the United States and 2.5 per cent that of Europe, the ability of governments to deliver infrastructure to the standard that industry and government would like is pretty limited. Increasingly, governments are finding it difficult to fulfil their traditional role as builders of transport infrastructure, so alternative ways of financing this infrastructure need to be found.It is necessary for governments to work in partnership with private enterprise and to undertake initiatives similar to those of the United Kingdom where private sector investment has seen the development of major transport networks. So what is the difference? Well, the private sector concentrates on design, construction, operation and funding of such projects, while government can provide the proper framework for investment from the private sector and protect the public interest through efficient regulation.The government has been actively supporting a number of major infrastructure initiatives in cooperation with the private sector. To mention a few: $300,000 committed in July this year to a pre-feasibility study to examine the possibility of a Melbourne to Brisbane inland rail link for both community and industry use; and the government's $40 million incentive package for the Tumut pulp mill as part of the coalition's investing for growth strategy, which is expected to create over 1,000 jobs in the construction phase and, once the mill reaches its peak, 145 full-time jobs, 578 indirect jobs and 260 sawmilling jobs. That is certainly something to anticipate.A recent study by the Australian Bureau of Agriculture and Resource Economics has found that, provided industry, government and regional economies work together, there are significant gains to be made in terms of developing the forestry and plantation industry in Australia. In particular, the Central Tablelands of my home state of New South Wales is just one area to be identified as having the potential to expand its plantation operations.As I said before, though, the need for partnership with the private sector should not be to the exclusion of the direct role of the federal government. There has been, of course, some direct investment by government. Now there is a need for a national strategy and for the political will to continue the good work that has been started.Over the decades, the notion of a comprehensive strategy has been consistently hampered by state and federal parochialism. Interestingly enough, in the recent Productivity Commission report on competition policy in regional Australia, it was noted that the Premiers Conference as long ago as 1944 attempted to establish a coordinated approach to regional development and decentralisation and broad principles for cooperation between Commonwealth, state and local governments, outlined by the Commonwealth for the postwar reconstruction. No firm policy ever evolved as friction developed between the states and the Commonwealth over their respective roles and responsibilities. Am I being cynical if I ask: has anything much changed since then?A recent visit to Eden on the south coast of New South Wales revealed a perception in the local community that neither state nor federal governments had adequately addressed the socioeconomic difficulties in that township. While many of Eden's immediate concerns have been somewhat lessened following the announcement of a $3.6 million rural adjustment package following the closure of the tuna factory, this was just one example where earlier cooperation between all tiers of government would have reassured the people of Eden.During the public meeting I attended in that town with Senator Heffernan the point was made to us that the local forestry industry was relatively satisfied with the implementation of the forestry agreements, but was frustrated with state Labor who had gone to the 1995 state election promising to make the south coast a wilderness area and then promising in the later election in 1999 to bring jobs back to Eden.So there are many challenges before us in relation to rural and regional development, but there is much to do and a great deal to learn before we can be satisfied that we really understand the bush. Those who have been adversely impacted by the forces of globali sation and competition policy are disproportionately located in rural Australia. It is up to all of us in government, the private sector, the unions, research institutions, to find a way for our regional communities to aspire to a better way of life.913813:40:009138Carr, Sen KimSenator CARRAW5VICALP00—In the matters of public interest debate today I raise concerns that a number of Australians have about the activities of a small group of shonky private providers of international education services who are using their facilities as more of an immigration rort than as a legitimate means of delivering high quality international education.At a time when DETYA has been trumpeting what it regards as an extraordinary increase in the numbers of overseas students studying at our universities, I think growing levels of concern have been expressed about the need for our international educational institutions to concentrate on the issue of quality in order to protect our competitive edge in this sector.I think it is important for this government to appreciate only in the higher education sector has there been some growth over the last two years, an increase of 14.3 per cent of students. But in the vocational education and training sector there has been a decline of 8.7 per cent; in the schools sector, 12.9 per cent; and in the ELICOS sector some 25.2 per cent. But these drops in student numbers are in fact forcing some educational institutions to compromise quality in order to reduce costs.Great concern has been expressed about the lack of diligence in the government administration of international education, particularly at the bottom end of the private provider market. A growing number of cowboy operators are undermining the integrity of the vast majority of legitimate high quality educational colleges.The minister, under some pressure from the opposition, has announced an inquiry into the operations of the ESOS Act with the aim of reporting back to the Senate education and employment committee by December of next year. This is an extraordinarily belated report ing date for such an urgent matter. It is extraordinary at a time when there is such turmoil in the industry about the operations of these shonky operators. I can only presume that the minister hopes that the furore will subside while there are some private chats with what he regards as some friendly industry sources. Perhaps it is the case that the minister hopes to announce a reporting date at the end of the parliament just before Christmas, at the time when the industry closes down, so as to avoid effective scrutiny of the government's actions.Let me disabuse the minister: that scrutiny will continue. The minister has, of course, been forced to strengthen the original proposition that he announced on the 19th of last month. He had to toughen up the terms of reference from those originally envisaged. The very fact that the terms of reference have been strengthened to the point they have implicitly acknowledges the strength of the claims the opposition has been making about the activities of these visa shops.The terms of reference go to some basic questions involving student enrolment and, one hopes, attendance, but that is not clear from the terms of reference; the administration of the Commonwealth Register of Institutions and Courses for Overseas Students—the so-called CRICOS list; the protection of students' prepaid course fees and tuition assurance funds; and intergovernmental coordination. Perhaps that is why we need to the end of next year to consider these questions: there is so much to consider, given the appalling record of intergovernmental coordination.The terms of reference are broad but they do not excuse what I believe to be the total lack of interest by this minister in stopping the form of people-smuggling that is being used by these colleges at the moment. They do not address the problem that is besetting the industry right now. It is my contention that there are ample powers with the ESOS Act and within the means of government, if this minister chooses to use them.The operation of these visa shops has already undermined the integrity of Australia's export industry. In answer to questions I asked on Monday, the minister representing the minister for education indicated, unfortunately, that he thought that situation was basically well in hand. It is quite apparent that for the young people engaged in these rackets there is considerable cause for concern. It is now apparent that on the government's estimates there are some 50,000 illegal migrants in this country at the moment. We know that 1,000 people or so come in on various forms of leaky boats and at airports, and whatever other means are available to them. The people smugglers demand fees of some $26,000 for each person. Yet it is obvious that alleged students can come to this country and may be able to arrive here in much safer and more comfortable conditions and at a much cheaper rate. That may involve up to 5,000 people in the so-called non-exempt institutional sector, which of course is administered under the ESOS Act.It is young people who are being plagued by these exploitative practices—the illegal actions of these sleazy and immoral operators who are using their capacity to spin big money as a result of their unscrupulous and greedy actions and who prey on the families of desperate people who are seeking, naturally enough, to secure a better life for their children here in this country. The operators are able to exploit young people in this country in the service industries, in prostitution, and in a range of other activities in such a way as to be a matter of great shame. It is important to recognise that this country is being targeted by people smugglers. While I do believe that this government is taking steps to improve the situation in terms of immigration, a great deal more ought to be done by the department of education with the cooperation of the department of immigration in this country about the operation of these unscrupulous persons and the use of visa shops.The unethical operators have led to an undermining of Australia's reputation because a series of problems is now emerging with the current administration of international education in this country. For instance, there is an ineffective regime in record keeping and an ineffectual duplication of records. There is a poor liaison between the commonwealth and state education authorities. There is a failure by this government to administer effectively the trust account system and there is a failure to guarantee that there is an effective auditing of such trust accounts. There is a failure to maintain effective independent insurance underwriting operations for colleges that operate outside the TAS scheme. There is an inability to detect fraud in the confirmation of enrolment offers and an inability to distinguish between the bona fide and non-bona fide private educational providers who are offering these so-called services to overseas services. There is an inability to track student visas and students in breach of visa conditions. There is a lack of disciplinary procedures against defaulting colleges and a lack of benchmarking of private education and training colleges against quality standards in the issuing of certificates. There is a lack of industry self-regulation, and in terms of the operation of student admission arrangements there is a lack in management of the capacity to weed out from within the industry those unscrupulous providers who are damaging all providers. Operations on various island territories around the coast have been established, and there is a lack of control in stopping so-called offshore providers from avoiding their ESOS obligations.Minister Ruddock asked me to provide additional information where that is available. In the past I have named six colleges: the Business Institute of Victoria, the National Business College of Management, Skywell College, Lloyds International College, Canterbury Business College and the Australian National College. I have raised concerns about the operation of these colleges and their relationship with immigration agents and, of course, concerns about the lack of effective government administration and the prevention of unscrupulous practices.I have been asked to raise any additional information if it is available to me. I have indicated in the past that I was looking at some 12 colleges. My estimates were grossly short of the mark because my inquiries suggest there are 30 or so bodgie operators working at the moment. There are a further nine colleges where I believe there are inappropriate actions taking place and the government ought to act to assist this industry by investigating thoroughly the activities of the following colleges. The government should check effectively the attendance of students. It should ensure that the fee structures make sense and are not so low as to not be able to offer an effective course. There should be some examination of the commissions and various kick-backs paid to agents. The government should look at the qualifications issued. It should examine the staff-student ratios. It should not assume that an audit consists of counting chairs, rather than people, which of course is the current practice at the moment. It should ensure that the taxation department has a very good look at the operations of these colleges.The government should look at Bridge Business College in Castlereagh in Sydney, which I understand is not a member of the ACPET organisation but is an RTO. It has some 600 students allegedly enrolled but they are required to attend only on an infrequent basis—what they call very flexible delivery service—and sometimes up to only an hour a day. This college claims to offer extensive courses in computing and business studies but for some 600 students it appears to have only 40 computers.The government also should look at Catch the World Pty Ltd, located in Pitt Street, Sydney, whose trading name is Astral Commerce and Language College. It should look at the Alpha Beta College Pty Ltd in Sydney. The Alpha Beta College is also a registered training organisation. Windsor Institute of Commerce (NSW) is another RTO, as is the Australian International College of Business, which was listed on the CRICOS list as the Australian International College Pty Ltd. The government should look at the Chalmers Business College in Victoria, where I understand complaints have been made to the state authorities about the attendance records of students. But yet again silence is the deafening reply from the regulatory authorities in that state because they claim it is a Commonwealth responsibility. I am advised that at one point only 80 students were in attendance at the college, which had an enrolment of over 500.The government should have a good look at Black Ace Pty Ltd and Reliable Enterprises Pty Ltd. It should conduct an examination of Marrickville Commercial College (HMBC) in Sydney and of Siu Sing Pty Ltd, located in Sussex Street, Sydney, which is an institute trading under the name International Wing Chun Academy. I understand they run very extensive courses in kung-fu, which is a valuable program, but they were might be more valuable if they were doing more work in, perhaps, sports medicine and sports management. But they have registration and their attendance records require close examination.What is apparent through all of this is that the government has failed to respond. When the industry association has raised concerns with this minister, he has failed to grant them an appointment. When the industry comes forward with suggestions of ways and means of improving quality assurance within the industry, the minister fails to see the organisation. What is apparent is that this is very much an issue about money. Clearly what is required from this government is a re-evaluation of its budget cuts, which has seen a 50 per cent reduction in the international section of DETYA, which was administering these colleges. We ought to see greater attention paid to the powers that are available under the ESOS Act to ensure that the guidelines are adhered to at all times.There should be proper examination of the colleges, but not on the basis of a three-day warning, as is the current practice. If a college has been identified by the government as a matter of concern, apparently the government rings up the college and says, `I'm coming to see you in three days time.' That is plenty of time for the college to get its books in order, plenty of time to bus students in, and plenty of time to improve the outward appearance of the operations of the college. It is apparent that cab drivers in Sydney know more about the operations of these bodgie colleges than this government is prepared to acknowledge within this parliament. These are actions that are well known within the industry.My inquiries, which will continue, suggest to me that there is grave reason for concern. It is now up to Dr Kemp to fulfil his responsibility to ensure that these practices are stopped and that the interests of this country be protected by his not taking the negligent and contemptible attitude that he has taken towards this industry to date.Sitting suspended from 1.55 p.m. to 2 p.m.Questions Without Notice914191419141Evans, Sen ChrisSenator CHRIS EVANSAX5WAALP00—My question is directed to Senator Newman, the Minister for Family and Community Services. Does the minister recall her media alert of 8 September promising that she would deliver a `seminal address' which would announce `future directions in social policy including the controversial growth in disability support pensions'? Can the minister assure the Senate that when she made this boast all she intended to do was announce a timetable for a review? In particular, can the minister confirm whether she originally considered announcing an extension of mutual obligation policies to disability support pensioners but was forced by the Prime Minister's office to drop the proposal for the time being?9141Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—I gave today one of the most important speeches that anybody is going to give on the future of welfare in Australia, during which I announced that the government was having prepared a green paper, in consultation with the community, academia, business and my department, and that the reference group will be reporting to me over a defined timetable—initially by the early part of the year and then by later in the year but by no later than June. This is the most significant review of welfare dependency Australia has ever had. It is very timely because, as you know, Madam President, we inherited a social security system which was not serving Australians well at all, whether they were the taxpayers funding it or the people trying to get assistance from it.3L6CONROYSenator Conroy—It's not us you've got to worry about; it's your colleagues.10000PRESIDENTThe PRESIDENT—Senator Conroy, cease interjecting.BE4Senator NEWMAN—Let me just point out for you, Madam President, that during the last three years of the Labor government the rate of growth in disability support pensions increased by an average of eight per cent per year. Within the first three years of this government coming to office, the rate of growth diminished. It still grew but at only five per cent. That is a drop of three per cent per year. That says something about the previous lack of control of the social security system. I also remind you, Madam President, that when we came to government the disincentives to work for families were enormous.We have heard a lot of bleating from the ALP about effective marginal tax rates lately. I remind you that, in the tax reform measures coming into place on 1 July next year, the disincentives to work have been reduced by 20 per cent for Australia's families so that, in every circumstance, it will be more beneficial for an Australian family to take up what work is available. I think they are meaningful reforms. They reflect on the system we inherited. They also reflect on the need for looking at, not in a spirit of partisanship but as a nation, what is good for Australia and for the individuals who need assistance. It is very much about the maintenance of a social security safety net. It is about making sure that we use and tap into the best potential that we have in our country. Too many people have been destined to be on the scrap heap because they were older workers or had been out of the work force for a while as carers or for other reasons.The system we inherited was not a caring system. It was a system that said it was okay, provided you threw money at people, to leave them on welfare forever if need be. I think that does people a terrible disservice. That is not what we are about. We are not about whatever you said we were about at the beginning—I have forgotten the nonsense that you went through, Senator Evans. We have put out clearly what this is about, and I want the whole nation to take part. I want people like you, the shadow minister you represent in the other place and the media to all be prepared to engage in a meaningful debate that does not frighten people.9142Evans, Sen ChrisSenator CHRIS EVANSAX5WAALP00—Madam President, I have a supplementary question. I note the minister's self-assessment of the importance of her speech. Could the minister clarify for those of us who listened to her address precisely what initiatives it contained other than a timetable for a review? Could she also tell us when on the weekend the decision to form a reference group was made?9142Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—It seems as though Senator Evans was not paying much attention while I spoke. I know that he was not at the luncheon, although Senator Bartlett did go. I am very glad to say that he was there. It is very hard to know where Labor stands on this issue because we have two voices talking for Labor. We have Mr Latham, who injects a somewhat more intellectual element into the debate than the shadow minister, and the shadow minister, who goes for frightening people and for cheap headlines and inaccurate facts. I imagine that it must be getting pretty hard in the Labor caucus to determine the way ahead. (Time expired)91429142Tierney, Sen JohnSenator TIERNEYO15NSWLP10—My question is to the Minister for Regional Services, Territories and Local Government, Senator Macdonald. Will the minister outline to the Senate projects under the federal government's Newcastle structural adjustment package to assist the Hunter region following the decisions taken by BHP Steel?9142Macdonald, Sen IanSenator IAN MACDONALDYW4QLDLPRegional Services, Territories and Local Government10—I thank Senator Tierney for the question and I also thank Senator Tierney for the interest that he has shown in the interests of the people of Newcastle since BHP announced the closure of their smelting works back in 1997. It has been useful for the Newcastle people to have a representative here who can make submissions to the government on how we should allocate the $10 million which the federal government under John Howard allocated to the Newcastle structural adjustment fund.That fund of $10 million has been almost spent: about $8 million has been spent so far. Some of the projects that have been assisted include a $1.5 million grant towards the Maitland distribution and transport centre. That is a great centre, which I had the opportunity of visiting a couple of weeks back. Already, Mercedes Benz and Blue Ribbon Coaches are setting up there. The project will create 80 jobs immediately and a further 70 jobs in the very near future. It would not have happened without federal government assistance.We have provided $1.5 million to Newcastle Airport to upgrade and expand that airport. That will create 300 new jobs with hundreds more to follow. The expansion will contribute to and stimulate projects like the British Aerospace project, the Hawk lead-in fighter construction, and a planned 100-room hotel on the site. We have also provided some $520,000 to the Lower Hunter water pipeline, which will create at least 600 jobs. That pipeline will increase vineyard production and encourage new tourism opportunities. The wine industry is worth $1.5 billion per year from that area, and it underpins the Hunter's tourism market.As well, we have provided $600,000 to the Newcastle Stock Exchange. That will create some direct jobs but, more importantly, it will set Newcastle up as a regional financial centre. We have provided $2.5 million to Impulse Airlines to set up a reservations centre which will create 70 new jobs initially, growing to 150 jobs after 12 months. We have also provided $500,000 to the Path to Success cycleway and foreshore redevelopment project in the Lake Macquarie area. That will create up to 400 jobs in the Belmont area. So the federal government investment has created some 840 jobs in total. There will be an additional 400 jobs in short-term construction. Those projects, it is estimated, will provide something like 4,000 indirect jobs in the next few years.As of tomorrow, BHP are closing down their smelter. I emphasise that it is only their smelter, but it is a very important part of their operations, and some 2,100 jobs will ultimately be lost. We are providing money to replace those jobs and to create a number of jobs that will exceed the number that have been lost. BHP themselves have done a fairly good job as a corporate citizen. They gave plenty of warning of their shutdown of the smelter. They have also had in place a Pathways program where they have assisted retrenched workers to go into different jobs and take on new careers. BHP estimate that, when the mill shuts down, the number of people that will not have been able to get new jobs will be only about 700, which is still an important number. (Time expired)9143Tierney, Sen JohnSenator TIERNEYO15NSWLP10—Madam President, I ask a supplementary question. Could the minister inform the Senate about the assistance he has received from local Hunter community groups in determining these projects?9143Macdonald, Sen IanSenator IAN MACDONALDYW4QLDLPRegional Services, Territories and Local Government10—The Prime Minister's task force that was set up to oversee the spending of this money on assisting Newcastle has been of tremendous help. That is chaired by Rob Chenery and by Kevin Maher from the union movement and consists of a number of very prominent Newcastle people. Senator Tierney has done a great job. Regrettably, I have had no contact or support at all from the Labor Party federally. I think I have had one request. The shadow minister for regional affairs has not contacted me once in the time I have been minister to urge a proposition for some help for Newcastle people. None of the New South Wales senators has been near me. I think one of the lower house members rang me once about it. Another one has just criticised the projects that we have established. Allan Morris has not been near me. It is a shame that, regrettably, the shadow minister for regional services has not been near me on this.91439143O'Brien, Sen KerrySenator O'BRIEN8O6TASALP00—My question is to Senator Newman, the Minister for Family and Community Services. Can the minister confirm that, in line with other major speeches from Howard government ministers, the original speech for today was written not in her office nor in the department but instead by an outside speech writer? If this is the case, how much did the original speech cost?Government senators interjecting—10000PRESIDENTThe PRESIDENT—Order! Senators on my right will cease interjecting.LD4ALSTONSenator Alston—What was Don Watson paid for?5K4FAULKNER Senator Faulkner—He was a paid speech writer, if you must know.10000PRESIDENTThe PRESIDENT—Order! Senators on my right will cease interjecting and so will Senator Faulkner.8O6Senator O'BRIEN—Will the taxpayers be receiving a refund now the Prime Minister has cut out all of the substance from it and left the deflated souffle that the minister delivered today which was, as a matter of course, worthy of a press release and not much else? Did the minister clear the version of the speech just delivered by the Prime Minister in answer to a dorothy dixer question in the House of Representatives?9144Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—It is a pretty silly question. The speech which I delivered today, which I said was one of the most significant speeches on welfare in Australia—Opposition senators interjecting—3L6CONROYSenator Conroy—You've said that on a number of occasions!10000PRESIDENTThe PRESIDENT—Order! Senators on my left will cease interjecting.BE4Senator NEWMAN—was one in which I and my office had total control over what was written and what went out. I believe it was an excellent speech. A number of people had an input into it. I have very good staff in my office, and I have some very good departmental officials who contributed information as requested, but that speech was very much from my office and from me personally.9144O'Brien, Sen KerrySenator O'BRIEN8O6TASALP00—Madam President, I ask a supplementary question. I ask the minister whether she will address the part of the question that concerned whether the speech was written by a speech writer. She said that her department and officers had input into it, but not that it was written by her officers, and I wonder if she would clarify that. If, indeed, it was not written by her officers but written under contract, can she confirm whether the original contract for the speech contained a requirement to announce that the parenting payment (single) would terminate when the child reached 12 years of age, as has been speculated upon in the media? Can the minister also confirm that she was compelled by the Prime Minister to scrap this change? Is there any humiliation that the Prime Minister would not impose on this minister?9144Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—That is even more pathetic, if I am allowed to express an opinion on this. That speech was written by me and my staff and it has a very personal stamp on it. It went out from my office as written by the group of us—we wrote it together. We put a lot of time and effort into it. If the Labor Party does not like it, that is a great pity. I believe it was an absolutely excellent speech, and it was not provided by any speech writer.91449144Knowles, Sen SusanSenator KNOWLESTH4WALP10—My question is also addressed to the Minister for Family and Community Services, Senator Newman. The Howard government is committed to a strong and compassionate welfare safety net so that the money actually goes to those in real need, as opposed to Labor's welfare policy that provided a hammock for anyone who wanted one. In supporting this commitment, will the minister outline what plans the government has to expand social policy reform, which will actively assist those people who want to move away from the welfare dependency that so demoralises them?9144Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—I thank Senator Knowles for that question. She has had a consistent interest in these matters for a very long time and makes a major contribution to the debate on these issues in this country. Today I delivered a seminal speech to the National Press Club which outlined social policy as the next major reform priority of the Howard government.Honourable senators interjecting—10000PRESIDENTThe PRESIDENT—Order! There are far too many people interjecting.FX5MURPHYSenator Murphy—I can see one or two of them up there.10000PRESIDENTThe PRESIDENT—Senator Murphy, I have just drawn the chamber's attention to what it should be doing.BE4Senator NEWMAN—To this end, today I announced that the government has established a high level reference group which will develop a comprehensive green paper on welfare reform. This green paper will be the basis of the most far-reaching and focused analysis of welfare dependency ever conducted in this country. I am pleased to say that the reference group will be chaired by Mr Patrick McClure of Mission Australia and its preliminary findings will be delivered to me early in 2000, with the final report provided as soon as possible thereafter, but no later than June. I have asked the reference group to consider the broader application of mutual obligation, demographic changes, the sustainability of the current system and the particular incentive effects associated with the design of social security payments.The terms of reference will be developed from the six guiding principles which I also announced today in my speech, and those terms of reference will be announced shortly. The reference group, as an important part of the development of the green paper, will be seeking submissions from interest groups and the broader community. In this way, the people in the broader community, who all have their views about the welfare system, will be part of the social coalition in reforming Australia's welfare system. I would like to make it totally clear that this government remains firmly committed to a compassionate and strong social safety net, whereby those who are in genuine need will always be supported. Make no mistake, the announcement that I made today will lead to substantial reforms to reduce welfare dependency in this country and it demonstrates that the government has made social policy reform its next major priority.91459145Denman, Sen KaySenator DENMANFY5TASALP00—My question is also addressed to the Minister for Family and Community Services, Senator Newman. It concerns the important issues raised by the title but avoided in the content of the minister's speech today on welfare in the 21st century. Is it not a fact that the Howard government has made it more likely that many Australians will remain on welfare in the 21st century because it has cut funding to programs which have helped people move from welfare to work? How can this government be serious about helping people get back to work when it has cut billions of dollars from very successful employment, education, training and child-care programs?9145Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—Senator Denman's question covered a few things and I am delighted to answer it. I would point out to her that good economic policy is the best kind of welfare policy because it produces jobs for Australians. That is what this government has done: 3½ years of hard work to develop and implement good economic policy. Reforms to the tax system and the industrial relations system, as well as careful management of budgetary outcomes, have been a key success in helping more unemployed people get back into work. I would also point out that Working Nation—which I think Senator Denman was obliquely referring to—had a terrible effect on long-term unemployed people. It gave them no hope and plenty of cynicism about where the government was going.RF4COOKSenator Cook—It would be useful if you told the truth about it.10000PRESIDENTThe PRESIDENT—Order, Senator Cook.BE4Senator NEWMAN—It threw money at a problem without any concern about outcomes. The problem with Working Nation was that the outcomes were so poor.RF4COOKSenator Cook—That is not true.10000PRESIDENTThe PRESIDENT—Order! There is an appropriate time to debate answers and deal with them, and you can have the opportunity to do so, but this is not the appropriate time.BE4Senator NEWMAN—Too many people in my own electorate of Tasmania were churned through Working Nation programs one after another, programs which enabled the Labor government to take people off the unemployed lists but which did not get them any jobs at the end.TH4KNOWLESSenator Knowles—Madam President, I raise a point of order under standing order 203(1), parts (b), (d) and (e), `Infringement of Order', being if a senator `is guilty of disorderly conduct', `persistently and wilfully refuses to conform to the standing orders' and `persistently and wilfully disregards the authority of the chair'. I submit to you that Senator Faulkner in particular is constantly guilty of offending these particular standing orders and at some stage he has to be brought into line. This incessant sledging that he conducts of Senator Newman should not be tolerated in this chamber.5K4FAULKNER Senator Faulkner—Madam President, on the point of order: as you would be aware, Senator Knowles again is using the government tactic of taking a spurious—Honourable senators interjecting—10000PRESIDENTThe PRESIDENT—There are senators conversing across the chamber, and that is disorderly.5K4FAULKNER Senator Faulkner—Madam President, I was pointing out to you on the point of order that Senator Knowles again is using a spurious point of order, which is a usual government tactic, to try to give a minister who has been humiliated—in this case, Senator Newman—a chance to try and recover some lost ground.10000PRESIDENTThe PRESIDENT—That has nothing to do with the point of order, Senator.5K4FAULKNER Senator Faulkner—What I say in relation to the point of order is this, Madam President: it is spurious and you should not allow Senator Knowles to use the mechanism of a point of order to try and recover lost ground, when we all know that her standing in the Liberal Party has been destroyed by providing the Labor Party questions in the Western Australian parliament.10000PRESIDENTThe PRESIDENT—Senator Faulkner, your contribution is totally out of order. I shall watch carefully the behaviour of all senators in relation to the standing orders.LD4ALSTONSenator Alston—Madam President, I raise a point of order. What you have just heard from Senator Faulkner is a comprehensive plea of guilty, your having told him that it was in no shape or form a point of order to say that Senator Knowles was raising a spurious point of order. It was certainly out of order for him to accuse Senator Newman of simply wanting time to read the papers. He proceeded to repeat both of those assertions. If that is not exactly what Senator Knowles was complaining about and which Senator Faulkner has not in any shape or form contradicted, I do not know what is. I would have thought, Madam President, this is the perfect opportunity to deal with him.5K4FAULKNER Senator Faulkner—Madam President, speaking to that point of order: Senator Alston is also a past master of taking spurious points of order in an attempt to ensure that a government minister tries to recover lost ground during question time. It is a developing pattern, and I have to say that I intend to continue to draw it to your attention when a government senator acts in that manner.BE4Senator NEWMAN—I think one of the most important things we have been doing for women who have been out of the work force for some time, for instance, has been expanding the JET program. I answered a question in here this week about claims that JET had been cut back. In fact, JET has been increased; expenditure on the JET program has been increased, and it now goes to not only lone parents but partnered parents, many of whom have also been out of the work force caring for