1999-10-183914SENATE978901999-10-18The PRESIDENT(Senator the Hon. Margaret Reid) took the chair at 12.30 p.m., and read prayers.Bills9789r6709789Consideration resumed from 14 October.10000CHAIRMANThe CHAIRMAN—The question is that section 664A to 665C in schedule 1, item 5, stand as printed.12:31:009789Harris, Sen LenSenator HARRIS8HCQldIND00—I am bringing to the Senate's notice that I have an additional amendment that is consequential on the amendment that we are voting on now. It will be circulated as soon as it is available.10000CHAIRMANThe CHAIRMAN—Do you wish to speak to how it is going to impact upon this?8HCHarris, Sen LenSenator HARRIS—Not at this point. It is consequential on the vote that you are about to put on this section. Question put: That sections 664A to 665C of schedule 1, item, 5, stand as printed.12:36:00The committee divided. (The Chairman—Senator S. M. West)38Alston, R. K. R. Bartlett, A. J. J.Boswell, R. L. D. Bourne, V.Brownhill, D. G. C. Calvert, P. H. *Campbell, I. G. Chapman, H. G. P.Coonan, H. Crane, W.Eggleston, A. Ellison, C.Ferguson, A. B. Ferris, J.Gibson, B. F. Greig, B. A.Herron, J. Hill, R. M.Kemp, R. Knowles, S. C.Lees, M. H. Lightfoot, P. R.Macdonald, I. Mason, B. J.McGauran, J. J. J. Minchin, N. H.Murray, A. Newman, J. M.Parer, W. R. Patterson, K. C. L.Payne, M. A.Reid, M. E.Ridgeway, A. D. Tchen, T.Tierney, J. Vanstone, A. E.Watson, J. O. W. Woodley, J.26Bishop, T. M. Bolkus, N.Brown, B. Campbell, G.Carr, K. Conroy, S.Cook, P. F. S. Cooney, B.Crossin, P. M. Crowley, R. A.Denman, K. J. Evans, C. V.Faulkner, J. P. Forshaw, M. G.Gibbs, B. Harradine, B.Harris, L. Ludwig, J. W.Mackay, S. McLucas, J. E.Murphy, S. M. O'Brien, K. W. K.Quirke, J. A. *Schacht, C. C.Sherry, N. West, S. M.Abetz, E. Lundy, K.Heffernan, W. Hogg, J.Stott Despoja, N. Hutchins, S. P.Tambling, G. E. J. Collins, J. M. A.Troeth, J. McKiernan, J. P.* denotes tellerQuestion so resolved in the affirmative.10000CHAIRMANThe CHAIRMAN—Senator Campbell, do you wish to seek leave to move some amendments together?12:40:009789Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—Yes. Amendments 26, 27 and 28, on sheet EP247.Leave granted.3L6CONROYSenator Conroy—I thought Senator Harris wanted to move an amendment if we lost.12:40:009789Harris, Sen LenSenator HARRIS8HCQldIND00—The amendment that I am proposing to schedule 1, item 5, page 226, line 21, again refers to the issues that the court can actually assess in relation to shares. I reiterate what I said last sitting week, that we are moving into an area where we are actually attempting to legislate to get outcomes in the market that I believe are detrimental to a certain percentage of the market.This amendment will allow the courts to assess whether the share offers that are made are fair and reasonable so as to, as printed, `give fair value for the securities'. It is our opinion that the courts should not be restricted in the issues that they can address in relation to giving a determination in relation to the values and the fairness and reasonableness of those values that are put forward by the company wishing to take 100 per cent of the shares in that particular company, the reason being that it is possible, if there is intent on the side of the takeover company, to in actuality artificially drive down the prices in the share market and therefore be able to access and compulsorily purchase that remaining percentage of shares to the detriment of the individuals who own those shares. If these people do not have the right in a court of law to argue whether they are being given fair and reasonable value for their securities, then we are taking away the rights of that minority share group. Again, it is an attempt to allow the courts to broaden the issues that they can take into account if a company is in a position of compulsorily acquiring the remainder shares. I move:Schedule 1, item 5, page 226 (line 21), omit "give fair value for the securities", substitute "are fair and reasonable".12:44:009790Conroy, Sen StephenSenator CONROY3L6VICALP00—Can I seek some clarification? I know Senator Harris is very keen to move his amendment, but I am not sure that we have not accidentally jumped ahead on the running sheet. There is one item earlier on on the running sheet that I still want to discuss. I am seeking guidance from the Chair on this matter. I understand that, following the loss of the amendments within that block—schedule 1, item 5—17, 19 and 26 lapse, but that still leaves 37. We seem to have jumped down today's new running sheet. I am concerned that Senator Harris does not miss his call. If I could check with the Clerk what the status of 37 is.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Knowles)—Senator Conroy, the chair took advice from you at that stage and called Senator Harris. There is nothing to prevent you from going back to amendment No. 37, following the putting of Senator Harris's amendment.12:45:009790Conroy, Sen StephenSenator CONROY3L6VICALP00—I indicate at this stage that the Labor Party is favourably disposed to the amendment. I would be interested, as I believe Senator Murray is, in hearing the government's response on this issue. So I hand over to Senator Campbell.12:46:009790Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—The government's response is that these concepts of fair value and their legal definitions are matters that have been built up in case law and statutes over many years. The consultation that took place around these clauses was thorough and detailed. This amendment has literally arrived at five minutes to midnight. It is very hard to get legal advice on how these changes may be interpreted. We are opposed to a last-minute change like this because of the total uncertainty it would put in place. I can get no better advice than to say that it may well add uncertainty. On behalf of the government, I will be voting against the amendment.12:47:009790Murray, Sen AndrewSenator MURRAY3M6WAAD00—I wonder whether we should give the government a little time on this and deal with Senator Conroy's amendment No. 37. The reason is as follows: I would not agree to the substitution of `give fair value for the securities' with `are fair and reasonable' because I think you lose some precision in that. You would need some advice. I would be interested in knowing from the parliamentary secretary how he would have reacted had the amendment read `are fair and reasonable and give fair value for the securities'. As I understand it, the proposition being put to us is that `reasonable' has considerable common law background. Frankly, because this is a late amendment and has not been considered at length, I am a bit cautious about it, because the term `fair value for the securities concerned' does give us what we want. I would be interested in your reaction. If you needed a little time, perhaps we could buy that time by discussing Senator Conroy's amendment No. 37.12:48:009790Conroy, Sen StephenSenator CONROY3L6VICALP00—I would love to be able to oblige Senator Murray with that time. I have now conferred with my advisers and, unfortunately, amendment No. 37 also lapses, even though it is not mentioned as having lapsed. That means we need to move on—perhaps to Senator Murray's next amendment, rather than to ours.12:48:009791Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—The offer is obviously a constructive one, but I have to say that in relation to time for advice on this, I would seek to go out and consult over a period of weeks and months with stakeholders and get expert advice on the impact of this change. It might seem like just adding a word here or a word there, but they are significant changes to the concepts involved. I would not proceed with this without having broader consultation. From the government's point of view, it would be wrong to proceed without significant input. That input is not available to us in the next few hours. We would not proceed with any changes to Corporations Law without consulting with those who are affected by the change.12:49:009791Murray, Sen AndrewSenator MURRAY3M6WAAD00—Without trying to horn in on Senator Harris's amendment, let me signal that the Democrats would only be interested in this if the words `are fair and reasonable' were additional to `give fair value for the securities'. At this stage, we agree with you: we have too little information to take a decision. So even if the amendment were put, we would not support it. In view of the sensitivity surrounding this area of acquisitions, would the government undertake to think about this particular amendment to see whether it improves the issue of a fair price by the addition of the word `reasonable'? If there are further amendments to corporate law legislation in due course, would the government consider it favourably if it added to `fairness', which, from my discussions with the government, I know it is anxious to ensure does occur in this area?12:50:009791Harris, Sen LenSenator HARRIS8HCQldIND00—I indicate to the chamber that I would be agreeable to amending the amendment. Rather than striking out the words `give fair value for the securities', the amendment would add, subsequent to that, the words `and are fair and reasonable'.12:51:009791Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—In response to Senator Murray, I think the sensible course of action is to have this issue referred to the joint statutory committee so that they can take evidence on it. Of course, there will be more Corporate Law Economic Reform Program bills coming before this place over the next 12 months. As I have indicated regarding other issues, we can take evidence on this issue. I concur with Senator Murray that the Commonwealth government is interested in ensuring that the compensation provisions for compulsory acquisitions do give a fair price to the people who are having their shares acquired. Whatever legislative provision can be put in place to ensure that is something that the Commonwealth will ultimately support. But we will not do it on the run and without proper consultation.12:52:009791Harris, Sen LenSenator HARRIS8HCQldIND00—We are raising this amendment as a result of discussions with the industry and in particular with the group of people who are subject to the list of companies that I read out last week, the people who will become the affected parties if the government's intention is to continue with this section of the act as printed. For clarity, the people who have raised the issue and asked for this amendment to be brought forward are the people who sit within that 10 per cent as shareholders in not only the group of companies that I listed in the chamber last week but also other organisations which represent that smaller end of the market. The amendment is moved as a result of consultation with the people who will ultimately be impacted upon by the government's action. I seek leave to amend the amendment circulated in my name.Leave granted.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Knowles)—Just to clarify, the amendment now before the chamber reads:Schedule 1, item 5, page 226 (line 21) before `give fair value for the securities', insert `are fair and reasonable and'.12:54:009792Conroy, Sen StephenSenator CONROY3L6VICALP00—I thought Senator Murray's contribution was valuable. As I indicated, our predisposition is to support this amendment in either form. Now that Senator Harris has accepted Senator Murray's suggested form of words, I do not think the Labor Party will have any difficulty supporting the statement that the price to be achieved should be fair and reasonable. Notwithstanding that I appreciate there are legal issues at stake here, the implication of not being willing to support fair and reasonable is that we want unfair and unreasonable prices. The government has moved in a very controversial area. I believe that this is a form of words that would give some comfort to those who have the most concern about the compulsory acquisition provisions. I am disappointed the government is saying that fair and reasonable is a proposition that it cannot support.Senator Murray has made a couple of contributions. I am hoping that he can be swayed. Given the amendment is now in the form that he indicated he was most favourable to, I am hoping that the Democrats will give consideration to supporting it. There has been a lot of controversy and a lot of suspicion that what has actually been happening is that the government has been looking after large shareholdings ahead of small shareholdings. Given that small shareholdings may be owned by the mums and dads of today—for example, in Telstra—this is particularly an issue that should be given greater weight than it has been given previously.The government's arguments about rejecting `fair and reasonable' at this point are not substantial. These are words that have been kicked around and it is fairly well understood what they mean. As I have indicated on a number of occasions, I am not a lawyer, but it is hard to understand how anyone could be opposed to the words `fair and reasonable'. As I said, I hope we can encourage the Democrats and Senator Murray to give this their consideration and support Senator Harris's amendment.12:56:009792Murray, Sen AndrewSenator MURRAY3M6WAAD00—Some people say to me that I should not be quite as blunt and honest as sometimes I am, but I am going to be very frank about this. I have great worries with this emerging at this stage. It has not been circulated, we have not discussed it previously and it is a very complicated area of law. On the face of it, I can see that it does no harm. For the purpose of this debate, I am prepared to let it through, but I clearly signal to the government that, if it goes through and, after having a day or two to evaluate it with more time, which we do not have today, the government decides it is to be rejected, I would not insist on it if it came back to this chamber, if that course of action would be satisfactory to you.I take this route only because it is a particularly sensitive area on which there has been a great deal of concern. My instinct is to let it go by. If you decided that you thought it was fair enough once your advisers have a chance to chat to the minister and to think about it a little, that is fine, it will stay. If you decided that you wanted to insist, for good reason, that it was not accepted, we would not insist when it returns here. I am not supposed to be as honest and blunt as that, but at least everybody knows exactly where I stand on the matter. That is how I would seek to proceed, unless you have other reasons why I should not.12:58:009792Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—Although I would like to see it voted down here because it would save an enormous amount of parliamentary time in transmitting it, I would say that the government will not allow—because it sounds like a good idea or it sounds nice—a matter like this to go through without proper consultation and advice. The Pauline Hanson One Nation Party may regard that as a sound way to legislate. The Australian Labor Party may regard that as a sound way to legislate; in other words, `Put it in and see how she goes and if it does not work, rip it out again. It sounds nice. We will not take any legal advice. We're not lawyers. We don't really know whether it is sound practice to put new legal concepts into a very important area of the law, but let's just put it through because it sounds like a good idea and they sound like nice words.' This government will not do that.I would prefer to see it defeated here because it would save transmitting it back to the House of Representatives, having another debate there, rescheduling it here and bringing it on. It would delay the introduction of these important laws. That would certainly be a far more sensible way to proceed than that which has been pursued by Pauline Hanson One Nation and the Australian Labor Party, who seem to think that, as it sounds like a good idea, without expert legal advice, we should proceed to make this change. I do appreciate what you are saying, Senator Murray.13:00:009793Harris, Sen LenSenator HARRIS8HCQldIND00—The government's response cannot go without recanting. There are intentional slurs there. I reiterate clearly that the emphasis giving rise to this amendment comes from the people whom the government is obviously hell-bent on doing this to. To stand there and say that we are bringing this amendment forward because it sounds good and it is nice and touchy-feely is totally incorrect. The government is aware, from the amendments that were circulated in my name last week, that this carries exactly the same intent as the arguments that I put forward last week. To stand in this chamber and imply that we are doing it with no basis is quite improper when we are representing a percentage of the market that this will impact on. I ask the government representative, if he would, to consider retracting the implication of his previous statements both on Pauline Hanson's One Nation and on the Labor Party.13:01:009793Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I will not do that, but I would be happy to do so if the honourable senator were to table the legal advice he has on the way these words would be interpreted or any other expert advice he has. He has clearly been lobbied by interests associated with that section of the community. We have all been heavily lobbied by groups of people who have a very strong interest in ensuring that they maintain their leverage. They are known to most people in the industry as greenmailers. Greenmailers use a minority in a company to extract an exorbitant premium at the expense of lots of other small shareholders.In terms of the process, if you will table your expert advice we will look at it. As I have said, we are happy to look in a considered and thorough manner at what the changes of these words will mean to the law. This law has been available for consultation, discussion, detailed consideration and amendment since last April, I think. So for 18 months it has been out there on the table. The Australian Labor Party, to their credit, came forward with their amendments through that process and were part of the detailed process of analysing the law. They have circulated amendments in plenty of time for the government to consider the legal ramifications of any changes to the wording, as have the Australian Democrats. I regard it as incredibly bad parliamentary practice and legal practice to come forward with a change of wording such as this and to have it dealt with on the run.I thank Senator Harris for at least circulating his other amendments last Thursday. But the legislation has been out there for public discussion and consultation and finetuning for the best part of 18 months, so bringing in changes of this significance, and with amendments being circulated at 12.30 today, makes it hard to make a sound assessment. If I have to choose to make an amendment to the law when I do not know what the consequence of it is, then it is, in other words, a clear leap into the dark. The government will certainly not do that. I do not know the ramifications of these changes. People in this place can vote for an amendment but not know what the legal ramifications of that change are—and it is your right to do so—but I regard it as a very bad thing to do. The government will not be doing it.We are very happy, as I said, to see it properly considered. If it comes back and the legal advice says, `This is a totally reasonable suggestion, it makes no change, it won't have these bad ramifications, it won't have these unintended consequences and on the best of our advice this is a constructive change which will help shareholders to gain fair consideration,' then I have said to you that the government will support it because that is our policy objective. To try to imply that our intentions are other than that is insulting to me, but I am not going to respond to it. That implication has been made by Pauline Hanson's One Nation senator and by the Australian Labor Party. I would expect them to make that sort of political point, although it is not a great debate to do it in. As I said, I don't think a lot of people are tuning in to the political byplay here, but that is all part of the game.That is an affront. It is totally disingenuous. I know it is not true, but I think it is very bad process to make a change like this without expert advice and consultation. I know that Pauline Hanson's One Nation have consulted on this. I know very accurately whom they have consulted with. Those people have a genuine case to put. But there are lots of other people out there and there is also expert legal opinion that I believe the government would be totally wrong not to consider and consult with in proceeding with this. That is why I am very pleased that the Democrats have taken a constructive, sensible and sound approach to this in the absence of others having done so.13:06:009794Conroy, Sen StephenSenator CONROY3L6VICALP00—I rise partly to respond to Senator Campbell. People who live in glass houses shouldn't throw stones. I can't remember the last time the government on request tabled their legal advice. I would be pleased to see yours, Senator Campbell, on a whole range of issues, particularly in this area. Given that you are so generously inviting Senator Harris to table his legal advice—I am sure he does not have a problem tabling his advice—I put it to the government that it is about time the government tabled some of their advice in this area. I have noticed that you and your government have consistently opposed tabling legal advice on request. So if you are going to live in a glass house, don't throw stones.I am surprised to find myself in the position of defending Senator Harris and Pauline Hanson's One Nation Party. It is not a party that I feel I have a lot in common with. But while I have been involved in this debate—as Senator Campbell has—for a couple of years, I make the point that Senator Harris took office on 1 July. Given that the bill was dealt with in the other place prior to 1 July, I think, it is a little harsh to suggest that he is deliberately seeking to make policy on the run. I am sure that in your first three months of parliamentary duty you were not allowed on your feet—and certainly not to move an amendment. But Senator Harris is attempting to conform to the rules as best an individual senator can. To impute other motives to him is going a bit far. I would probably disagree with Senator Harris on almost every substantive policy issue he is likely to put before the chamber at various times in both our careers. But to impute him with somehow attempting to manipulate and take advantage of the process is, I think, unfounded.On the question of moving amendments at short notice without consultation, the government should not live in a glass house. Recently, we have seen the surcharge bill, where Senator Kemp moved amendments from the floor and on the floor. The governments of both parties have, at various stages I am sure, moved amendments from the floor. It is an affront to suggest that the motive behind supporting an amendment that has only just been circulated is either mischief or an attempt to manipulate good parliamentary debate. It is certainly an affront to the Labor Party, as you suggested that we are in on this fix, but I also had not seen Senator Harris's amendment before today or possibly Thursday at the earliest.Last week Senator Murray made some comments about me being continuously on report for not being able to resist the temptation. I would suggest to him that Senator Campbell would be on the same report with me. Senator Campbell, you are not helping to speed along the debate with your gratuitous verballing of either Senator Harris or me. To get to the substantive point, Senator Campbell, I do not believe the government are seeking to achieve a fair balance between majority and minority shareholders. I have been blunt about this from day one. I believe the balance is tipping too far in favour of the majority of the shareholders and that a range of rights is being removed from the minority.This is not an outrageous amendment, and I believe that the principle of it is about a far more balanced outcome than the government is seeking to achieve. I would caution Senator Murray on the legal advice coming from the government. I do not believe the government will seek legal advice or that the legal advice that will turn up will be indisputable. I believe there will be a variety of points of view and, before you make a final decision, I would urge you to—as we will—consider a range of legal advice, not just the advice that the government gives you. The government's legal advice has consistently been wrong or has been convenient, if I can describe it in that manner. I urge you to seek counsel from a broader field than just the government's legal advice, including from your own staff and from any advisers you are able to round up.I cannot understand why Senator Campbell does not want to name the people who are alleged to have consulted with Senator Harris. I do not think it is any great surprise that the Shareholders Association have got a strong point of view on this. They have argued consistently on this point of view. You have quoted Ted Rofe extensively in earlier debates in this chamber. Ted is not somebody who has sought at any stage to sabotage or bring down CLERP. He has simply represented, in his own passionate way, the interests that he is there to represent. I do not believe the references and imputations you have made to both Senator Harris and me—and, through us, to Mr Rofe—are fair or justified, and I hope that we can bring the debate to a close today, although if this keeps happening we could be here all week.I welcome Senator Murray's suggestion on how to deal with this. I hope it will provide a safety valve so that, if we are in a position where a range of legal advice finds that the provision is now unworkable, we would all reconsider it. I put it to the government and to Senator Campbell that I do not believe the advice will be that it is unworkable. I believe it will substantially change the balance and the onus. This is something we have sought to achieve from day one. I do not believe you are seeking to achieve the fairness and balance that you suggest you are. I do not believe that you will find the provision unworkable; I believe you may find the provision better balanced. I urge Senator Murray and the Democrats to consider a wide range of legal advice on this matter.13:13:009795Murray, Sen AndrewSenator MURRAY3M6WAAD00—I have three things to say. I repeat that this has emerged relatively late in the process, which does not condemn it, I might say very particularly. The limited advice I have received to date indicates there is no particular magic to this amendment. The government bill asks that fair value for the securities be a condition. Fair value, in my view, would take into account being reasonable, being fair and other matters. I do not think the actual amendment adds that much to the process, but neither do I think it takes that much away. However, I have clearly signalled that it is not an issue on which we would insist and hold up the bill. The government has clearly indicated that it is not going to let it through, because it wants to consult further. There is no point in holding up the entire process of the Senate and the House of Representatives when we would not be insisting on passing an amendment, simply because we cannot see either much harm or much good in it. On those grounds, I do not believe it would be right, and that is why I clearly signalled my position earlier on. I do not think it would be right for me to vote for the amendment if the government is not going to let it go through once it goes to the House of Representatives, which the government has indicated it will not. On those grounds, I will simply vote against it, and I look forward to the government referring the matter for early report to the corporations and securities committee.13:15:009795Harris, Sen LenSenator HARRIS8HCQldIND00—I would like to add that the intention of the amendment was to allow the court to look at broader aspects in its deliberation. If Pauline Hanson's One Nation were attempting to restrict the ability of the court, I believe that would be improper. We are clearly not intending to do that. What we are attempting to do is allow the court to look at a broader set of issues for all parties when these issues are brought before a judiciary for settlement.Amendment not agreed to.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Knowles)—The committee will resume consideration of government amendments Nos 26 to 28, postponed from 13 October, as follows:(26) Schedule 1, item 5, page 221 (after line 24), after section 664A, insert:664AA Time limit on exercising compulsory acquisition powerThe 90% holder in relation to a class of securities of a company may compulsorily acquire securities in that class under section 664A only if the holder lodges the compulsory acquisition notice for the acquisition with ASIC under paragraph 664C(2)(a) within whichever of the following periods ends last: (a) the period of 12 months after the commencement of this section; or (b) the period of 6 months after the 90% holder becomes the 90% holder in relation to that class.(27) Schedule 1, item 5, page 227 (after line 25), after subparagraph (i), insert: (ia) sets out the information that was included in the compulsory acquisition notice given in relation to securities in the main class under paragraphs 664C(1)(d) and (e); and(28) Schedule 1, item 5, page 229 (after line 21), at the end of section 665C, add: (3) If the Court makes a determination under paragraph (2)(b) in relation to the terms of sale for a holder's convertible securities of a particular class, the determination applies to all holders of convertible securities in that class who have applications to the Court pending for a determination under that paragraph in relation to the terms of sale of their convertible securities.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—The question is that the amendments moved by the government be agreed to. Those of that opinion say aye and against say no. I think the ayes have it.13:16:009796Murray, Sen AndrewSenator MURRAY3M6WAAD00—My apologies, Madam Chair, but Senator Conroy was distracting me. What did you just say—something about aye and no and all that?Senator Conroy interjecting—10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—I did wait, Senator Conroy. They were government amendments Nos 26 to 28, Senator Murray, and, in the absence of any other contribution when I did wait, I called it for the ayes.3M6Murray, Sen AndrewSenator MURRAY—Madam Chair, I am terribly sorry but might I just make a brief remark under that?10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Yes.3M6Murray, Sen AndrewSenator MURRAY—I just want to indicate that the government has moved an amendment which was recommended by the majority of the joint committee, and the Australian Democrats support it.13:17:009796Conroy, Sen StephenSenator CONROY3L6VICALP00—I seek leave to have the amendments recommitted because I would have actually liked to have divided on that last matter, and I seek leave to make a small contribution on it.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—On which?3L6Conroy, Sen StephenSenator CONROY—Amendments Nos 26 to 28. I seek leave for them to be recommitted.Leave granted.3L6Conroy, Sen StephenSenator CONROY—This overall amendment, which the government agreed to hold over from earlier on—and we appreciate the government's support on that—opens up the timing through an increase in the time limit. But it also does one extra thing which I do not believe was suggested by the parliamentary committee, Senator Murray: it allows existing companies that have not been involved in a takeover for any number of years to mop up the outstanding shareholdings.I described it earlier as the Apocalypse Now approach, and if I were a minority shareholder I would be worrying about the smell of napalm at the moment. I think that we are going to have an awful lot of shareholders who are moved on, as I indicated earlier. We have people who are already threatening to put pressure on minority shareholders, saying this bill is going to be passed and saying that they are coming to get them, and I do not believe that this amendment, as it stands at the moment, is in the interests of fairness or of balance, which is something that we have talked about before.I am disappointed the Democrats decided not to at least put the issue to further consideration in that last amendment. This is opening up a Pandora's box which will see neither fairness nor equity involved in the process. It will see a number of ordinary battling Australians being substantially leant on by overwhelming interests in corporations. I do not believe that to be fair.If the Democrats were at least supporting a position that said, `All right—existing situations and let's go forward from here,' then I would think that at least they would be consistent. But this is, in effect, granting companies an ability to retrospectively apply this law by opening it up for 12 months. You have a situation where, if you believe in this particular proposition and you have indicated that you do, that is fair enough. But to now allow pre-existing shareholdings to be plundered like this I do not believe to be in the interests of a range of minority shareholders, and I would urge you to reconsider your support for this position.