children—3L6CONROYSenator Conroy—Your own backbench rolled you.BE4Senator NEWMAN—an awfully important and responsible role in life, but one which does get you into a position where your skills do become rusty and maybe your confidence goes. So we have not cut the JET program—and that now is the second time I have said that in the Senate this week.Opposition senators interjecting—3L6CONROYSenator Conroy—Has child-care assistance dropped? It's in the budget papers.BE4Senator NEWMAN—We have not cut child care.10000PRESIDENTThe PRESIDENT—Order! Senators on my left will cease interjecting. Senator Conroy!BE4Senator NEWMAN—Both the JET program and the child-care assistance, as well as the increasing focus on flexible child care which is needed by so many people who are working in the shift working area, for example—Opposition senators interjecting—3L6CONROYSenator Conroy—It's your backbench that is the problem.10000PRESIDENTThe PRESIDENT—Order! Senators on my left are continuously shouting. Your behaviour is disorderly, and you know whom you are.BE4Senator NEWMAN—are important measures which we have already put in place to try and prevent people from becoming long-term welfare dependent. We are determined to continue in that track. Are the Labor Party prepared to be involved in reforming the welfare system? Are they going to play games within the caucus so that they never know what their answer is on any particular issue, or are they going to make a substantial contribution to one of the most important issues facing Australia? They have walked by on the other side in policy development in a whole lot of areas. This is very important for our country. Are Labor going to walk away or are they just going to take cheap pot shots at anybody who is trying to make a serious attempt to do something about welfare reform?LI4PATTERSONSenator Patterson—Madam President, I raise a point of order. Senator Conroy interjected five times, you called him to order and he has interjected three times since. When are you going to do something about it, Madam President? It is impossible for Senator Newman to speak with the sort of behaviour that is going on on the other side of the chamber. I ask you to call Senator Conroy to order again and to warn him.9147Denman, Sen KaySenator DENMANFY5TASALP00—Madam President, I ask a supplementary question. Shouldn't we conclude from today's speech that, having slashed welfare-to-work assistance from 1996, the government now has nothing more to say and no more constructive ideas on helping Australians who want to work?LI4PATTERSONSenator Patterson—Madam President, I raise a point of order. I would like a ruling on the point of order I raised previously.10000PRESIDENTThe PRESIDENT—I shall observe behaviour and let you know if I think anything needs to be done about it.9147Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—I point to the Job Network as being a much more successful way of getting people into work—a very successful way. I am sure that Senator Denman will have read reports last week or so about surveys that have been taking place of customers and also of people who are providing the services. I point out also how youth allowance has succeeded in supporting more low income young people into tertiary education. It has supported some thousands of young people to go back into the skills acquisition process, education or training, since the introduction of youth allowance only just over a year ago. These are significant measures to make sure that our population has the skills for the jobs that are there. Today I was told by somebody from Telstra how there are 30,000 jobs that cannot be filled in the IT industry, and I think Senator Alston today launched the web site for the task force which is trying to fill those jobs. (Time expired)91479147Lees, Sen MegSenator LEES8U4SAAD00—My question is to the Assistant Treasurer, Senator Kemp. I ask the minister if he is aware that nearly half the funding for the capital gains tax cuts assumes that lower tax rates lead to higher tax collections, as advocated by the conservative right in the United States? In embracing the Ralph report figures as government figures, isn't the minister also embracing the radical supply side theory pushed by economist Alan Reynolds in his report for the Australian Stock Exchange, upon which in turn Ralph relies? I also ask the minister: if the Reynolds report is wrong, as key officials in most United States agencies believe, including the US Treasury and the Congressional Research Service, doesn't this create a serious $500 million black hole in the government's funding of the capital gains tax cuts?9147Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I will make a number of points in relation to the question by Senator Lees. The first point is that currently Australia taxes capital gains relatively harshly compared with many other countries. As you indicated in your question, the Ralph report estimates that the proposed CGT reforms will be revenue positive, notwithstanding the reduction in the CGT rate. The overseas experience supports the conclusion that a lower CGT rate increases realisations. I think, as I pointed out in relation to other questions I have received over the last week, that among other things it reduces the lock-in effect—that is, the reluctance of people to sell because of the tax—it encourages capital formation and it makes Australia more competitive. A relatively strong short-term positive revenue response is expected to follow the lowering of the CGT rate. In the first two years, the review estimated a 50 per cent increase in the rate of realisations as investors realigned portfolios due to the CGT rate cut. Revenue gains from these increased sales more than offset revenue losses from the lower rate.The Ralph estimates are not inconsistent with the findings reported in a study commissioned by the ASX. As you will be aware, the ASX conducted a study of capital gains tax options for Australia.RF4COOKSenator Cook—It is like Dracula being in charge of the blood bank. It is outrageous.WW4Senator KEMP—It was undertaken by Alan Reynolds, a senior fellow and a director of economic research at the Hudson Institute. I was quite interested to hear Senator Cook refer to the Stock Exchange as the blood bank. This was the party that decided that it needed to get a bit closer to business.8U4LEESSenator Lees—Madam President, I raise a point of order. Can I bring the good senator back to the question. I did not ask about the Labor Party's policy or the Labor Party's questions. We are specifically looking at the very report he is quoting from. Could he please answer my question.10000PRESIDENTThe PRESIDENT—Senator Kemp, I remind you of the question.WW4Senator KEMP—True, Senator Lees. I was distracted. The Ralph committee did not rely on the ASX study to draw its conclusions. The ASX study translated official US estimates to the Australian context and concluded that a lowering of the top CGT rate would have a revenue elasticity of minus 1.65 to minus 2.24. The estimates in the Ralph report are not inconsistent with those in the ASX study. There is an extensive discussion of the estimates that have been calculated in the Ralph report, and I would refer senators who wish to pursue this matter to that section of the Ralph report. I think it deals with quite a range of these issues, and I think it is well worth a read. We have used the figures which were prepared by the Ralph review, and we believe they are the best available estimates. The Ralph review relied on a number of sources of advice, and the government has accepted their figures.9148Lees, Sen MegSenator LEES8U4SAAD00—Madam President, I ask a supplementary question. Minister, isn't it the case that Ralph has largely relied on that Reynolds report? Specifically, I ask the minister to confirm that Treasury has in fact assessed the Reynolds paper on capital gains tax, that Treasury has questioned its arguments and that Treasury has cautioned against relying on it for revenue estimates. Finally, I ask the minister: can he please make available to the Senate Treasury's advice on funding of the capital gains tax changes?9148Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—As I said, the government has accepted the figures in the Ralph report. The Ralph report conducted an extensive study in this area, and the government has been prepared to accept these figures.8U4LEESSenator Lees—Madam President, on a point of order. My specific question is: can we please see the work that Treasury has done? Can the Senate have a copy of Treasury's work on this particular report?WW4Senator KEMP—Treasury prepares work for the government, as I said. However, if you have particular concerns, I will refer your question to the Treasurer.3L6CONROYSenator Conroy—What about Treasury—do they work for a living any more?10000PRESIDENTThe PRESIDENT—Order! Senator Conroy, you have been interjecting persistently this afternoon.91489148Crossin, Sen TrishSenator CROSSIN7Y6NTALP00—My question is to Senator Newman, the Minister for Family and Community Services. Minister, in light of your humiliating capitulation in not providing any constructive initiatives in your speech today for the future of welfare and community services, can you inform the Senate why did the Prime Minister in fact order you to change your speech to the Press Club today? Wasn't it done because the Prime Minister suddenly got cold feet about the political effect of the most draconian of the proposals? Haven't the proposals been delayed so as to ensure that they are extensively focus tested and polled before seeing the light of day?9149Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—The senator is completely wrong. The Prime Minister did not order me or ask me to change my speech. 9149Crossin, Sen TrishSenator CROSSIN7Y6NTALP00—Madam President, I ask a supplementary question, which is probably really a re-question of what I originally asked. It goes to proposals being tested and polled. Can the minister attempt to minimise her embarrassment over today's debacle by informing the Senate whether or not opinion polling is being conducted? Which company is undertaking the research for her, at what cost and using which methods?N26ABETZSenator Abetz—Madam President, I raise a point of order. That is—in my respectful submission to you—not a supplementary question but a completely new question. Further than that, standing order 73 deals with a whole host of issues that you are not allowed to include in questions, such as inferences, ironical expressions, hypothetical matters, imputations, epithets, et cetera. The honourable senator's second question is clearly out of order and in breach of standing order 73.5K4FAULKNER Senator Faulkner—Madam President, this is a clumsy attempt to protect a struggling minister by taking a spurious point of order. Senator Newman was asked in the primary question by Senator Crossin about the extent to which the proposals were extensively focus tested and polled before they saw the light of day, and she has followed that up in her supplementary question. It is in order—that is how you have consistently ruled—and the senator has taken a spurious point of order to protect a struggling minister.10000PRESIDENTThe PRESIDENT—You should not be casting those sorts of aspersions in any event, but I do not believe that the supplementary question is out of order because I think it does arise from the original question that was asked.N26ABETZSenator Abetz—Madam President, I did raise a two-pronged point of order. Clearly you have ruled against me in relation to it being a supplementary question, but there was another matter. With respect, I thought the question clearly fell foul of standing order 73(1), which says:The following rules shall apply to questions:questions shall not contain:—then you have a whole list—. . . . . . . . .(c) inferences;(e) epithets;(f) ironical expressions; or(g) hypothetical matter;and so on. I would have thought that terms such as `humiliation' and `the debacle you presided over'—or words to that effect—clearly fit into the categorisation of standing order 73, which is disallowed. The whole question was like that and, therefore, it should be ruled out of order.10000PRESIDENTThe PRESIDENT—I would need to re-read the question to make a ruling on that. If the minister has anything that she wishes to add to it, she may do so, but I shall examine the question and the supplementary question. Senator Newman, if there is anything you wish to add? I call Senator Harradine.91499149Harradine, Sen BrianSenator HARRADINE 6H4TASIND00—My question is to Senator Newman, representing the Minister for Defence. Last June the Prime Minister asked for a paper to be prepared to set out measures that would make the Defence Force reservists more available. What is the progress of that paper, and what particular measures is the government considering to assist employers to ensure job security in particular for those reservists who will make the sacrifice of being available for service?LD4ALSTONSenator Alston—Madam President, I raise a point of order. I do not want to interrupt Senator Harradine's question, but is it in order for Senator Faulkner to—in the course of everyone else listening to Senator Harradine's question—effectively query your ruling directly to you and to end up by saying, `You are outrageous'? I would have thought that was the height of flouting the ruling of the chair, making it abundantly clear that he does not accept your ruling. You have already told him that he is not entitled to cast aspersions on members of this chamber.3L6CONROYSenator Conroy—What's the point of order?10000PRESIDENTThe PRESIDENT—Senator Conroy, stop shouting.LD4ALSTONSenator Alston—Madam President, the point of order is that Senator Faulkner is acting in a thoroughly disorderly manner, and I am asking you to rule that it is totally unacceptable for him to sledge you in that way.5K4FAULKNER Senator Faulkner—Madam President, on the point of order: as you would be aware, in my view the ruling that you have made in relation to what was described by Senator Abetz as the `second prong' of his point of order was an incorrect ruling. It was not my intention, as you heard in the aside I made to you, not to say that you were outrageous but that I thought the ruling was wrong. Madam President, I think you need to very carefully check the Hansard in that regard. I appreciate that you have ruled part of Senator Abetz's point of order out of order. The other part of the point of order, in my view, had absolutely no justification to receive the ruling that it did from you, and I believe that on an examination of the Hansard you will find that to be the case. I think the ruling that you—N26ABETZSenator Abetz—She didn't make a ruling; she is going to consider the question.5K4FAULKNER Senator Faulkner—It is an important issue. Madam President, I think the ruling that you made in suggesting to Minister Newman that she only had to answer that supplementary question if she so desired was wrong, and I think you will see on your reading of the Hansard that that is the case. I am happy to await until that occurs. My sotto voce comment to you, which was not that you were outrageous but that I thought the ruling was wrong, I would stand by. But it is a matter that I assume you will deal with later.10000PRESIDENTThe PRESIDENT—I shall look at the Hansard and I shall watch the replay of question time. I suggest some other senators might do likewise. My comments about whether the minister wanted to answer anything further on the supplementary question is totally appropriate in any supplementary question or question. No minister has to answer the question, and I would not make them do so. I shall look closely at it. Senator Harradine, had you completed your question?6H4HARRADINESenator Harradine—Yes, I am awaiting the reply.10000PRESIDENTThe PRESIDENT—So am I.9150Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—The response I have for Senator Harradine may go part of the way to the answer he requires, but I will undertake to get more for him if there is a need. The information that is provided in this brief from the Minister for Defence speaks about the importance of the reservists in terms of our defence capability. They are currently serving on Bougainville, of course, as part of the peace monitoring mission. They have always played a vital role in ADF deployments, whether it be by their military skills or civilian specialist skills, such as doctors. The longstanding call-out legislation allows the reserve to be called out in defence of Australia or in a declared defence emergency but neither of these conditions are met by the East Timor deployment.Reservists are able to serve on deployment and in other positions with the ADF, after volunteering for full-time service, and that is how the reservists are currently serving on Bougainville. We will employ reservists in full-time ADF positions where we have the requirement to do so and where reservists with the right skills are available. I note there has been a newspaper report at home in Tasmania of seven reservists who may be going away—being deployed. Despite claims from the opposition to the contrary, whether reserve leave is provided in awards or under the more flexible cooperative workplace relations framework is simply not relevant to the legislative protection of reservist employment.Reservists are protected by section 118A of the Defence Act 1903 and part 2 of the Defence (Re-establishment) Act 1965 from being penalised or prejudiced in their employment because of service. This applies to former regular personnel who are members of the reserve. Reserve issues, including the role of reserves, call-out flexibility and employment protection, are under consideration by government. If there is more that is needed, I will be happy to get it for Senator Harradine.9151Harradine, Sen BrianSenator HARRADINE6H4TASIND00—Madam President, I ask a supplementary question. I specifically asked for a response as to what has happened to the paper that the Prime Minister had requested to ensure the ready availability of reservists. Also, could the minister respond to the question as to what consideration is being given by the government to assist employers to ensure that job security and other entitlements are maintained?9151Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—I will do my best for Senator Harradine.91519151West, Sen SueSenator WEST1X4NSWALP00—My question is also to Senator Newman, Minister for Family and Community Services and Minister representing the Minister for Defence. The minister is uniquely placed to answer this question. Is the minister aware of comments by Chris Richardson from Access Economics this morning on the AM program regarding the effect of extra defence spending on other areas of government expenditure? In particular, is the minister aware that Mr Richardson said:. . . when you're talking $2 billion for Timor and more again to raise spending in general, that's a lot of money. That's more than the fat in the system, if you like. That logically means cuts on the very big-ticket items, of which social security dominates.Given the minister's unwillingness to answer this issue in response to a question at the Press Club a short time ago, what is the minister's reaction to the targeting of the social programs to pay for extra defence spending?9151Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—I did not refuse to answer that question at all. I answered the question a couple of times, and in each case I highlighted the government's record in fiscal responsibility, which we intend to maintain come what may, unlike the government that preceded us. Let us make it absolutely clear: that is the basis on which any policy development in this country, in any portfolio, will always proceed. The cabinet of this government will be prudent with the nation's finances.Let me turn to the work which I have set in train today. The green paper, the reference group, is something for the whole of the next century. It is about doing better by Australians, whatever their walk of life, whatever the circumstances they find themselves in, about having a welfare system which is responsive to their needs. Their needs are not always addressed, like they used to be under Labor, by throwing money at them. Sometimes a more active social welfare system is a much more compassionate one.I have given you examples of some of the reforms we have already put in place which are helping young people, for example, to get skills so that they can find jobs instead of getting sit-down money, which they got from Labor. There was more money in unemployment payments than there was in payments for students. There is an example of where a smarter and a more compassionate welfare scheme does not necessarily mean more money; it means that people are being treated in a more compassionate way. The cabinet will be the body which rightly decides what sort of money will be expended in any portfolio over coming years, and mine is no different. The priorities of the government will be assessed when the results are available to cabinet and not before.9151West, Sen SueSenator WEST1X4NSWALP00—Madam President, I ask a supplementary question. Given that Mr Richardson was talking about taking an additional $2 billion for Timor, what impact is that likely to have on the social security budget given that there is no `fat' in the system? Given that the minister's speech was rewritten, and she allowed that, can we expect similar changes to take place when the Prime Minister and the Treasurer target that portfolio?9151Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—I did not suggest my speech was rewritten. I suggested that my office and I worked as a team to write a blasted good speech—a very good speech, an excellent speech! I commend you to read it. I am pleased with that speech, I am proud of that speech. It is a significant speech. I would think you, of all people, would have a great interest in the future directions of social policy because you have had a longstanding interest in this area, and I hope you will engage meaningfully in this dialogue. The future for Australia's defence is a vitally important issue, so too is the future of Australia's welfare. The cabinet of this government will decide the priorities, as I said, across all portfolios. They will not be left to Mr Richardson of Access Economics. Despite his standing in the community, he makes only recommendations; governments have to make decisions.91529152Payne, Sen MariseSenator PAYNEM56NSWLP10—My question without notice is addressed to the Minister for Justice and Customs.UNKNOWNOpposition senatorsOpposition senators—Bring back Skase!10000PRESIDENTThe PRESIDENT—Order! The behaviour of senators on my left is totally disorderly.3L6CONROYSenator Conroy—Which jail is he in?10000PRESIDENTThe PRESIDENT—Senator Conroy! You have been interjecting persistently this question time, as has been pointed out. I would remind you of the provisions of standing order 203 and the consequences of your persistent breach of it.M56Senator PAYNE—For some people in Australia, it is important that today is the national remembrance day for police officers killed on duty, and they are recalling it with appropriate gravity. Will the minister inform the Senate of the importance of this day for all Australians?9152Vanstone, Sen AmandaSenator VANSTONE7E4SALPJustice and Customs10—I thank Senator Payne for her question. Perhaps Senator Payne and Senator Bourne, since their trip to Timor and their association with the Federal Police, are setting up an Australian Federal Police fan club, and I thank them for recognising the job that the Australian Federal Police do.Each year we set aside this date nationally to remember the men and women of our police forces who have given their lives in performance of their duty. Police are sometimes taken for granted by the rest of us in the community. Many of us have the perception that the fact that the police are there to protect us is a given in life in Australia—in other words, someone else will chase the muggers, someone else will chase the drug barons, someone else will board the ships in the dark of night not knowing if illegal immigrants or drug runners are armed. In other words, the `someone else' are the members of the Australian police forces around Australia.We take for granted that each of us can go about our lives and our business in relative safety. Violence still shocks Australians. We live as if we are in some sort of charmed circle, yet police, unlike the rest of us, live and deal with violent tragedy on a day-to-day basis, and sadly at times become the victims of this violence themselves. The recent tragic slaying of Sergeant Glen Huitson in Darwin and the equally tragic death of Constable Ty Bennett in southern Tasmania, as well as the deaths of Constable Simon De Winne in Victoria and Gordon Patrick in Western Australia, are graphic illustrations of this reality.During the recent crisis in East Timor, 50 Australian Federal Police men and women lived amongst the crisis of violence, mayhem and death. It is difficult to describe the relief I am sure we all felt when we knew that the Federal Police personnel had returned safely to Australia. We can all be very proud of the contribution they made in ensuring the conduct of a peaceful ballot and in ensuring that the ballot boxes were properly counted, giving a proper count and resulting in, as we now know, the crystal clear demand by East Timorese for independence.Today, the honour roll of those police officers killed in the exercise of their duty was read as part of a remembrance day ceremony held here in Canberra and, incidentally, duplicated in other capital cities. While it was being read, one could not help but reflect on the lives that were cut short while looking after the rest of us, the sacrifice made not only by those members but by their wives, husbands or children who, of course, have been left behind.Police fight a war on a day-to-day basis against those who bring violence and crime into our communities. As such, the Australian people should take a moment on a day such as today to consider this with the same sense of pride and thanks that we all give to defence forces who look after us in another way. It is perfectly fitting that this one day of the year is taken to reflect on the debt we owe to those people.I conclude by saying that this is very much in keeping with Senator Ian Macdonald's recent initiative and announcement that a national emergency services memorial would be established in Canberra. The memorial will honour the men and women of emergency services of Australia, which includes the police services around Australia, who have lost their lives in the course of their duty. Like this day, the memorial will provide a focus to commemorate those who have fallen or perished while carrying out the important duties for the rest of us.91539153Crowley, Sen RosemarySenator CROWLEYZF4SAALP00—My question is to Senator Newman. When was the decision made to set up the reference group announced by the minister today? Why has the composition of the reference group not been determined yet? Why was the minister not able to announce a firm timetable for the review process?9153Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—I have announced a firm timetable for the progress of the green paper, and I think that gives the answer to that. I have actually spoken to that several times in the chamber already as well as at the Press Club. In terms of the establishment of a reference group, I had a number of conversations with Mr Patrick McClure once the chairmanship of the reference group was established. I have an appointment with Mr McClure tomorrow to discuss with him the appropriate people who should be on his reference group. I have ideas about who should be on it, and Mr McClure will also have ideas. It would be only courteous that the chairman of the reference group would have input into that process.9153Crowley, Sen RosemarySenator CROWLEYZF4SAALP00—Madam President, I ask a supplementary question. The minister has not answered the question: when was the decision made to set up the reference group that she announced today? Further, despite that curious response, how does the minister explain the fact that she is not in a position, on the day of her seminal future directions speech, to announce even the terms of reference, let alone the personnel who shall constitute this inquiry?9153Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—As I said in my speech, the terms of reference will be based on the six principles for reform, which are clearly set out in my speech, and I do commend the senator go and have a read of them. That seems to me the most important issue that she has to attend to. I cannot remember precisely when the decision was made.91539153Bartlett, Sen AndrewSenator BARTLETTDT6QLDAD00—My question is also to the Minister for Family and Community Services. The minister informed the Press Club earlier today that she would be providing her discussion paper on welfare reform as a submission to a newly announced, high level welfare reference group on welfare reform. As the minister would be aware, many potential changes to the welfare system need the approval of the parliament and the Senate. In order to assist open community discussion and debate on as broad a range as possible on this important issue, will the minister table her discussion paper in the Senate? If not, why not?9153Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—No, I will not. It is an internal working document which will inform the work of the reference group. When I ask a reference group to help in the direction of vitally important future reform, I do not believe that everything takes place during their working in the public arena. Nevertheless, some of the submissions that people are making to the reference group will no doubt be made public by those people who are making them. The green paper will of course be a public document when it is received.9154Bartlett, Sen AndrewSenator BARTLETTDT6QLDAD00—I ask a supplementary question. Given the minister's frequent statements during her speech today about the importance of an open and wide-ranging community debate on this issue, how can she justify not enabling the community to see the government's ideas and proposals in this area that it is providing to the reference group? Does this not indicate that the reference group's activities will not be completely open to full community participation? Can she indicate whether the reference group will be conducting public hearings, whether submissions will be called for widely from the entire community and whether all those submissions will be made public, as would be the case in a normal public parliamentary inquiry?9154Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—This inquiry will be different from a parliamentary inquiry. Let us get that straight in the first place. It will not just be about the government's views. If the Democrats would like to contribute as one of the stakeholders in the national debate, that would be very important and valuable. But there are so many players who have an interest in this that the reference group will be seeking out views from right around the spectrum.I do not know whether the Labor Party thinks that they are part of this or whether they are just going to sit around on the sidelines and take pot shots. So far, all I have seen from them is talk about how deplorable the welfare dependency of Australians is and then their saying, `Shock, horror! The government is going to do something nasty to welfare.' If that is the level of the contribution we are going to see from Labor, then they have simply walked away from the responsibilities of an opposition.RF4COOKSenator Cook—Madam President, I rise on a point of order, although I am reluctant to call the point of order. The point of order is on relevance. Nothing in the question was about the Labor Party. It was a question from the Democrats to the government about a government held inquiry. It seemed to me a perfectly reasonable question, asking, `Is it going to be open and public and can everyone participate?' Can you call this minister to order? She is totally incompetent, that is clear, but at least she ought to be able to answer the question put to her.10000PRESIDENTThe PRESIDENT—There is no point of order.N26ABETZSenator Abetz—I rise on a different point of order. I am wondering whether it is open to a senator to call another senator `incompetent'—whether that is a word that is allowed. You may be interested to know, Madam President, that in your absence Madam Deputy President ruled that the word `duffer' was not allowed, albeit that the word `duffer' is defined in the dictionary as meaning `incompetent'. So either both words have to be allowed or both have to be disallowed, and I would be interested in your ruling.10000PRESIDENTThe PRESIDENT—I am advised that the word `incompetent' has been allowed previously. I have not heard the word `duffer' used.BH4HILLSenator Hill—Madam President, I ask that further questions be placed on the Notice Paper .Questions Without Notice9154915415:03:009154Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—I seek leave to incorporate an additional response to some questions by Senator Sue West from a little time ago. I have told her I would be tabling it today.Leave granted.The document read as follows—Additional Response to Questions by Senator Sue WestSenate Hansard p 8122, 1 September 1999.In relation to the table on page 3 of Child Care in Australia , it is true that prior to 1997 a number of community places were counted as non-profit places on the grounds that they did not attract operational subsidy.When community centres had the operational subsidy removed from July 1997 it was more appropriate to record places within the services where they were provided—this small group of non-profit places was therefore included with places in community based centres. These places have always been counted in the total number of places. It is irrelevant to families accessing care how they were counted as it is the total number of places available which is important.These numbers with a similar footnote were included in the Department of Health and Family Services Annual Report for 1997-98 (table 19, page 138).The publication Child Care in Australia was compiled by the Department of Family and Community Services with the aim of providing trend information against the Childcare Program objectives of affordability, access and quality. As is usual practice the final draft was forwarded to my office for clearance. There has been no attempt to `fudge the figures'—as indicated above, the figures relating to community places had already been published in a previous Annual Report.915515:03:009155Hill, Sen RobertSenator HILLBH4SALPEnvironment and Heritage10—I seek leave to incorporate some further information I have in regard to a question asked by Senator Forshaw concerning Australia's trade with Indonesia and a second question asked by Senator Harris in relation to petroleum franchising.Leave granted.The documents read as follows—For Senator Hill in response to questions from Senator Forshaw regarding Australia's trade with Indonesia.Senator Forshaw asked the Minister representing the Minister for Trade on 27 September1. What is the government's assessment of the possible impact on Australian trade with Indonesia of the anti-Australian feeling which has been whipped up there as a consequence of the role we have taken in East Timor? In particular, has there been any effect, or does the government anticipate any effect, on our sales of wheat, cotton and sugar to Indonesia?2. That the Minister confirm the current annual value of our wheat, cotton and sugar sales to Indonesia is approximately $800 million. If, given the importance of these sales to our rural producers and to our economy, you will undertake to get the information regarding the current situation—whether there is a real prospect that our sales will be affected—and report back to the Senate as soon as possible. The answer to the Senator's questions of 27 September, which I undertook to get some further information is as follows:Unfortunately there have been a number of anti-Australian statements recently, including threats to key Australian exports, and the security and political environment for Australian businesses has become more difficult. So far the Indonesian Government has acknowledged that businesses were looking to find alternative suppliers for commodities such as wheat and cotton. Some businesses and business groups in Indonesia have already indicated they are considering taking steps against Australian trade interests. Most notably, Bogasari Flour Mills (the largest importer of Australian wheat) said it would cut imports from Australia by 50% and halt all imports if asked by the Indonesian Government. The Indonesian Chamber of Commerce (KADIN) is reported to have said it would not object to Indonesia cutting back on business with Australia.This is of course disappointing particularly given the significant trade and business relationships that have been built up over many decades. There are no Australian Government trade sanctions against Indonesia, and ACTU actions have ceased. The Government is monitoring the situation closely and we are talking with our key clients. It is our hope that cooler heads will prevail and that politics will be kept out of trade.Noting that wheat and sugar export figures are confidential items in Australian trade statistics, Senator Forshaw was roughly correct in estimating Australia's annual wheat, cotton and sugar sales, which totalled over $850 million last year. Cotton exports last year amounted to $A463 million. At this stage, while there are threats to these exports, it is still too early to say whether they will be realised.We have always recognised that our trade relationship is based on mutual advantage and that many Indonesians have directly benefited from access to fairly-priced, quality Australian produce. I have no doubt that the strength of commercial relationships built up between Australian and Indonesian businesses will allow them to sustain normal trading operations.MULTI-SITE FRANCHISINGQUESTION (from Senator Harris, (PHON), Qld)Is the Government aware that the major oil companies are engaging in the practice of multi-site franchising and that this is allowing them to effectively control a potentially unlimited number of retail sites in contravention of the purposes of the Sites Act? What is the Government going to do to protect consumers and franchise holders against excessive vertical integration by major oil companies and the reduction in competition that will occur as a result of multi-site franchising?ANSWER. The Government is aware that some refiner marketer companies are multi-site franchising their petroleum retail sites. Multi-site franchising is a response to the current restrictions placed upon the local refiner marketer companies by the current regulatory environment; in particular the Petroleum Retail Marketing Sites Act (Sites Act) and the Petroleum Retail Marketing Franchise Act (Franchise