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—The question is that the amendments moved by the government be agreed to.13:20:009797Murray, Sen AndrewSenator MURRAY3M6WAAD00—I am actually looking up the report on the Corporate Law Economic Reform Program Bill 1998 , issued in May 1999 by the parliamentary Joint Committee on Corporations and Securities, and I am pretty certain that it was a recommendation in that. Perhaps the advisers in the various boxes, including mine, could find it. I think it is on page 37 but perhaps they could confirm that whilst I am looking it up. So it was a majority recommendation, in my view, and that recommendation corrected the following issue. Under the bill at present the new compulsory acquisition power may be utilised by the 90 per cent at any time after achieving 90 per cent ownership of the company. That means that 90 per cent ownership could be achieved now and that the 90 per cent holder could sit on his or her hands for several years and ultimately decide to acquire the balance of the company shares. The majority of the committee recommended that he or she should only be permitted to exercise that right of compulsory acquisition within six months.Surely that is an improvement: if the balance of shares is not compulsorily acquired in that time, then the right of compulsory acquisition is lost. In other words, the committee said it should not be an open-ended right; it should be a short-term right. Given the point of view that the Labor Party have been putting, although I know of their opposition to the whole thing, I would have thought a shorter period would have attracted them more than an open-ended period. That is certainly our position and that is why we support the government.13:22:009797Conroy, Sen StephenSenator CONROY3L6VICALP00—I agree insofar as a shorter period is preferable to us to minimise the harm that this would do, but recommendation 3 on page 54 of the committee report suggests only six months. What the government have done in this legislation is extend it to 12 months, which is why I am saying this is not actually consistent. The government, as you indicated, originally wanted open slather. The committee committed to six months and the government have slipped in 12 months on you. So, if you thought you were voting for something that was consistent with your previous view, I think they have, perhaps not intentionally, pulled a bit of a swiftie on you. I would suggest that Senator Murray may wish to amend paragraph (a), which says `the period of 12 months after the commencement', to read perhaps `six months' if you wish to stay consistent, and I think I probably support that just to, as I indicated, keep the period as minimal as possible.This is opening up a retrospective element. By allowing everybody to reach back and do something that they were not able to do before—to reach back through this door, if you like—is retrospective behaviour and retrospectively removing rights that sharehold ers have had previously. I have always been surprised by this particular element. I have been unhappy about the whole compulsory acquisition power, but this one I think is the most onerous, where you are withdrawing rights that shareholders have previously had and saying, `Go for it. You can get them now whereas you could not get them before.' Perhaps an amendment back to six months, which is what you originally recommended, may make it slightly more palatable. Taking it out altogether would be my preference, but I do not believe I can win you over on that one. Certainly an amendment moving it from 12 months back to six months would be a preferable position from the Labor Party's point view.13:24:009798Murray, Sen AndrewSenator MURRAY3M6WAAD00—Senator Conroy and I might be talking past each other on this one, because paragraph (a) says `the period of 12 months after the commencement of this section'—in other words, for the initiation of this practice—whereas paragraph (b) says that the period of six months thereafter will apply. That period of six months does definitely relate to the committee majority, but the 12 months is the kind of transitional implementation. We thought that was actually reasonable because it allowed both the entities and the shareholders to have a longer period to assess their position under what is new law and to get their acts together, essentially. We are probably on different tacks.13:25:009798Conroy, Sen StephenSenator CONROY3L6VICALP00—I think we possibly are, but recommendation 3 on page 54, the conclusions and recommendations of the committee report of May 1999, says:The committee recommends that section 664A be amended so that a compulsory acquisition can only occur within six months of the proclamation of the legislation.I am talking about the proclamation of the legislation, and this amendment talks about 12 months. So the government are moving from what you had recommended, which was a six-month period, to a 12-month period on the proclamation issue, not on the length of period if you commenced a takeover from today or tomorrow. I actually think they have slipped in an extra six months on where you were originally on the proclamation issue. I am not sure whether that clarifies it and gets us perhaps talking about the same thing, but that is the issue I am referring to.Amendments agreed to.13:26:009798Harris, Sen LenSenator HARRIS8HCQldIND00—by leave—I move:(1) Schedule 1, item 5, page 213 (line 19), omit "the consideration is not fair value for the securities" substitute "the terms of the proposed acquisition are not fair and reasonable".(2) Schedule 1, item 5, page 232 (line 6), omit "give a fair value for the securities concerned", substitute "are fair and reasonable".In speaking to the amendment to 66(1E)(2), I say that the courts have developed a set of guidelines as to whether or not a compulsory acquisition should be prevented on the basis of equity. Basically, the courts can stop a compulsory acquisition if it is inequitable. The current legislation proposes to limit the court to considering price only in a compulsory acquisition, but price alone is rarely an issue if the offerer has received a 90 per cent acceptance rate for the offer. Disputes usually arise because there has been some unfair action taken by the offerer. Restricting the courts to considering price only is an unacceptable trampling on the rights of small shareholders to air their grievances relating to unfair actions taken by the offerer.Speaking to the amendment to 66(7A)(1)(a), I point out that the purpose of this amendment is to ensure that the independent experts consider other factors in addition to pricing when valuing securities to be acquired. The proposed legislation limits the scope of the expert's investigation and report to the single issue of price and again may well be to the detriment of the small shareholders concerned. For example, the expert should be able to consider factors other than price, such as a temporary depression of the market, a pending business deal which may affect the valuation, the possibility of counteroffers or the existence of unusual circumstances which are hard to qualify in legislation but which do crop up from time to time.What we are attempting to do here is to give the courts the ability, and also to give to the expert valuers the ability, to look at factors other than the price of the share. I believe we are not about restricting the ability of the courts; we are about enhancing the ability of the courts to make a fair and balanced decision and also allowing the expert valuers to be able to carry out the same obligation.Amendments not agreed to.13:30:009799Harris, Sen LenSenator HARRIS8HCQldIND00—We will be opposing the following item in the bill:Schedule 1, item 5, page 233 (lines 16 to 25), section 667C,10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Knowles)—The question is that section 667C, as amended, stand as printed.Question resolved in the affirmative.13:31:009799Murray, Sen AndrewSenator MURRAY3M6WAAD00—The opposition have suggested that their amendment No. 27 be moved first. I note that my amendment No. 7 is identical to their amendment No. 27. We will be opposing that, so I will be withdrawing item 7. In that instance, I will therefore be moving items Nos 8 to 10, by leave, together. As to whether the opposition would still like to go first on amendment No. 27, I do not mind, but we will be opposing it.13:31:009799Conroy, Sen StephenSenator CONROY3L6VICALP00—Thank you, Senator Murray, for yielding the floor. I move opposition amendment No. 27, on sheet No. 1414:(27) Schedule 1, item 5, page 265 (lines 22 to 31), omit paragraph (8)(c).The fundraising proposals in this bill are primarily intended to reduce costs involved in capital raising, particularly for start-ups and small and medium sized enterprises. This is an appropriate goal in order to assist entrepreneurs and smaller companies to realise their full potential and to help create employment. To reduce the cost of capital raising, the government has targeted costs tied up with the preparation and lodging of prospectuses. The amounts of capital usually sought by start-ups and SMEs are, typically, small, which makes the prospectus preparation prohibitively expensive. It may therefore be appropriate for small capital raisings to be excluded from prospectus requirements.The opposition see merit in this assessment. Thus, we support the proposal that capital raisings resulting in 20 issues in Australia, rather than the current arrangement of 20 offers, within a rolling 12-month period, as long as no more than $2 million is raised, be excluded from prospectus requirements. Already exempted from prospectus requirements are issues to so-called `sophisticated' investors, defined as `an individual who subscribes to a minimum of $500,000 worth of securities'. Sophisticated investors are those considered to have the experience and resources to undertake their own investigation of a venture, so that issuers do not have to provide them with a disclosure document—that is, a prospectus. An expansion of the definition is now being proposed as part of the CLERP bill so as to allow investors to invest less than $500,000. One of the proposals would allow licensed security dealers to classify investors as sophisticated and able to invest in less than $500,000. The criteria to be applied by the licensed security dealers in making this decision are vague, to say the least. A more appropriate proposal is that a qualified accountant would issue a certificate classifying investors as sophisticated and able to invest in less than $500,000, if they determine that, prior to the investment, the investor has net assets of at least $2.5 million or has earned a gross income of $250,000 for each of the previous two years. At least in the latter proposal there is a clear and definable threshold that would ensure the investor has a level of resources to investigate the prudence of the investment. It is also proposed that the preparation of an offer information statement instead of a full prospectus be allowed when raising capital of not more than $5 million. Above this figure a prospectus would have to be prepared, but a profile statement—that is, a short form or summarised version of the prospectus—would also be sufficient for the purposes of public circulation. We are supportive of these proposals, except for the provision giving licensed security dealers the authority to determine who is a sophisticated investor and able to invest less than $500,000 without a disclosure document. This power is likely to be abused due to pressures to earn commissions. This proposal would be better considered once the licensing and customer obligations of financial services providers have been clearly defined in CLERP 6. As a passing note, the introduction of a short-form prospectus is also likely to deliver only marginal benefits as the real costs of prospectus preparation, such as legal, auditing and due diligence processes, are unlikely to be reduced.13:35:009800Murray, Sen AndrewSenator MURRAY3M6WAAD00—We do not support opposition amendment No. 27 because we will be supporting the granting of a power to licensed securities dealers to certify investors as sophisticated, and we will be putting up that amendment next.13:35:009800Conroy, Sen StephenSenator CONROY3L6VICALP00—I would like to seek clarification from Senator Murray. You have withdrawn amendment No.7. Can I just get an indication, through you Madam Temporary Chairman, whether or not, if your amendments were defeated, you would still be opposed? I appreciate your assistance in letting us go first, but I am just now confused in terms of what happens if your amendments are knocked off—H15CAMPBELLSenator Ian Campbell—It's hypothetical; they're going to get up.3L6Conroy, Sen StephenSenator CONROY—I very pleased to hear they are going to get up. I withdraw my question on that basis, Senator Murray. As I have already indicated, we have genuine concerns. Only one aspect of this bill, we believe, can cause potential harm in the future, and I have noted over the last six months the government's continued disinformation campaign to mislead the Australian community about the Labor Party's position on this. I have noticed that with some disappointment because, except in this one area—which I will come to in a moment—we are supportive of this package. The government, the minister and the parliamentary secretary have consistently sought to suggest that the Labor Party is opposed to the entire package when in actual fact all we are opposed to is one element, one sentence, in this package. That sentence revolves around the ability of an investment adviser to make a decision about upgrading an investor to a sophisticated investor level.When the committee first examined this position, I think it would be fair to say that some government members believed that the a, b and c—if I can refer to it in shorthand—all had to be met before the investment adviser could upgrade the investor. However, I pointed out that the current wording of the legislation says that either a, b or c must be met, not all three. Only one of the three tests has to be passed, not all three. More and more often nowadays, an individual investor will be in possession of around $500,000. Compulsory superannuation has substantially changed the playing field, and we now have many, many people potentially in this field who have no experience in this field. If compulsory superannuation works as well as the government and the opposition would like to see it work, this bill would allow the 60 per cent of people who have had no direct involvement in the share market to be taken advantage of. The Democrats and I have had many discussions on this, as Senator Murray would attest.This is an area I am particularly passionate about because I believe it is one of the areas where the most harm can come to mums, dads or workers who retire and end up with $500,000 as a one-off investment for their retirement. In this instance you are relying on the goodwill of investment advisers who are under constant pressure to get higher and higher commissions and to complete financing packages. What happens if they are one short of the number of investors—potentially sophisticated investors—they need to get a package off the ground and some poor bloke or some poor woman comes in the door with their superannuation payout and says, `I need some advice about the best vehicle to ensure that I have got enough money for the next 10, 15 or 20 years or however long I am still alive'? With half a million dollars on offer, what is to stop the adviser thinking, `This is a different sort of investment vehicle and it is not necessarily appropriate for somebody in these circumstances, but there is a big commission coming if I get this finance project up and running. It is in my hands as to whether or not I upgrade this investor.' What I say is: that is too much of a risk.There are too many people coming into the market in those circumstances, and I believe it is not a case of putting up a set of amendments which would see greater protection after the fact—as Senator Murray would like to do—and after the investor has lost their money. The Democrats' proposals are for a greater degree of ability for an investor to take action. I welcome the greater transparency and the greater documentation, but this is shutting the door after the horse has bolted—after the money is gone, potentially.What you will find is that the life savings of investors who have just retired may be lost. They will not have the money to get into the legal field, as Senator Murray would hope they do. Legal aid is nonexistent in these circumstances; there is not enough to go around now. You would see people who had lost all their money being told, `Get into the legal field.' They are not going to be able to. These are people who will have, potentially, lost their life savings, and the Democrats' answer is, `There is all this transparency and documentation. The legal avenue is there.' This is not what will happen in the real world. People will have lost all their money. They will not be confident, because they are not genuine, sophisticated investors. They have absolutely not got the sort of experience that all the other people who fall into the sophisticated investor category in this legislation have. It is likely that those investors will have more assets than somebody who just retires and then loses their piece of this total investment.I say to Senator Murray: your protections are welcome—and I think we are voting for your amendments—because they do increase the transparency. But this is one tiny area where you are handing an enormous opportunity for abuse to a profession that unfortunately has track record, through the pressures that they get into, to sell a product. They get money themselves. An entire project could fall over and they take the cheap and easy option. Do not open the door for them, if they cannot round up the extra sophisticated investor, to take somebody who you and I truly know is not a sophisticated investor. Do not let them put them into the equation. Do not shut the door after they have bolted; do not let them open the door in the first place. This one sentence has the greatest potential of all for individual abuse and individual loss in the future, and it is one sentence in the definition that should be rejected. I urge you to consider supporting our amendment to protect ordinary people who are not what we mean, or what this parliament is intending to mean, by `sophisticated investor'. If you open the door, it will be too late.13:44:009801Murray, Sen AndrewSenator MURRAY3M6WAAD00—I should clarify some matters. Senator Conroy, apart from being on report—and I notice that when they write those things they never get the sense of humour in it, but it was a humorous exchange—also has the ability to sometimes confuse everybody else on the field. Effectively, in allowing him to go forward, I took a view which, having studied more closely what we intended to do, was inaccurate. I should explain to the committee of the whole that, once this amendment has been dealt with, I will be moving amendments (8) to (10) on revised sheet 1592 together. If those amendments are passed—and I hope they are—I will then be moving amendment (7), which would result in that particular section being omitted. So it is a consequent amendment. I cannot vote for Senator Conroy's amendment yet because I need to put up amendments (8) to (10) first, but there is no harm in us having the debate now. I just point that out so that you know what I am doing.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Crowley)—Senator Murray, just for clarification, would you be seeking leave to resubmit?3M6Murray, Sen AndrewSenator MURRAY—Madam Temporary Chair, the matter is not before the committee at present because the opposition's amendment jumped over mine. Effectively, what I will be doing is moving amendments (8) to (10) together and then, consequent to that, amendment (7) on sheet 1592 revised.13:46:009802Cooney, Sen BarneySenator COONEYSF4VICALP00—I understand what Senator Murray is doing—that is, to put in a regime that gives the protection that Senator Conroy feels has been taken away as things now stand. If you go through proposed amendment (7), subsection 9A sets out a regime for giving protection to investors when it is done through a licensed dealer. I would ask Senator Murray whether he thinks that perhaps too much reliance is being put on the dealer. If, for example, a spouse guarantees a husband's or a wife's loan, the advice that person has to get about that step has to be independent and has to be, I think, legal advice. Where a bank is involved, much stronger advice has to be got than is proposed by Senator Murray. I am wondering why a person whom he wants to protect has to get advice from a licensed dealer. I am not trying to say that licensed dealers are not honest, but they might be overenthusiastic. Does Senator Murray not see that there is a danger in leaving that advice to a licensed dealer rather than to some independent source? The licensed dealer is hardly independent.13:48:009802Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I might partially be able to answer what Senator Cooney has raised. Basically, under section 66 of the law at the moment, a licensed securities dealer or any other promoter of a float or an enterprise who is seeking to raise funds has an exemption from the prospectus provisions as long as the offer is greater than $500,000. When we looked at that exemption, we also looked at the need to try to make it less expensive to raise funds in that small venture capital area where there is a serious problem. Somewhere in between borrowing money from a bank and raising money on the stock market in that $2 million to $10 million range in Australia there is a significant gap in being able to raise money for potentially high tech ventures or anything else. So this is what we have aimed it at. I am genuinely thankful for the Labor Party's support for all but this particular provision.At the moment, a licensed dealer or anyone else can say, `Please give me your recently achieved lump sum payout' or `Please give me the value of grandma's house which you have just had willed to you' or whatever, and the only test in the law as it stands is that you have $500,000. I think Senator Conroy and others make a legitimate point in saying that, with super payouts and lump sums of this value probably being more readily available in coming years than they have been in the past, this fairly broad exemption is not particularly sophisticated—to steal a term we are throwing around today. We were looking for a series of tests that were in fact more sophisticated tests of a sophisticated investor. So we have gone for a number of different tests that seek to do that. One is an assets tests—you have to have, I think, $2 million; and another is that you have to have a high income, which I think is in excess of a quarter of a million dollars.Under these provisions that we are bringing in, instead of just saying that you have half a million dollars to invest, which is a sort of test in the current law, we are saying that an appropriate person—that is, an accountant—needs to actually warrant that you have that asset or income. We are also saying—and this is a provision that is not in the legislation at the moment—that if you are to be called a sophisticated investor then the licensed securities dealer, who already is subject within the law to the `know your client' rule, will have to warrant that you are sophisticated. The effect of one of the Democrat amendments is to say that the investor must sign a document to say that they have been through that process.So the licensed securities dealer at the moment has no requirement to make any inquiries whatsoever as to the level of sophistication of the investor. What we are doing is putting in a whole series of tests and also warranties. We are actually saying that, in relation to assets or income, an accountant must sign off to say that you indeed have that. I do not think Senator Cooney or I would qualify under either of those tests if our statement of senators' interests are correct. As to the sophistication of the investor, we are asking the licensed securities dealers, who already have significant legislative and statutory requirements falling on them as a class of people. As Senator Conroy has accurately said, we will also have a new range of regulatory requirements under the CLERP 6 proposals.Already under the fundraising provisions of the law, licensed securities dealers are subject to very important statutory requirements. So we are applying what we think is a far more thorough set of protections for investors. We not only regard the regime we are putting in place as meeting a balance between investors' protection and the need to raise funds at a reasonable price; we believe it stands on its own. If you turn your attention, Senator Cooney, to subclause (3) of clause 66—the excluded invitations section—you would agree that the regime we are putting in place is far more thorough and will, in fact, significantly increase the protection of investors who are gaining the benefit of the exempted offer provisions.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Crowley)—Before we proceed—and I may be stealing your thunder, Senator Murray—Senator Conroy, there may be some point in you giving consideration to postponing your amendment at this moment in the light of Senator Murray's proposal to move first amendments (R8), (9) and (10) and then (7). As I understand it, amendment (7) is identical to the amendment moved by the opposition and currently before the chamber. If it is defeated, then it will be a matter of resubmitting amendment (7), which is identical. Senator Conroy, you may want to give consideration to postponing your amendment at this time.13:54:009803Conroy, Sen StephenSenator CONROY3L6VICALP00—Madam Temporary Chair, I thank you for the invitation to say something. Senator Murray, I am not sure whether you were suggesting that I was setting out to deliberately confuse or that it happened by accident because I was confused. In this instance, I think we are both confused, and Senator Kemp's contribution will only make matters worse. I am not sure why you need amendment (7) to go before or after. Given that you have the numbers to amend this part, I did not think it mattered whether or not it went before or after your amendment. You are taking what is, in effect, an expanded version of that section and putting it into a new spot. I think you would have unanimous support around the chamber to do that, so I am not sure why you are concerned about my amendment being moved first. I am not sure that it matters whether it goes first or second.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Clearly, we need you to help us, Senator Murray.13:55:009803Murray, Sen AndrewSenator MURRAY3M6WAAD00—Yes. It would have been best if we had stuck with the running sheet in the first place, frankly. Please correct me, Madam Temporary Chair, if I am incorrect. I think the sequence procedurally would be best as follows: (R8), (9) and (10) up first and they can be either agreed to or disagreed to. The reason I would like those to go first is that I do not believe you should ever count your chickens until they are voted on. So that is the first thing. Then would follow opposition amendment (27), because that is already in the debate. If that was passed, then my amendment (7) would simply fall away.13:55:009803Conroy, Sen StephenSenator CONROY3L6VICALP00—I perceive a flaw in some of Senator Murray's suggestions. Could I simply make the point that your (R8), (9) and (10) do not achieve the same as (7). I want to make it clear that we will be supporting this as a second-best option. Even under your enhanced protections, I believe this to be seriously flawed. The parliament will live to regret this when some spiv investment adviser with a very shonky project takes to the cleaners some poor worker whose retirement income happens to pass the tests that you are setting. We will all live to regret people losing their retirement incomes because of the changes that you have allowed today. Madam Temporary Chair, per your advice, I seek leave to postpone amendment 27.Leave granted.13:56:009803Murray, Sen AndrewSenator MURRAY3M6WAAD00—by leave—I move amendments (R8), (9) and (10) on sheet 1592 revised together:(R8) Schedule 1, item 5, page 266 (after line 8), after subsection (9), insert: (9A) An offer of a body's securities does not need disclosure to investors under this Part if: (a) the offer is made through a licensed dealer; and (b) the dealer is satisfied on reasonable grounds that the person to whom the offer is made has previous experience in investing in securities that allows them to assess: (i) the merits of the offer; and (ii) the value of the securities; and (iii) the risks involved in accepting the offer; and (iv) their own information needs; and (v) the adequacy of the information given by the person making the offer; and (c) the dealer gives the person before, or at the time when, the offer is made a written statement of the dealer's reasons for being satisfied as to those matters; and (d) the person to whom the offer is made signs a written acknowledgment before, or at the time when, the offer is made that the dealer has not given the person a disclosure document under this Part in relation to the offer.(9) Schedule 1, item 5, page 306 (line 11), after "708(8)", insert "or (9A)".(10) Schedule 1, item 5, page 306 (line 27), after "708(8)", insert "or (9A)".In the short time that is available, I will make some remarks to motivate those amendments. Our amendments relate to capital raising and the ability of a body to offer securities to a person without providing a prospectus document—which, as you know, is often very expensive—as is ordinarily required.One of the primary objects of the Corporate Law Economic Reform Program Bill 1998 is to reform capital raising so as to reduce the cost of that process, and the Australian Democrats have always believed that that is a worthy objective. However, the desire to reduce the cost of capital raising must be tempered by the need to ensure that prospective investors always have access to the appropriate level of information necessary to make an informed investment decision.The bill currently sets out a number of circumstances in which an offer of securities does not require full disclosure by way of a prospectus. These include the situation where the minimum amount payable for the security is at least $500,000. The basis of the abrogation of the disclosure requirement is that it is felt that someone who is investing $500,000 will make their own inquiries to inform themselves about the nature of the investment and the risk attaching to it.Senator Conroy is quite right that sometimes people who have vast amounts of money are far from sophisticated and sometimes people with very little money are very sophisticated. So we need to be alert to the range of investors who are apparent in these circumstances. Another of the circumstances in which full disclosure is not required is where a licensed security dealer is satisfied on reasonable grounds that the person to whom the offer is made fulfils certain criteria. The securities dealer must be satisfied that the prospective investor has experience to allow them to assess the merits of the offer, the value of the securities, the risks involved in accepting the offer, their own information needs and the adequacy of the information given by the person making the offer. A person who is assessed as fulfilling these criteria is known as a sophisticated investor.Progress reportedQuestions Without Notice980498049804Mackay, Sen SueSenator MACKAY9L6TASALP00—My question is to Senator Macdonald, Minister for Regional Services, Territories and Local Government. Can the Minister inform the Senate what the government is doing to assist Western Australian local government with its—by its own calculations—$3.5 million bill to implement the GST? Can the minister confirm that the total amount of funding from this government for WA councils to deal with the GST is a paltry $400,000 for a total of 144 councils—a miserly $2,780 each? Is the minister aware of a study which indicates that local government in Queensland faces a bill of around $7 million associated with the implementation of the GST, yet the federal government has provided Queensland councils with only $535,000—a total of $4,300 each? When will the minister give local government the money and information it desperately needs to cope with the impending GST?9805Macdonald, Sen IanSenator IAN MACDONALDYW4QLDLPRegional Services, Territories and Local Government10—I genuinely thank Senator Mackay for her question to me. It is almost the first one I have had on local government this year, so I appreciate it. Thank you very much, Senator Mackay. You asked about Western Australia and you also mentioned Queensland. There have been a number of studies done by various people in relation to the costs of implementation of the GST. The most recent was done by the Victorian government through its Department of Treasury and Finance. I think it got Arthur Andersen to do that summary. That summary showed that most councils would benefit quite substantially from the GST.9L6MACKAYSenator Mackay—This is the Kennett government?YW4Senator IAN MACDONALD—No; it is the Victorian government. But it was done by Arthur Andersen, one of the respected big seven accountancy firms. They found that there were substantial benefits. The report shows that there will be one-off costs to councils to implement them but the savings to councils each year will really go beyond that. There were some other reports done. The MAV originally did one, Senator, and you issued a press release on it. Remember that one where you said, `Cost of implementation—a million dollars per council'? Well, that turned out to be completely inaccurate.9L6MACKAYSenator Mackay—Madam President, I rise on a point of order. The question I asked related to the Western Australian Municipal Association's own calculations of $3.5 million for implementation of the GST.10000PRESIDENTThe PRESIDENT—There is no point of order.YW4Senator IAN MACDONALD—Most councils around Australia understand that the package has real benefits to them. Around $70 million worth of embedded costs to councils Australia wide will go. Councils in rural and regional Australia will benefit very substantially from the reductions in fuel costs—and even councils in the metropolitan areas. Whilst I acknowledge there will be some small cost involved in the implementation, my department together with the state local government associations are working very hard to make sure that every council in Australia is aware of what is involved. We are implementing a lot of training schemes, a lot of information and a lot of help with software. The government is assisting that in a financial way by providing some moneys to the various local government associations to go with the funds that they are already allocating towards bringing councils up to speed.Across the board, councils will benefit. Ratepayers—the customers that use council services—get a pretty good deal because most of the services that are provided and the payments that are made to councils are GST free. So there will be no GST on rates, water or sewerage and at the same time councils will have substantially reduced costs. So the Western Australian Municipal Association—a very good organisation, I might say; a very well led and very professional organisation—understand the huge benefits to councils from this program. They also understand that, whilst there will be some one-off costs which the government is helping with, overall the package is a very good one for local government.9805Mackay, Sen SueSenator MACKAY9L6TASALP00—Madam President, I ask a supplementary question. The Western Australian Municipal Association is indeed a very good association. They have calculated the costs of implementation of the GST at $3.5 million. Could the minister please answer that question, if nothing else? Further, is he aware that in addition WAMA has reported that members have been deluged with building applications prompted by the impending GST? Can the minister inform the Senate of the actions the government has taken to help Western Australian councils to deal with this? Will the minister provide councils around the country with GST transitional compensation to deal with these applications?9805Macdonald, Sen IanSenator IAN MACDONALDYW4QLDLPRegional Services, Territories and Local Government10—Obviously, there is a boom in building applications. There is a boom right across Australia because the economy is going so well. There is a lot of building activity around and it is no different in Western Australia.Senator Lightfoot interjecting—YW4Senator IAN MACDONALD—As my colleague from Western Australia interjects, the Western Australian economy is booming.RF4COOKSenator Cook—It is not.YW4Senator IAN MACDONALD—Argue with your own spokesman, Senator. She says there are a lot of building applications, which must mean that people have money and are keen to expand and do their building works. That is an indication of a good economy and an indication of people wanting to expand their dwellings and their offices. That is the same across Australia. (Time expired)Distinguished Visitors98069806The PRESIDENTThe PRESIDENT10000PON/A10—Order! I draw the attention of honourable senators to the presence in the chamber of a parliamentary delegation from the state of Missouri in the United States, led by the President of the Senate, the Hon. Roger Wilson. On behalf of honourable senators, I have pleasure in welcoming you to the Senate and trust that your visit will be informative and enjoyable. With the concurrence of senators, I propose to invite the President to take a seat on the floor of the Senate.UNKNOWNHonourable senatorsHonourable senators—Hear, hear!Questions Without Notice980698069806Crane, Sen WinstonSenator CRANE UW4WALP10—My question is to the Minister representing the Minister for Finance and Administration, Senator Christopher Ellison. The privatisation of Telstra has been an outstanding success, with more Australians now investing in the share market. Will the minister inform the Senate of the success of the sale of a further 16.6 per cent of Telstra?9806Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—The privatisation of Telstra has been an outstanding success, although the opposition do not want to listen. At 11.30 today, history was made when Telstra tranche 2 was listed. This offers the people of Australia a great opportunity: 1.6 million Australians are becoming sharehold ers. In fact, 43.3 per cent of all Australians have some form of share investment. That is great news indeed. In fact, it puts us foremost in the world in relation to share ownership. I might even say with our American friends present that I think that might just put us ahead of the USA. That is great stuff indeed. It is a glowing testimony to the privatisation of this great company. It offers normal Australians, ordinary Australians, mums and dads, a chance for investment.We have listed the price at $7.40 for ordinary shareholders and $7.80 for institutions. But, in order to allow for those people, the working men and women of Australia to participate, we have allowed for a down payment of $4.50 with the remainder to be paid by November 2000. That makes it easier for those ordinary investors to become a part of this great venture.During the process of the marketing of the second tranche, we also streamlined the way we did business. The broking syndicate that we used is made up of 17 banks and broking firms, six fewer—Senator Schacht might want to know—than last time. In fact, this has resulted in a $25 million saving in commissions, which again is good news for Australians.Opposition senators interjecting—10000PRESIDENTThe PRESIDENT—Order! There are too many senators interjecting.9X5Senator ELLISON—This is just a step forward along the road leading to the government's vision of Australians not only being home owners but share owners as well. Just 18 months ago less than 29 per cent of Australian adults directly owned shares. Now we have 43.3 per cent of Australians having some form of share ownership. This brings working Australians into the loop, in with a chance to benefit from this. I might say that, despite recent fluctuations in Wall Street brought about by speculation in relation to interest rates, Telstra will trade well. A commentator from CNBC—and again the opposition do not want to hear this—said that this was $20 stock in the medium term. That is good news for those people who have invested. 