Act). The Sites and Franchise Acts discriminate against local refiner marketer companies that employ thousands of Australians. Key competitors including other fuel marketers and supermarkets that don't refine petroleum products in Australia, are not subject to restrictions on the operation of their retail sites.. Multi-site franchising is not contrary to the legal requirements of either the Sites or Franchise Acts.. Multi-site franchising was addressed in the 1996 ACCC Inquiry into the Petroleum Products Declaration. The ACCC was of the view that multi-site franchising should provide for increased managerial efficiency through flatter structures and lower costs. On balance the ACCC considered that no action was required in the light of other recommendations being made.. There is no evidence to suggest that consumers or franchisees are disadvantaged by any increased efficiencies, flatter structures or lower costs that the ACCC identified as resulting from multi-site franchising. In a competitive petroleum retail market, efficiency gains will benefit consumers. There is no evidence to suggest that multi-site franchising leads to a decrease in competition. Efficiencies and lower costs associated with multi-site franchising enable those franchisees to be even more competitive.. The Government has no intention of legislating to prevent franchisees in the petroleum industry from operating more than one service station site.. The Government also has no intention of placing further restrictions on the retail operations of the refiner marketer companies. The former Trade Practices Commission noted that the existing restrictions are unparalleled in the private sector in Australia.The Government remains committed to reform and encourages the oil industry to work towards resolving its differences so that reform can pro gress. Reform must include repeal of the Sites and Franchise Acts and the introduction of a strengthened Oilcode, as recommended by the former Industry Commission in 1994 and the Australian Competition and Consumer Commission in 1996.SUPPLEMENTARY QUESTIONHas the Government investigated whether multi-site franchising is being carried out through blind trusts?ANSWER. The Department of industry, Science and Resources has not investigated this matter. The Australian Competition and Consumer Commission indicated in the 1996 ACCC Inquiry into the Petroleum Products Declaration that it will continue to watch multi-site franchising for any breach of the Trade Practices Act including conduct in relation to establishing such franchises.915615:04:009156Evans, Sen ChrisSenator CHRIS EVANSAX5WAALP00—I move:That the Senate take note of the answers given by the Minister for Family and Community Services (Senator Newman) to questions without notice asked today, relating to welfare reform.Senator Newman's speech to the Press Club today has been described as `seminal', `significant', `important', `agenda setting' and `a blasted good speech'. Unfortunately, the author of all those descriptions was Senator Newman herself. It was in fact an announcement to form a committee. I do not know whether we usually give such high praise to a speech which announces the formation of a committee, but Senator Newman thinks it is that important. Senator Newman has not been able to give us the terms of reference of this committee. She has not been able to give us the membership of the committee and today she has not been able to answer the question: when was the decision taken to set up this reference group and the committee process? We suspect it was some time over the weekend when the Prime Minister rang her and told her that a discussion paper was not to be released.At today's Press Club lunch, the minister was unable to announce a single new initiative in social policy in this country. All she could announce was that she had an agreement to set up a committee. She may see that as seminal, but most of us were extremely disappointed. We were concerned that there were hints in her speech about a pending attack on the rights of sole parents and the entitlements of sole parents and disability pensioners. She threw out a few hints that she was looking to reduce their entitlements. But there were no new initiatives in the speech and nothing that could match the rhetoric that emanated before the speech was given.It was interesting because the minister postponed the speech once and then, having postponed it, again could come up with virtually nothing today. I think perhaps it would have been better if the minister had just called in sick rather than go ahead with it today. Quite frankly, there was nothing in the way of new directions for social policy in this country. There was nothing that gave hope to those seeking employment, seeking better opportunity in their lives—nothing that gave them any encouragement that they would be able to find their way off welfare and into work. Given the hype that the minister used in beating up the address, it is surprising that she did not offer any hope at all.It is disappointing that the minister cannot name the members of the reference group and cannot give us the terms of reference. It indicates that this was done on the run as a response to the Prime Minister pulling any detail or any substance from the minister's speech. So we are left with a decision to appoint a committee with no terms of reference and only one member announced. This really is a very small fig leaf to cover the minister's embarrassment and her rebuke by the Prime Minister. It is a very small fig leaf and it does not hide the fact that the government have nothing to say about the future directions of social policy. All they have to say is that they are going to set up a committee. If that is seminal, if that is important, if that is a blasted good speech, you could have fooled me.What we need to know is what the government is doing to assist the people who are reliant on welfare in our community to get off welfare. We do know that there are problems—and the minister listed those in the speech today—but what we were hoping for was some answers. We were hoping that people on welfare would get some encouragement, some support, to make the transition to work. We did not get anything. We did not get any encouragement, any hope, any initiatives, to allow people to make that transition. What we got instead were very strong hints that the government has an agenda to reduce benefits, to reduce entitlements, to sole parents, and it has an agenda to reduce benefits and entitlements to those currently on disability support pensions. I do not know whether the Prime Minister did not agree with the agenda or whether he just wanted to choose a better political opportunity to announce that agenda.Clearly the minister is committed to reducing entitlements to sole parents and disability pensioners, but today she offered no hope for those people in terms of the transition to work, no hope for a better future for them. I think they will feel cruelly misled by all the hype about the speech when in fact it offered them nothing other than the threat that they may lose their entitlements at some stage in the future when the government develops the political will to mount its attack on their entitlements.15:09:009157Knowles, Sen SusanSenator KNOWLESTH4WALP10—I find today's attack on, and sledging of, Senator Newman pretty breathtaking. There is no substance to it other than abuse. I think the state of the Senate really gets down into the gutter when the best the Labor Party can do is abuse a senator for the sake of abuse. I am not too sure that some of the abuse coming from some of the senators over on the other side is not targeted specifically to a female senator.I talk about this subject of welfare and social security generally. The comments that have come from the Labor opposition are pretty breathtaking, considering that their policies were policies that actively sought to pay people more to stay on welfare than to be educated or trained. People had more money from the Labor Party to stay at home than to work. Under Labor, one million people were out of work. In her speech today, Senator Newman said:While we have record levels of employment—not unemployment, which the Labor Party had—there are now around 2.6 million people of work force age on government income support payments, which is around one in five. Ten years ago, under the Labor government, the figure was around 1.5 million people or around one in seven.Yet when this mob opposite come in here today, all they can do is sledge. It is the same Labor Party that created a system of intergenerational welfare dependency, where people would go from the cradle to the grave never having earned a dollar other than welfare. There was intergenerational welfare from one generation to the other to the other, and they were proud of it. I have to tell you, Madam Deputy President, this government—the Howard government—and Senator Newman in particular will not tolerate that. It has taken three years to start to turn it around. No wonder there is a need to turn it around. Even Labor's Senator Mackay signed off on a document from the ALP national consultative review committee report following the 1996 election defeat, and she said:It seemed that everyone knew of a welfare cheat. This exploitation was blamed on Labor. It aroused real antagonism. The party members' comments about pandering to sexual interests are also seen to be in light of this antagonism.Even the Labor Party were honest enough, back in 1996, to be able to state that that type of welfare was not desirable. But here we are today again playing the man instead of the ball. That is all the Labor Party can now do. Why don't they look back on their track record? In 1998, two years after we came to government, there were 2.6 million Australians of work force age receiving income support payments and that, as I said before, represented one in five people, as opposed to one in seven, from the Labor Party. But there were 577,000 customers receiving the disability support pension in June 1999. On current growth rates that figure will increase to 750,000 people by 2006—possibly more than those on unemployment payments.The whole notion that this government has cut welfare, has cut everything from those who need it—which the Labor Party keeps on saying—is so wrong. Take for example the youth allowance. The youth allowance that was brought in by this government was not a savings measure, as is so often said by this Labor opposition; it was an expenditure measure to the additional outlays of $254 million over its first four years. The same applies to family assistance. The Labor Party continually says that family assistance has been cut. It has not. The reform of family assistance payments represents additional outlays of $2½ billion a year. So how can this Labor opposition continue to come in here and make such claims that are blatantly wrong and then proceed to sledge a minister who has had the courage to turn the dreadful welfare system that we inherited around? (Time expired)15:14:009158Crowley, Sen RosemarySenator CROWLEYZF4SAALP00—I, too, rise to take note of Senator Newman's answers today. Despite the figures and the obfuscation from Senator Knowles, we are addressing the minister's answers today in response to any number of headlines: `Welfare backdown', `Spooked PM delays welfare reforms', `Howard puts welfare cuts on hold', and `Paper on welfare axed'. This is the story in today's papers: Senator Newman was to make a definitive, seminal speech, an important agenda setting speech, for future directions for welfare and she has had the rug pulled from under her feet by her own Prime Minister. The Sydney Morning Herald in the article headed `Spooked PM delays welfare reform' stated:In the wake of the brutal voter backlash against the Victorian Kennett Government, which was widely seen as economically driven and socially harsh, some backbenchers said Mr Howard wanted to drive the social policy debate personally.Mr Howard and the Liberal government are running scared to proceed with the tough proposals for welfare cuts that they had in mind. And what are they? The government was going to talk about the following issues: forcing single parents to look for work when their children turned 12; extending Work for the Dole to over-35s; and tightening eligibility for disability pensions. They are the sorts of things in that speech that were to be looked at further but they were pulled by a Prime Minister who is spooked.I have to worry a whole lot about a Prime Minister who is to the right of the Lyons Forum in the tory party that we have running this country. Where does the Prime Minister go with policy if he wants to go to the right of the Lyons Forum and Senator Newman? I do believe people should be extremely concerned about a paper which was going to be presented on welfare rearrangement by the appropriate minister and which is suddenly pulled over the weekend. And, in answer to a question from me today, the minister's memory does not go back to last weekend. She says that she cannot remember when the decision was made—that is, a matter of three or four days ago. How poor can her memory be?It is a matter of grave concern for the Labor opposition that people who are already doing it extremely tough in the community will be forced to do it even tougher under Senator Newman's welfare proposals, changes which John Howard has pulled at the moment. Senator Newman cannot give us a timetable for the inquiry that she is setting up. This may be because of the line in an article in the Daily Telegraph today, reporting on caucus, which states:Yesterday he—Mr Howard—told a meeting of Liberal and National MPs "there would be a discussion paper on the subject issued at some stage later this year or early next year".No wonder Senator Newman cannot give us a timetable: Mr Howard has not told her what it is. That is the problem. And he also has not told her what will be in it. If the minister has flagged her interests in welfare reform in the area of her portfolio responsibility and then has to give a seminal speech on how she does not know what she is going to say—she does not know who will be the committee that will look at it, she does not know what the terms of reference will be, she does not know the time line for any of this—then you have to wonder who in fact is running the welfare portfolio for this government. One knows how concerned the people are and one knows how right the government is to be concerned, because the message is getting home out there. Read today's Newspoll. Unfortunately I do not have it here, but it does say that many, many people in the community are very concerned about this government's approach to welfare and would much rather trust Labor with it.In the NewsExtra column in the Sun-Herald on 26 September 1999, there is an article that also gives the lie to the comments we have just heard from Senator Knowles. This is about the concern raised by Pru Goward on her retirement from her job as head of the Office of the Status of Women. She is pulling out after two years or so—well before her five-year term has expired. The article reads:Her OSW period was difficult on many levels. Its budget was cut by 40 per cent in 1996 and its grants by 50pc, while Goward was forced to defend cuts to child care, the watering down of affirmative action laws and new industrial laws.Life is very tough for women under the Howard government. Pru Goward and the office know it, and they have it on the record. (Time expired)15:19:009159Patterson, Sen KaySenator PATTERSONLI4VICLP10—After listening to the contribution—I do not know whether you could call it a contribution—from the other side, all I can say is: empty vessels make the most noise and there is no vessel more empty than the Australian Labor Party. In response to Minister Newman's speech on transforming the nature of welfare and work to ensure that the system works for Australia's aspirations, all we have had from the ALP is ugly inferences and empty-vessel noises and smarmy sledging. They are not game enough to look in the mirror and reflect on the state of social security when we came into government in 1996. They have no policy. We have seen it day after day in here. They ask questions that demonstrate they have no policy ideas. Their policy cupboard is bare. And the hacks and has-beens on the other side are scrambling to find any sort of response.An interesting task I have been engaged in lately has been to go through the ALP party platform for the last election, trying to find a policy which has not been disavowed.TH4KNOWLESSenator Knowles—That wouldn't have taken long.LI4Patterson, Sen KaySenator PATTERSON—No, it didn't take very long. They were going to put capital gains tax on things that were purchased pre-1985 and they got rid of that straight after the election. They were going to put tax on four-wheel drives and they got rid of that after the election. There were going to be wage increases for aged care nurses and that went by the wayside after the election. There was one thing after another. After the 1993 election they were going to take all pensioners out of the tax system. They were actually in government, when they could do something about it, and the day after the election they said, `No, we are not going to do that.' They told pensioners right up to the 1993 election, `We are going to take you out of the tax system. All pensioners will be out of the tax system,' and on the day after or two days after the election the then Minister for Social Security said, `Oh, no, we didn't really mean it.' So for Labor to come into this chamber and go on the way they have today is outrageous.When Labor was in government, ministers like former Senator Graham Richardson said, `Social security was a tight ship and nothing could be done to make savings.' Mr Baldwin said over and over again, `There are no savings to be made in social security. We could not do anything to save any money in social security.' Senator Newman did say today in her speech—and she is not one to blow her own trumpet, but I will blow her trumpet for her—that the social security system in Australia was in a state of neglect when we came to government, but one of the things that we were able to do was reduce fraud and overpayments—and not by taking money away from social welfare recipients who needed it or who required the safety net. The situation was that people who had got a job and who were still on social security said, `I won't ring Social Security for a couple of weeks because they don't ever bother chasing you up. I'll take the money and then I'll ring them in a few weeks.' Labor had done nothing about that.There have been a number of reforms which Senator Newman has brought into social security, to the point where she is saving $46 million a week in social security fraud and overpayment. That was the state in which Labor left the social security system, and I do not hear anybody saying that is not true—$46 million a week in social security fraud and overpayment. And the opposition stand here and say that Senator Newman does not have a vision for social security, a vision for the future, to ensure that we have a system which will last into the future.Labor was borrowing nearly $1 billion a year to pay for social security fraud and overpayment. In relation to the $10 billion black hole that Mr Beazley left in the budget, the children of this generation, and possibly the next, would have paid for those borrowings—$1 billion a year to pay for social security fraud and overpayment. The opposition have a hide to come into this chamber today and say that Senator Newman does not have a vision for the future. What Senator Newman said today was, `I am now setting the stage to look at how we will develop a policy that will take us into the next millennium.' (Time expired)15:24:009160Bartlett, Sen AndrewSenator BARTLETTDT6QLDAD00—I also rise to speak to the motion to take note of the answers given by the Minister for Family and Community Services during question time today. I want to take a slightly different tack to the adversarial approach with which both coalition and Labor speakers have approached this issue.LI4PATTERSONSenator Patterson—It was not adversarial; it was the truth.DT6Bartlett, Sen AndrewSenator BARTLETT—It sounded pretty adversarial to me. There are a lot of aspects of Senator Newman's speech that I do think need focusing on. It is fair to point out that, in terms of concrete proposals contained within her speech, I have not been able to find anything other than announcing the establishment of a reference group who will then develop a green paper which will then go to cabinet. Presumably, cabinet will then present some proposals and the parliament will have a look at them probably around this time next year, at a guess. That is unfortunate in the sense that there are many possible specific changes that may be proposed. It would be good to have some of those in the community debate as well rather than just general statements of principles about the future of the welfare system in Australia. I think that is a cause for concern.The minister has made it clear during her various comments today that she does have a discussion paper developed. It is hard not to believe that it was not originally intended to be part of her speech, but she obviously changed her mind on that, for whatever reason. But that discussion paper obviously exists. If the government is genuine about the ideals it has put forward today, then it should not have any problem in making that discussion paper public. Certainly, from the Democrats' point of view, I can assure the government that we are quite happy to consider any proposals in an objective and as non-inflammatory way as possible because it is an important area for public debate. But it very much curtails the debate if we are not able to have any concrete suggestions but just general statements of philosophy.On the surface, some of those general statements of philosophy appear quite positive and the Democrats would be supportive of them, particularly ones that indicate the need to provide extra assistance to people on whatever form of income support payment to enable them to contribute more effectively to society, which may mean getting a job. There are plenty of other ways of contributing to society other than getting a job. It is important to emphasise—the Democrats believe it is an issue that is often forgotten in debates about welfare policy—that people on welfare do contribute positively to society now. They are not a passive drain on society. They contribute enormously in lots of ways through unpaid work, voluntary work and other aspects of interaction with the community. Indeed, society as a whole would collapse if it were not for the contribution made by many people who are involved in significant unpaid work but who, nonetheless, happen to receive some welfare.There were a couple of aspects of the minister's speech which do give the Democrats cause for concern and which are worth highlighting. Because it was very general, it is hard to get a tight grip on anything specific. But one does have to look at the record of this government in terms of its tightening of criteria and its cutbacks to various people, which, in the Democrats' view, have caused increased suffering and increased poverty.One aspect is the issue of mutual obligation. Some aspects of the minister's comments were very much discriminatory about young people. She suggested that somehow young people think that the world owes them a living and that that was part of the reason why Work for the Dole was initiated. Yet now there is talk of extending it to older people, and I am not sure whether that means everybody else thinks the world owes them a living and needs to have Work for the Dole visited on them as well.There are a few lines of the minister's speech, such as `needing to look closely at disability payments in relation to other welfare payments to ensure that there are no unintended incentives built into disability income support', which ring a lot of alarm bells. I do not know what an `unintended incentive' is. I am not sure whether that means people are getting more money than we want them to get so we had better give them a bit less, particularly if you are comparing it to other welfare payments. That is an area of great concern.Also, the mutual obligation principle of increasing the range of activities that are subject to some sort of compulsory test inevitably means that some people will fail that test and will be cut off from receiving payments. There is virtually no way around that. That is an area that would be of great concern to us. Those issues, amongst many others, are issues the Democrats would flag which need widespread community debate—not in some closed group but amongst the entire community. (Time expired)15:29:009161Tchen, Sen TsebinSenator TCHEN86YVicLP10—I am continually astonished and impressed by the ability of Labor senators to talk loudly and fluently on something which they appear to know nothing about. Today the opposition concentrated for most of question time on questioning Senator Newman on her alleged failure to deliver in a seminal address. The reality, as the senators on the other side readily admit, is that none of them actually went and listened to Senator Newman's address and yet one senator after another has got up to speak fluently on what she has supposedly failed to do. It is pretty obvious from what they said that none of them knows what she said.At this point, I might contrast their approach to these very important issues in our community with the approach taken by Senator Bartlett of the Democrats, who actually took the trouble to attend the Press Club meeting and heard Senator Newman's speech. His question, when he had the chance to ask it, was on a very substantial matter which the minister was able to give a very clear answer on. I must remind the Senate that, in areas of welfare, we as a nation face some extremely serious problems. With unemployment today, 2.6 million people in Australia of working age receive some sort of welfare. As Senator Knowles pointed out earlier, that is one in five of the adult population—an increase from one in seven 10 years ago.Another aspect of this unemployment problem is intergenerational unemployment, where one generation after another receives welfare. Today something like 900,000 children live in households which receive welfare. This is a tremendous problem, as anyone who looked at this would know. Disability support accounts for another 600,000 people. Parenting payment is another 600,000. If we do not do something about these problems now, they will get worse and worse. In this respect, Senator Newman's address can be described only as `definitive' and `seminal' because—I remind senators on the other side if they have not had a chance to listen to Senator Newman—she set down the ground rules for our future welfare policies. The definition of a welfare safety net is not about more government intervention or about throwing money at problems, methods which the Labor Party of course favour—they tried it for years. It is about helping people to avoid or move out of welfare dependency and giving them real opportunities. This is why Senator Newman's speech was seminal and definitive. It defined a new approach to handling welfare problems instead of simply throwing money at them and hoping people would get better.I recommend strongly that if Labor senators wish to speak on weighty matters in future they should spend some time studying them rather than just standing up, opening their mouths, letting the usual rhetoric run out and going on the basis that the longer and the louder you can shout, the more persuasive you can be. It is not true. When we have a real problem, we need to look at how big the problem is and how we can solve it. (Time expired)Question resolved in the affirmative.916210001CLERK ASSISTANTThe Clerk—Petitions have been lodged for presentation as follows:91621410000VICE-CHAIRMANTo the Honourable the President and Members of the Senate in the Parliament of Australia.The humble petition of the undersigned citizens of the Commonwealth of Australia requests that the Members of the Senate act to make it illegal for those who are openly homosexual to teach our children.Children are great imitators, with parents and teachers becoming role models. All normal children go through a latency period when they have no interest at all in the opposite sex. The presence of a teacher who is openly homosexual would cause a child in this stage to think he was also a homosexual, even if the teacher was not actively trying to influence the child.Homosexuality should never be presented to children as `normal'. If it was normal the human race could not have survived.Your petitioners therefore request that the Senate act to protect our children.And your petitioners, as in duty bound, will ever pray.the President10000the President(from 14 citizens)916219510000VICE-CHAIRMANTo the Honourable the President and Members of the Senate assembled in Parliament. This petition of certain citizens of Australia draws to the attention of the Senate that the people of East Timor have overwhelmingly voted to become an independent and sovereign nation and the Indonesian government has failed to fulfil its responsibility to maintain security in East Timor during the period of transition.We therefore petition the Senate to require the Australian Government and all responsible Ministers to:(i) Act urgently to use all possible methods of persuasion and non-violent pressure to convince the Indonesian government to accept a United Nations sponsored multinational peacekeeping force in East Timor.(ii) Provide immediate humanitarian assistance to East Timorese, who are forced to flee from their country to save their lives, and to include the provision of temporary Safe Havens in Australia.(iii) Plan for the provision of substantial aid to the East Timor nation for rebuilding purposes, as soon as its independence and sovereignty is fully effective.the President10000the President(from 195 citizens)Petitions received.Notices91639163Senator Ian Campbell to move, on the next day of sitting:That, in accordance with the provisions of paragraph (6) of the resolution of appointment of the Select Committee on Superannuation and Financial Services, Senator Watson be appointed the chair of the committee.Senator Ridgeway to move, on the next day of sitting:That the following matters be referred to the Rural and Regional Affairs and Transport References Committee for inquiry and report by 24 November 1999:(a) the provisions of the Fair Prices and Better Access for All (Petroleum) Bill 1999; and(b) the practice of multi-site franchising by oil companies and, in particular: (i) whether this practice allows oil companies to avoid restrictions placed on them by the Petroleum Retail Marketing Sites Act 1980 , and (ii) whether the Act should be strengthened. Senator McKiernan to move, on the next day of sitting:That the time for the presentation of the report of the Legal and Constitutional References Committee on the operation of Australia's refugee and humanitarian program be extended to the first sitting day of the second sitting week in 2000.Senator Woodley to move, on the next day of sitting:That the time for the presentation of the report of the Rural and Regional Affairs and Transport References Committee on issues relating to air safety, the application of competition policy to services provided by Airservices Australia, and the impact of Airspace 2000 and location specific pricing be extended to the last sitting day in February 2000.Senator McKiernan to move, on the next day of sitting:That the Legal and Constitutional References Committee be authorised to hold a public meeting during the sitting of the Senate on 21 October 1999, from 5 pm, to take evidence for the committee's inquiry into the operation of Australia's refugee and humanitarian program.Senator Chris Evans to move, on the next day of sitting:That the Senate—(a) notes that food products containing genetically-modified organisms (GMOs) have the potential to be a significant technology for Australia, particularly in agriculture and human health;(b) believes that the principal policy consideration should be consumer and environmental safety and that community acceptance of this new technology will depend on confidence that there is strict enforcement of national standards; and(c) urges the Government to: (i) build public confidence by the early establishment of a strong national regulatory body that is independent and scientifically-based, and whose processes are transparent, (ii) establish a meaningful labelling regime as part of Australia's national food standards to enable consumers to make an informed choice about what they are buying, (iii) establish a general community education program about the nature of biotechnology, the state of research into GMOs and the issues raised by the use of GMOs in food products, (iv) undertake continuing research on the use of genetically-modified food products so that the risks and benefits are better understood, including: (a) any health and safety risks to humans, and (b) any environmental impacts as a result of gene transfers in the wild, (v) ensure that there is a rigorous approach to the approval of research, including the establishment of trial plots of GMOs outside the laboratory, and (vi) ensure that appropriate research and development occurs in Australia to enable its food industry to remain at the forefront of international developments and ensure that Australia retains its market reputation as a reliable source of high quality and safe food.Senator Jacinta Collins to move, on the next day of sitting:That the time for the presentation of the report of the Employment, Workplace Relations, Small Business and Education References Committee on regional employment and unemployment be extended to 21 October 1999.Senator Crowley, Senator Bourne and Senator Payne to move, on the next day of sitting:That the Senate—(a) notes that: (i) Tuesday, 12 October 1999 is the day of Six Billion People, and (ii) uncontrollable population expansion will lead to increasing pressure on the world, leading to serious environmental and social problems;(b) while respecting cultural sensibilities, calls for a realistic approach to family planning, including access to information on family planning; and(c) emphasises that the issues of population and development are interconnected.Senator Brown to move, on the next day of sitting:That the Senate opposes any management plan, bilateral agreement or other instrument under the Environment Protection and Biodiversity Conservation Act which:(a) divests the Commonwealth of decision-making power; or(b) obliges the Commonwealth to pay compensation for protecting the environment, over and above existing entitlements; or(c) fails to protect ecosystems or environmental amenity.Senator Bartlett to move, on the next day of sitting:That the Senate—(a) notes that the Minister for Family and Community Services (Senator Newman) will be providing a discussion paper to her newly-established reference group developing a green paper on welfare reform;(b) supports the notion of an open, public and wide-ranging community debate on the future of Australia's welfare system; and(c) requires that the discussion paper mentioned in (a) be laid on the table no later than 3 pm on 12 October 1999.Committees91649164916415:36:009164Calvert, Sen PaulSenator CALVERT5F4TASLP10—I present the 16th report of 1999 of the Selection of Bills Committee.Ordered that the report be adopted.5F4Calvert, Sen PaulSenator CALVERT—I seek leave to have the report incorporated in Hansard .Leave granted.The report read as follows—SELECTION OF BILLS COMMITTEEReport No. 16 of 19991. The Committee met on 28 September 1999.2. The committee resolved to recommend-(a) That the provisions of the following bill be referred to a committee:Bill titleStage at which referredCommitteeReporting dateFamily Law Amendment Bill 1999 (see appendix 1 for a statement of reasons for referral)immediatelyLegal and Constitutional29 November 1999(b) That the following bills not be referred to committees: Electronic Transactions Bill 1999 Migration Legislation Amendment (Migration Agents) Bill 1999.The Committee recommends accordingly.3. The Committee deferred consideration of the following bills to the next meeting:(deferred from meeting of 29 June 1999). Australian Tourist Commission Amendment Bill 1999. Customs (Tariff Concession System Validations) Bill 1999(deferred from meeting of 10 August 1999). A New Tax System (Pay As You Go) Bill 1999. Authorised Non-operating Holding Companies Supervisory Levy Determination Validation Bill 1999. Export Finance and Insurance Corporation Amendment Bill 1999. Financial Sector Reform (Amendments and Transitional Provisions) Bill (No. 2) 1999. General Insurance Supervisory Levy Determination Validation Bill 1999. Life Insurance Supervisory Levy Determination Validation Bill 1999. Retirement Savings Account Providers Supervisory Levy Determination Validation Bill 1999. Social Security Amendment (Disposal of Assets) Bill 1999. Superannuation Supervisory Levy Determination Validation Bill 1999. Taxation Laws Amendment Bill (No. 8) 1999(deferred from meeting of 24 August 1999). Superannuation Legislation Amendment Bill (No. 4) 1999(deferred from meeting of 21 September 1999). A New Tax System (Tax Administration) Bill 1999. Convention on Climate Change (Implementation) Bill 1999 . Taxation Laws Amendment Bill (No. 9) 1999(deferred from meeting of 28 September 1999). Border Protection Legislation Amendment Bill 1999. Choice of Superannuation Funds (Consumer Protection) Bill 1999. Diesel and Alternative Fuels Grants Scheme (Administration and Compliance) Bill 1999. Equal Opportunity for Women in the Workplace Amendment Bill 1999. International Tax Agreements Amendment Bill 1999. National Residue Survey Levies Regulations (Validation and Commencement of Amendments) Bill 1999.(Paul Calvert)Chair29 September 1999Appendix 1Proposal to refer a bill to a committeeName of bill:Family Law Amendment Bill 1999Reasons for referral/principal issues for considerationThe need for community consultation and debate on proposals for the greater enforcement of parenting orders and financial agreements.Possible submission or evidence from:Law Council of Australia, Family Law Council, Law Reform Commission, Federation of Australian Community Legal Centres, Lone Fathers Association, Australian Women's Legal Services NetworkCommittee to which bill is to be referred:Senate Legal and Constitutional Legislation Committee.Possible hearing date(s) : 25 October—15 November 1999Possible reporting date : 29 November 1999signedKerry O'BrienWhip/Selection of Bills Committee member Notices91669166Items of business were postponed as follows:General business notice of motion no. 311 standing in the name of Senator Carr for today, relating to the Victorian state election, postponed till 11 October 1999.General business notice of motion no. 312 standing in the name of Senator Cook for today, relating to the Victorian state election, postponed till 11 October 1999.General business notice of motion no. 319 standing in the name of Senator Carr for today, relating to Indigenous education, postponed till 30 September 1999.General business notice of motion no. 321 standing in the name of Senator Carr for today, relating to Telstra, postponed till 30 September 1999.Miscellaneous9166Motion (by Senator Stott Despoja) proposed:That the Senate—(a) notes that: (i) the Australian company ICM Agribusiness holds a 46.5 per cent stake in food and beverage maker Berri and significant grain growing, beef feedlot and meat processing operations, (ii) the company has called for a moratorium on the use of genetically-modified organisms in food production, and (iii) the company sees a moratorium as necessary to provide time for appropriate consideration of the adoption of gene technology in Australia and its long-term impacts;(b) recognises industry concerns regarding the fast-tracking of genetic technologies and endorses the application of the precautionary principle in adopting genetic technology; and(c) calls for a review of current gene technology regulations, which are effectively `fast-tracking' in focus and which fail to ensure consumer confidence. 15:42:00The Senate divided. (The President—Senator the Hon. Margaret Reid)11Allison, L. Bartlett, A. J. J.Bourne, V. *Brown, B.Greig, B. A. Harris, L.Lees, M. H. Murray, A.Ridgeway, A. D. Stott Despoja, N.Woodley, J.45Bishop, T. M. Boswell, R. L. D.Brownhill, D. G. C. Calvert, P. H.Campbell, G. Campbell, I. G.Carr, K. Collins, J. M. A.Conroy, S. Cook, P. F. S.Coonan, H. Cooney, B.Crossin, P. M. Crowley, R. A.Denman, K. J. Eggleston, A.Evans, C. V. Ferguson, A. B.Ferris, J. Gibbs, B.Gibson, B. F. Hill, R. M.Hogg, J. Hutchins, S. P.Kemp, R. Knowles, S. C.Lightfoot, P. R. Ludwig, J. W.Mason, B. J. McGauran, J. J. J.McKiernan, J. P. McLucas, J. E.Murphy, S. M. O'Brien, K. W. K. *Parer, W. R. Patterson, K. C. L.Payne, M. A.Quirke, J. A.Reid, M. E. Sherry, N.Tchen, T. Tierney, J.Troeth, J. Watson, J. O. W.West, S. M.Question so resolved in the negative.Miscellaneous9166Motion (by Senator Stott Despoja) not agreed to:That the Senate—(a) notes that: (i) the National Farmers Federation (NFF) recommended the separation of genetically-modified foods from traditional crops at the Agforce National Conference on 6 August 1999, (ii) the NFF is a member of the industry body the Australian Agrifood Alliance, and (iii) the NFF stated that separation of genetically-modified foods from organic and chemically-enhanced foods would allow people to avoid genetically-modified foods if they chose; and(b) calls on the Government to investigate and implement effective standard segregation measures based on independent scientific data to ensure that: (i) consumers can choose foods free of genetic modifications, (ii) horizontal gene transfer is minimised between organisms, and (iii) food labels claiming products are free of genetically-modified foods are meaningful.Miscellaneous9167Motion (by Senator Stott Despoja) not agreed to:That the Senate—(a) notes that: (i) the Codex Allimentarius, the Food Safety Agency of the United Nations representing 101 nations globally, ruled unanimously in August 1999 to support a moratorium on Monsanto's genetically-engineered hormonal milk (rBGH) which has been operational in Europe since 1993, (ii) the moratorium was based on findings by two independent committees of internationally-recognised experts established by the European Commission to review the scientific literature on rBGH on veterinary and public health, (iii) Insulin-like Growth Factor One and its potent variants present in rBGH milk were found to pose major risks of breast and prostate cancer and inhibiting apoptosis (promoting cancer cell invasiveness), and (iv) rBGH milk has been available for consumption in the United States (US) since February 1994 when it was approved by the Food and Drug Administration (FDA); and(b) calls on the Government to: (i) review European systems of independent testing procedures for genetically-modified foods and endorse similar measures for application in Australia, (ii) deem US FDA approval alone inappropriate to establish public and environmental safety of genetically-modified foods, and (iii) arrest introduction of all genetically-modified foods in Australia until an appropriate independent monitoring and testing regime is established.Miscellaneous916715:46:009167Brown, Sen BobSenator BROWNQD4TASAG00—I ask that general business notice of motion No. 309, standing in my name for today and relating to the United Nations referendum for self-determination in Western Sahara next year, be taken as formal.Leave not granted.916715:47:009167Brown, Sen BobSenator BROWNQD4TASAG00—Pursuant to contingent notice, I move:That so much of the standing orders be suspended as would prevent me moving a motion relating to the conduct of the business of the Senate, namely, a motion to give precedence to general business notice of motion No. 309.Madam Deputy President, I did not hear where the objection came from.8O6O'BRIENSenator O'Brien—It came from me.QD4Brown, Sen BobSenator BROWN—I think it is very unfortunate that this motion, which has been before the Senate for some time now, has received an objection. I will pursue the proper avenue now for us to debate the motion because it is an important one. Let me read the motion so that the Senate is very clear on what it involves. The motion states:That the Senate—(a) welcomes the progress made by the United Nations (UN) and the Organisation of African Unity (OAU) in finding a peaceful solution to the conflict in Western Sahara, through the organisation of a free and fair referendum to enable its people to exercise their right to self-determination, in July 2000;(b) calls on Morocco—which, by the way, invaded Western Sahara and took the country by force when the power of General Franco of Spain was waning two decades ago— to abide by the UN-OAU peace plan and to fully cooperate with these organisations in their efforts to organise the referendum; and(c) urges the Australian Government: (i) to extend all due assistance to the UN mission in Western Sahara, and (ii) to establish official contacts with representatives of Polisario, the movement representing the people of Western Sahara.Labor has blocked formality, and let me tell those people listening that that will ultimately mean this motion gets blocked as far as today is concerned. Those people listening will notice that all the other motions will be likely to receive formality, come to a vote and therefore be accepted or rejected—but not this one.Labor is likely to get up and say that that is because this is a matter of foreign affairs where there may be some contention. But let me say that Labour parties elsewhere, particularly in Europe, have no trouble with this matter. The Blair government, for example, has consistently supported motions just like this, and right across the community of European nations not only is there support for motions like this—including those motions that have gone through the European parliament in Strasbourg—but also great assistance has been given to Polisario, the group representing the democratic aspirations of Western Sahara. This has also been the case for North America.Because Western Sahara is on the other side of the world, we do not hear so much about it here in Australia, but the situation of the Western Saharans is very similar to that of the East Timorese. Their country was taken over by an armed invasion by Morocco when, as a former Spanish colony, the Spaniards withdrew—in much the same way as the Portuguese withdrew from East Timor. Since that violent takeover by Morocco, 100,000 Western Saharans have died. Moreover, the Moroccan military have built the world's modern `great wall', including ribbon wire and cement emplacements for thousands of kilometres across the Western Sahara, to divide the country as a so-called defensive tactic. A very cruel regime has been imposed on the people of Western Sahara.Now we have the situation where the United Nations, together with the Organisation of African Unity, have set up the process for an act of self-determination in Western Sahara in July next year. There has been world support for this, but here we are in the Senate and I cannot even get this matter brought to a vote. So where is the objection? This is too important a matter for Labor simply to say that it is another foreign affairs matter. They had a motion before the Senate last week which was clearly a matter of foreign affairs. Nobody else in this place had difficulty with that. Labor is aware of motions like this which have gone through parliaments right around the rest of world. But here in the Senate, because of an internal minute or a process which has been clamped on the Senate by a party which stands for democratic principles, this motion has been blocked today. I only wish that Senator O'Brien had informed me that this was going to happen.8O6O'BRIENSenator O'Brien—I made the comment at the whips meeting. Did you send someone there?QD4Brown, Sen BobSenator BROWN—He is ducking that because he did not inform me. (Time expired)15:52:009168Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—The government opposes the suspension. I heard Senator O'Brien—who can certainly speak for himself on these matters—say that the opposition's position on this was put at the whips meeting. Regardless of that, I do not think it is fair for Senator Brown to say that Senator O'Brien is ducking the issue. There are formal methods by which the parliament can be made to work and by which communication can be had between all parties in the Senate, and Senator O'Brien used those to communicate that position. We try as far as possible to use those forums as well; the whips meeting is the most regular one of those.A point that I think should be made is that Senator Brown's motion for the most part is unobjectionable. In part (a) it `welcomes the progress made by the United Nations', then in part (b) it `calls on Morocco to abide by the UN-OAU peace plan and to fully cooperate with these organisations'—again, totally unobjectionable to the government. It urges the Australian government, in part (c)(i), `to extend all due assistance to the UN mission in the Western Sahara'. Again, Senator Brown will probably be aware that Australia provided a contingent to that peacekeeping force in its earlier stages, as requested. The assistance to that force in the Western Sahara was specifically 45 signallers; they were withdrawn back in May 1994. But that Australian withdrawal in no way indicates any diminishing of Australian support for the UN operation. In fact, we have been a vigorous supporter of that operation and, as Senator Brown said in his proposal to suspend standing orders, Australian support for the referendum next year is well known.The point I come to here is that, if Senator Brown had done what most senators do around this place—that is, to consult and discuss in relation to these motions and seek to find a consensus—there is little doubt that this motion could have gone through with unanimous support and probably could have assisted with the peace efforts in that region. The government is opposed to the motion really because of part (c)(ii). That goes against the foreign policy of this government and, as I understand it, the foreign policy pursued by most governments—that is, that the government recognises states, not governments, and that creating formal contact with the Polisario would therefore be inappropriate.But we are hopeful that, with a range of developments in the region, peace can come there and that UN efforts will be successful. Senator Brown's motion certainly does not reflect the government's views because of the inclusion of (c)(ii), and we do not support the suspension.15:56:009169O'Brien, Sen KerrySenator O'BRIEN8O6TASALP00—In relation to the proposal to suspend, I am reminded that on several occasions I have stood in this place to advise Senator Brown that, where a motion relating to foreign affairs does not have unanimous support, and certainly if it is not a simple proposition, the Labor Party will not simply support a motion going to a vote without debate. Consistent with that view, Senator Brown's request for formality today was denied by me on behalf of the Labor Party.Having said that, my advice on this matter is that, having been advised of an amendment to the original unacceptable motion, we can now support the motion. We are prepared to support the suspension on that basis so that our position and the position of all senators can be put in relation to this matter.But let me say that it is not appropriate for Senator Brown to snipe about our position, firstly, because he knew it before he came in here today and, secondly, because it was set out at the whips meeting last night, which is always the case. On occasions Senator Brown has a representative at those meetings; on others he does not. But that is a matter for him. So the Labor Party's position is that we support the suspension to put our views in relation to the amended motion.15:58:009169Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—Could I indicate first of all in my contribution on this suspension debate that I do not accept Senator Brown's interpretation of the statement that I made in the Senate in relation to the opposition's approach to foreign policy motions. I think I made that statement on 27 May 1998; it was one of those statements one makes in parliament that often is revisited by senators in the chamber.But let me say that, while I do not accept Senator Brown's interpretation in this respect, I do think that we have come up here with what is best described in the circumstances as a process hiccup. Because we have a process hiccup, I think we might be able to deal with this matter outside the chamber—and cost the chamber a great deal less time—in a way that Senator Brown and other senators might be more comfortable with. I am going to suggest, through you, Madam Deputy President, if Senator Brown would be generous enough to consider by leave withdrawing his suspension motion and if senators in the chamber would be generous enough to give Senator Brown leave to defer this matter until the next day of sitting, then I suspect we can save a great deal of time in the chamber and probably get a substantive result that a majority of senators would be comfortable with. I think Senator Brown would be more comfortable in the inevitable defeat of his suspension motion if we proceed with it this way. I hope that might be accept ed by Senator Brown and other senators in the chamber in the spirit that I am approaching the question.16:00:009170Brown, Sen BobSenator BROWNQD4TASAG00—by leave—Senator Faulkner has spotted my generosity, and I am willing to even overlook any of the comments about whips meetings and so on.8O6O'BRIENSenator O'Brien—You always do.5K4FAULKNER Senator Faulkner—They stand as I said them.QD4Brown, Sen BobSenator BROWN—Nor do 70 other members of the chamber get there, Senator O'Brien. But the matter itself is far more important than our pursuing that level of debate. I hear what Senator Faulkner and Senator O'Brien have said. It looks like we can get a positive outcome from this, which would be the same outcome if we were now to proceed to a full debate. In view of that potential outcome, I seek leave to revert to having this made a notice of motion for tomorrow.10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—You are seeking leave to withdraw the suspension of standing orders motion?QD4Brown, Sen BobSenator BROWN—Yes.Leave granted.10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—You are seeking leave to move a motion to postpone the consideration of this matter until tomorrow?QD4Brown, Sen BobSenator BROWN—Yes.Leave granted.QD4Brown, Sen BobSenator BROWN—I move:That general business notice of motion no. 309 standing in the name of Senator Brown for today, relating to Western Sahara, be postponed till the next day of sitting.Question resolved in the affirmative.Bills9170s2289170Motion (by Senator Harris) agreed to:That the following bill be introduced: a bill for an act to amend the Commonwealth Electoral Act 1918 to provide that optional preferential voting be the method of choosing members of the House of Representatives, and for related purposes.Motion (by Senator Harris) agreed to:That this bill may proceed without formalities and be now read a first time.Bill read a first time.917016:03:009170Harris, Sen LenSenator HARRIS8HCQldIND00—I move:That this bill be now read a second time.I seek leave to have the second reading speech incorporated in Hansard.Leave granted.The speech read as follows—I have introduced this bill to establish optional preferential voting for the House of Representatives because I believe it is wrong to force voters to allocate preferences to candidates or parties that they do not support.Under the current system, it is compulsory for voters to number each square on the ballot paper consecutively in order to cast a formal vote, this bill will allow voters to partially allocate preferences, or choose not to allocate preferences at all if they prefer.As competition is held to be beneficial to economics, industry and industrial relations, competition should also be beneficial to politics, but unfortunately political competition in the House of Representatives is limited by the Labor-Coalition duopoly.Even if electors vote "1" for an independent or minor political party candidate, under the present compulsory preferential system, the vote will usually ultimately flow to either Labor or the Coalition, regardless of the fact that the voter may be diametrically opposed to the policies of these parties.Optional allocation of preferences would not increase representation for minor parties or independent candidates in the House of Representatives, but it would provide a powerful incentive for the major parties to perform in order to earn preferences, since voters could not be compelled by law to allocate preferences.The main argument levelled against the optional preferential voting system is that it is in fact a form of first past the post voting. This is only true if every voter chose to vote "1" and then not distribute preferences, but in practice this is highly unlikely.Voters can allocate some, none, or all preferences, at the voter's absolute discretion, and therefore it is arguably the purist expression of democracy possible except perhaps for voluntary voting.Optional preferential voting works very well in Queensland and New South Wales, and there are no plans to my knowledge to revert back to a compulsory preferential electoral system in those states.The bill is relatively easy to read and understand in conjunction with the Commonwealth Electoral Act 1918, and I commend the bill to the Senate.Debate (on motion by Senator O'Brien) adjourned.Committees917191719171Motion (by Senator Woodley) agreed to:That the time for the presentation of the report of the Rural and Regional Affairs and Transport References Committee on the Australian dairy industry be extended to 21 October 1999.91719171Motion (by Senator Calvert, at the request of Senator Gibson) agreed to:That the time for presentation of the report of the Economics Legislation Committee on the Taxation Laws Amendment Bill (No. 5) 1999 be extended to 12 October 1999.9171917116:04:009171Knowles, Sen SusanSenator KNOWLESTH4WALP10—I present the 79th report of the Committee of Privileges, entitled Possible false or misleading statements tabled in the Senate—discontinuation of inquiry .Ordered that the report be printed.TH4Knowles, Sen SusanSenator KNOWLES—I move:That the recommendation contained in paragraph 5 of the 79th report of the Committee of Privileges be adopted.On 7 May 1997, the Senate referred the following matter to the Committee of Privileges:(1) Whether statements by Senator Colston and Mrs C. Smith, relating to payments of travelling allowances to Senator Colston, tabled in the Senate on 24 March and 6 May 1997, were false or misleading in any particular, and, if so, whether a contempt of the Senate was committed by the making of those statements.Two succeeding paragraphs of the motion directed that the committee not commence its inquiry until a statement was received from the Attorney-General indicating that all legal proceedings in respect of payments made to Senator Colston were concluded. The Committee of Privileges, having received and considered the requisite advice, has concluded that it would be inappropriate to undertake the investigations necessary to resolve any question of contempt arising from Senate proceedings. It recommends that the inquiry be not further pursued. I commend the report to the Senate and seek leave to continue my remarks later.Leave granted; debate adjourned.Miscellaneous9171917191719171Coonan, Sen HelenSenator COONAN2M6NSWLP10—At the request of Senator Gibson, I present additional information received by the Economics Legislation Committee relating to the budget estimates hearing for 1999-2000.Committees917191719171Denman, Sen KaySenator DENMANFY5TASALP00—On behalf of Senator Cooney, I lay on the table Scrutiny of Bills Alert Digest No. 15 of 1999, dated 29 September 1999.917191719171The ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator McKiernan)10000PON/A10—The President has received letters nominating senators to be members of the Select Committee on Superannuation and Financial Services.Motion (by Senator Ian Campbell)—by leave—agreed to:That Senators Allison, Chapman, Lightfoot and Watson be appointed to the Select Committee on Superannuation and Financial Services Bills9172r875Billsr889Billsr881Billsr868Billsr876Billsr882Billsr8909172Bills received from the House of Representatives.16:08:009172Campbell, 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 one of the bills listed separately on the Notice Paper . I move:That these bills may proceed without formalities, may be taken together and be now read a first time.Question resolved in the affirmative.Bills read a first time.917216:09:009172Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I table revised explanatory memoranda relating to the Financial Sector Reform (Amendments and Transitional Provisions) Bill (No. 2) 1999 and the Taxation Laws Amendment Bill (No. 8) 1999 and move:That these bills be now read a second time.I seek leave to have the second reading speeches incorporated in Hansard .Leave granted.The speeches read as follows—FINANCIAL SECTOR REFORM (AMENDMENTS AND TRANSITIONAL PROVISIONS) BILL (No. 2 ) 1999I rise today to introduce a bill that represents further refinement of financial system regulatory reform initiated in response to the Final Report of the Financial System Inquiry, chaired by Stan Wallis.Honourable senators will be aware that last year the Treasurer introduced into Parliament a package of legislation to complete the first stage of the Government's financial sector reform program. These reforms introduced a new organisational framework for the regulation of the financial system from 1 July 1998, and a variety of measures to improve the efficiency and contestability in financial markets and the payments system.The second stage of reforms transfers regulatory responsibility for State and Territory based financial institutions to the Commonwealth. I presented legislation providing for the transfer on 11 March this year. These bills passed through the Parliament in May and received Royal Assent on 17 June 1999.I now introduce a bill with a number of miscellaneous additional amendments and transitional provisions that continue the reform process and help enhance the operation of existing financial sector legislation.The more significant amendments will:bring the superannuation legislation up to date for the electronic age;clarify the availability of financial assistance to superannuation funds in cases of fraud;allow certain foreign deposit-taking institutions more time to consider the future structure of their operations in Australia without incurring taxes, fees and charges;better protect members of deposit-taking mutuals in the event of a proposed demutualisation; and include amendments which assist the functioning of the Reserve Bank of Australia.I also propose to remove Part IV of the Financial Corporations Act 1974, which provided the Government with powers to regulate registered financial corporations but was never proclaimed.Madam President, over the last eighteen months or more the power and importance of the financial sector in the world economy has been fully recognised. Countries all over the world have been given good cause to reconsider the effectiveness of their financial sector regulatory framework.In Australia our regulatory system has proven to be efficient and robust.The main package of financial sector reforms already introduced by the Government helped to establish a forward looking, flexible and sophisticated regulatory regime. Today's package of amendments and transitional provisions, while modest in the context of the overall reform process, are important in refining and developing the regulatory framework and elevating it towards `world's best practice'.These reforms will update, enhance and streamline Australia's existing financial sector regulatory procedures and operations.They further assist the development of the financial sector as a key driver in the economy that is strongly contributing to our record economic growth. They help consolidate Australia's position at the leading edge of financial sector reform, and finally, they contribute to our continued efforts to secure Australia's place as a centre for global financial services.I will now turn to the bill in more detail.Amendment to the Australian Prudential Regulation Authority Act 1998The bill amends the Australian Prudential Regulation Authority Act 1998 to exempt APRA from paying sales tax on the goods it purchases. This is consistent with the Government's intention when this legislation was originally passed. In addition, the bill proposes some largely technical amendments to the secrecy provisions of the APRA Act to enable them to operate more effectively.Amendments to the Banking Act 1959In response to requests from industry, the bill amends section 63 of the Banking Act 1959 to enable the Treasurer to issue disclosure guidelines to ensure that all authorised deposit-taking institutions (ADI) seeking to demutualise give proper regard to members' interests, and disclose adequate information for members to make an informed decision. As ASIC is currently responsible for assessing demutualisations by ADIs that transferred to Commonwealth supervision, these amendments enable the Treasurer to delegate his powers, regarding demutualisations falling within the scope of the Banking Act 1959, to ASIC.Amendments to the Financial Corporations Act 1974The bill amends the Financial Corporations Act 1974 to reduce compliance costs on business, ensures the information collection provisions are more flexible, and removes superseded provisions. In addition the proposed amendments will enable the Reserve Bank of Australia to delegate the majority of its functions under the act to APRA, the Australian Statistician, a staff member of APRA, or the Australian Bureau of Statistics.Amendments to the Financial Corporations (Transfer of Assets and Liabilities) Act 1993 The bill amends the Financial Corporations (Transfer of Assets and Liabilities) Act 1993. It will extend the deadline for foreign ADIs operating in Australia since 18 June 1993 to obtain a banking authority until 30 June 2000, in order for them to be eligible for concessional tax treatment for transferring assets and liabilities. This will provide ADIs with more time to decide on the structure of their operations given the Government's tax reform package. In addition, the legislation will apply even if there has been a change in ownership of the foreign institution.Amendment of the Financial Laws Amendment Act 1997The bill amends the Financial Laws Amendment Act 1997 to correct an error in the definition of newly established foreign banks, and makes the necessary consequential amendments.Amendment to the Life Insurance Act 1995The bill will amend the Life Insurance Act 1995 to expand the requirements for the assignment of an interest in an approved benefit fund of a friendly society. This will bring the requirements for assignment into line with those of the Friendly Societies Code.Amendment of the Reserve Bank Act 1959The bill amends the Reserve Bank Act 1959 to extend the conflict of interest provisions to all ADIs rather than just banks when considering eligibility for Reserve Bank Board membership.Amendment of Superannuation Legislation relating to Financial Assistance to FundsThe bill amends certain superannuation legislation to clarify the circumstances in which funds, which suffer losses due to fraud or theft, will be eligible to apply for a grant of financial assistance.Amendment of the Superannuation Industry (Supervision) Act 1993The bill amends the Superannuation Industry (Supervision) Act 1993 to extend the range of material and information required under the act that may be submitted in electronic form. Consequential amendments are also being made to the act to improve the efficiency of arrangements for the lodgment of information required under the act, including by electronic means. To complement these changes, additional amendments will apply to strengthen safeguards against misuse or fraud in relation to electronic lodgment, including penalty provisions and the removal of the requirement for a common or official seal on election notices.I commend the bill to the Senate.SUPERANNUATION SUPERVISORY LEVY DETERMINATION VALIDATION BILL 1999This bill is complementary to the Authorised Non-operating Holding Companies Supervisory Levy Determination Validation Bill 1999.I commend the bill to the Senate.LIFE INSURANCE SUPERVISORY LEVY DETERMINATION VALIDATION BILL 1999This bill is complementary to the Authorised Non-operating Holding Companies Supervisory Levy Determination Validation Bill 1999.I commend the bill to the Senate.AUTHORISED NON-OPERATING HOLDING COMPANIES SUPERVISORY LEVY DETERMINATION VALIDATION BILL 1999I am introducing a package of bills to validate a series of determinations made by the Treasurer. These determinations relate to levies imposed on certain industries within the financial sector.Subsection 48(2) of the Acts Interpretation Act 1901 provides that determinations have no effect if they are due to take effect before the date of notification. In this case, the determinations were to take effect from 1 July 1998, but did not appear in the Gazette until 13 August 1998.That said, there is some ambiguity as to whether these determinations do impose a retrospective requirement as levy payments were in practice not payable until at least 1 October 1998. However, on balance, there is sufficient uncertainty to warrant legislation to ensure that these determinations are valid.As the determinations relate to the imposition of taxation they require separate validating legislation for each determination.I commend the bill to the Senate. GENERAL INSURANCE SUPERVISORY LEVY DETERMINATION VALIDATION BILL 1999This bill is complementary to the Authorised Non-operating Holding Companies Supervisory Levy Determination Validation Bill 1999.I commend the bill to the Senate.RETIREMENT SAVINGS ACCOUNT PROVIDERS SUPERVISORY LEVY DETERMINATION VALIDATION BILL 1999This bill is complementary to the Authorised Non-operating Holding Companies Supervisory Levy Determination Validation Bill 1999.I commend the bill to the Senate.TAXATION LAWS AMENDMENT BILL (No. 8) 1999This bill makes amendments to the income tax law and other laws to give effect to the following measures:CFCs and capital gains tax The bill will amend the controlled foreign company (CFC) rules in the Income Tax Assessment Act 1936 to give effect to the Treasurer's announcement in the 1997-98 Budget to rectify a number of anomalies in the interaction of the CFC measures and the capital gains tax (CGT) provisions. These amendments ensure that capital gains made on tainted assets, deemed to be disposed of after the amendment of the measures on 13 May 1997 when a company leaves a wholly-owned company group, are included in the attributable income of the Australian resident controllers.The amendments also enable those tainted capital gains to be taken into account when applying the active income test. In addition, the amendments will prevent taxpayers deliberately avoiding taxation of those capital gains by using schemes or arrangements intended to dilute the Australian taxpayer's attribution percentage in the CFC holding tainted assets that have previously received CGT roll-over relief.Amendments to exempt certain post-judgment interestThis bill will amend the income tax law to exempt post-judgment interest in personal injury compensation cases from income tax, where the interest accrues from the time a judgment debt arises until all avenues of appeal have been exhausted. The amendments will apply from the 1992-1993 year of income. This will allow taxpayers who have already paid tax on post-judgment interest in recent years to obtain a refund.Franking of dividendsThe bill will amend the Income Tax Assessment Act 1936 to make a number of corrections to the franking credit trading and dividend streaming rules. These changes will apply from the commencement of the measures.Non-deductibility of bribesThis bill amends the income tax law to deny tax deductions for bribes paid to foreign public officials. The Government is introducing this measure to support global moves to discourage bribery in international business transactions. The amendments are in response to the recommendation by the Organisation for Economic Co-operation and Development that member countries deny tax deductibility for bribes made to foreign public officials. The amendments will apply to the 1999-2000 year of income and later years of income. The gain to the revenue from the amendments is estimated to be insignificant.PhilanthropyThe bill will provide taxation incentives for personal and corporate philanthropy in Australia.These measures arise as a response to the report on philanthropy in Australia by the Business and Community Partnerships Working Group on Taxation Reform. The measures were announced on 26 March 1999 by the Prime Minister, the Treasurer and the Minister for Family and Community Services.Rate of tax for friendly societiesIn Tax Reform: not a new tax, a new tax system: The Howard Government's Plan for a New Tax System the Government announced changes to the taxation treatment of life insurers that are proposed to commence from the 2000-2001 income year. The details of the changes to the taxation of life insurers are being developed as part of the Review of Business Taxation.As the law currently stands, the rate of tax on the eligible insurance business of friendly societies is scheduled to increase from 33 per cent to 39 per cent for the 1999-2000 and subsequent income years. However, pending the results of the Review of Business Taxation, this bill will retain the rate of tax for the eligible insurance business of friendly societies at 33 per cent for the 1999-2000 income year.Company Law Review AmendmentsThe bill will amend the Income Tax Assessment Act 1936 and associated tax laws to ensure that distributions of share premium are within the ambit of certain anti-avoidance rules known as the capital streaming and dividend substitution rules. The bill also makes some minor technical and clarificatory changes to ensure that other provisions operate as intended.The amendment to include distributions of share premium within the ambit of the anti-avoidance rules will apply from the date of introduction of this bill. The other amendments will apply from 1 July 1998, the date of commencement of Taxation Laws Amendment (Company Law Review) Act 1998Technical amendmentsThere are minor technical amendments in the bill that improve the signposting to provisions in the income tax law dealing with excess tax offsets.Concessional tracing rules for company lossThis bill gives effect to the Government's 1996-97 Budget announcement that the prior and current year loss, bad debt and debt/equity swap deduction rules for companies will be amended so that two concessional tracing rules that are available to trusts under the trust loss measures will also be available to companies. These amendments will apply to losses and debts incurred in the 1996-97 income year and later income years.These rules were previously included in Taxation Laws Amendment Bill (No. 6) 1997 which was introduced into Parliament in October 1997 but lapsed because of the election.Full details of the measures in this bill are contained in the explanatory memorandum.Debate (on motion by Senator Denman) adjourned.Ordered that the Taxation Laws Amendment Bill (No. 8) 1999 be listed on the Notice Paper as a separate order of the day.Miscellaneous917516:15:009175Bartlett, Sen AndrewSenator BARTLETTDT6QLDAD00—I move:That item 101 to schedule 1 of the Migration Amendment Regulations 1999 (No. 6), as contained in Statutory Rules 1999 No. 81 and made under the Migration Act 1958 , be disallowed.As always with disallowance motions, it does not mean much to read them out—they are just a bunch of items, subitems and schedules of regulations and statutory rules contained under a particular act. But regulations have a real impact on real people. That impact in relation to this issue is one that the Democrats are concerned about. The particular item that the Democrats are seeking to have disallowed is the one to increase the application fee for people applying to get a decision reviewed by the new Migration Review Tribunal. The fee is being increased to $1,400. If this disallowance were to succeed, the effect would be that the application fee would be set at $850. So there is a fee in place—if the disallowance were to succeed, the fee would sit at $850. Under these regulations, that fee has been increased to $1,400.When this proposal was first announced by the Minister for Immigration and Multicultural Affairs back in the last budget, on the surface it seemed reasonable enough. The Migration Review Tribunal is a new tribunal that was generated from a merging of the old Migration Internal Review Office—MIRO—and the Immigration Review Tribunal. They had fees of $500 and $850 respectively. If you merge the bodies and add their fees together, that makes $1,350. If you then whack on a bit for inflation, you have $1,400—which seems reasonable enough, and that certainly was how it appeared to me on first glance. But when one looks more deeply into the impact that this measure will have and some of the principles that are affected by it, it becomes a very different story.The first point to make is that one of the reasons for introducing the new Migration Review Tribunal to streamline the process was to create a more user-friendly process of merits review. It is also important to emphasise that because there is now only one tribunal rather than a two-step process, people are paying one fee. Instead of paying for two separate applications and reviews, they are now paying more to receive just one service. On top of that is the minister's own forecast when he