4J4SCHACHTSenator Schacht—You have given them away too cheaply if they are worth that much. You have robbed the public purse again.10000PRESIDENTThe PRESIDENT—Senator Schacht, we are waiting for you to cease breaching standing orders.9X5Senator ELLISON—Madam President, it is obvious Senator Schacht has not got a clue about how the stock market runs. I suppose he is going to advise us as to when we should list these shares as he in his wisdom knows how Wall Street is going to go. What a joke, Madam President. This is good news for Australia and Australians. We are using the proceeds from this to reduce the debt that the opposition when it was in government left us with, so that the next generation of Australians will not be saddled with such a burdensome debt. I notice that the shadow minister for communications, the member for Perth, Stephen Smith, to his credit wished this venture great success because he can see what benefit this will bring to Australia and all Australians.98079807Mackay, Sen SueSenator MACKAY9L6TASALP00—My question is directed to Senator Macdonald, the Minister for Regional Services, Territories and Local Government. Does the minister recall his promise in the 1999 Regional Australia Budget Statement that the `Government is committed to supporting access to higher education for students from rural and isolated areas.' In light of this stated commitment to regional universities, what is the reaction of the minister to the admission in the leaked cabinet document that eight institutions are operating at a deficit, and some regional campuses are at risk? Is the minister aware that these risks to regional universities are a direct result of the Howard government slashing funding to higher education? Can the minister answer this simple question: which regional campuses and universities are in this category?9807Macdonald, Sen IanSenator IAN MACDONALDYW4QLDLPRegional Services, Territories and Local Government10—Our government has substantially assisted those students and people in rural and regional Australia with universities in rural and regional Australia. I remember proudly, when I was a lot younger, how it was a Liberal government in those days that got the James Cook University to Townsville, and it expanded that into Cairns as well. We continue to assist regional universities as an important part of our higher education system. It is particularly important in a country as vast as Australia that people who, like me, live a long way from the capital cities do have the opportunity of going to a university. When I was that age there were no universities around and people like me either did it by correspondence, as I did, or they did not do it at all. Subsequently, Liberal governments helped with these universities in rural and regional Australia.Perhaps one of the proudest moments in the Howard government's life has been the decision to establish medical schools in universities. Again I mention the James Cook University of Townsville and the clinical school at Wagga Wagga. There are university departments being established in many other parts of Australia with medical schools. The question that Senator Mackay was asking me was which regional universities fall into this category. I am not quite sure what `this' actually referred to. What was `this' category?10000PRESIDENTThe PRESIDENT—Senator, you should not be engaging in conversation across the chamber.YW4Senator IAN MACDONALD—I must say that I did not quite understand that part of the question.5K4FAULKNER Senator Faulkner—That's perfectly obvious.YW4Senator IAN MACDONALD—It was a pretty silly question, wasn't it, Senator Faulkner? If it is one of those questions that require a detailed answer on the balance sheet of every university, and I have to confess that I do not have the balance sheet of each university in my head—you might be surprised by that, Senator—I invite you to put it on notice and I will get the information. Generally speaking, our government has done a lot for students in rural and regional Australia and I, for one, am very proud of it.9807Mackay, Sen SueSenator MACKAY9L6TASALP00—Madam President, I ask a supplementary question. I thank the minister for taking the question on notice— that is, which regional universities are at risk, according to the leaked cabinet document. I would appreciate that information as soon as possible. Further, can the minister guarantee that the participation rates for rural students will never ever fall again as a result of this government's proposed `education for the rich' policy? Can the minister guarantee that there will never ever be further cuts to higher education funding in regional Australia beyond the massive withdrawal of funds already seen under this government?9808Macdonald, Sen IanSenator IAN MACDONALDYW4QLDLPRegional Services, Territories and Local Government10—What I can guarantee is that students, people wanting to attend the universities, in rural and regional Australia will get a fair go from this government, and participation rates will continue to increase under this government. We are a government that does more than just pay lip-service. Senator Mackay referred to a so-called leaked document. I have not seen that. Why does she not table it so that we can see what she is talking about? I assume, from what she is talking about, that all the information is in that alleged leaked document. If it is, Senator, why are you asking me? You obviously have it. If you have it, and it is what you say it is, read it and you will get the answer. You do not need to waste my time or the time of my department by getting an answer on notice to the question you have raised. I am not really aware of the document that you speak of. Table it and I will tell you about it. (Time expired)98089808Payne, Sen MariseSenator PAYNEM56NSWLP10—My question is to the Minister for Communications, Information Technology and the Arts, Senator Alston. Will the minister inform the Senate of how more Australian families can share in the greatest national company in Australia, Telstra? Secondly, what is the government doing to assist the growing number of Australians who are taking up share ownership, particularly in the growing information technology and technology sector? Finally, is the minister aware of any alternative policy proposals, and is the government giving these any serious consideration?9808Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—I thank Senator Payne for a very important question. In fact, I think that Senator Ellison did spell out some of the important statistics. In particular 1.6 million people applied for T2—not much less than the 1.8 million who actually took shares in the first tranche. We go from strength to strength as a country that is interested in being a share owning democracy. Over the last nine months alone, three-quarters of a million Australians have invested in listed Stock Exchange shares and we now have some 5½ million Australians owning shares—up to about 40 per cent. All of that is very positive. It is a vote of confidence in the stability of the Australian corporate structure and it is a recognition that we have the right policies in place to ensure that those companies thrive.That is why it is critically important that the capital gains tax relief that is proposed as a result of the Ralph committee report does recognise that there are so many people who are on low and middle income levels who are now shareholders in Telstra. This is not something simply for a few at the top end of the market. We have 77 per cent of Australians paying capital gains tax who earn less than $50,000 a year and some 60 per cent earning less than $39,000 a year. It is not simply a matter of pretending—as some commentators have—that somehow this is all loaded, that the ASX are the ones who argue this. The fact is that the work that is being done on demonstrating the equity across the board comes from Treasury. You have only to look at the independent evidence of the United States where capital gains tax rates were lowered back in 1978 and again in 1981 and, at the same time, revenue climbed steadily. In fact, between 1978 and 1985 the top marginal rate was cut by almost 45 per cent, but total individual tax receipts in relation to capital gains tripled from $9.1 to $26.5 billion annually.It is quite clear that we have a vast number of people in Australia who are interested in taking a stake in some of the great Australian companies. So we have to ask ourselves why it is that anyone would be opposed to privatisation. I heard Senator Ellison give Mr Stephen Smith a bit of a pat on the back for his positive approach. But Mr Smith has a very serious problem in this whole policy area because he knows, as well as we do, that we are on the right track. If he had his own way he would be arguing it as loudly as he could. He wanted to do that when he worked for Mr Keating and he wants to do it now. But of course he has to pay lip-service to the unions which insist that you do not go down this path while in opposition. What he had to say in a press conference the other day—apart from trotting out that usual dishonesty about this all being linked to quality of service, when we know that Telstra has had problems with quality of service for the last decade—was this:Well, we've consistently said we regard Telstra as an important part of our national infrastructure and on that basis we wouldn't privatise it.That did not stop them with the airports and the airlines. He went on to say:Before you would contemplate a privatisation of Telstra you might want to ensure that we had a fully competitive telecommunications market.In other words, it is optional: you might want to. Clearly, they do not have any opposition in principle: it is simply premature. So if Labor get into government, hey presto, they decide there is sufficient competition in the telecommunications arena and they suddenly get themselves a full privatisation with all that flows from it. It is rank hypocrisy, it is clearly against the national interest, it is utterly opportunistic, and it ignores the wishes of all of those Australians who not only want to have a stake in Telstra but also want to ensure that they get the right capital gains tax regime. I hope Mr Smith will at least compensate for his opportunism on that front by urging his party to support the capital gains tax proposal. (Time expired)98099809Carr, Sen KimSenator CARRAW5VICALP00—My question is to Senator Alston representing the Minister for Employment, Workplace Relations and Small Business. I refer to the statement today made by the minister for education concerning the $259 million over three years application of public moneys to bribe workers in universities into signing workplace agreements. I quote the reference to the `meeting of the government policy objectives' as was outlined in what is now quite clearly the disgraced cabinet submission. How does this policy differ from the $25 million which was indicated in the previous cabinet submission? Does the minister approve of the policy, or does he view this as an act of coercion? In light of the Prime Minister's repudiation of Dr Kemp and his draconian policies last week, and of course in question time again today, will the Howard government repudiate Dr Kemp's proposal to coerce academic staff by using taxpayers' money?9809Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—Here we go again! The good old class warfare is alive and well. They kept him quiet during the Victorian state election, but I suppose they cannot keep him out of the game indefinitely if they have him up here in Canberra for six years at a time. Senator Carr could not help himself; that is his problem. He purported to quote from a cabinet submission. He could not help himself because he asked whether I agree that Dr Kemp was arguing for $259 million over three years to bribe workers in universities. I have not looked closely at it, but I would be very surprised if any such term was used in the cabinet submission. All it does, of course, is suggest that what Senator Carr is about is upping the rhetoric; in other words, trying to ensure that those who have put him here in the first place get their money's worth by arguing about draconian changes and coercion.The reality is, if you make proposals that are designed to bring about sensible change as far as Senator Carr is concerned, if you try to do it by money rather than, as Labor would do, by trying to change the law and impose whatever ideological view of the world they might have at that particular time, if you actually try to accompany it with measures that are designed to bring about change and, at the same time, transfer money, then that, of course, is coercion if you do not like it. If you do like it, you think it is a very sensible incentive structure; if you do not, it is a bribe. All I can say is: go away, get your rhetoric right and go back to policy formulation stages. Get a bit of advice from anyone on your side who might be interested in policy and you will see that we do have a commit ment to the university sector and we do want to improve education in Australia.9810Carr, Sen KimSenator CARRAW5VICALP00—Madam President, I ask a supplementary question. Minister, has the legal advice flagged in paragraph 22 of Dr Kemp's higher education cabinet submission provided to the government been on `minimising the risk of legal challenge to Dr Kemp's reforms'? Who is providing that legal advice and will that advice be made public?Honourable senators interjecting—10000PRESIDENTThe PRESIDENT—Order! There are senators further down the chamber shouting across the chamber and your behaviour is disorderly.9810Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—There it is: game, set and match! Senator Carr did not in any shape or form attempt to justify the use of the words `bribery and coercion'. He simply moves on to some utterly unrelated question about legal advice. If he is serious about coercion and bribery, perhaps he might like to explain to us why the Premier of New South Wales is supporting the press ganging of workers and compulsory backdoor membership requiring people to pay a percentage of their union's annual dues, irrespective of whether they are union members, bringing about a windfall to the New South Wales unions of some $231 million—no doubt very helpful for the ALP's campaign war chest. Why should they be regarded as volunteers? They have obviously been forced to do something they do not want to do, that is, they do not want to join a union. If you want to have a debate about bribery and coercion, let us start there.Opposition senators interjecting—10000PRESIDENTThe PRESIDENT—Order! The behaviour on my left is unacceptable.98109810Ridgeway, Sen AdenSenator RIDGEWAY8G6NSWAD00—My question is to Senator Herron, the Minister for Aboriginal and Torres Strait Islander Affairs. Why does the Australian government, in acting in accordance with international law, recognise the right of the East Timorese people to the right of self-determination, yet in the case of Australia's indigenous peoples denies them this fundamental right, substitut ing it with a nebulous concept unheard of and unrecognised in international law, namely, self-empowerment? Will not this inconsistency inevitably open Australia to charges of gross hypocrisy and double standards, especially from the nations in the Asia-Pacific region which are monitoring very carefully our actions following Australia's support for the right of the East Timorese to self-determination?9810Herron, Sen JohnSenator HERRONVW4QLDLPAboriginal and Torres Strait Islander Affairs10—I thank Senator Ridgeway for the question. The term `self-determination' means different things to different people. There is no fixed definition. I hear the laughter from the other side. It is just evidence of their absolute ignorance on this particular matter. The term `self-determination' appears in many publications but there is no fixed meaning. To some people it may mean