launched the MRT that the unit cost per MRT decision under the new, streamlined procedures should be reduced to approximately half that of the system it replaces whilst ensuring high quality decisions. The minister himself stated that the unit cost of decisions will be halved, yet the fee if people want to access those tribunal decisions will be increased. The Democrats believe there is an inconsistency there.It is also worth emphasising the reality of the impact of a fee like this on people. As I often say in speeches in this chamber, I think it is important to look at and be aware of the impact on people out in the real world and what this will mean to those people. Certainly the feedback I have had from organisations that work out in the real world—or on the ground or at the coal face, whatever expression you want to use—with people is that a fee of this size will serve as a significant disincentive to people who want to have their migration applications reviewed. With this regulation the government has set up an administrative review system with a fee attached. The cost stands in stark contrast to other tribunals and merit review mechanisms. By way of example, the fee for a post-decision by the Refugee Review Tribunal—which we debated in this place last week—is $1,000. In the view of the Democrats that is also inappropriate. Nonetheless, that is a decision that the Senate and the government have made. But, by way of contrast, applications to the Social Security Appeals Tribunal are free. In situations where people appeal matters relating to their social security entitlements—I do not wish be dismissive of them because they are important matters in many cases; it can be a matter of certain amounts of money people believe they are entitled to per week—an application for that sort of review is free, yet if someone wants to appeal a migration decision, something that has the potential to have a much more significant impact on their life, they have to pay $1,400.There is, as I am sure the government will point out, scope for a waiver of the MRT fee. That waiver is only available in cases of severe financial hardship, yet clearly there are many ordinary people on average incomes or with average assets for whom finding $1,400 from their budget would be very difficult, particularly given that they would in many cases have already had to pay about $1,500 for the visa application charge itself. They pay $1,500 to apply for a visa and if they are knocked back on that they have to pay $1,400 to appeal that knock-back. The Immigration Advice and Rights Centre, which works every day with people who use this system, states that in its experience it has had cases where even people in real financial hardship have been refused fee waivers. So the Democrats do not have any confidence that the department being able to waive the MRT fee is a sufficient escape clause or safety net. We believe that the reality is that many people will still experience a significant degree of hardship in paying this fee or else they will decide not to have their decision reviewed because of the cost.This issue is a fundamental one of ensuring people have access to justice. Not all people who want their migration application reviewed are people of inadequate financial means; in fact, many people have significant financial means. But clearly many people do not. Those that do not are put in a situation when they have to pay significant amounts of money to go through these processes. There is a legitimate debate and legitimate arguments throughout the community about how our immigration program should be structured—how many people should be permitted in each year and the criteria for various visas. Those are all legitimate arguments and debates at community and political level, but the Democrats do not believe they should in any way be driven or affected by people's basic ability to pay for access to the country; that only the well-off have an added advantage in getting through the system. That, the Democrats believe, is not how a fair system should work, and that is regardless of differing views about waiting times between family reunions, skilled migration and other areas. Leaving all those arguments aside, it should be a level playing field and it should not be impacted on by people's ability to pay.Merit review of administrative decisions must be genuinely accessible. Decisions relating to immigration applications affect people's lives in the most fundamental way. The Democrats believe that we are in danger of having a migration program that puts too many hurdles in people's way. You have to have criteria and you have to have rules—we acknowledge that—but they should operate in a way that ensures a level playing field. They should not just put hurdles in the way of people to try to discourage them from coming here because of the difficulty of getting through the system and because it has been made so expensive. That is not the way to go about curtailing, shaping or structuring your immigration program.The rates at which primary decisions by the old IRT have been found to be wrong in the past indicates how crucial it is that there is an avenue for review of departmental decisions. Now there is genuinely only one avenue for review of those decisions, that is, the new Migration Review Tribunal. The Democrats believe it is crucial for a fair immigration system that access to merit review is not blocked by prohibitive application fees.Another related point that is appropriate to raise in the context of this debate is the length of waiting times for people to have their decisions reviewed by the MRT. I think that is a problem that very seriously needs to be addressed. Fees such as these should not be—and in technical terms are not—a revenue raising measure to try to offset the cost of the operation of the tribunal. There should not be any validity in any argument that, somehow or other, having a lower fee will add to the waiting list, because there should not be connection between the fee charged for a review application and the budget bottom line of the tribunal. But the waiting periods of the tribunal are a matter for concern and, again, can create an extra hurdle, an extra impediment, for people who are trying to access basic justice, a fundamental right to have an administrative merits review of a decision that impacts on them fundamentally.As I have said a number of times recently in this place, the Democrats believe that we do need to ensure that we do get the balance right when we are examining how we implement and operate our migration system. One of the factors that we believe has not been high enough in the mix in recent times is a basic degree of fairness and compassion in relation to how our system operates. I think there are other measures and other aspects of the system that are more problematic than this one in that regard, but I do think that this is another example of putting a significant financial high jump bar in front of people when it comes to their ability to access the system. In comparison with the ability of people to access the Social Security Appeals Tribunal—which is free, and I hope it remains free—I think the contrast is pretty stark and pretty blatant.So I do urge the Senate to support this disallowance motion. As I say, the effect of it, if it were supported, would be not to abolish the fee but to pull it down to $850, which we believe is more appropriate and in line with the old Immigration Review Tribunal application fee. I do urge the Senate to consider the real impact that this has on many people who already face significant difficulties trying to utilise the migration system. Supporting this measure is one small way of reducing some of the difficulties that people will otherwise face.16:25:009178McKiernan, Sen JamesSenator McKIERNAN1I4WAALP00—The opposition will not be supporting this disallowance motion. Like the Democrats, we thought long and hard about our decision about whether or not to support the motion. In many respects, we used the same criteria which were used by the Democrats, but we arrived at different conclusions.In comparing the costs of appealing to tribunals, we kept in mind the fact that up until 30 June this year the cost to members of the public who wanted to lodge an appeal with the then Immigration Review Tribunal was $850. They only reached that point of paying $850 after they had gone through an internal review with the Migration Internal Review Office of the Department of Immigration and Multicultural Affairs, at a cost of some $500. That is a total cost of some $1,350. The new fee that we are talking about is $1,400. That is a difference of $50. It is not a dramatic difference.In arriving at our decision, we also considered the matter of equity. We are very aware of the fact that a waiver is in position and will remain in position with the new tribunal. With the old tribunal—the Immigration Review Tribunal—some 20 per cent of the applicants were able to have their fee waived when they were applying if they were in such circumstances that required the waiving of the fee. In any case, the fees do not apply to anybody who is successful in their application. So the equity ground is something that we looked at and considered very careful ly, and we arrived at the conclusion that $1,400 is not unreasonable.Another thing we focused on with this motion to disallow the regulation was the fact that, if the motion was carried by the Senate and the regulation was disallowed, it would leave the review process fee free. There would be no fees applying to it at all. The fees for migration decisions apply not only to individuals coming on skills migration or family reunion but also to those migrants who are employer nominated. I think that my colleague Senator Bartlett would agree with me that there are many employers who, when they nominate a person from overseas to come to Australia, can actually afford the $1,400 application fee. There is no problem about that. That was another thing that we took into real consideration.The opposition did support the establishment of the Migration Review Tribunal. We had some concerns about it, and we will continue to monitor its progress. We will particularly monitor the length of waiting times for decisions. We had some concerns, which were expressed in the Senate estimates committees earlier this year, about the appointment processes and the training processes and whether or not those were contributing to the more streamlined system that was going to be established, which was to provide a faster and better resourced one-stop shop appeal mechanism. We have some confidence that that will eventually be delivered, but it is still very early days for the MRT.We cannot see any real merits in the carriage of this motion here today, other than it benefiting some sections of the community which are not necessarily in need of a fee free appeal system in the migration area. We are not enamoured of that. As I said earlier, the overall increase in the fee level is just $50, which is not a tremendous sum these days. For those in hardship, it can be waived, and I have confidence that it will be waived. I know that in my own electorate office—where we have taken the trouble to assist people seeking a waiver—we have had waivers granted in the past with the IRT, and I am confident that will happen in the future with the MRT. With those words, I again express the view that the opposition will not be supporting the motion.16:30:009179Patterson, Sen KaySenator PATTERSONLI4VICLP10—The government opposes the motion put forward by Senator Bartlett to disallow item 101 of schedule 1 to Statutory rules 1999 No. 81. I would like to remind honourable senators that applicants whose review is successful have the fee refunded. If they are genuine applicants who believe a wrong decision has been made and they put forward their case, the fee is refunded. As Senator McKiernan said, if they are in genuine financial hardship, the fee can be waived.Part of the overall review package introduced by the Migration Legislation Amendment Act (No. 1) 1998 included a requirement that tribunals formally hand down decisions to applicants or their representatives, except in the case of ex tempore decisions or applicants in immigration detention. It also included measures to ensure certainty of dispatch of certain information to applicants and provision for full financial accountability and independence for the tribunals. The changes in the review system will further improve the efficiency, credibility and accountability of immigration decision making and financial management. The fee offsets the additional costs resulting from the enhanced review procedures.At $1,400, the fee represents—and Senator McKiernan has talked about this—a less than four per cent increase in the combined fee for the former Migration Internal Review Office and the Immigration Review Tribunal. The fee is still below the MRT review cost recovery level. Setting the fee at $1,400 minimises the cost to the Australian taxpayer and ensures that those who can use the system, and can afford to contribute to its costs, do so. I reiterate: if they are assessed as having financial hardship, the fee is waived. If they are successful in their appeal, the fee is refunded. This change in the regulation deserves the support of the Senate and I ask all senators to vote against Senator Bartlett's motion.16:32:009179Bartlett, Sen AndrewSenator BARTLETTDT6QLDAD00—in reply—I want to respond briefly and put on record a little more completely the Democrats' position in relation to this. I believe it is an important issue. It is one where the bottom line is the issue of access to justice. That is spoken about in many different contexts in this chamber, and one of the issues that always comes to light in relation to access to justice is ensuring that it is affordable. I acknowledge the comments that the other speakers have made about the fact that there is provision for waiver in there, but I repeat: it is a discretionary power, it is not a guarantee.Certainly those that work with the system and work with people who go through the system report that they have had experience of people in significant financial hardship who have not been able to achieve a waiver. I am sure in many cases people have been able to achieve a waiver, and that is good; but I find—unless there is clear-cut evidence provided to the contrary from government or departments—it is inappropriate to disregard the information and evidence provided by those people who work on a daily basis in this area. They deal on a day-to-day basis with matters such as the Migration Review Tribunal and I think we should take heed of their words and information rather than just ignore or dismiss them.We have a situation where we now have people paying more for less. They have one tribunal review instead of two reviews and they are paying more for that privilege. The parliamentary secretary says that that fee is below a level of full cost recovery. It may well be but, from the Democrats' point of view, a full user-pays principle should not apply to basic issues of access to tribunals and administrative review and courts. It is completely inappropriate to have a cost recovery model overlaid on something like that. I think that is a dangerous argument to use. I acknowledge the suggestion that people should contribute if they are able, but to use a principle and a measuring stick of cost recovery is a dangerous principle.I think Senator McKiernan said that if this disallowance were to go through there would be no fee. My advice is that it would be $850. There was an earlier set of regulations, Statutory Rules No. 68, which set out regulations for the new MRT and set the fee at $850. That never applied in reality because this set of regulations came in which was backdated to prior to the introduction of the $850 fee. I do not know the rationale for why the government should put in place an $850 fee that it was never going to have operate and then bring in some new regulations in advance of the MRT coming into place with a higher fee. For whatever reason it did that, it leaves the situation where if this disallowance were to succeed—and unfortunately it will not—we would have a fee of $850. I think all senators would agree that that is quite a lot cheaper than $1,400, and those people who have to use the system would very much appreciate that fact.In conclusion, I am disappointed that the Senate has not chosen to support this because I think there are some fundamental principles there that are not being given enough recognition, particularly in relation to the basic issue of access to justice. I acknowledge it is a waiver, but I do not believe it is a sufficiently reliable safeguard. Nonetheless, in the absence of success on this occasion, I indicate that the Democrats will certainly continue to monitor the operation of the MRT and try to ensure that information is made available about the accessibility of it, the application of the waiver and also the legitimate and very important issue that Senator McKiernan raised of the problematic length of waiting periods that currently apply. Certainly, this issue and issues relating to this will not go away with a lack of success on this particular occasion on this issue. It is one that we will continue to monitor. Question put: That the motion (Senator Bartlett's ) be agreed to.16:42:00The Senate divided. 0Allison, L. Bartlett, A. J. J.Bourne, V. *Brown, B.Greig, B. A. Harradine, B.Lees, M. H. Murray, A.Ridgeway, A. D. Stott Despoja, N.Woodley, J.0Bishop, T. M. Brownhill, D. G. C.Calvert, P. H. Campbell, G.Campbell, I. G. Carr, K.Chapman, H. G. P. Collins, J. M. A.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.Ferris, J. Gibbs, B.Gibson, B. F. Hogg, J.Hutchins, S. P. Knowles, S. C.Ludwig, J. W. Macdonald, I.Mason, B. J. McGauran, J. J. J.McKiernan, J. P. McLucas, J. E.Murphy, S. M. O'Brien, K. W. K.Parer, W. R. Patterson, K. C. L.Payne, M. A.Quirke, J. A.Sherry, N. Tchen, T.Tierney, J. Troeth, J.Watson, J. O. W. West, S. M.Question so resolved in the negative.Bills9180r6539180Message received from the House of Representatives acquainting the Senate that the House has agreed to amendment No. 21, and the consequential amendments Nos 1, 2 and 3, made by the Senate in the Electoral and Referendum Amendment Bill (No. 2) 1998 and does not insist on its amendments Nos 1 and 3 disagreed to by the Senate.Bills9180Message received from the House of Representatives agreeing to the amendments made by the Senate to the following bill: National Health Amendment (Lifetime Health Cover) Bill 1999 Bills9181r8429181Message received from the House of Representatives acquainting the Senate that the House has made the requested amendments in the Aged Care Amendment (Omnibus) Bill 1999 .9181Bill (on motion by Senator Ellison) read a third time.Bills9181r904Billsr9039181Debate resumed.16:47:009181Brown, Sen BobSenator BROWNQD4TASAG00—I will conclude my remarks on the Appropriation (Supplementary Measures) Bill (No. 1) 1999 from before lunch. I just want to return to the subject of the GST package, which went through the Senate with the support of the Democrats. There are a couple of matters that I may raise in the committee stage but I would like to foreshadow them so that some answers may be forthcoming.The first is the business of the adjustment assistance being given by the government to businesses preparing for the GST. There have been reports in various financial journals and elsewhere that some $500 million will be available to help for-profit businesses as they make this adjustment to the GST. But nowhere can I find any government commitment to giving specific assistance to the not-for-profit organisations. In other words, the government is saying, `If you are in a business to make a profit—if you are in private enterprise—we will help you out but if you are a charitable organisation or a sporting or other community based organisation we are putting you second.'I am not saying the government is not going to help out; that is what I would like to know about in the committee stage. The Democrats, including Senator Woodley, have made quite a feature of the need to support the not-for-profit organisations, including charities, in this major adjustment and therefore, I would have thought, would have been ensuring that the government would be, right at the outset, jumping in to make sure that community organisations are assisted to adjust to the GST and everything that comes with it—a major matter for many charitable and community organisations right across Australia.I predict that quite a number of these will go to the wall—they will fold—over the GST. I want to say here and now to the government and to the Democrats that you have a responsibility to help these amateur organisations or professional non-profit organisations to meet the quite extraordinary demands that the GST will place upon those organisations. Remember that many of them involve large numbers of volunteers. I know that they will have to be sizeable organisations if they are going to really be in the business of restructuring according to the GST, but that is a major structural and financial burden for non-profit organisations, from surf lifesaving and little athletics through to scouts clubs and charitable organisations, big and small. There are thousands of these organisations across the country who do not know what the impact on them is going to be.What is more, if you want to seek information from the tax office and you are a business, a profit business, you can get it. But if you are not-for-profit, you cannot. If you seek to get such information, you are told that it is coming down the line and will be available later this year. That is not good enough. These organisations need that assistance; they need to know where they stand, they need to know what the GST means for them, they need to be able to adjust now, because, after all, for example, they are going to be paying taxes on membership fees collected now that extend into the next financial year. They need to know how to do that and they need to be ready for it.Finally, I turn to the business of forests. Senator Lees, you will remember, Mr Acting Deputy President, made a commitment that the diesel fuel rebate would not apply to off-road uses as far as the forest industries were concerned. This was part of the environmental offset. Now we find that the government is moving to give that concession to the logging industry which is marauding our forests, not least the woodchip industry, which is in the business of bringing down forests all over this country.In the 60 seconds I have left, I ask the Democrats to bring that pressure they have on the Howard government to stick to that commitment. I suspect what we are going to get is the government and Labor putting through a late measure—Mr Wilson Tuckey, the minister, has called for it—to extend this diesel fuel rebate largesse to the woodchippers, who are marauding forests right across this country. The Democrats alone can stop that happening. It was a commitment they made. They should see that it does not happen.16:52:009182O'Brien, Sen KerrySenator O'BRIEN8O6TASALP00—This legislation provides for the appropriation of money from the Consolidated Revenue Fund for the Book Industry Assistance Plan and additional funding for the Supported Accommodation Assistance Program. It must be noted that the government's tax plan was to place a 10 per cent GST on books. That is the government's preferred option. This bill deals with part of what is little more than a political buy-out plan. The Democrats claimed long and hard that books should not attract a GST. They said that they should not be taxed. But in the end their principles went to auction, and we are now dealing with the successful bid.It is important to note that the book plan is a finite package. Assistance runs for four years, commencing in the tax year 2000-01. It has to be said, however, that the 10 per cent tax on books could last indefinitely. There is also doubt that the package will redress the decline in demand for books flowing from the GST induced increase in their price. The Supported Accommodation Assistance Program is part of the same bribe. This book plan amounts to little more than an attempt to paper over what is really bad public policy and it is also an attempt to mask the real impact of the GST.The reality of this tax was brought into sharp focus the day before yesterday, when both major airlines put out media releases announcing that the domestic airfares for travel after 1 July next year will increase by at least 7.5 per cent. I say `at least 7.5 per cent', because Ansett said that it expected a further GST related increase before that date and Qantas said that it would have to undertake a further review of costs closer to 1 July next year. I think that is code for yet another jump in airfares prior to GST day. Senator Abetz was quoted in the Advocate yesterday in relation to the announcement by the airlines, suggesting that they were announcing an increase now so that it would not be noticeable when the GST was introduced on 1 July. In fact, that is absolutely not the case. The increases were announced the day before yesterday to take effect from 1 July as a result of the GST.The government claims that the impact of the GST on books will be negated by the package we have before us. It made a similar claim about the impact of the GST on air travel. In fact, we were told that overall prices for air travel would actually fall. This first round of airfare increases, with more to come, is an indication that the Australian community has been deceived.Part of Senator Kemp's defence of the GST and its impact on airfares was that we were all going to enjoy substantial income tax cuts. There must now be some doubt about the state of the budget, as there is an overrun due to the cost of maintaining an appropriate presence in East Timor. We have been told that the cost would be $300 million, then $500 million, and now $1 billion. I suspect that even the $1 billion figure is a very conservative number.No-one is suggesting that we should not be participating in the force in East Timor, but it is blatantly obvious that, if we had ensured the security of East Timor prior to the vote for independence, then we would be dealing with a very different problem. It is becoming increasingly obvious that this government has failed badly in its management of our defence capability right from day one. So we are confronting a much tougher task than we should be and our ability to do the job rightly asked of us is significantly tougher than it should be. It appears that the cost of Australia fulfilling its obligations to the people of East Timor will be well above $1 billion. I understand that the Treasurer, Mr Costello, is absolutely committed to protecting the budget surplus, despite this dramatic increase in defence costs. So the government's ability to diminish the negative impact of the GST, which is the very matter we are dealing with here, is now clearly under threat.Consideration of how the government has promoted its regional foreign affairs strategy but failed to underpin that rhetoric with an appropriate strategic defence capacity is instructive when one looks at the Costello tax plan. On 15 October 1996 the then Minister for Defence, Mr McLachlan, delivered a ministerial statement in the other place. Mr McLachlan announced two major initiatives in defence policy to `increase the combat capacity of the Army and the efficiency and effectiveness of the whole defence organisation'. This is the exact rhetoric we have heard from Mr Costello about Australia's taxation system and his new tax plan: `increase efficiency and effectiveness'—the same words.The small business community are now coming to the realisation that the imposition of the GST will dramatically reduce their ability to run their business; that is, dramatically reduce their efficiency. And low and middle income earners are about to find out how ineffective the new tax system will be in ensuring that everyone pays their fair share. The lower your income, the more tax as a percentage of your income you will have to pay.Mr McLachlan, in his ministerial statement, said that the Army lacked sufficient combat power to quickly end a conflict. He said, `By 2000, the Army's capacities will be significantly enhanced.' Mr McLachlan also announced the Defence Efficiency Review to cut expenditure in the overall defence budget and he identified a number of sectors as sources of potential savings. The savings target set by the department was $500 million. The Australian Defence Force chiefs increased that target to $700 million, and the minister demanded savings of $1 billion. In pursuit of these savings, the government have progressively eroded the very defence capacity they claim they were enhancing. This defence plan has proved to be an absolute disaster, as will be the goods and services tax. I intend to pursue the government's failures in the Defence portfolio in some detail at a future time, but I want to touch on a couple of issues today.There are a number of aspects in this failed attempt by the government to manage our defence effort, and again they parallel the GST debate and the evolution of this bill. I understand, and I am happy to be corrected, that the recruitment budget for the ADF in 1996-97 was around $25 million. And I am told that by 1999-2000 the appropriation for recruitment had been cut to only $12 million—a more than 50 per cent reduction. I understand that a further $2 million was cut from the recruitment budget at the end of the last calendar year—and all this in the name of greater efficiency. The result was obviously a significant shortfall in recruitment with targets being missed by between 40 per cent and 50 per cent.The minister's response was innovative: he simply reduced the target. Now we have a major problem in ensuring that we can properly support a force of up to 4,500 troops in East Timor. I noted the Prime Minister had 2,000 Australian troops in East Timor at the beginning of question time today but by the end of question time that number had jumped to 3,077. Defence spokesman Colonel Duncan Lewis was quoted in the Canberra Times of 23 September as saying, `The recruitment drive will have to start soon because of the urgency of getting a rotation in place.' This is very much a problem of the government's own making, as the tax package is now proving to be, and on both counts it will be the Australian community who will have to foot the bill for the government's mismanagement.The second defence matter I want to refer to today is the approach taken by this govern ment to the provision of medical support for the Defence Force. A minute circulated by Major General J.C. Hartley, the Army's Land Commander, to other Army, Navy and Air Force commanders on 30 June this year said that urgent action is needed because of `the critical nature of shortages of specialist medical officers for surgical teams for operational deployments and training support'. Major General Hartley said that urgent action was necessary because the impact on Australia's Defence Force capability was immediate. The order given to Defence health was simple. Officers managing health services were directed to maintain only `minimum safe health standards'. Again the government has sought short-term savings, but they are savings that have come at a significant operational cost.The third defence matter that I wish to refer to again goes to the competency of the government. The growing tension in East Timor prompted the government to increase our defence readiness in northern Australia. How did the government meet the increased costs? By raiding the fuel and oil budget of the Navy and the Air Force. This is no way to administer our defence forces. The failed structure and incompetent administration of our defence forces since March 1996 is now being exposed by the demands of East Timor. And this bill and the announcement that the GST will significantly drive up airfare costs is now exposing the flawed structure of the government's tax plan.17:02:009184Crossin, Sen TrishSenator CROSSIN7Y6NTALP00—In speaking this evening on the Appropriation (Supplementary Measures) Bill (No. 1) 1999 , I particularly want to concentrate on the book industry assistance plan. As we know, under the GST, books—which in the past have not been subject to the wholesale sales tax—will be subject to a 10 per cent GST. The proposed Book Industry Assistance Plan is the outcome of negotiations, as we know now, between the government and the Australian Democrats in return for their support in the Senate for the tax reform package. The Democrats have accepted the plan as compensation for the GST on books, and this bill is, in effect, putting that deal and that package into place.The book compensation package is a $240 million program over four years. Under this package, the government intends to fund an eight per cent subsidy for educational textbooks from 1 July next year, costing $117 million. However, the subsidy is only for books which appear on designated reading lists. There is $48 million for an Innovation, Infrastructure and Development Fund and a skills development program; $38 million to extend the libraries' lending rights scheme for Australian authors from public libraries to cover educational libraries; $28 million in grants to primary schools to increase their collection of Australian books; $8 million for marketing books to promote reading and literacy; and $1.2 million to improve the collection of statistics concerning the Australian publishing industry.So who supported a GST on books? From my involvement with the Senate inquiry earlier this year, no-one—no-one associated with the publishing industry anyway, neither booksellers and publishers nor authors; no-one represented by the Australian Booksellers Association, the Australian Publishers Association and the Australian Society of Authors. Educational institutions and libraries also opposed a GST on books and all the industry and other interest groups requested a zero rating for books.The booksellers, publishers and authors represented by the various groups that appeared before us presented numerous submissions on their opposition to a GST on books. In fact they ran a campaign against the introduction of a GST on books. Educational institutions and libraries also expressed their concern. Issues raised have ranged from concerns about the potential adverse effects on education and literacy and the development of an information knowledge economy to concerns about the effects on the book industry—the creators, the producers, the artists, and even the sellers of books.These concerns are largely based on overseas research, which suggests that the demand for books is highly price sensitive—that for every percentage point increase in the price there is an equivalent drop in demand. It has been argued that a drop in demand will affect reading and learning; that Australian authors, already surviving on low incomes, will be further disadvantaged; that Australian printers and publishers, particularly smaller establishments, will be unable to compete; and that the profitability of booksellers will be affected.In support of this line of argument, the point has often been made that the majority of the major industrial nations have either no tax on books or a reduced tax on books. During the GST inquiry it was interesting to note the argument from booksellers that research internationally has shown that, with the addition of a GST on books priced at $9.95 or $19.95, which would tip the price just over the edge of the $10 or $20 mark, there would be quite a significant drop in demand.Despite their strong opposition to the introduction of the GST on books, the APA and the ASA have welcomed the compensation package. However, the APA believe that it will go only some way to alleviating the impact of the GST on the book industry, a GST that they never wanted anyway. The ASA have stated publicly that they are pleased with the introduction of the educational lending rights which they as an organisation have long advocated. While the ABA have welcomed the book marketing initiative, book retailers have been critical of the book subsidy on textbooks, arguing that it will introduce an added administrative burden on booksellers and that it will do little to compensate for the increase in the cost of the 70 per cent of book sales which are made to consumers rather than to educational institutions.The package negotiated between the government and the Democrats is supposed to soften the impact of the introduction of the GST on books. However, there are concerns that the package will not significantly redress the expected reduction in the demand for books resulting from the price rises associated with the GST. For a start, it is questionable whether the subsidy will compensate for price rises. The subsidy is only for books, as I said earlier, which appear on designated reading lists. So there is no encouragement really for students to diversify their reading and go outside the reading lists unless they are prepared to pay the extra price. The Australian Bureau of Statistics data appears to support the claim that over 70 per cent of book sales do not fit within the education category and are therefore unlikely to be covered by this subsidy.Details regarding the implementation and administration of most of the initiatives have not been negotiated with the relevant groups. There are concerns about the administrative complexity for the book industry. Book retailers are critical of the book subsidy on textbooks, arguing that it will introduce an administrative burden on booksellers. They also argue that it will do little to compensate for the increase in cost. So why did the Democrats allow a GST on books to slip through? In a media release on 20 August this year, the Leader of the Democrats, Meg Lees, stated:. . . the Democrats would have much preferred that books were GST-free, but that the $240 million negotiated package was a very good substitute.Run that past us again. Why go belly-up and agree to a GST on books at all? Why not hold the line? I had thought that the Democrats opposed a GST on learning. That is what a GST on books is as far as I am concerned: it is a tax on learning.So why shouldn't there be a GST on books? Concerns were expressed throughout the year about the impact on education and literacy and the development of the information knowledge economy. There were concerns expressed about the effects on the book industry and the effects it will have on creators, writers, artists, illustrators, producers and sellers of books. Overseas research suggests, as I have said before, that the demand for books is very sensitive to price rises. As a result of that, there is usually an equivalent drop in demand. Another reason why a GST should not be included on books is that books have never been subject to sales tax. Books are the major means by which individuals acquire education from a very early age to late in life.In an age in which individuals have to acquire new skills several times in their lifetime, it is vital that books are easily and cheaply available. A tax on books is a tax on education, a tax on learning and a tax on knowledge. Books promote general literacy, are essential for the maintenance and improvement of reading skills and are the major means by which individuals acquire education. Books are essential to the lives of all Australians. Books form an essential element in the proper working of a democratic society. They are essential even more to our culture and our identity.One will remember that even the Treasurer, Peter Costello, acknowledged the unfairness of the GST on books. One cannot forget the advice he gave to a constituent some months back when he suggested that importing books by post from overseas in lots of less than $1,000 will allow the constituent to avoid paying the GST if they are purchased via the Internet. What about the impact of that suggestion, Mr Costello, on the Australian publishing industry? Of the 19 major industrial nations around the globe, 17 of them have either no tax on books or a reduced tax on books. So we are going to lead the world internationally by being one of the first countries to have a significant tax on books and to have very few of those books exempted under this arrangement.The government has claimed that the price rises on books will not be significant, that the tax cuts offered in the tax package will mean that consumers have more money to spend on goods and services and that the price of books will not rise relative to other competing goods and services. If the increase in airfares we saw yesterday is any indication of what we are about to expect in the coming 12 months, we may well be in for a similar shock when it comes to books and book prices. The reality is that the government's tax cuts are not going to go very far at all.In conclusion, the Labor Party is opposed to a GST and it is opposed to a GST on books. That has always been the case and it will remain the case. A GST on books is a tax on learning; a tax on knowledge. I believe it is a tax on the society we want to be in the future. While these measures go a small way to soften the impact of the GST on books, it will be an administrative nightmare. Finally, the Book Industry Assistance Plan would not have been necessary at all if the Democrats had not agreed to the GST in this deal.17:13:009186Bartlett, Sen AndrewSenator BARTLETTDT6QLDAD00—I rise to speak to the Appropriation (Supplementary Measures) Bill (No. 1) 1999 and the Appropriation (Supplementary Measures) Bill (No. 2) 1999 . These bills are important bills which flow on from the adoption of the new tax system legislation and agreement reached between the Prime Minister and the Leader of the Democrats in May. The bills lock in place the appropriation not just for this year but for the full four years of the forward estimates. I think that is an important point to emphasise: it is not just for the first year. Therefore, the programs will not have to rely on annual appropriations over the next four years. That will provide much greater certainty in relation to the issues covered by these bills—that is, books and the environment.Briefly, on the issue of the application of a GST to books, I have made my own position clear in the chamber and in speeches in the past, but it is nonetheless important to emphasise and highlight the significant ameliorating measures represented in this appropriation bill which go a significant way towards addressing the impact the GST is likely to have on books. I also think it is important to emphasise that the Democrats will continue to campaign for and seek to achieve an eventual outcome of GST-free books.In the area of the environment, there are very significant measures in the Appropriation (Supplementary Measures) Bill (No. 2) 1999 which I believe must be highlighted. As the Democrats' environment spokesperson, I obviously have a particular interest in this area and in ensuring that the money is not just appropriated—it is obviously an essential and important start—but also spent effectively. There are ongoing discussions not just with the Democrats but also with the wider community and the government about the most effective ways to utilise the funding and the measures contained in the Appropriation (Supplementary Measures) Bill (No. 2) 1999 .I would like to briefly highlight again all these measures and remind the Senate that the measures exist only because of the intervention of the Australian Democrats. Firstly, there will be $75 million over four years to support conversions to compressed natural gas or liquid petroleum gas for commercial vehicles and buses with a weight equal to, or greater than, 3½ tonnes. This applies to trains and ferries as well. Another measure is to develop a product stewardship system for the reuse and recycling of waste oil. That is $60 million over four years. This is a significant industry, and evidence given before the Senate Environment, Communications, Information Technology and the Arts References Committee has shown that on 1996 figures approximately 540 million litres of new oil were sold in Australia, of which 149 million litres were collected for recycling. That is significantly less than would be available if full recycling were utilised. This incentive and this funding should provide significant assistance in improving Australia's performance in recycling and reusing oil.Another measure supports the utilisation of photovoltaic systems on residential buildings and community use buildings. Photovoltaic systems convert sunlight into electricity, which is a very significant mechanism for not just reducing greenhouse emissions but developing sustainable energy industries. It is very important environmentally, but it is also an area where Australia has significant economic potential if we make use of that. The Democrats are very pleased that this measure exists which will go some way towards moving things in a more positive direction in that regard.On top of that, there is extra funding to support the development and commercialisation of renewable energy, which is a vital area for the reasons I have just expressed. The extra funding will build on the Renewable Energy Commercialisation Program, almost doubling its expenditure. That will provide potential for significant economic as well as environmental benefits for Australia and for the world as a whole. Over $250 million is provided for the use of renewable energy for remote power generation, which is often a viable alternative to diesel generated electricity in remote areas and those areas not served by a main electricity grid. The government has been lax in the past in not providing support and incentives for this area. It is a very significant component that the Democrats achieved that is represented in this bill. There are also measures to support the development and implementation of in-service emissions testing capabilities for diesel and petrol vehicles, which should assist significantly in reducing emissions and providing better air quality than would be the case if the measure were not there.The measure which has perhaps had the most attention drawn to it is the Greenhouse Gas Abatement Program—$400 million over four years. This is perhaps the biggest area where ongoing work is occurring on how best to utilise that funding and what specific measures will be put forward and developed under that initiative. It is specifically designed to reduce greenhouse emissions—an issue that the Democrats have campaigned on extremely vigorously for many years, and we will continue to do so. This government's record on supporting measures and adopting targets to reduce greenhouse gas emissions is very poor, and it is one the Democrats have highlighted time and time again. It is an achievement that should not be dismissed—that the Democrats have managed to get significant movement from the government in this absolutely crucial and fundamental area.There are often debates and surveys about the different priorities that people give to environmental issues. From my point of view, the issue of greenhouse emissions is perhaps up there at the top in terms of the importance of environmental issues. Indeed, the National Youth Roundtable is in Canberra at the moment, and I managed to see most of its presentation today on environmental issues and the survey it has done in recent times about the views and attitudes of young people in Australia towards the environment. According to its survey, the number one issue of concern for young people in Australia is air quality and emissions. I believe it is a significant measure and a significant gain by the Democrats which is represented in this bill. It should go a significant way towards addressing the very issue that young people in Australia have indicated they are specifically concerned about.There are major measures in this bill. It is, if you like, a major environmental package disguised as a benign appropriation bill. I believe that, amongst the differing arguments about the impacts of various components of the wide ranging tax agreement, the environmental measures which have been inserted as part of that, which were not there at all and were not even on the radar of the government with the initial package, are a major advance on what would otherwise have been the case.I emphasise the importance of the involvement of community and environment groups in the ongoing development and expenditure of these measures. It is one thing to provide $400 million, for example, for a greenhouse gas abatement program; what that is spent on is going to be critical in terms of how much benefit it produces for the environment. It is crucial that as much thought, energy, effort and input as possible go into those decisions so that the absolute best possible environmental benefit is achieved not just in the short term but in an ongoing way. The Democrats will bring that focus to the ongoing work of the government in our consultations with them and also with the broader community, who are being encouraged to have input into that process through the Australian Greenhouse Office. I hope that we are able to achieve the best possible outcome in relation to that area, and I urge the many Australians who share our concerns about environmental issues to work with the process that has now been put in place to ensure the best possible outcome is achieved. (Quorum formed)17:25:009188Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—The commencement of the Appropriation (Supplementary Measures) Bill (No. 1) 1999 and the Appropriation (Supplementary Measures) Bill (No. 2) 1999 is important because the legislation relating to the goods and services tax and the diesel grants scheme is contingent on these appropriation bills. The Appropriation (Supplementary Measures) Bill (No. 1) 1999 provides for the appropriation of money from the consolidated revenue fund for the Book Industry Assistance Plan and additional funding for the Supported Accommodation Assistance Program. The Appropriation (Supplementary Measures) Bill (No. 2) 1999 appropriates $896 million from the consolidated revenue fund for expenditure over four years on a range of environmental measures particularly relating to greenhouse gases, renewable energy and transport issues.These are very important bills, and the government acknowledges the effort that the Democrats have put into working with the government to achieve a result that is good news for the environment. When you look at that $896 million over four years, you see a total of $70 million for the conversion of vehicles to gas; $60 million for product stewardship—for example, dealing with the recycling of oil; $31 million for rebates for people who convert solar power to electricity; $26 million for the commercialisation of renewable energy; $264 million for renewable energy for remote power generation; and $40 million for the development of diesel emission testing. There is also the large figure of $400 million for a greenhouse gas abatement program.These are significant measures which are part and parcel of the new tax legislation and which go to meeting concerns in relation to the environment. As well as that, the first bill appropriates funds totalling $240 million for the Book Industry Assistance Plan, which addresses the effect that any tax change might have on the cost of books, particularly in relation to textbooks. The government rejects totally any allegation that this is a change which involves a tax on education. It is not so, and the Book Industry Assistance Plan will go to ensure that. There is also $60 million in assistance for those who are homeless. That is a pertinent issue in Australia today, and that money will be well spent.The government has arrived at an agreement with the Democrats on these very important issues. This agreement is good for Australia and all Australians. As well as that, it will usher in the new tax system, where we will see tax cuts of $12 billion and whereby average men and women working in Australia will see a reduction in their taxes. This will then give them the ability to spend their take-home pay on items of their choice. It will empower them to use their pay in a manner that they see fit, and that can only be good news for working Australians. There are also other aspects, such as the reduction in fuel prices and in the cost of transport. The new tax system spells good news for Australia. When you look at the new tax system and these measures, you can only wonder why the opposition has not seen its way clear to supporting this package of legislation which will advance Australia.Question resolved in the affirmative.Bills read a second time.9189The bills.(Quorum formed)17:33:009189Cook, Sen PeterSenator COOKRF4WAALP00—In relation to the section in the Appropriation (Supplementary Measures) Bill (No. 1) 1999 dealing with the extra financial support to be given to publishers of books, I wonder if the minister could tell me what the difference is between the financial support to be given through this bill—were it to be carried into law—and that given through the provisions that would have been extended to publishers of books under the book bounty legislation. Is there any difference in the amount of financial support?17:34:009189Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—The assistance to the book industry is $240 million over four years. I will take instructions on the details of the book bounty. However, it might assist Senator Cook to know that the book bounty will continue in place, notwithstanding the introduction of the book industry assistance scheme that I mentioned. I am obtaining the details of that bounty and, as soon as I have them, I will provide them.17:35:009189Cook, Sen PeterSenator COOKRF4WAALP00—I would appreciate that answer. The $240 million over four years that is going to the support of the book industry as a consequence of this measure is in consideration of the impact on the industry of a 10 per cent goods and services tax across the board. Has the Department of the Treasury done any estimates as to what the likely income to revenue will be of a goods and services tax on the book publishing industry?17:36:009189Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—I will have to take that question on notice—I have asked for the details that Senator Cook is seeking. I might say that we anticipate that an eight per cent subsidy will more than compensate for the price rise on textbooks. However, I appreciate that the answer Senator Cook is after is how much the government will receive from a GST on books. We will get that information and provide it.17:37:009189Cook, Sen PeterSenator COOKRF4WAALP00—Mr Chairman, through you to the minister: my reason for asking this question is that the Book Publishers Association, as I read its public comments, while acknowledging that this measure goes some way to meeting its concerns about a GST, implies that it does not go all the way. As a consequence, there will be a deleterious impact on the book publishing sector in Australia.I mention this point now—and no doubt, Minister, you will have followed the debate on the GST—because one of the major points of contention was that a tax on books is a tax on knowledge; that Australia up until now has not been a nation which has taxed knowledge; and that Australia, as a country, aspires to being a knowledgeable society, one that encourages education and skilling in order to be more competitive in a global community. The government is moving now to impose a tax on books which, from a cost point of view, is a deterrent to book purchasing by making prices higher or, stated from another perspective, making books more expensive for people on lower incomes, many of whom may be students. Therefore, by imposing a tax, potential knowledge and skill and higher qualification are, if not put beyond the reach of many people, certainly made more difficult for them.My interest is in trying to ascertain what the so-called advantage of this tax might be. If there were some figures on what the government expects to raise by virtue of the imposition of this tax on this industry, at least we could have a healthy debate on the cost benefit of that. While many of the arguments about a tax on knowledge are, by their very nature, hard to quantify in financial or economic terms, nonetheless you can quantify the likely impact on sales and the likely impact on prices. It is also possible to identify the signal that this sends to the rest of the community. That signal goes to the point: are we interested in encouraging people to read, to learn, to acquire knowledge and information, to have their imagination challenged by fiction and poetry and to acquire cultural knowledge? When you tax books, the signal is given that: no, we are not as interested in those things as we are in acquiring some revenue. It certainly would be very interesting to look at what the amount of that revenue will be.You may not be able to give me a figure—and I understand and sympathise with your dilemma; the cost benefit analysis debate is hard to engage in. But in any case I would suggest that the figure, when it is given, will not be a very impressive one; not a lot of money will be raised by this goods and services tax measure. When you compare that amount with the cost of the benefits to be applied by this bill to the industry, the net revenue gain to the coffers of the Commonwealth compared with the damage this measure will do to the industry and to the image of Australia and the message it will send to many people, it will be very much a massive minus. I think it is important that that information be in the public domain so that we can address that debate.I also have to mention that, in my speech during the second reading debate, I made the point that the Democrats voted for this measure. I think I need to qualify that by saying that, in my earnest recollection, not all of the Democrats voted for it; Senator Stott Despoja and Senator Bartlett did not vote for it. Nonetheless, a majority of Democrats did vote for it. Therefore, a tax on learning, a tax on knowledge was carried in the GST legislation because of that vote in this chamber. With those remarks in mind and noting, Minister, that you have had an opportunity to confer more fully with your advisers, might I ask again: are you in a position to answer the question, or do you still require further notice?17:43:009190Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—The figures in relation to the revenue from the goods and services tax which will apply to books are not available and I will need further time to get them. But I can say that, in relation to Senator Cook's comments, we have a situation where there has been on record mention made of a four per cent increase as a result of the GST in relation to the publishing and recorded media. The subsidy we are talking about here is eight per cent, which will provide more than adequately for any anticipated price rise. As for our targeting of textbooks, there have been similarities drawn in relation to Canada. But, of course, Canada did not have this book industry assistance scheme that we are introducing here. It is not the government's intention at all to tax knowledge. In introducing the new tax system, we kept the education sector apart from the rest of the community, so to speak, in relation to the goods and services tax. That was done on the basis that we did not want to tax knowledge, we did not want to tax education, and it is certainly not our intention to do so.I have a press release from the Australian Publishers Association which was issued on 20 August 1999. They state there that the important part of the package is that which compensates students and parents for the imposition of GST on educational books. This compensation means that not only will educational institutions be able to claim back the GST on educational book purchases but also the same benefits will now be passed on to individual buyers of those books. There are benefits for not only the educational sector of the publishing industry but also for children's publishing, trade book publishers, authors, primary school libraries, retailers and printers. I would submit to the Senate that that statement by the Australian Publishers Association acknowledged that this assistance plan will address any consequences which might be arrived at in relation to the education sector.It is the government's intention, I repeat, that knowledge not be taxed and that the GST not apply to education as such. I think I cannot take it any further than that. We are still waiting for the figures in relation to the revenue that Senator Cook has mentioned.17:46:009191Bishop, Sen MarkSenator MARK BISHOP2L6WAALP00—Following on from the issues being discussed by Senator Cook and the minister in respect of the Appropriation (Supplementary Measures) Bill (No. 1) 1999 I note in the EM attached to the bill that the government has outlined three rather basic objectives in respect of the Book Industry Assistance Plan: to provide financial assistance to those producing books in Australia, to provide financial assistance to Australian creators of books and to provide financial assistance to retail sellers of text books in Australia in connection with reducing the retail price of text books for use in studies at an Australian educational institution. So the government appears to be intent on providing subsidies to those involved in the manufacturing processes attached to the book industry and also to a select group of consumers who avail themselves of the product of those producers primarily who are, as I understand the minister's comments, students at universities and other associated educational institutions.Somewhat curiously, the EM goes on in the first sentence of the next paragraph to say it `may also have any or all of the following additional objectives'. It does not say they are the objectives. It uses the verb `may', not the verb `shall'. So the objectives appear to be somewhat discretionary on the part of the government. It has three clear objectives in (1), (2) and (3), then a series of seven or eight dot points which are expressed as being discretionary. I suppose you could not say that they are not worthwhile objectives, they are not worthwhile concepts, but most of them appear to be a bit like motherhood— rather nebulous. I refer in particular to the fourth dot point, the promotion of literacy. I would have thought the promotion of literacy was one of the primary functions of the education system and the school system. That is why we send our children to school, particularly in the early years—to learn the basics of reading and writing and the rest of the material that they are taught. But the Book Industry Assistance Plan has this discretionary objective, being the promotion of literacy.Other rather nebulous discretionary objectives appear to be the promotion of the books of Australian authors, the training of book producers and something else which I do not suppose anyone else in this chamber would ever distance themselves from or be critical of—support for innovation and infrastructure development in book production. Again, independent of this debate, they are probably worthwhile matters. But, again, one must go back to the introductory sentence expressing the discretionary context that it `may' be the objective. So looking at those add-ons, I suspect they are really just trying to flesh out the three core objectives that were developed for the Book Industry Assistance Plan. They are being fleshed out for no apparent reason to me. The government may well have good and cogent reasons for wanting to do so; it is just to hand over this sum of $60 million per year for the next four years, $240 million, for a range of what appear to be vague objectives attached to nothing more than, as I said, providing assistance to the producing element of this industry and to select groups of consumers in this industry.Having made those comments which seem to me to be accurate, I ask the minister what mechanisms is the government in the process of establishing, or has established, to promote the effectiveness of the Book Industry Assistance Plan? What areas of the program are being established? Which department will have the running and the supervision of the program? What additional staff have been allocated in the relevant department to monitor that program? And what objectives have been established by the government to ensure that the large sum of $60 million per year being allocated for each of the next four years for this Book Industry Assistance Plan is going to result in proper, effective distribution of Commonwealth funds? I must say, having listened to the debates today and read the EM attached to this bill, we all know that the government has put a 10 per cent levy on all goods and services in this country. It comes into effect from 1 July next year. There will be an immediate increase in costs. And, as either the bill or the EM identifies, this plan is part of the agreement, or the deal, however characterised, that was reached with the Australian Democrats.So we are handing out the $60 million. We have three core objectives. There are benefits to particular groups in our community. There are funds of $60 million allocated per year, but I am not aware of any mechanisms being established that will ensure that the moneys that are being allocated to the beneficiaries are going to be properly accounted for. We are somewhat confused by the description of the additional objectives being so vague and nebulous in terms of this plan. So the issues I am trying to identify and seek advice from the minister on are: which department is going to have the running of this scheme, what additional staff have been allocated for the administration of the Book Industry Assistance Plan and what measures have been established to ensure that the funds are properly allocated? I ask the minister those questions.17:53:009192Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—To set up programs and allocate staff before the passage of this bill might be a bit too enthusiastic. I understand that this is being looked at, however, and that an announcement will be made public in the near future in relation to the allocation of staff, the department which will deal with this and the programs that are relative to the purposes of the bill.But can I just say that there is a total of $240 million in funding in relation to this bill. Of that, there is $48 million to enhance the printing industry competitive scheme. There is $38 million for a scheme to provide further support for Australian authors, which will come under the education lending rights scheme. There is $1.2 million to enable the Australian Bureau of Statistics to annually collect data on book publishing and retail sales. There is $8 million for a marketing campaign to promote books, reading and literacy. I think that takes in one of the points that Senator Bishop made about the additional objectives of the promotion of literacy. There is $28 million allocated to grants which will go to all primary schools to upgrade their holdings of Australian books. That is quite a focused allocation of funding in relation to those purposes. I think that you will note that the explanatory memorandum states:Further objectives may be specified in regulations made under this Act.I think that there has to be that flexibility for the government because, as time goes by, needs may arise which need to be addressed. I think that that is not an unreasonable point to have under the heading of `additional objectives'. So, whilst we have those three main objectives, there are also these ancillary objectives and an ability to expand them by way of regulation. I think that is highly desirable because, no doubt, once this is in place there will be other needs which will be identified, which can be incorporated by regulation. I think the funding that I have mentioned gives some idea of the focus that we are looking at initially, but I expect there to be public announcements on the departments and the staff in the near future.17:56:009192Cook, Sen PeterSenator COOKRF4WAALP00—Can I go to Appropriation (Supplementary Measures) Bill (No. 2) 1999 . This bill deals with diesel fuel emissions. On page 2 there is a table that spills over to page 3 that sets out the amounts that are being appropriated and the purpose for which they are being appropriated. In the left-hand column, under `Purpose', the following explanation is given in respect of item No. 1:Supporting conversions to CNG—that is concentrated natural gas, I imagine—or LPG—liquefied petroleum gas—for commercial vehicles that have a GVM equal to or greater than 3.5 tonnes, buses that have a GVM greater than or equal to 3.5 tonnes, trains and ferries.An amount of $75 million over four years is appropriated in one lot of $15 million followed by three lots of $20 million. I wonder if the minister could inform the Senate on what basis these figures were arrived at, and what number of vehicles these amounts will meet the conversion needs of.17:58:009193Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—I understand that in the Prime Minister's statement of 28 May it was mentioned that the annual target was to be 800 buses and 4,000 vehicles.17:58:009193Cook, Sen PeterSenator COOKRF4WAALP00—Thank you. They are the targets, but can the minister enlighten the Senate about what number of buses or what number of vehicles out of the total population we are talking about. What percentage of the problem are we dealing with?9X5ELLISONSenator Ellison—Are you asking about a percentage of the total cohort of buses or vehicles in Australia as such? Is that what you are looking at?RF4Cook, Sen PeterSenator COOK—Thank you for asking me to be more definite. That is a reasonable request. The Prime Minister's statement, as you have said, indicates the target which these appropriations are meant to service. I am asking this question: what percentage of the eligible population of buses and vehicles is represented by the target figures that you have given me? In other words, how much of the total population will these appropriations meet the needs of?17:59:009193Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—I do not have the figures for diesel commercial but, as I understand it, some 40,000 diesel buses are relevant here. I would have to take on notice that part of the question for which I do not have the figures—that is, the part dealing with diesel commercial vehicles. I will then make a calculation in relation to the figure I have mentioned. I will obtain those figures shortly and get back to Senator Cook.18:00:009193Cook, Sen PeterSenator COOKRF4WAALP00—That is 40,000 buses and the target announced by the Prime Minister was 4,000. Is that the correct calculation?18:00:009193Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—It was 800 buses. It is to be remembered that the 40,000 I mentioned are diesel buses. There may well be other buses which run on petrol, but we are dealing with diesel buses.18:01:009193Cook, Sen PeterSenator COOKRF4WAALP00—And the target is 4,000 other vehicles. Is that the figure that you are not in a position at this point, perhaps understandably, to provide?18:01:009193Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—That is right. We are dealing with diesel commercial vehicles. The target for them is 4,000 out of a total cohort of a number which I am obtaining for you.18:01:009193Cook, Sen PeterSenator COOKRF4WAALP00—Thank you. Can you tell me whether the departmental administration costs of overseeing a program to support conversions to CNG or LPG for these vehicles comes out of these appropriations or whether the administrative costs that will obviously be incurred are met in some other way out of normal budgetary allocations?18:02:009193Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—I am advised that the administrative costs would come out of the amounts appropriated in that table.18:02:009193Cook, Sen PeterSenator COOKRF4WAALP00—Is there a percentage or an expected figure, either reasonably precise or ballpark, as to what the administrative overheads would be in running a program under item 1, the conversions program?18:03:009193Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—I am advised of a figure which is not a percentage but in dollar terms is some $200,000 per annum. That is out of the figures mentioned there, which are, of course, $15 million and $20 million respectively.18:03:009194Cook, Sen PeterSenator COOKRF4WAALP00—I am sorry, Minister, I was distracted at the time. Could you repeat that answer?18:03:009194Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—Yes. I would have to make a calculation to give you the percentage, but I am advised that in round terms the administration costs would be approximately $200,000 per annum from those amounts which are listed in that table, those amounts being $15 million in the year 2000-01 and then $20 million, respectively, for the subsequent years.18:04:009194Cook, Sen PeterSenator COOKRF4WAALP00—My recollection is that this is a program that would be administered at state level, rather than by the Commonwealth, through the state departments of transport. If that recollection is correct—maybe you would indicate if it is—the $200,000 you have referred to for each year of this program, I assume, is the Commonwealth's cost. Just to try to get through this quickly, if I am right about that, and it is only the Commonwealth's cost, is there any estimate of what the cost will be for the states, or will they have to meet their own administrative costs outside of these appropriations?18:04:009194Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—I am advised that on this one there is no state component because the Australian Greenhouse Office will be administering this, so there is no state component to take into account.18:04:009194Cook, Sen PeterSenator COOKRF4WAALP00—So that is entirely the Commonwealth's cost and the rest is expected? In other words, if I subtract $200,000 from the appropriated figure for each year, the balance is available for meeting the supporting of the conversions? I notice an affirmative nod by you, Minister.18:05:009194Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—Yes, I can confirm that. Of course, in the out years, there may be a CPI increase accordingly. But I assume that is taken for granted.18:05:009194Cook, Sen PeterSenator COOKRF4WAALP00—What then is the proposal here? What will be the way in which an owner of an eligible vehicle or bus can obtain a grant in order to support conversion? How will their conversions be supported? What administrative arrangements are in place that will cost us $200,000?18:06:009194Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—I am unable to provide detail as to the administrative arrangements because the government is consulting with industry. I would envisage it would take the form of an application to the Australian Greenhouse Office, but the details of that are yet to be finalised. Understandably, we have to consult with industry and the various stakeholders to get that right. It is a little early to go into that much detail.18:06:009194Bishop, Sen MarkSenator MARK BISHOP2L6WAALP00—It is interesting that you have allocated $75 million over the next four years for supporting conversion to CNG or LPG, an entirely worthwhile initiative and not something that the opposition would be particularly interested in attacking for attacking's sake. It is also interesting that, having decided to allocate that sum of funds, the minister is indicating that you do not quite know yet where the funds are going to be allocated and the manner in which they are going to be allocated.Taking that point a little bit further, Minister, you said at the outset that some 40,000 buses are relevant and the program is going to affect some 800. When respective bus operators, owners of buses, do apply to the relevant agency to undergo the conversion process, can the minister advise whether there will be an order of priority in terms of those applications which might be successful, other than an order of priority in terms of date of application?It is fairly well agreed that, if you go through Australia's major cities, the age of our fleet causes harm in itself. Older buses and older trucks, those that are heavily used, are more inclined to pollute. As their engine parts wear, they become more inefficient in their combustion processes and spew out grey and black muck into the air of all of our major cities. So, having decided to allocate $75 million to address this problem in part—with 800 buses out of 40,000, I suppose the improvement in air quality will be, at best, marginal and minor over time—it seems to me that it would be a sound objective to be seeking to have older machines, those that are more inclined to pollute our air, changed to be more efficient and environmentally friendly.I ask the minister: has the government yet determined the order of priority? Will older buses and the like receive preferential or priority treatment? Will those engines and other parts of the buses that are more inclined to pollute, those that are more offensive in nature, receive priority treatment? What negotiations, if any, have been conducted to date with the major fleet owners? Is that issue going to be left solely to the states for implementation, or will the Commonwealth be indicating to the states and the relevant agencies their concern that the priorities be of a particular order and the progress, if any, of those negotiations to date? Does the government have in mind any particular regions, cities or parts of Australia that should be priority areas attached to this concern?It is one thing to have a long range truck fleet or bus hauling system in remote parts of Australia where the harmful effect of pollutants is rapidly mitigated by the overall cleanliness of the air environment as opposed to some of our bigger cities like Sydney and Melbourne where the pollutant just hangs in the air for hours on end. What I wish to explore and get advice from the minister about is: has an order of priorities been attached to remedying this problem?It appears to the opposition that, whilst the government was obviously keen to get its GST package