separate nations within a nation, and many speak of it in that way. The terms `self-empowerment' and `self-management' are considered by some to be more a recognition of an internal structure that exists in this country as applied to the indigenous people of this country. The government certainly supports the principle of indigenous people exercising varying degrees of control over aspects of their affairs. You would recall that I gave an instruction to the House of Representatives Standing Committee on Aboriginal and Torres Strait Islander Affairs to look at structures for self-management within the Torres Strait Islands. They came up with a recommendation which is being discussed by the Torres Strait Islanders.What that meant in that context was that they should have greater control over the administrative structures within the Torres Strait Islands, not that they should separate themselves off as a separate nation. Yet to some people there, that is what it means. In the international context, this matter was raised before the United Nations working group on the draft declaration in December last year and many delegations expressed concerns about the ill-defined nature of self-determination. Australia's position was explicitly supported by the United States of America and the United Kingdom.In reply to Senator Ridgeway's question, I do not see a disparity in that between a popularly elected people having a vote—over 90 per cent—seeking in that context self-determination and control of their own separate part of the country, as opposed to, in our context, trying to draw an analogy between the indigenous people of this country within part of the Australian nation as a whole. I do not believe that analogy is valid, so I reject the implication in that question.We have progressed along the line since coming to government. We have done a lot more than the Labor Party in this regard.XE4BOLKUSSenator Bolkus—Absolute rubbish!VW4Senator HERRON—Senator Bolkus was not present two weeks ago when Gatjil Djerkurra, the Chairman of ATSIC, and I jointly released a paper on regionalisation, so that in those parts of the country where there are major numbers of indigenous people they can take control of their own destiny in relation to the administrative structures. That green paper is available.Opposition senators interjecting—VW4Senator HERRON—Those opposite who are trying to interrupt should go and read that paper so they will get a bit more knowledge in this regard and understand the direction the indigenous people of this country wish to pursue. I would advise them to get hold of that. I will be happy to send a copy to Senator Bolkus if he so desires, but I doubt if he would be bothered reading it because he has shown no interest in these matters at all.But we are progressing along these lines to give people the opportunity to control matters within their own regions. It also brings up the problem, which is being discussed, of the introduction of control of legal matters, particularly within Arnhem Land. The people there believe that they should have the right—(Time expired)9811Ridgeway, Sen AdenSenator RIDGEWAY8G6NSWAD00—Madam President, I ask a supplementary question. I thank the minister for his answer. Can he officially confirm that the position that is being put is the one that is being put by the Australian government and advocated at a meeting of the working group of the United Nations Human Rights Commission concerning the Draft Declaration on the Rights of Indigenous Peoples? Hasn't this also been confirmed in a publication from the minister's office rebutting myths about Australia's indigenous human rights? Won't this put at risk the whole question of `reconciliation'?9811Herron, Sen JohnSenator HERRONVW4QLDLPAboriginal and Torres Strait Islander Affairs10—I thank Senator Ridgeway for the supplementary question. No, I do not believe that it will put at risk the question of reconciliation. Reconciliation is something that has to be determined by each and every one of us within Australia. I do not believe that any actions of the United Nations in this regard will cause great dissent within this country. It is up to each and every one of us, every individual in this country—every Australian has an obligation—to pursue reconciliation. Any discussion of this at the working group of indigenous peoples within the United Nations will have an influence, obviously. I understand that group is meeting at the moment in the United Nations. But reconciliation within Australia is of far more fundamental importance to each of us within this country as Australian citizens, both indigenous and non-indigenous. (Time expired)98119811Bishop, Sen MarkSenator MARK BISHOP2L6WAALP00—My question is directed to the Minister for Communications. How does the government justify its decision to support Telstra's decision to increase the fees for its 12 non-executive directors by a massive 53 per cent, to $1.15 million, when Telstra's main competitor, Optus, only pay their seven non-executive directors $166,000 in total? Why is a Telstra non-executive director worth over $90,000, while his or her counterpart in Optus is worth only $24,000?9811Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—The judgment about what they are worth in the private sector is generally a matter largely for the directors themselves, usually taken on advice from the remuneration committee, which in most listed companies would operate at arm's length. There is a huge difference in terms of the size of Telstra and Optus. Optus is a minnow compared to Telstra. What is significant about Telstra is that it has generally underpaid its directors by reference to market levels. In other words, there is no shortage of reviews which demonstrate what the going rate is in the marketplace.AW5CARRSenator Carr—Do they apply to everyone in Telstra, do they?10000PRESIDENTThe PRESIDENT—Order! Senator Carr, you are out of order. There is an appropriate time to debate this matter. That is at the end of question time, not during the time of answering.LD4Senator ALSTON—I know Senator Carr would like to see a Labor government using the power of direction to decide what every single employee amongst those 55,000 ought to receive, but that is not the way the system operates. The directors are perfectly entitled to take the view that by reference to market standards their levels have been below the going rate. When you are talking about the largest company in Australia you expect it to pay world's best rates if it is to attract top quality people. I hope none of you objected to Mr Blount being brought in from the United States. Mr Blount would come from a culture where—4J4SCHACHTSenator Schacht—You appointed them. You appointed them out of political favouritism.10000PRESIDENTThe PRESIDENT—Order! Senator Schacht, you have been interjecting in just about every answer during question time today. I point out to you what the standing orders say about interrupting other speakers and the consequences.LD4Senator ALSTON—I am simply making the point that if you want to attract world class people to run the company, and we did have Mr Blount running the company for more than five years, Mr Blount was perfectly entitled to point to the fact that his counterparts in telcos in other countries would have been earning a great deal more than he was. If that is the going rate, then I do not have any problem with it. What I seriously object to, however, is situations where CEOs take very significant increases in their own levels of remuneration, despite the fact that the company is not performing very well. I think that is out of kilter. I think it is a responsi bility the directors have to ensure that the company has the capacity to afford to pay those rates. Beyond that it is a matter of judgment.If Optus chooses to underpay its directors—and I do not know whether it is; by market standards it sounds as though it might be—and if Telstra chooses only to go close to the market level but certainly not well beyond it, then I would have thought that is the way the system ought to be operating. I do not begrudge those directors the entitlement to receive something that is commensurate with the level of responsibility which they accept. We all want them to take very big decisions on a regular basis—decisions that affect every Australian—and we want to have the best possible people there, and they are entitled to receive market remuneration.9812Bishop, Sen MarkSenator MARK BISHOP2L6WAALP00—Madam President, I ask a supplementary question. My question to the minister went to the government's decision to justify the decision of the board of management of Telstra. How does the minister justify to ordinary Australians on average incomes a 53 per cent increase in fees to directors of Telstra at a time when the organisation is under increasing criticism for failing to deliver on basic services to its customers?9812Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—As I have said many times, the complaints about quality of service go back a decade, and that is one of the responsibilities which I think the directors in general, and Dr Switkowski in particular, take very seriously. To say that directors' remuneration has gone up by 53 per cent is irrelevant unless you go back and look at the base point. I think you will find that they have not had an increase for quite some years, and if you then look at the absolute level of remuneration I think you will find it is very much in line with the going rate. Those two factors do not suggest to me that they are being overpaid. I do not think we need to justify that to the Australian public any more than we need to justify allowing the private sector to make its own arrangements. As far as we are concerned, I think the extent of our responsibility was in endorsing an overall increase in the allocation. It is then a matter for the directors themselves to strike the balance within that limit. That is the way the system has worked, and I think it works pretty well.98139813Brown, Sen BobSenator BROWNQD4TASAG00—My question is to the Minister for Industry, Science and Resources, Senator Minchin. I have only just been able to hand him a copy of a report from the consultants DuPont and Bergin to Pangea. That report targets South Australia for a nuclear waste dump measuring 14 square kilometres and up to five kilometres deep, sited 300 to 1,000 kilometres from, presumably, Whyalla or Port Augusta. I ask the minister: will he let the Blair government, as a 70 per cent shareholder through British Nuclear Fuels Ltd in Pangea, know that it is time for them to rack off and not to see Australia as a repository for their waste? Secondly, I ask the minister: will he support legislation—or indeed initiate legislation if he finds the legislation I bring in unacceptable—for a national assurance that Australia cannot in the future be used as a nuclear waste dump? (Time expired)9813Minchin, Sen NickSenator MINCHINJX4SALPIndustry, Science and Resources10—The Blair government is indeed a Labour government, but I do not think it would be appropriate or diplomatic of me to tell it to rack off. I have written to Pangea, as Senator Brown knows, and made it abundantly clear to them that the government totally opposes—Opposition senators interjecting—10000PRESIDENTThe PRESIDENT—Order! There are far too many senators interjecting.JX4Senator MINCHIN—I have stated in this place repeatedly and publicly, and I have written to Pangea themselves restating this, the government's very firm opposition to the Pangea proposal to establish in Australia a repository for international radioactive waste materials. That is the clear policy of this government. There is no prospect of that changing. I confess and admit that Pangea is a most persistent applicant.Honourable senators interjecting—10000PRESIDENTThe PRESIDENT—Order! There are too many senators engaged in conversation across the chamber and amongst themselves. It is hard to hear.JX4Senator MINCHIN—Pangea did make it clear from the outset a long time ago that Western Australia and South Australia were the two states that suited their proposal, but both the governments in those two states have made it clear that they are totally opposed to it and would not issue any of the relevant permits or licences needed for such a proposal to advance. Radioactive substances are a prohibited import under the Customs (Prohibited Imports) Regulations. We believe that the regulatory regime is sufficient to ensure that our policy will be adhered to. I know that is the Labor Party's policy as well. It seems to me that there is absolutely no prospect under any government in Australia for the Pangea proposal to proceed.It is true that there is a discretion for the Minister for Health and Aged Care under the customs regulations to give written approval for the importation of radioactive substances but, as the former Labor government discovered when it sought to perhaps change that, that is an essential part of our managing responsibly our own radioactive wastes. We have sent and will be sending the spent fuel rods from Lucas Heights overseas for processing, and then we will bring back—as we should as the responsible source of the waste—the radioactive waste from those fuel rods. It is necessary under the customs regulations for the minister for health, as the minister responsible for ARPANSA, to issue a specific permit to enable that radioactive waste to be returned to Australia so that we can responsibly look after our own waste. That is our policy: that every country involved in the nuclear fuel cycle should make its own arrangements for looking after its own waste. We are not going to look after anybody else's waste, but we will responsibly look after our own.9813Brown, Sen BobSenator BROWNQD4TASAG00—I thank the minister for that reassurance. Madam President, I ask a supplementary question. In view of the fact that 93 per cent of South Australians, according to a recent poll, oppose even low level nuclear waste being reposited in South Australia, let alone high level and intensely radioactive material, including plutonium, which Pangea proposes to—EP5FERGUSONSenator Ferguson—Where would you want to send it—Tasmania?QD4Senator BROWN—They will try Tasmania next. They are going to obviously go right around the lot. In view of that fact, will the minister look again at legislation analogous to that in Western Australia, which I am sure would get multipartisan support here, to give the South Australian people a reassurance that there is no loophole through which Pangea can keep its hopes alive?9814Minchin, Sen NickSenator MINCHINJX4SALPIndustry, Science and Resources10—I think I have given all the assurances that I can possibly give. There is no loophole. The Pangea proposal will go nowhere. I do not know about the poll you mentioned, but of course radioactive waste repositories are not popular. Nevertheless, we are committed to establishing a low level waste repository in South Australia. As I understand it, the federal opposition understands that and accepts that reality. We will proceed with that. We are going through all the relevant procedures to do that properly and sensibly, but it will be for our own radioactive waste and not for anybody else's.98149814Crowley, Sen RosemarySenator CROWLEYZF4SAALP00—My question is to Senator Newman, as the Minister Assisting the Prime Minister for the Status of Women. Does the minister agree that, if you apply a real interest rate to a loan, then the longer you take to pay it off the more interest you will pay? Doesn't this mean that, under the Howard government's newly revealed approach to higher education, a woman's decision to take time off to start a family will cost her thousands of dollars extra compared to her male colleagues? Won't her debt be growing while she is on maternity leave, with the interest being capitalised and massively increasing the debt potentially to well over $100,000?9814Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—It is interesting that Senator Crowley has taken this long to realise that interest rates actually cost people money. It is a pity she did not think about that when Labor had interest rates right up at 17 or more per cent. I would also point out that the Prime Minister has made it very clear that the interest rates that she was talking about are not going to be applied at all to students.9814Crowley, Sen RosemarySenator CROWLEYZF4SAALP00—Madam President, I ask a supplementary question. Did the minister raise this detrimental impact on women when the loan at real interest rates proposal was considered by cabinet—back in June this year and again this morning—or did she meekly let this outrageous policy continue to be developed by Dr Kemp as her Prime Minister did and does?9814Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—Of course, when Senator Crowley was a minister, she was not a member of cabinet, but if she had been she would have realised that you do not discuss what happens in cabinet in the Senate.98149814Tierney, Sen JohnSenator TIERNEYO15NSWLP10—My question is to the Minister for the Environment, Senator Hill. Will the minister inform the Senate how the initial sale of Telstra has helped community groups across Australia in their efforts to protect our natural environment? What further benefits will flow to these groups from the sale of Telstra 2?9814Hill, Sen RobertSenator HILLBH4SALPEnvironment and Heritage10—I thank the honourable senator for that important question. It is true that the first sale of Telstra delivered major benefits to the Australian economy by allowing the government to pay back some of Labor's debt. The Senate will recall, of course, that when the Howard government came to government the Commonwealth debt was some $96 billion; that was in the year 1995-96. It has now declined by $24 billion, and this has been as a result of sensible economic management: getting the deficit—$10 billion—reversed to a surplus and repaying debt from the sale of some assets. Of course, Labor, when it sold capital assets, used the funds against recurrent expenditure, and nothing