of bills up, having allocated something in the order of $214 million rising to $233 million per annum—almost $800 million or $900 million over four years—for improvement of our environment, there would be clear objectives in terms of the implementation of the seven particular programs that have been identified. Minister, in respect of program 1, supporting conversions to CNG or LPG for commercial vehicles, the opposition is interested in being advised now on the record the order of priorities by state and by region. Is there an order of priorities for aged vehicles to be converted? I ask the minister to respond to those queries.18:12:009195Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—Senator Bishop has put forward a number of questions, and I will deal with each in turn. Firstly, in relation to the development of priorities, this scheme does not take effect until 1 July next year, and so it is that we have some nine months or so between the implementation of this scheme and the introduction of the legislation. There is no plan as such to prioritise any particular region or to give priority to a state. It is a nationwide scheme and will apply across the board with respect to Australia.It is difficult to say at this point how we would deal with older vehicles as opposed to newer vehicles. We would think that most of the applications would come from those people with newer vehicles because you would not have the investment in an old vehicle which you are just about to dispose of or which is just about to go off the road. So we would expect that the majority of applications would be for newer vehicles which still have a long working life.Compressed natural gas is a rather new area, and it is something which we expect will be perhaps not as quick on the uptake out in the community as the liquid petroleum gas conversions. LPG tends to be used by taxis, and the conversion there might have a heavier demand than the CNG conversions. But we are consulting with industry, as I mentioned, and the various stakeholders—and Senator Bishop mentioned the various bus operators. It is essential that we do this because we have to start on 1 July next year on the right footing. That consultation is essential.The question of prioritisation is certainly one which I think could arise during that consultation, but it is difficult to see how you could do that between an old vehicle and a new vehicle. It may well be that all the applications for conversion come from owners of newer vehicles because of that long working life. The administration of the scheme is still to be worked out.Whilst I am on my feet, I can say, in relation to one of Senator Cook's earlier questions, that we do have an estimation of some 1.9 million diesel commercial vehicles nationwide, so the target I mentioned of 4,000 applies to a cohort of 1.9 million diesel commercial vehicles. This is, of course, to be considered quite separately and apart from the buses I mentioned.18:15:009196Bishop, Sen MarkSenator MARK BISHOP2L6WAALP00—I thank the minister for that response. The line of questioning opened up by Senator Cook is becoming curiouser and curiouser as we go on. One point nine million vehicles are theoretically comprehended by the scheme, and 40,000 buses. The target for program 1, the $15 million to $20 million per year, is going to affect 800. So it is literally a drop in the ocean—at most—of those that can be affected.As I recall the discussion, with various representatives from the Australian Democrats waxing lyrical through the GST debate, one of the justifications, if you like, for their attachment to this program was the significant improvement that was going to result in environmental issues in Australia. We now see in this program 1, with some $75 million attached to it over four years, that at best 800 buses out of a vehicle population of 1.9 million are going to be affected. So I do not think it is unreasonable for the opposition to comment that the government has done exceptionally well in that round of negotiations. It has got a GST up for $15 million in this program per year, which is going to have absolutely no impact or effect at all on the level of pollutants caused by commercial vehicles and buses in our major cities—no impact at all. In fact, I suspect it would be impossible to measure the difference in air quality in any of the affected regions, because such a minor level of heavy vehicles or buses are going to receive the benefit of this program.I am further surprised when the minister says—and I do not wish to misquote the minister—that at this stage no order of priorities has yet been established, although it is fair to say that he saw the wisdom of that suggestion, and it probably will be incorporated into government negotiations or consultations over the next nine months. What intrigued me in the minister's response was that he did not think that there would be any particular attention paid to older vehicles vis-a-vis newer vehicles. Indeed, implicit in his comments was that if we are going to have this program and allocate the $15 million or $20 million a year, it is best allocated to new vehicles to undergo conversion, because they will have a longer effective working life.I can understand that the thinking behind such a proposition is entirely sensible. However, the problem we have is that the justification for this program is to alleviate environmental problems in terms of air quality to reduce the level of pollutants in our major cities, and that was, as I recall the discussion in the GST debates, one of the primary concerns of the Australian Democrats—that they were achieving significant gains for the environmental movement, that there would be significant improvements in a whole range of environmental issues. But here we have the minister saying, `Well, really, I think it is more sensible that we convert those buses with engines that have been little used, that by definition cause minimal to zero pollution, because they will have a more effective and longer working life.' His logic is entirely correct, but it defeats the purpose of the agreement of his government with the Australian Democrats, because, when you look at the facts, the heavy pollution that does occur in our major cities is caused by the older buses, by the dirtier engines of the buses that have been excessively used.The minister says, `We are going to convert the newer buses, not the older buses. We are going to convert the buses with newer engines, which cause minimal pollution, and not attend to the older buses, which cause major pollution.' So in relation to the net effect of allocating $15 million or $20 million per year, in terms of the amount of pollutant in our major cities, there is not going to be any change at all.That leads to the question: what is the benefit of supporting conversions to CNG or LPG for commercial vehicles when we are going to do it for those buses that have had minimal engine usage to date and are currently engaged in putting a lesser, marginal or minimal amount of pollutant into our air environment? Would it not be wiser, better, more effective—a more sensible use of government funds—to allocate those funds to removing the older and more corrupt buses from the system. The purpose of this appropriation bill is clearly to appropriate the money to attach to the various programs. The programs have a particular purpose. Apart from getting the sweetheart deal some months ago with the Australian Democrats, it appears that we are wasting some $15 million to $20 million each year for the next four years and not going to achieve any purpose.If the purpose was, as we believe, simply to get the sweetheart deal up with various representatives of the Australian Democrats, it would be entirely good. We would just note that for the record. But the Democrats constantly spoke about this, and I recall Senator Allison, amongst others, waxing lyrical for hours on end about the major improvements, the major changes, that were going to occur to the environment in Australia as a result of their continuing and dedicated interest in environmental matters. But here, in program 1, the first program of seven programs attached to this, the government advises us, as I understand its position at this stage, that there is no order of priorities or that its order of priorities is to convert modern buses with engines that have, in the scheme of things, the wherewithal to engage in minimal pollution.My query to the minister is: what is being achieved? What gain do we make? What benefit is the Australian community going to see for its $20 million conversion program for the next four years? As I understand the government's position, the benefit is zero; the material gain is minimal; the improvement to the air quality in our major cities is going to be absolutely zero; and the amount of buses and vehicles affected by this program—800 out of 1.9 million—certainly suggests that the change, the benefit, is going to have zero impact.RF4COOKSenator Cook—Given the new buses coming on to the road. 2L6Bishop, Sen MarkSenator MARK BISHOP—Given the new buses coming on to the road are going to have—RF4COOKSenator Cook—What will be the reduction in greenhouse gases overall?2L6Bishop, Sen MarkSenator MARK BISHOP—I thank Senator Cook for that advice. Given the new buses coming on to the road, what will be the net reduction in greenhouse emissions overall?18:23:009197Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—To correct something from the start, I did not say that the government would be dealing with only new buses, to the exclusion of old buses. I reiterate: no priority has been determined at this stage. What I did say was that it was an anticipation that, there being many more newer buses than older buses on the road, the applications for conversion would more likely come from the owners of those newer buses. While we are on that subject, I would submit it is a reasonable scenario to consider that a lot of the newer vehicles are doing more tasks, more mileage, than the older ones. Therefore, to say that the older buses are the worst offenders in relation to emissions is a rather simplistic approach. I would submit that the newer buses do much more mileage and thereby have much more time on the road to emit more diesel fumes.An aspect which should be remembered is that the national environment protection measures which have been announced deal in the testing of diesel emissions. I mentioned that earlier in my reply when I dealt with the summary in relation to the funds provided by these bills, and I think there was some $40 million tied up with the NEPM. That will be a very good measure indeed, whereby vehicles will be tested for their emissions. If the levels are not maintained within the required limits, then those vehicles will be put off the road. So I would say to Senator Bishop that those offending older buses could well face their fate via that program and, if not, be converted in any event under the program that we are talking about.Senator Bishop also raised the question of the target being such a small amount. I am advised that, for large vehicles, the uptake of LPG is very, very small indeed. I think the assessment is that across Australia there are only four large commercial vehicles using LPG. Senator Bishop mentioned priorities. I did mention CNG being a growth industry. That is really where you are going to find your conversion for those heavy haulage vehicles because of the power it delivers, I understand. LPG for those vehicles will be not such an attractive option; they will be looking at CNG. As I said earlier, LPG is more for taxis. I think that covers the point made by Senator Bishop.I reiterate: there are no priorities at this stage. It would be absolutely premature for the government to be guessing; it would be throwing doubts in the dark to say what priorities there should be at this early stage. We need to complete our consultation with industry.18:27:009198Brown, Sen BobSenator BROWNQD4TASAG00—On the same matter, I am interested in the outcome that this Democrat-government initiative, by appropriating money from consolidated revenue for seven environmental initiatives, might have compared with other areas in which there has been no action. The opportunity to get action by the Democrats in negotiating the GST deal was available but came to nothing. Could the minister tell the committee the percentage or the actual amount of greenhouse gas coming out of native vegetation clearance and logging of native forests in Australia?9X5ELLISONSenator Ellison—We will have to take that on notice.QD4Brown, Sen BobSenator BROWN—That is quite extraordinary, because we are here dealing with a number of initiatives to offset the greenhouse gas output by this nation. There are billions of dollars involved in this, but the minister is unable to give the committee figures for native forest vegetation loss and forest loss, which, I indicate to the committee, are pro ducing about a quarter of the greenhouse gases that are emitted in Australia. I therefore want to go on to ask the minister the rationale for proceeding now with the government giving a cheque each year, in terms of the diesel fuel rebate, to the people who own the bulldozers and the other machinery in the bush that is leading to the destruction of forests in this country. Can he tell the committee how much that is going to cost taxpayers and how much impact, if any, it will have on fostering greenhouse gas production in the country?18:30:009198Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—There is some uncertainty as to Senator Brown's first question. If he could give that to us in writing, we will take it on notice. I understood he was asking a question in relation to greenhouse emissions from vegetation and the variation in emissions as a result of clearing forests. I just want to make sure we have Senator Brown right on that first question.In relation to the second series of questions he has posed, I do not have the figures available as to what effect there will be on the forestry industry in relation to the new tax system, and we will take that question on notice. With respect to those vehicles, we would hope that diesel commercial vehicles would look to this program to convert. Perhaps that would be an aspect which would also deliver a benefit—the conversion of those vehicles. I think the government here is targeting a very sound area and an area of great concern in relation to the conversion of diesel powered vehicles to gas. But we will have to take those other questions on notice.18:31:009198Brown, Sen BobSenator BROWNQD4TASAG00—I thank Senator Ellison for that response. Let me make it clear what my question was. It will be in writing because it will be in Hansard . What is the nation's component of greenhouse gas coming from the clearance of native vegetation in terms of volumes or weight and also in percentage? Separating out from that, what is the component coming from native forest logging in Western Australia, Victoria, New South Wales, Queensland and Tasmania in both percentage terms and tonnage or volumetric terms?The point here is that our best resource is native forests, not plantations, because native forests are the major carbon sinks—that is, banks—which are the major on-land form of keeping carbon out of the atmosphere and therefore holding back global warming, and maybe 90 to 95 per cent of the carbon that is held in these banks in Australia is native vegetation, particularly native forests. As you will know, Mr Temporary Chairman Calvert, because I have put this to the Senate before, the amount of carbon that is kept in these forests is roughly proportional to the square of the diameter of the trees in the forests. So the bigger and older the forest, the greater the amount of protection it gives the world from global warming.2L6BISHOPSenator Mark Bishop—That is not right.QD4Brown, Sen BobSenator BROWN—Yes, it is.2L6BISHOPSenator Mark Bishop—Old-growth forests have lower absorption of carbon.QD4Brown, Sen BobSenator BROWN—I thank Senator Bishop for that interjection. I see you nodding, Mr Temporary Chairman. He is talking about the absorption of carbon; I am talking about the bank, the store, of carbon that is already there because the forests have been absorbing carbon, as they grow, for hundreds of years. It is very important to make this distinction. What we are dealing with here is carbon banks.What happens is that, when the forest machinery that is now going to get a government subsidy through the diesel fuel rebate moves into these giant forests, cuts them down and sends them off to paper mills where later they are converted into garbage and greenhouse gases but, more particularly, then burns the remnants of the forests, the huge amount of carbon that is stored there goes into the atmosphere; and the amount that is released into the atmosphere is proportional to the square of the diameter of the trees. So as you get a bigger forest it becomes exponentially greater.I might add—and this is a surprising figure—that 50 per cent of the carbon that is released is in the ground; it is in the root systems, the organisms and what is under the forests you can see standing above the ground. There is an enormous amount of carbon held there. So when a woodchipping operation comes in and not only cuts the trees down but also fire bombs the remnants and sets fire to much of the ground itself, there is an enormous release of greenhouse gases.And do you know what? The biggest forests in the country are in Tasmania. Just last week the Bacon Labor government in Tasmania released an inventory of Tasmania's contribution to global warming and found that we are actually holding back global warming, that we are in the positive—we are absorbing more carbon than we are letting out. And do you know what? They did not measure the release of global warming gases from the destruction of the biggest forests in the Southern Hemisphere because it was too hard. So they just took that off the agenda as if it did not exist and said, `Hey, this means we are actually doing better than the rest of the country. Tasmania is the best state in the Commonwealth as far as global warming is concerned because when we take out the worst, the most disgusting, form of government aiding and abetting global warming—that is, the destruction of the tall forests of Tasmania—it looks pretty rosy in Tasmania.' So the Bacon government in Tasmania has very deliberately refused to face the facts.What we have here before the committee today is an arrangement whereby the government is actually going to pay an incentive, through the diesel fuel rebate, to the machines working in the forests to destroy those forests to release greenhouse gases. I am going through the logic of this situation to point out what an absurdity this government's approach to global warming is. Sure, you come in here with a list of Democrat arranged appropriation of moneys to aid the reduction of emissions—I would laud that; that is fine—but that is not in the same ballpark as the reprehensible policies the government has which are allowing the destruction of our forests and, I might add, the wholesale clearance of native vegetation, particularly in Queensland, where some 400,000 hectares are being scraped off the face of the earth and burnt each year. As I heard the submitter at the National Youth Roundtable in this parliament say this morning, it is Amazonian in proportion.What are the government, the minister for the environment or the Prime Minister doing about that? They are supporting it. We are here seeing the diesel fuel rebate going towards that process. As I said earlier today, extending beyond that, some $2 billion a year in diesel fuel rebate, supported by the Democrats, will go to the big mining corporations in this country through the prescription that will come out of the GST package to which an ameliorating effect is being put forward under this legislation today. It is window dressing, to some degree. It is so far short of the mark of national responsibility for facing up to atmospheric pollution and global warming that it is reprehensible.I am glad that Minister Ellison—and I thank him for his kindness—is prepared to get those figures for me. I add that I would also like to know the dollars and cents going through diesel fuel rebate to off-road vehicles—that is, bulldozers, et cetera—working in the forests. Mr Temporary Chairman Calvert, you will remember that Senator Meg Lees and the Democrats lauded the fact that they had been able to not have the diesel fuel rebate apply to off-road vehicles working in the destructive logging industries. But now we have heard through the Minister for Forestry and Conservation, Mr Wilson Tuckey, that in fact the government is going to prime the pump of forest destruction by giving diesel fuel rebates to off-road vehicles, including sniggers, bulldozers and cable loggers, no doubt.Mr Temporary Chairman, you will have seen those working their way through the valley of the giants, the Styx River valley in Tasmania, where the trees reach up over 90 metres. They are the tallest trees in the Southern Hemisphere. As we are debating this today, these monuments of nature in Tasmania are targeted for destruction from end to end. We are dealing here with a process of subsidising the people who are doing that. It is very important that the government—even if the minister does not know what they are here—gets the figures so we are at least able to say with a clear mind, `Yes, this govern ment, and anybody else in here who supports this industry, is contributing to global warming through the destruction of these forests'—and it is a monumental amount that is being contributed.I digress here a little, but I want to put this issue forward if Senator Bishop and other opposition members do not mind. It will only take a few seconds; it is something that the government can work on overnight. I refer to the matter I raised in my speech at the second reading stage of non-government organisations and not-for-profit organisations. Many of these organisations are frightened of the impact of the GST, so it is very important that we let these organisations know exactly what the impact is going to be and what assistance they are going to be given. We hear that half a billion dollars is going to private business to help it adjust to the GST. But, so far as I know and so far as they know, not one cent is going to charities, surf lifesaving clubs, little athletics clubs, conservation groups, overseas aid groups—the whole lot—working in our community right across the board and affecting every Australian. I have heard no figure given of assistance to help them readjust. I said earlier today that I think many of them will go to the wall in the next couple of years under the Democrats-government GST package.I was just speaking to New South Wales upper house Greens member Lee Rhiannon. She was telling me that at a recent meeting in the eastern suburbs of Sydney there was a lot of alarm being expressed by people working in the areas of health, housing and so on about the impact of the GST on non-government organisations working in these very important areas. They know it is coming, they know it is going to hit them, but they have no way of finding out how. If you get on to the Taxation Office, as my office has done in the last few days, and ask for an outline of how non-government organisations are going to be affected, they say, `Please wait. We'll tell you later on,' and that is only after you have gone through a lot of processes. The government itself is not telling the community, and here we are nine months out from impact day. There is going to be a massive impact on these organisations. I put it to the Democrats—although there are none present in the chamber in this important debate which is a result of their negotiations with the government—that they must get on to the government and change this situation. They must demand that non-government organisations, affecting millions of people across this country, are given not only advice but also assistance in the coming trying nine months as they face up to the impact that the GST is going to have on them.18:44:009201Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—It may assist in part to advise Senator Brown of the information I have to hand, albeit preliminary. Forestry is estimated to provide a net sink of 24 megatons or six per cent of the total national emissions in 1997. The current best estimate of net emissions from land clearing for 1997 is 65 megatons. This estimate is uncertain and should be regarded as interim only. I might say that land clearing emissions are not currently included in the national total due to the continued high uncertainty of the estimates. It is very difficult to provide a state by state breakdown because it is not assessed, as I understand, in that manner, but we will see what we can do in relation to those questions posed by Senator Brown.Senator Brown also mentioned the assistance to the charitable and non-profit sector. The government has made it clear that the $500 million which has been set aside for the transitional assistance to small business and others for the implementation of the new tax system will apply to the charitable and education sector and that a specific team within the Australian tax office has responsibility for liaising with the charitable sector on the GST and implementation issues. That will have to be worked through with the sector. In the ensuing months, no doubt there will be issues raised by that sector.It may assist Senator Brown to know that that $500 million fund does apply to that sector. I understand the new tax advisory board will be looking at the provision of assistance from this fund. No percentage or set amount has been ascertained. I still think it is early days but, for instance, you have representatives on that board from the sectors. Offhand, I know Dr Peter Tannock, who heads the National Catholic Education Commission, is on that board. I also understand there is a representative from the charitable sector, although I cannot recall offhand who that person is. I will get the make-up of the board to Senator Brown, but it is still too early to allocate set amounts or percentages.18:47:009201Bishop, Sen MarkSenator MARK BISHOP2L6WAALP00—I want to return briefly to the issue we were discussing before on the quantum reduction, if any, of greenhouse gas emissions. As I understand the government's position, 1.9 million vehicles are affected, including 40,000 buses, 800 of which are in the target program. The government advises that some four vehicles have already converted to CNG.9X5ELLISONSenator Ellison—LPG.2L6Bishop, Sen MarkSenator MARK BISHOP—Sorry, LPG. The government also advises that it has no priorities at this stage in terms of older or newer bus conversions. There will be a nationwide scheme, and there is no particular plan to promote particular regions or areas of states. The consultations with the various states have not yet commenced. My query of the minister is: with that background, and allocating in the appropriations bill some $15 million to $20 million per year, what reduction, if any, in greenhouse gas emissions does the government anticipate will be the net benefit of the introduction of this scheme from 1 July next year? What is the anticipated net reduction of greenhouse gases that is going to be derived from the implementation of this scheme from 1 July next year?18:48:009201Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—I do not have that figure to hand. I will have to take that on notice.18:48:009201Cook, Sen PeterSenator COOKRF4WAALP00—Thank you, Madam Chairman—which is the way in which I have to address you.10000CHAIRMANThe CHAIRMAN—No, I am quite happy for you to call me `chair'.RF4Cook, Sen PeterSenator COOK—Madam Chair, then.9X5ELLISONSenator Ellison—You don't look like a chair!10000CHAIRMANThe CHAIRMAN—I don't look like a chairman either.RF4Cook, Sen PeterSenator COOK—I asked the minister—and he kindly gave me an answer—on item 1 about the conversions to CNG and LPG. I asked what the administrative cost was. It was $200,000 a year. I then asked him what the administrative arrangements were. They have apparently not been put in place—I think that was the answer. I now ask the minister: when will the administrative arrangements which will cost $200,000 a year be known? When will they be available to be reported?18:49:009202Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—The Australian Greenhouse Office will be dealing with this, as I have said earlier. The precise arrangements as to allocation of staff have not been determined. This will be made public in the near future.Progress reported.Documents9202920218:50:009202Eggleston, Sen AlanSenator EGGLESTON4L6WALP10—I move:That the Senate take note of the document.I am very pleased to see the third annual report of the Medical Training Review Panel. It arose out of a recommendation from an evaluation by the Standing Committee on Community Affairs of the changes which were made to medical provider code numbers at the end of 1996. Senator Knowles was the chairman of the committee involved, and Senator Helen Coonan and I were also on that committee. We were concerned at that time that there did not seem to be any specific information about the number of medical training programs available in Australia. We felt that it would be a good thing if a national body were set up to oversee medical postgraduate training in Australia and to quantify the number of training posts so that there was hard data available as to how many training posts there were and where they were. We also thought that it was important that some attention be paid to the criteria for the selection of people going into medical postgraduate education and an appeal process be provided for people who felt that in some way the selection of candidates for postgraduate medical education training had not been fair or they had been unfairly dismissed from training programs. We thought an appeal mechanism should be set up.The Medical Training Review Panel has addressed all of the issues that we thought were important very well. For example, in terms of medical training placements, it is now on the public record in this document that, as of June 1999, 5,645 medical vocational training positions in specialist training programs were available in Australia. That is a very specific figure. There were 1,478 trainees in general practice, representing 26.2 per cent of all medical trainees; 655 in emergency medicine; 652 in psychiatry; 559 in anaesthesia; 541 in surgery; 426 in adult medicine; and smaller numbers in various other specialist areas.Previously, those kinds of specific figures would not have been able to be provided. This means that there is a much better idea of what is available in terms of postgraduate medical education in Australia. Planning can be undertaken as to the medical manpower needs of Australia and increases made in relevant training programs. Some states appear to have fewer training programs in certain areas than one would have expected, but I have no doubt that, with these statistics available, those deficiencies will be addressed and training numbers increased in the areas where specific training programs are rather light on.One of the things the Medical Training Review Panel has done this year is produce a report on the basis upon which individuals should be selected for medical postgraduate training. That report is called the Brennan report, and it outlines a very clear series of principles for the selection of candidates for medical training. These principles include selecting the best possible candidate—with the objective of producing the best possible practitioner—and having a legal and accountable process. As I said in my introduction, the panel has also set up an appeals process for people who feel they have not received natural justice in the selection or training process. The Medical Training Review Panel has proved to be a very useful and important body, and this report shows that.18:55:009203West, Sen SueSenator WEST1X4NSWALP00—I also rise to speak to this report because the training of medical personnel is very important. This issue raises in my mind a great deal of concern. We know there are shortages of doctors in areas, and the government has taken some measures in conjunction with the states to try to address this. But this gives the indication that there is a shortage of only doctors and trained specialists, when there is a shortage of personnel from the whole of the medical, paramedical or allied health area.There is a very major shortage of nurses looming, and the government is going to have to address that at a national level. There is no point in one state undertaking work to overcome this problem only to find that, because it is providing extra training or extra assistance to the registered and enrolled nurses within that state, those nurses are being pinched by states that are not prepared to put in the same amount of work.I am also concerned about the problems, particularly in relation to training issues, in attracting other health professionals—such as speech therapists, social workers, psychologists and physiotherapists—to rural and regional areas. This review panel is able to look at aspects of medical training—as in doctors—and look at where the problems are there, but we also need an organisation that looks at the problems with the training that is given to the other health professionals, which is not encouraging those professionals to move to rural areas.Whilst doctors are vitally important as part of the health profession, they are only one part. If you are going to have a comprehensive, well-balanced health system, it is important to have adequately trained health professionals to support the activities of doctors. Having the best trained surgeons in the world is fine but, if you cannot provide them with support staff trained to the same level, you may as well forget about having adequate numbers of doctors and training them to the highest of levels.This is a major concern to me, and it definitely has to be addressed. We cannot think that health equals just doctors. It equals a whole range of specially qualified and experienced staff, and they have to work together in multidisciplinary teams. For some people, this may be an unusual approach but, from my experience in the health field, this is a way of driving the dollar better. It is a way of utilising each group's training to the maximum degree and therefore getting the best, and often quickest, results in the area of health. I note with interest the table in the document looking at the gender of trainees. It would appear that some of the specialty areas have upped their game in increasing the number of female doctors who are undertaking additional training. That is welcome, but there are some areas that are still dragging the chain.It is also very hard to compare tables across the report. However, if I look at the number of people undertaking training with the college of anaesthetists, I can tell from that table how many of them are female. It is close to half, which is very good. I can do the same with the college of dermatologists—there are 50 positions and only 18 of those are filled by women—emergency medicine, general practitioners, medical administrators and obstetricians and gynaecologists. It is when I start to get to some of the more specialised areas within the college of physicians, with their speciality areas of occupational medicine and paediatrics, that it becomes a little more difficult. Maybe paediatrics has been left out; that might be my problem. I seek leave to continue my remarks.Leave granted; debate adjourned.920319:01:009203West, Sen SueSenator WEST1X4NSWALP00—I move:That the Senate take note of the document.I seek leave to continue my remarks later.Leave granted; debate adjourned.Adjournment920410000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Knowles)—Order! There being no further consideration of government documents, I propose the question:That the Senate do now adjourn.920419:01:009204Payne, Sen MariseSenator PAYNEM56NSWLP10—In recent weeks, most members of this chamber, and in fact most members of the Australian community, have placed an enormous focus on the ongoing situation in East Timor. We, like many people around the world, have been appalled at the overwhelming humanitarian crisis and serious human rights abuses which have faced many East Timorese—those who are still in East Timor and those who have been displaced. I touched on some of these issues during my comments in the debate in the chamber last week. Tonight, I wish to expand on some of those issues.I will refer on a number of occasions this evening to the words of Mary Robinson, in her capacity as the UN Commissioner on Human Rights, and to her recent work in relation to some of the most significant of these issues. In her statement on 23 September to the special session of the Commission on Human Rights on East Timor, she said:We do not yet know the total number of those who were killed, separated from their families, or deported, nor the full extent of property destroyed. Yet available information shows clearly that gross human rights violations were committed in East Timor affecting its entire population and territory.Those words on the record from Mrs Robinson note that the activities certainly involved terror, killings and other violence, attacks on women and significant displacement of the East Timorese. In its press statement of 27 September, UNICEF noted that the provincial social affairs office were reporting an:. . . estimated 236,424 displaced persons in 37 camps in 11 locations in West Timor and nearby islands. Some 33,099 are under five years old, 13,240 are under two years old and 6,362 are pregnant mothers. These are extraordinary figures when one considers the humanitarian crisis being faced by these people. I understand that the foreign minister of Indonesia, Ali Alatas, has indicated to Australia's foreign minister, Alexander Downer, that those people can now return to East Timor. I welcome that announcement and hope very much for its rapid implementation.But we are also looking at extensive devastation of infrastructure. Just last week, the multinational humanitarian mission representing Japan, Sweden, Thailand, the United Kingdom and the United States visited East and West Timor, and commented:. . . we were shocked to observe the widespread physical destruction of homes, commercial facilities and public buildings.We would note, from recent press reports, that that destruction appears to be continuing. That multinational mission also raised the important issue of preparing for the forthcoming planting season in East Timor. Unless some sort of order can be restored reasonably quickly, there will be a significant impact on the cycle of planting and harvesting, ensuring that questions of food supply continue for an extended period.I understand that the city of Baucau is now being used as an eastern distribution base for humanitarian aid, but even in the last couple of days reports of further deaths in Baucau have been made public. Bishop Besilo Nascimento confirmed this week