was left afterwards.So, yes, it has helped the economy and that is very important. But the sale of Telstra 1 also delivered a significant bonus to our environment. The first Telstra sale allowed this government to invest $1.25 billion in the Natural Heritage Trust—the largest environmental action plan ever undertaken by an Australian government. Of course, the Natural Heritage Trust was a commitment made by the coalition during the 1996 election campaign and, unlike under the Labor Party, it has been delivered in full. Madam President, you might remember that during that election campaign the then Labor environment minister said about the coalition's NHT promise:It's now clear to anyone with the most rudimentary understanding of Australian politics that the Trust Fund will never see the light of day.That, of course, was Senator Faulkner, the then Labor environment minister. He got it wrong, not as embarrassing, of course, as the time he smeared the Baillieu family by claiming that dead members of that family were benefiting from a grant to the Trust—he has not yet apologised, I might say—but wrong all the same. Through the Natural Heritage Trust, the Howard government is backing the efforts of community groups across Australia. The community identifies their local environmental problems, they work out a local solution and they become part of that solution by providing the on-ground work force. The Natural Heritage Trust then provides them with the financial support they need to implement their plan.So, far from Senator Faulkner's claims that the trust was a cruel and deliberate hoax, the trust has in fact already delivered more than $700 million for environmental and sustainable agricultural projects. The government recently has announced a further $185 million to fund more than 2,600 projects in this financial year—$48 million in New South Wales, $38 million in Victoria, almost $30 million in Queensland, $29 million in Western Australia, $24 million in South Australia, $14 million in Tasmania, just under a million in the ACT, and an announcement is still to come in the Northern Territory. The Telstra 2 sale will help us build upon these environmental efforts because the second Telstra sale will deliver an additional $250 million to the Natural Heritage Trust. Of course, the sale will also deliver other benefits, particularly for rural and regional Australia, including $70 million for a network of rural transaction centres, an expansion of the regional telecommunications infrastructure fund and funds for increased access to the Internet. None of these would have been possible under a Labor government. Under this government more money is being invested than ever before in the greatest capital asset of all, our natural capital. (Time expired)98159815Evans, Sen ChrisSenator CHRIS EVANSAX5WAALP00—My question is directed to Senator Newman, in her capacity as Minister representing the Minister for Defence. Is the minister aware that the Defence Force child-care centre in Perth, the Sunny Child Care Centre, which serves the families of the personnel of the SAS barracks at Swanbourne, is having its child-care places cut, from 47 to 28 from January next year, as part of a privatisation program? Isn't it the case that the centre serves the families of Swanbourne barracks personnel serving with the multinational forces in East Timor? Why was the number of places reduced and can the minister guarantee that defence families will not lose access to child-care services as a result of these measures?9815Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—I am not a Western Australian senator, but I visited the child-care centre at Swanbourne a number of years ago. I have no idea why there is any cut, if there is any, and I suggest to you that it may be a matter for the local authorities. It could be local government or the Army. I have not heard any information that Defence or my department are involved in that. I will get information for you, Senator.9815Evans, Sen ChrisSenator CHRIS EVANSAX5WAALP00—Madam President, I ask a supplementary question. I appreciate the minister seeking some information, and I assure her that my information is accurate. Wasn't the original justification for Defence Force child care to ensure that Defence Force families, in times of emergency when service personnel may be overseas on active duty, had access to respite care and additional services because of the stress placed on families? My concern and the concern of the residents is that that not be reduced. I would like to know what measures have been put in place to ensure that those families continue to get the same access and the same service that they have had in recent years when the government has cut the places that are available at these centres.9816Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—I have already made it clear that I do not know who made the cuts in places. I agree that respite assistance for people whose extended family is on the other side of the continent is important, but I also remind the Senate that it was a very slow Labor government that came to support child care in defence establishments. As the shadow minister for defence science and personnel, I spent a very long time trying to sensitise the previous government to the needs of defence families. I will certainly get you an answer, and I support the general principle that you are talking about, but as to why there are any changes in the places, I do not know.AX5EVANSSenator Chris Evans—Because you are privatising it!BE4Senator NEWMAN—Oh, come away! We're not privatising it.98169816Allison, Sen LynSenator ALLISON1M6VICAD00—My question is to the Minister representing the Minister for Education, Training and Youth Affairs. Is the minister aware that the government's ongoing refusal to decide on citizenship for East Timorese asylum seekers who arrived after 1992 means that they cannot attend university or TAFE colleges unless they pay thousands of dollars in overseas student fees? Is the minister also aware that the children of East Timorese asylum seekers have been denied access to public education for three to six months until their visitors' visas expire? Is the minister aware that the Catholic schools are taking in many Timorese students free of charge? Minister, given the importance of education to the rebuilding of East Timor, why is Australia not making a concerted effort to give Timorese in Australia the best possible access to our schools and universities?9816Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—The East Timor situation is a very serious one indeed, and particularly in relation to those East Timorese who are in Australia. I am not aware of the matters that Senator Allison raises, but I will certainly look into them and take them on notice.9816Allison, Sen LynSenator ALLISON1M6VICAD00—Madam President, I ask a supplementary question. I ask the minister to consider the pain and trauma that is experienced by East Timorese coming to Australia and to acknowledge that denying them a public education is exacerbating that pain and trauma. Isn't it the case that the federal government has no coherent policy on education for the children of asylum seekers in detention in Australia?9816Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—I am not the minister for education, so I do not have that detail to hand. I will certainly take it on notice. What we have done in relation to East Timorese asylum seekers is on the record. Minister Ruddock mentioned this just the other day. I will look into these matters and get back to Senator Allison.98169816Denman, Sen KaySenator DENMANFY5TASALP00—My question is to Senator Newman, the Minister for Family and Community Services. My question concerns funding to child-care centres in the electorate of Bass, which is centred on Launceston, the minister's home town and the site of her electorate office. Can the minister confirm that, according to data from her own department, child-care assistance and capital grants funding to the eight community child-care centres in Bass has fallen from $1,547,891 in 1995-96 to an estimated $887,694 in 1998-99? This is a drop of $660,197, or 43 per cent. Can the minister give any credible explanation for this 43 per cent drop in community child-care funding in her home town of Launceston? Or will she simply find someone to blame in the department for releasing this figure?9816Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—First of all I make it absolutely crystal clear there have been no funding cuts in child care in 1998-99 in Tasmania—none! As far as the detail of Bass is concerned, Senator Denman may be relying on a survey conducted by the member for Bass rather than that of an independent organisation. Senator Denman shakes her head; she may not be relying on that. If that is the case, it may be that she is not aware that many workers who use child care in Tasmania generally have casual or contract work. They use care only when they are working, and this can be very variable, especially in a depressed economy—despite the fact that Tasmania now has the `benefit' of a majority Labor government. It seems to have been pretty complacent about encouraging investment. We are still waiting for the sorts of projects that will provide employment to people in Bass.I would also point out the flexible working arrangements, which are now very much more helpful to parents who have responsibilities for children, which provide families with more options for managing their work and their child-care responsibilities. The vast majority of Tasmanian families use formal child care on a part-time basis—an average of around 17 hours paid per week. Since we came into government, people have not been paid for child care that was not provided to them, which was the case under Labor—you could have child care paid for more than 50 hours a week and not be receiving that child care which the taxpayer was funding. If there have been changes in the level of funding, Senator, I suggest you look at some of those reasons for why that might be. I would also suggest that you look at the fact that in the recent year or so, Tasmania is down about 2,000 children in the child-care age group, partly because of the lack of live births in Tasmania and partly as families are moving out of the state because of lack of work. All these things put together make a difference in how much money comes into any one electorate.9817Denman, Sen KaySenator DENMANFY5TASALP00—Madam President, I ask a supplementary question. That data did come from the department, Minister. Does the minister recall claiming in a radio talkback session on this issue on 5 October that Tasmania's child-care problems were due to the state having a `Rolls-Royce' model of child care in that the staff-child ratio for babies—that is, babies from zero to two years of age—was one in three? In fact, Tasmania has not had this ratio for two years and was forced to increase the ratio to the more common one in five in 1997, following the aboli tion of the operational subsidy to community based child care. Does the minister still believe that Tasmania has a Rolls-Royce model of child care?9817Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—The information about the ratio for people caring for babies came to me from two sources: firstly, my department and, secondly, from child-care proprietors or managers in Tasmania. You may not like the description, Senator, but it does highlight the fact that state governments determine the ratio of staff to children. The federal government does not determine fees, nor does it determine the ratio of staff to children in child-care centres by age. Therefore, if Tasmania is very out of kilter with other states, as it also is in aged care—where our costs for nursing and the occupational health and safety claims are much greater than in many other states—then our organisations carry a heavy overhead burden which has to be looked at in determining whether families can afford child care. (Time expired)98179817Brownhill, Sen DavidSenator BROWNHILLRD4NSWNP10—My question is to the Minister for Regional Services, Territories and Local Government. Given the float of shares for ownership of a further 16 per cent of Telstra by the Australian public, would the minister please inform the Senate how the proceeds will be used to enhance regional Australia's infrastructure? How will this benefit the lives of regional Australians?9817Macdonald, Sen IanSenator IAN MACDONALDYW4QLDLPRegional Services, Territories and Local Government10—Senator Brownhill will be interested to know that the government is investing the money from the sale of Telstra in infrastructure, much of it in rural and regional Australia. That is so unlike the previous government, the Labor government. When they sold everything that moved—the Commonwealth Bank and Qantas—they simply invested the capital proceeds in day-to-day living expenses, the recurrent expenses of government. So, Senator Brownhill, unlike the Labor Party, we will be putting it into infrastructure. We are not just flogging Telstra to a single company, as you might recall the former Labor leader wanted to do—you will remember Mr Keating wanted to sell Telstra in one lump sum to BHP—we are selling it to the ordinary mums and dads of Australia, but the money they pay for those shares will go into a lot of infrastructure projects. Senator Hill mentioned the great investment we are making in our natural heritage. In addition to that, we will be putting some $45 million into a project called Local Government Online to build up the telecommunications infrastructure for local government to allow them to keep up with the new millennium. In addition, we will be putting in $120 million to establish a television fund to expand SBS TV and to fix transmission black spots in parts of rural and regional Australia. I know Senator Brownhill will be very interested in that. We will be giving up to $150 million for untimed local call access to some 37,000 families and households located in the old pastoral zones, the outer extended zones, of remote Australia to enable them to call in at local call costs. We will also be spending some $70 million on rural transaction centres—that is, our program of putting banking facilities, transaction facilities, back into the small country towns, which the banks left during the term of Labor's government. Those transaction centres will re-establish in those smaller country towns real infrastructure, real transaction centres and real communications areas. We will also be putting $36 million into a program called Points of Presence in regional Australia. That means that all Australians, no matter where they live, will be able to access the Internet at the cost of a local call. Again, I know that Senator Brownhill has made a lot of submissions on that. As well, we are putting in $20 million to expand regional telecommunications in remote and isolated island communities, particularly on Cocos (Keeling) and Christmas islands, Norfolk Island and even down in Antarctica. The money we get from the sale of Telstra will be put back into that telecommunications infrastructure.So it is a great initiative. I just wish the Labor Party would not be so negative. They opposed the sale of Telstra; they opposed the sale of a further 16 per cent of Telstra. They do not want any of these infrastructure reinvestments. As Cheryl Kernot said, of course, if Labor were in government she would be worried about them selling it. I would be worried, too, not about the fact that they were going to sell it but that if they sold it, they would just put the money back into recurrent expenditure. They would not put it into the infrastructure that is so desperately needed. I do ask the Labor Party to think about that. I know that presenting policies might involve a policy reversal for many in the ALP, but I do urge it upon them.BH4HILLSenator Hill—Madam President, I ask that further questions be placed on the Notice Paper .Questions Without Notice9818981815:06:009818Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—I have some additional information for Senator Allison, which was requested on 14 October. I wish to table it.5K4FAULKNER Senator Faulkner—Madam President, I raise a point of order. Senator Newman has tabled that material and she is entitled, of course, without the leave of the Senate to do so. Can I suggest, Madam President, given this is extra information in response to a question—and I am not directing this specifically at Senator Newman; I notice this is a trend that has developed over recent sitting weeks and months—I really do think that the appropriate course of action for an answer providing further information to a question that has been taken on notice by a minister is that that particular answer should be incorporated in the Hansard record. It is an important part of the record and is directly in response to a question without notice that has been asked in this place.I do not specifically address the concerns about what Senator Newman has done on this occasion, but it is a pattern that is developing that is outside the spirit of the way this place has worked previously. I think more details of an answer to a question without notice that has been taken on notice by a minister should be incorporated in Hansard for the benefit of all senators—and, frankly, for the public record. It is very difficult to access this material if it is tabled. I think it is appropriate on this occasion, and on subsequent occasions—as I say, I do not make this specific to Senator Newman—that further information be incorporated in the Hansard. 