that seven people had been killed in Baucau, including a priest, two nuns and four church workers. That aspect of the process continues in some places, it would seem, unabated. A delegation of aid workers from Darwin was due to arrive in East Timor on Monday, but there is an enormous scarcity of resources on the ground. There are very few trucks to transport material. Anybody who saw the pictures of the destruction of UN vehicles in Baucau itself—an area which I visited with Senator Bourne—would not be surprised that that makes it so much harder to address these particular challenges.An Antonov aircraft provided by Australia is now making twice daily runs between Darwin and Dili delivering United Nations and NGO supplies. But the issue of returning people to anything that resembles their former lives is what is most difficult. `The difficulties of returning home'—that is such a simple sounding statement when in so many cases people's homes have been destroyed, as have the homes of their neighbours and the homes of the rest of their communities; and this would appear to be the case in area after area.In my remarks last week, I spoke in particular about the village of Memo, near Maliana. Lower Memo was burnt to the ground on the Friday before the poll. What struck me most in that observation process was that those people still voted. I am still incredulous that one can face that level of intimidation and still be determined to exercise one's democratic right.Julia Taft, the US Assistant Secretary of State for Population, who travelled to East and West Timor as part of the multinational mission to which I referred earlier, commented that:. . . swift action must be taken to allow UNHCR to identify those seeking to repatriate to East Timor from those wishing to remain in Indonesia.That is a very important aspect of this whole process. Those people who fled their homes, especially those who went to West Timor—some voluntarily, many forcibly—must have a choice in whether they remain where they are, relocate to another part of Indonesia or return to their communities, such as they remain. They must have `an opportunity to express their choices for the future', as Mary Robinson phrased it.Several NGOs and their Australian operations in particular are playing key roles in the crisis in East Timor and with work in West Timor. Among those are CARITAS, the International Red Cross and UNICEF. In the last week, in my capacity as Chair of the Parliamentary UNICEF Association, I have circulated amongst members and senators information relating to the UNICEF East Timor Appeal. UNICEF's activities in East Timor are significant, important and ongoing. The agency has been working in East and West Timor for 18 years. In fact, it was not until shortly after the Popular Consultation that its staff were finally forced to evacuate their East Timorese operations.The total cost of UNICEF emergency relief efforts in East and West Timor has been estimated at $US5 million, covering activities in water and sanitation, health, nutrition, education and psychosocial services. UNICEF is also planning, of course, longer term work. Last week it delivered 1.2 metric tonnes of baby food over land from West Timor, followed by more deliveries over the weekend of aid vital for children. I am looking forward to an opportunity this Friday to meet with UNICEF and other NGOs in Darwin to learn more about the specific operations that they are undertaking in West and East Timor.I want to refer briefly to the role of the United Nations Commission on Human Rights. The calling of the special session of this commission was only the fourth such time in the commission's 50-year history. The other occasions—twice to consider the former Yugoslavia and once to consider Rwanda—were also examples of extreme situations of human rights abuses. As Mary Robinson has said, this is not a matter of writing new laws but rather needing to implement in practice, on the ground, the international norms and standards that exist. On 23 September, in presenting the `Sounding the Century Lecture' in London, she said:Failures of prevention shame us. Cambodia shamed us, Kosovo shamed us and now East Timor has shamed us. Are we going to be shamed again? Our failures to prevent the gross violations of the past do not relieve us of the responsibility to prevent their recurrence.The announcement yesterday that the United Nations Human Rights Commission will set up an international inquiry into the atrocities in East Timor is, I think, a welcome one. The inquiry will investigate cases of torture, violence against women and executions. The resolution adopting that process also directed the investigative body to work in cooperation with a fact-finding body already appointed by Indonesia's National Human Rights Commission. It is crucial that those responsible for these actions be brought to justice. It is crucial that we emphasise in this process that our argument is not, as I have said before, with the vast body of the people of Indonesia but rather with the perpetrators of these actions. If the norms and standards referred to by Mary Robinson are to be enforced, then punishment must be meted out for those actions.I would like to refer just briefly to the work of the Australian legal professionals to participate in this inquiry, particularly the efforts of Mr Justice John Dowd of the International Commission of Jurists and Mr Nick Cowdrey QC, the New South Wales DPP. With some 200 other volunteers, they have begun the process of studying for the collection of evidence and preparation of prosecution briefs. Just as it is important to rebuild East Timor's infrastructure, so it is important to rebuild the rule of law and to re-establish a system of justice in which the East Timorese can place their faith. Australia can play an important role with the international community in this process. The work of reconstruction must recognise the urgent and fundamental importance of the early re-establishment of the rule of law in East Timor. The people need a system of land tenure and the development of civil, political and social systems to ensure that there is a framework on which the rebuilding can occur. (Time expired)920619:11:009206Crossin, Sen TrishSenator CROSSIN7Y6NTALP00—I am aware that last week a whole day was set aside in which my Senate colleagues from all sides of the political spectrum in this House had an opportunity to put on record their thoughts about the current situation in East Timor. I was out of the country at the time attending a Commonwealth Parliamentary Association conference, and so I would like to take this opportunity to provide my contribution to those words and thoughts that were given.As a Labor senator for the Northern Territory and actually living in Darwin, I am only too aware of how close East Timor is to the city in which I live—less than 600 kilometres to the north. People should be aware that in Darwin there is a significant East Timorese community; in fact, around 3,000 East Timorese now make their home in Darwin. Let me say from the outset that my knowledge of the East Timorese community in Darwin has left me with no doubt whatsoever that they are a very peaceful people. But they have been passionate and diligent for many years about what they want for their country.We all knew, I think, and welcomed the announcement that there would be a ballot held to determine independence for East Timor, but at no stage did we ever believe that it would lead to this sort of turmoil and, I guess, spiritual destruction and humiliation of its people in the way that it has. I think those in the East Timorese community have shown enormous strength. I have great admiration for the way in which they have rallied around in the last couple of weeks and supported the Darwin community in the efforts that have been made, with Darwin being the gateway out of Australia, to bring some kind of relief and assistance to the people in East Timor. Tonight I want to talk about four areas in relation to East Timor, and the first of those concerns the Cox Peninsula transmission towers.I believe it is becoming patently clear that there is an orchestrated campaign of misinformation in Indonesia about our involvement in that country following the 30 August ballot. Anti-Australian protests are occurring in a number of Indonesian cities, as reported in the media this week. Whether this is an orchestrated campaign by organised sections of the military or just spontaneous responses by ill-informed Indonesians I am not sure. But there is a real danger that these protests may develop their own dynamic, increasing in size, frequency and ferocity. There is increasing pressure on the Indonesian government to establish a boycott of Australian goods and services.One thing is clear: we are now paying the price for what I believe is the short-sightedness of the Liberal government in its decision to close the Cox Peninsula towers and to wind back Radio Australia. At a time when more than ever we need to be able to promote our involvement in East Timor, we are unable to do so throughout the whole of Indonesia. The Cox Peninsula site near Darwin provided a location for broadcasts into the Indonesian archipelago for many years. We had at the Cox Peninsula three powerful 250-kilowatt transmitters which allowed Radio Australia to broadcast 24 hours a day on five different frequencies across all of Indonesia, all of mainland South-East Asia and a large part of the Indonesian subcontinent, as well as southern and coastal China. The closing down of the Cox Peninsula transmitters means that Radio Australia has been forced to rely on lower grade transmitters at Shepparton in Victoria and Branson in Queensland. At best, we now have one-third of our previous geographical reach.In closing down the transmitters the government denied Australia the capacity to broadcast either in English or in Indonesian to central and western Indonesia as well as to broader South-East Asia. At the same time, the operating budget of Radio Australia has been halved. The government has more than halved the number of foreign language staff working for Radio Australia from 144 to 68 and halved the number of foreign language staff working for Radio Australia from 16 to 8. Most critically, it has effectively halved the length of daily programming in the Indonesian language being broadcast to those parts of Indonesia which are still capable of hearing the transmission. The government demonstrated an incredible lack of foresight, I believe, in its decision to close the Cox Peninsula site and subsequently to offer it for sale or lease.During question time this week Senator Hill said that he did not believe that the transmission from the Cox Peninsula was an adequate situation. I put it that it is better than nothing—if it is not adequate it at least provides transmission across Indonesia. You would want to believe that at this time of crisis in Indonesia and in East Timor that this government was doing everything it possibly could to get our message across. At a time when it is more important than ever for the Australian government to be able to counter misinformation and to directly communicate with Asia, we find ourselves unable to project our message across Indonesia and other audiences in the neighbouring ASEAN states. Nearly 90 per cent of Indonesia's population cannot hear our current signal. We cannot be heard in Jakarta, Java or Sumatra. We do not have a voice at a time when we so obviously need to be heard in that part of the world. The government must, I believe, reverse its proven short-sighted decision to slash Radio Australia services and close the Cox Peninsula transmitters. Our long-term foreign policy interests and national interests in the region will best be served by ensuring that Australia can communicate directly with the whole of Indonesia, particularly during this time.I want to briefly talk about what I believe is the need for us to press for an investigation of human rights abuses. Since the ballot we have been shocked by the numerous accounts of human rights abuses committed against the East Timorese people by the pro-Indonesian militias and the Indonesian military. I am pleased that the United Nations Human Rights Commission has announced it is to establish an international inquiry into the human rights abuses and atrocities committed in East Timor. But it must be done quickly to ensure that the evidence is collected before it disappears, and the United Nations investigations must start as quickly as possible. In addition, this country must support the international inquiry into the atrocities and do everything possible to help the United Nations bring those responsible for crimes against humanity in East Timor to justice. As the Human Rights Commissioner, Mary Robinson, says in her initial report on recent events in East Timor:There is overwhelming evidence that East Timor has seen a deliberate, vicious and systematic campaign of gross violations of human rights.We must directly support the work of the international inquiry into East Timor by providing the necessary forensic and other experts and information.Australian intelligence has very detailed knowledge of the activities of the Indonesian military, policy, militias in East Timor and their chain of command. The Australian government must now acknowledge that we got it wrong with our `real politik' foreign policy stance regarding East Timor. I believe we now owe the people of East Timor a special responsibility for the loss and suffer ing they have experienced. We must do everything in our power to see justice. I noticed this week that the East Timor independence leader, Xanana Gusmao, a man of outstanding strength and fortitude who will be well recognised in the future for the way in which he has protected and defended the rights of his people in East Timor, has appealed for the international community to help ensure the safe return of about 200,000 people he says are being held in camps in West Timor. Hundreds of thousands of people were made homeless in attacks carried out by pro-Indonesian forces, which failed in their bid to stop the great majority of Indonesian Timorese voting for independence. People are coming out of the hills back to East Timor. We must now see the people forced to move to West Timor moving back to their homes.In closing I briefly want to say two things. First, I want to thank the media for the role that they have played in providing us and the international stage with information on the events in East Timor. They have played a vital role in keeping Australians informed about the events there and revealing the atrocities under extreme conditions. Second, it would be very remiss of me if I finished without saying a few words about the young women and men in the Australian Defence Force who, by and large, are living in and based at Darwin. We should think not only of the ADF but also of their families and friends left at home. We pray for them and send them godspeed in their mission for us in East Timor.920819:21:009208Woodley, Sen JohnSenator WOODLEYHX5QLDAD00—Let me compliment Senator Crossin on that speech, most of which I heard. I think it is important that we continue to put on the record the kinds of things that she was saying. I want to speak about something entirely different, however, and really to conclude a speech which I gave on Monday night about the draft BASI report into the deficiencies in CASA. I listed in that speech a number of serious deficiencies and placed those on the record. But I do also want to acknowledge—and I did not have a chance to finish my speech the other night—some pretty signifi cant comments from the Senate representative for the Minister for Transport and Regional Services, Senator Ian Macdonald, in response to a number of questions which I asked last week on class G airspace.Senator Macdonald acknowledged that there had been weaknesses in the way airspace reform had been handled. He said that CASA has been an active proponent of airspace reform which, frankly, has conflicted with its role as an aviation safety body. Senator Macdonald appeared to foreshadow a change in the roles of CASA and Airservices Australia. He certainly announced that from now on CASA will be responsible for setting minimum standards for airspace classes but perhaps no longer responsible for airspace design.The Democrats welcome this announcement, and we welcome the announcement that from now on the Department of Transport and Regional Services will engage an independent consultant to prepare safety cases for changes in airspace. We also see this as a frank admission that CASA has failed in the preparation of the safety case for the class G airspace trial, and that is why we had the problems that I detailed in my speech on Monday night. However, I do want to acknowledge that the government has, in answering my questions, certainly placed on the record a number of very important announcements about government policy. I also want to say that there has been real tardiness in the response of the government to that draft BASI report and, really, we cannot wait much longer for the final report. That is why on Monday night I made an appeal to the government to get a move on.We are aware that the BASI report is in fact very critical to the whole issue of air safety in this country. We want put the government on notice that we cannot ignore or continue to delay dealing with the crisis in Australian air safety. The draft BASI report is now available. Many of the critical conclusions were put on the record on Monday night, and I believe this will enable the Senate and the public to compare that draft report with the final report whenever it comes out. It is time to fix the crisis in air safety in Australia, and I do not believe that the Senate should rest until this has taken place.920919:25:009209Mason, Sen BrettSenator MASON84MQLDLP10—It has been heartening for me as a new member of parliament to witness all sides of politics supporting the decision to send Australian troops to East Timor. This demonstrates that, despite real and important differences between political parties, there exists a consensus as to basic values which all of us hold dear. We all recognise the value of democracy, we are committed to protecting human life and we desire that human decency and dignity be universally upheld and universally respected. Until recently, many commentators argued that such principles were an expression of peculiarly Western values. Asian values, they said, were different, and we should not seek to impose our own values upon Asian people, who for millennia had lived according to a different ethic and a different set of rules. Any Australian arguing or intervening on behalf of democracy and human rights risked the charge of cultural insensitivity, disrespect for other traditions and perhaps even cultural imperialism.As our country's attention continues to be captivated by the ongoing crisis in East Timor, I cannot help but remember my own personal experiences during another crisis in a different Asian country not so long ago. I had the great privilege of working with the United Nations Transitional Authority in Cambodia during 1992 and 1993. Throughout my time in South-East Asia I was told that our sophisticated notion of civil and political rights could not be transplanted into the Cambodian countryside: the paddy fields grew a harvest of rice, not human rights.But the cause that we are fighting for today in East Timor and that we fought for in Cambodia is not one grounded in some sophisticated debate on civil and political rights. In the jungles of Cambodia and East Timor the issue is not one of liberal versus communitarian thinking or Western versus Asian values; it is a question of whether governments should allow people to be killed at whim, whether a police force should be accountable for torturing and killing their captives, whether people should be able to express a political preference without fear of endangering their lives and those of their loved ones. Sadly, the cry of `Asian values' has sometimes been a self-serving refuge of generals and politicians who want to escape international scrutiny for the mistreatment they visit upon their countrymen.There is no particular Asian tradition that the state can kill its people with impunity. How many villagers, be it in Cambodia or East Timor, think that it is all right for governments to arbitrarily kill them? Arbitrary molestation is abhorrent. Everyone thinks that brutality, rape or murder by the state, the military or the police is an outrage. This is not an argument about sovereignty or cultural relativism. This is about common humanity. We do not disengage that sympathy or that outrage simply because it is inconvenient. When another man bleeds, we feel it because he is a man as we are human beings. Here, surely, race and culture are irrelevant. As the last Governor of Hong Kong, Chris Patten, in his recent book, East and West, said:Asia has shown the rest of us how much can be achieved by energy, commitment and hard work, but it does not offer . . . the case for authoritarianism, whose delusive and presumptuous bluster has recently been repudiated by events.No-one in this chamber underestimates the gravity of East Timor's anguish or the seriousness of Australia's commitment. Our nation faces not only its largest military commitment since Vietnam but also, perhaps, its most challenging one.The faded certainties of the Cold War no longer provide us with tried courses of action or with the assurances of automatic support by our traditional allies. We have to forge our paths anew. It is for statesmen to navigate this perilous road and arrive at an acceptable balance between a commitment to national values and an awareness of a broader national interest. Particularly in our region, an understanding of competing national interests and different cultural and value systems complicates this assessment. Unfortunately, foreign policy does not invite simple morality plays. As Professor Milner recently cautioned us, Australia should not swagger in Asia. But, at the same time, we should not be afraid to walk tall.Market economics and the technology of globalisation will make it increasingly difficult for cultures to isolate themselves from others. They will become increasingly porous and open. With that, it will become more and more difficult for politicians to deny their people the same basic rights that are enjoyed by increasing numbers of other people worldwide.I would like to congratulate our Prime Minister for his stewardship of Australia's involvement in East Timor and in particular for his recognition that we, as a nation, cannot ignore our international obligations, even when it would perhaps be easier and more convenient to do so. Fundamentally, we cannot avert our gaze out of fear of offending the sensibilities of men with guns. If we genuinely believe that there are certain values so very precious that our society seems unimaginable without them, it is difficult in conscience to accept the reality of our fellow human beings elsewhere in the world being deprived of the same values.I, like Senator Crossin, would like to send my best wishes to our peacekeeping troops in East Timor. From the battlefields of the First and Second World Wars, to Vietnam and the Persian Gulf, our soldiers have a very proud history in the front-line of the fight to protect freedom at home and to restore it to others in foreign lands.When I was working in Cambodia, I met a young Indian Army officer. He was a great patriot and went to great lengths to expound on the virtues of the Indian Army. He then discovered that I was an Australian. He paused for a second, thought, and looked at me jealously, and said, `Yes, Australians. There's nothing like Australian soldiers. Aussie courage is unbeatable.' This Aussie courage is the brave bequest of our Anzacforebears. Our young Australian men and women bringing peace to the people of East Timor now carry this torch and are building on this very proud legacy. We wish them all the success in their mission and a safe and speedy return home.Senate adjourned at 7.35 p.m.Documents92109210The following government documents were tabled:Advance to the Minister for Finance and Administration—Statements and supporting applications of issues for— May 1999. June 1999.Department of Family and Community Services—Evaluation of stakeholders' experience with the use of the tables for the assessment of work-related impairment for disability support pension—Final report prepared by Jenny Pearson and Associates Pty Ltd for the Steering Committee and the Department of Family and Community Services, 3 September 1999.Medical Training Review Panel—Report for 1998-99.Payments System Board—Report for 1998-99.Provision for running costs borrowings—Statements and supporting applications of issues for— May 1999. June 1999.The following documents were tabled by the Clerk:Cocos (Keeling) Islands Act—Utilities and Services Ordinance 1996— Electricity Fees/Tariffs Determination, dated 20 September 1999. Water Consumption Fees Determination, dated 20 September 1999.Health Insurance Commission Act—Commission's Additional Functions (Disclosure of Childcare Rebate information) Determination—HICA 8AA(4)/1/1999.Parliamentary Entitlements Act—Parliamentary Entitlements Regulations—Advice of decision under paragraph 18(b).Answers to Questions on Notice9211The following answers to questions were circulated:9211(Question No. 1187)11879211O'Brien, Sen KerrySenator O'Brien8O6TASALP00 asked the Minister for Justice and Customs, upon notice, on 12 July 1999:(1) Has the Australian Customs Service (ACS) been contacted by the Australian Quarantine and Inspection Service (AQIS) in relation to Recommendation 4.6.7 made by the National Task Force on Imported Fish and Fish Products; if so, when and how was the ACS contacted by AQIS.(2) What action has the ACS taken in response to the AQIS contact.(3) Has the ACS reviewed statistical code 0306 (crustaceans cooked and raw, chilled, frozen, dried and salted).(4) Has statistical code 0306 been broken down to allow identification of green, farmed product and freshwater crayfish.(5) Did AQIS ask the ACS to notify ports customs agents of the correct tariff classifications for products of concern to AQIS; if so: (a) when was the request made; and (b) when were the ports customs agents provided with the AQIS advice.(6) Can a copy be provided of the advice given to the ports customs agents.9211Vanstone, Sen AmandaSenator Vanstone7E4SALPJustice and Customs10—The answer to the honourable senator's question is as follows:(1) Yes.Modifications to statistical codes were raised as part of regular dialogue between Customs and AQIS on tariff matters.(2) See 3.(3) Australia uses the international Harmonized system for tariff classification which may not be altered by Australia other than to append sub-codes to the base tariff classification. Discussions are continuing with AQIS and with the Australian Bureau of Statistics (ABS) to determine if an effective sub-code can be added to tariff classification 0306 to provide for enhanced profiling which will satisfy AQIS requirements. As reflected in the Government response to the Task Force Report, it is not certain that such an approach would be more effective than improved quarantine risk management methodologies.(4) See 3.(5) No.As mentioned in (3), AQIS and the ABS are considering changed statistical codes which in turn may require amendments to the Quarantine Regulations. Until this aspect is resolved it would be premature to approach Customs agents about this matter.(6) See 5.9211(Question No. 1240)12409211Evans, Sen ChrisSenator Chris EvansAX5WAALP00 asked the Minister for Family and Community Services, upon notice, on 12 August 1999:(1) Can an outline be provided of the income tests that apply for the: (a) Family Allowance (b) Maternity Allowance; and (c) Maternity Immunisation Allowance.(2) Can it be confirmed that a family may be disadvantaged under those tests where a child is born late in the financial year as the current financial year's income is used as the basis for the income test.(3) What is the eligibility for the allowances in the following situations: (a) a family, where both parents earn $35,000, which has a child on 30 June, after which one parent remains at home to care for the child; and (b) a family, where both parents earn $35,000, which has a child on 1 July, after which one parent remains at home to care for the child.9211Newman, Sen JocelynSenator NewmanBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—The answer to the honourable senator's question is as follows:(1) (a) For Family Allowance purposes, the income test is applied to taxable income, plus the value of certain employer provided benefits, foreign income, net rental property losses, less 50 per cent of any child support paid.Payments are assessed for each calendar year, based on income in the financial year that ended in the previous calendar year. This represents the person's base year income. However, a person can request that payment be assessed using an estimate of income for the current financial year. For couples, their combined income will apply. The table below sets out the income limits for 1999.No. of childrenIncome limit to get maximum FA $ pa*Income limit to get minimum FA $ pa123,55066,403224,17469,725324,79873,047425,42276,369For each extra child6243,322* Income over these amounts reduces the annual rate of Family Allowance by 50 cents in the dollar until the minimum rate is reached.Families receiving an income support payment such as a pension or allowance are not subject to the income test.A separate maintenance income test applies if any maintenance or child support is received. Maintenance income above a "free area" reduces payment by 50 cents in the dollar until the minimum rate is reached. At 1 July 1999, the free area is:Per year. Single parent, or one of a couple receiving maintenance$967.20. Couple, both receiving maintenance$1,934.40. For each child after the first, add$322.40(b) Maternity Allowance is payable to families who meet the income and assets tests and residency requirements for Family Allowance within 13 weeks of the birth of a child, and claim within 26 weeks of the birth. Therefore, if a family's base year income, or estimate of income for the current financial year, does not exceed $66,403 per annum plus $3,322 for each child after the first, Maternity Allowance may be paid.(c) Maternity Immunisation Allowance is paid for children born on or after 1 January 1998 after a child reaches 18 months old and is fully immunised or has a valid exemption from immunisation. It is available either where Maternity Allowance has been paid in respect of the child or where Family Allowance is being paid for the child at the time Maternity Immunisation Allowance is claimed (ie between 18 months and 2 years of age). Therefore, the same income limits referred to above apply.(2) No. As noted in the answer to question 1, Family Allowance and Maternity Allowance is assessed on the family's base year income, unless a person requests that eligibility be based on an estimate of income for the current financial year. When a new financial year commences, it is open to the person to provide an estimate of income for the new financial year.If a person is ineligible for Family Allowance using the family's base year income or an estimate of income for the financial year in which the child is born, the person may qualify for Family Allow ance at the start of the financial year after the child is born by providing an estimate for the new financial year.If the day on which the person provides an estimate of income for the new financial year for the purpose of claiming Family Allowance is within 13 weeks of the child's birth, the person may also qualify for Maternity Allowance on the basis of the new estimated income.(3) (a) On 30 June, the family is ineligible for the allowances as a combined income of $70,000 exceeds the income limit for one child of $66,403. However, on 1 July the family may become eligible for the allowances if the family provides an estimated income for the new financial year which does not exceed the income limit. This is likely to occur due to a drop in income of the parent remaining at home to care for the child.(b) On 1 July, the family is eligible for the allowances if the family provides an estimated income for the current financial year which does not exceed the income limit. This is likely to occur due to a drop in income of the parent remaining at home to care for the child9212(Question No. 1267)12679212Brown, Sen BobSenator BrownQD4TASAG00 asked the Minister for the Environment and Heritage, upon notice, on 19 August 1999:According to data sets compiled for the Regional Forest Agreement in Tasmania:(1) How much of the following has never been logged: (a) Eucalyptus regnans forest; (b) Eucalyptus obliqua (wet) forest; (c) Eucalyptus delegatensis (wet) forest; and (d) Eucalyptus viminalis (wet) forest.(2) How much of the following consists of silvicultural regeneration: (a) Eucalyptus regnans forest; (b) Eucalyptus obliqua (wet) forest; (c) Eucalyptus delegatensis (wet) forest; and (d) Eucalyptus viminalis (wet) forest.(3) How much of the following is formally reserved: (a) unlogged Eucalyptus regnans forest; (b) unlogged Eucalyptus obliqua (wet) forest; (c) unlogged Eucalyptus delegatensis (wet) forest; and (d) unlogged Eucalyptus viminalis (wet) forest.9213Hill, Sen RobertSenator HillBH4SALPEnvironment and Heritage10—The answer to the honourable senator's question is as follows:(1) (a) approx. 23,100 ha;(b) approx. 133,800 ha;(c) approx. 119,000 ha;(d) approx. 300 ha;(2) (a) approx. 23,600 ha;(b) approx. 61,300 ha;(c) approx. 36,400 ha;(d) approx. 700 ha;(3) (a) approx. 5,600 ha;(b) approx. 55,200 ha;(c) approx. 56 400 ha;(d) approx. 200 ha.These figures are derived from the Tasmanian Regional Forest Agreement data sets, and are thus based on area information as at 30 June 1996.9213(Question No. 1344)13449213Cook, Sen PeterSenator CookRF4WAALP00 asked the Minister representing the Minister for Foreign Affairs, upon notice, on 24 August 1999:(1) During the 1998-99 financial year, did any departmental employees spend time working in other countries' bureaucracies; if so, can a breakdown be provided of:(a) the number of such persons;(b) each person's classification; (c) the length of time that each person spent overseas;(d) the country that each person worked in; and(e) the additional cost incurred by deploying such people overseas.(2) During the 1998-99 financial year, did any employees of other countries' bureaucracies spend time working in the Department; if so, can a breakdown be provided of:(a) the number of such persons;(b) each person's equivalent classification;(c) the length of time that each person spent in the Department; and(d) the country that each person was employed by.9213Hill, Sen RobertSenator HillBH4SALPEnvironment and Heritage10—The Minister for Foreign Affairs has provided the following answer to the honourable senator's question:(1) (a) During the 1998-99 financial year there were four departmental officers working in other countries' bureaucracies.(b) Their classifications were: one Executive Level 1, two APS 6 Technical Officer (TO), one APS 6.(c) i. Executive Level 1 position in Ottawa was filled from July to August 1998 and from November 1998 for the remainder of the financial year.ii. APS6 TO position in Ottawa was filled for the entire financial year.APS6 TO position in Washington was filled July 1998 to May 1999.iii. APS 6 position in Wellington was filled from January 1999 to the end of the financial year.(d) Two officers worked in Ottawa, one in Wellington and one in Washington.(e) The additional cost incurred by the Department in deploying these officers overseas was approximately $1,218,750. This total comprises the following components:EL1 position in Ottawa—$312,500APS6 TO position in Ottawa—$375,000APS6 TO position in Washington—$343,750APS6 position in Wellington—$187,500(These figures are calculated using a methodology agreed between DFAT, Austrade, the Australian National Audit Office and DoFA for calculating the annual cost of maintaining A-based representatives at overseas posts.)(2)(a) During the 1998-99 financial year, three officers from overseas bureaucracies worked for the Department. (b) All overseas officers working in the Department had approximately equivalent classifications to that of their Australian counterparts.(c) Two officers worked for the entire financial year, and one officer worked from July 1998 to April 1999.(d) Two officers were employed by the Canadian Government and one officer was employed by the United States Government.9214(Question No. 1363)13639214Allison, Sen LynSenator Allison1M6VICAD00 asked the Minister representing the Minister for Foreign Affairs, upon notice, on 27 August 1999:(1) How much money has been provided in aid to help the victims of the recent earthquake in Turkey.(2) What additional provisions have been supplied to date in the form of tents, water tanks and other necessary items.(3) Does the Government intend to increase the aid donated to Turkey, either through monetary donations or the further purchase of necessary goods.(4) If further aid is to be given: (a) what form will this take; (b) how will it be determined; and (c) who will administer it on the ground.(5) If no further aid is to be donated, can details be provided of the reason for this decision.9214Hill, Sen RobertSenator HillBH4SALPEnvironment and Heritage10—The Minister for Foreign Affairs has provided the following answer to the senator's question:(1) The recent announcement of $2 million brings the total value of Australia's assistance for the victims of the Turkey earthquake to $3.5 million. These contributions were to the International Federation of the Red Cross and Red Crescent Societies (IFRC) ($1.4 million); to the United Nations Office for the Coordination of Humanitarian Affairs (OCHA) ($600,000); to the United Nations Development Program (UNDP) ($500,000) and to the United Nations Children Fund (UNICEF) ($1 million).(2) To date Australian assistance has been used by relief agencies operating on the ground to purchase urgently needed items such as food, medical supplies, tents, water tanks and mobile toilets. In addition, Australia has provided one team member to the UN Disaster Assessment and Coordination (UNDAC) Team.(3) The Government has maintained close liaison with the Turkish authorities and international humanitarian relief agencies to determine the most effective form of assistance that Australia could offer. Following reports from Turkey, the Government decided to increase funding to $3.5 million and that the additional funds should be provided to assist the Red Cross and UNICEF with their efforts to provide immediate relief needs for the earthquake victims.(4) Any decision to contribute further assistance will be made after close consultation with the Turkish authorities and relief agencies active in the field to ensure maximum benefit to the earthquake victims.(5) The Government will continue to closely monitor the recovery operations, as it does with other emergencies around the world.