981915:08:009819Evans, 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.I want to concentrate my remarks in particular on the questions I asked of Senator Newman relating to the child-care services provided to our defence forces. The minister claimed to know nothing about the changes that are occurring in child-care services provided to the defence forces, and I accept that on face value. It is not her primary responsibility so that may well be the case. As I understand it, the defence forces have undertaken a program of contracting out, of privatising, the child-care services they provide to defence forces personnel and their families to a company called Kindergarten Union Services. This is part of a rationalisation of the child-care services provided to defence forces personnel and their families.What I do know, from the information I have from clients of the child-care services and from the staff of the centres, is that, in addition to the privatisation measures, there will be fewer places available at defence forces child-care establishments. The centre I mentioned, in Swanbourne in my own state of Western Australia, is having its numbers cut from 47 to 28 places, and I understand there are similar reductions in services at other centres in Australia. I also know that the level of Commonwealth defence department subsidy to those establishments is being reduced and that the services have been told they will have to rely on less Defence Force subsidy. The impact of all this is that the capacity of these child-care centres to provide respite care and emergency care services is going to be reduced because they will be licensed for fewer places and they will have less staff.As I understand it, the services currently provide care for children of families other than defence forces personnel to keep their numbers up. But what is of most concern to me—and it has been raised with me by the wife of a member of the defence forces—is that the capacity of these child-care centres to service the needs of families when troops are involved in action overseas will be diminished. The partner of the woman who wrote to me is currently on active service in Bougainville, and I understand there are a number of families of those currently serving in East Timor who are now seeking services from these centres.There is a serious public policy issue here. As I said, I understand that originally child care was provided inside defence forces establishments not purely because of the transitory nature and the other demands of serving in the defence forces but also because of the need to assist families to respond to situations quickly. These are people who are often living away from family and friends in communities other than their normal communities. Obviously, when a partner is sent overseas on active service or is deployed in some other way, the strain on the family can be an unusual one and they require extra services.The families of defence services personnel who have raised these concerns with me are concerned that these rationalisations will limit the capacity of defence services child-care services to meet the needs of the service families who are making such a huge commitment to our efforts in East Timor, in Bougainville and in other parts of the world where Australia has committed troops, either in advisory or in active duty roles. It is a very serious issue. I appreciate that the minister is going to come back to me, but I think there is a real concern that the government's broader child-care policies of reducing funding for child care, of reducing places, and of removing the priority of providing good quality child care in Australia is now being seen in the Defence Force as well. The contracting out of the service, the reduction in places and the reduction in funding are symptomatic of what has been happening in the general community, and now it is starting to affect Defence Force families, including the families of Defence Force personnel serving in East Timor and Bougainville. That is clearly not a desirable thing. We ought to be offering these families as much support as possible, but there is concern that these cutbacks in child care will impact on the families adversely.15:13:009820Patterson, Sen KaySenator PATTERSONLI4VICLP10—Today we hear members on the other side talking about child care in general, and in particular about child care for Defence Force families. It often behoves us to go back in history to have a look at what happened when Labor was in government. I want to read out a notice of motion that Senator Newman gave on 2 May 1989. It reads:(i) late in 1988 the child care centre at RAAF Base Point Cook closed down through lack of funds,(ii) both the Hamilton Report in 1986, and the Cross Report in 1988, pointed out the special need amongst service families for the provision of child care,(iii) in April 1988, the then Minister for Defence Science and Personnel (Mrs Kelly) announced her intention of formulating child care policy guidelines before the August 1988 Budget,(iv) no such guidelines were announced,(v) the Children's Service Program which was announced in the 1988 Budget contained no specific provision for child care for Defence families, and(vi) for 3 years the Federal Government has chosen to ignore the recommendations of the Hamilton Report, but has nevertheless sought to encourage employer-based child care in the public and private sectors by offering to fund 24 per cent of the running costs of 1000 centres, but no Defence Force centres; and(b) condemns the Government's blatant hypocrisy on the issue of child care for Defence families, and calls on the Government to end its neglect to immediately adopting Cross Committee Recommendation 17 child care in its response to the Report on Personnel Wastage in the Australian Defence Force of the Joint Committee on Foreign Affairs, Defence and Trade.They are hoist with their own petard. There is Labor's record summarised by Senator Newman—and they have the gall to get up here today and to talk about child-care facilities for people in the defence forces.It helps to have a little look back through history and to remind the Labor Party of their record on child care. Their record was that child-care facilities were growing up around Australia inappropriately—in the wrong places, not necessarily based on need and out of control. There were no child-care facilities where they were needed in rural and regional areas, whereas child-care facilities were expanding in areas where there was not the same need.The government's strong commitment to child care has been shown. We have spent in the order of $3 billion over the last three years—20 per cent more than Labor's last three years in office—and there will be an allocation of around $5.3 billion over four years to 2002-03, including an additional $600 million over three years from 2000 to 2001 with the introduction of the child-care benefit.The opposition have made outrageous claims about child-care fee increases. Those claims have been exaggerated and based on the small but more expensive community sector. Contrary to Labor's claims, the community sector represents about only 30 per cent of children in long day care centres. As Senator Newman said in answer to a question to her today, fees are set by child-care operators, not by the government. In fact, the rate of fee increase for centres has halved under this government. It was increasing under Labor by 8.5 per cent per annum and it has been increasing under this government by four per cent per annum.We also need to remind those opposite that the government contributes significantly to the child-care costs of low and middle income families. For low income families with two children in full-time care, the government assistance is around 75 per cent of the average fee in centres and around 80 per cent of the average fee in family day care. Families with children win under the coalition's policies in a number of ways. They win because we have a child-care policy which not only ensures that child care is being delivered in areas where it was not being delivered before but also takes into account the need for after school child care.I remind honourable senators on the other side that, when they come in here and make the sorts of claims they do, it might just pay them to go back and have a little look at their record. I think the example I have given today of the treatment of the RAAF Base at Point Cook and the fact that child care in Defence Force centres was neglected under previous defence ministers—under Minister Kelly, for example—demonstrate that it is a case of the pot calling the kettle black with this opposition. They ought to look to themselves. They should find some policies of their own and get on with being an opposition. (Time expired)15:18:009821McLucas, Sen JanSenator McLUCAS84LQldALP00—I rise to speak to the motion to take note of the responses by Minister Newman to questions she was asked during question time today. First of all, I would just like to note that the example that Senator Patterson gave us is, I understand, some 11 years old. Quite a bit of water has gone under the bridge since then.I wish to make some comment about the government's attitude to Australian women, especially women with children. Firstly, let us have a look at child care. Minister Newman, along with her Liberal colleagues, regularly trumpets the slogan of offering families more choice through the government's changes to child-care funding. With the removal of $850 million from the child-care budget, Australian women with children are not facing the choice of what sort of child care they may access but the choice of participating or not participating in the work force. I remember very clearly a parents' meeting in 1997 where women were discussing the impacts of the cuts in child care. A young mother of two children, on understanding how her family would be affected, came to the realisation that she simply could not afford her child-care expenses, and she said, `I don't think the Prime Minister wants me to work.' I think she was right.Traditionally, women have more of a broken work pattern due to their child bearing commitments. But with less access to child- care support, women's work patterns will increasingly become more interrupted, impacting on women's career development and realisation of the potential for women's full participation in the work force. The arguments around choice in child care, according to the government's point of view, are in fact no choice at all.I turn now to the impact on women of the leaked Kemp proposals on changes to higher education funding, especially the impact in regional areas. At James Cook University, based in Townsville and Cairns, 38.5 per cent of the undergraduate population is over 25 and, of these, 67 per cent are women. Women from regional and remote areas traditionally have taken up tertiary education later than those who come from the city areas. This is why the Kemp plan is going to be so damaging for regional universities and, in particular, women who attend them.I ask: will a woman with children—and the inherent responsibilities that those children bring—a mortgage and other family commitments take the plunge and enrol at university in the knowledge that, at the end of that time, she will end up with a bill of $100,000 or more? I think that the answer is pretty clear: a woman with family responsibilities will be provided with another of the coalition's famous choices. Her choice, on the one hand, will be to undertake a university degree, with the laudable object of broadening her education and improving her employment options, but ending up with a loan at real interests rates adding up to some $100,000. On the other hand, her choice will simply be to not take up university study at all. There is no choice under the Kemp plan and there is no choice for women in rural Australia. Last week, Anne Harding, of the National Centre for Social and Economic Modelling, warned that higher tuition fees could affect home ownership patterns. Women will be very unlikely to take on a debt of $100,000 which could jeopardise their access in the future to home ownership.These cuts in access to child care and the limiting of access to higher education options add to the list of changed policies which have affected women during the life of this govern ment. They add to the loss of 55 per cent of funds from the Human Rights and Equal Opportunity Commission, which weakens the ability of women to deal with discrimination matters, both in a personal and a more general sense. They add to the cuts in funding to peak women's bodies that we heard about last week and the transfer from operational funding to project grants. Women can rightly question this government's views on their contribution to our community, and they will come up with the answer that this government does not care about women, especially women of child-bearing age.15:23:009822Mason, Sen BrettSenator MASON84MQLDLP10—I will briefly mention the government's record, Labor's failure and some of the background to Labor's claims that government is forcing families out of formal care. Finally, if I get the chance, I will address Senator McLucas's claims that the government is opposed to child care and has cut expenditure.The government has committed about $5.3 billion to child care up to the year 2000-03. By that year, expenditure is expected to reach about $1.5 billion annually. This expansion will provide about an additional 70,000 places. Child-care funding has been re-focused away from the nature of a centre, be it private or community-based, and onto the circumstances of the family. That was a deliberate policy. As Senator Patterson said before, the operational subsidy was focused on community-based centres, which supply only 28 per cent of child-care places. This meant that some 72 per cent of users failed to benefit from the assistance. Under Labor, the growth of child care went unchecked: there was no formal operational subsidy, there was no formal planning, resulting in oversupply in some areas and undersupply in others.There are claims that the government is forcing families out of formal care, but there is no evidence to that effect. Child-care rebate figures show that the proportion of families claiming for informal care has fallen from eight to six per cent since its introduction in 1994. In fact, the number of children using child care has increased significantly from 460,000 in 1994-95 to over 544,000 in 1996-97.Senator Patterson touched on the issue of quality in child care. Quality assurance is fundamentally important to this government in many areas, including child care. A review of the system of accreditation and quality improvement for long day care centres has been under way for some time in order to strengthen and improve its efficiency. This system has been acclaimed by many experts and governments of other countries. It was recently noted by the Australian Confederation of Childcare Centres that we should be proud of the standard and quality of our Australian services. Seventy-two per cent of long day care centres have undergone quality improvement and accreditation and have been granted the maximum three-year accreditation status. Quality assurance has been extended to family day care and outside school hours care, and that is critically important to this government.The thesis of the motion to take note this afternoon is that the government is opposed to child care and has cut expenditure. The government's strong commitment to child care is demonstrated by several things: first of all, spending in the order of $3 billion in the last three years—20 per cent more than in Labor's last three years in office; secondly, with the introduction of the child-care benefit, the allocation of around $5.3 billion over four years to 2002-03, including an additional $600 million over three years from 2000 to 2001; finally, expenditure is expected to reach about $1.5 billion annually by 2002-03.Senator McLucas made a point about access to higher education for rural men and women, in particular women. Senator Macdonald has touched on this important issue. As we heard when this matter was debated last week, the entire notion of tertiary education does not hinge on tertiary education fees per se; it hinges on how many places are available for tertiary education. This government has a very proud record in that it has drastically expanded the number of tertiary education places in this country. As far as the idea of $100,000 fees is concerned, the US voucher system has been repudiated by the Prime Minister, the Minister for Education, Training and Youth Affairs and Senator Ellison. The government does not support it, but does support tertiary education fees along the HECS line that we currently have because that system has increased the number of places available, increased access and has made many more places available to men and women in rural and regional Australia.15:28:009823Denman, Sen KaySenator DENMANFY5TASALP00—I wish to speak to the motion that the Senate take note of the answers given by Senator Newman on child care, particularly as they relate to the electorate of Bass. Recently I drew the chamber's attention to a problem a sole parent had in securing child care and the real possibility that that person would have her working hours reduced because options were not available to her. I related that to the situation in the north-west coast of Tasmania, where I live. Since then, the member for Bass, my colleague Michelle O'Byrne, has conducted a survey in her electorate, and this is what I want to focus on.The Minister often maintains that there has been no drop in funding for child care, yet seven out of the eight centres in Bass have certainly lost money, and I will list those and the percentages they have lost. I have the results of the survey here, and I will go through some of the other issues later. I also want to put on record that this is an authentic survey and the responses have been collated and produced in a document.The Stewart Street child-care centre lost over 11 per cent; the Dame Marjorie Parker centre lost 36 per cent; the Bungawitta Child Care Centre lost 49 per cent; the Children's Playhouse lost 32 per cent; the Pedder Patter lost 51 per cent; the Tasmanian university lost over 45 per cent; and the Watchorn Street centre lost 52 per cent. There was only one place with an increase: Gordon Square centre received an increase of just over $16,000. The statistics that were contained in the question that I asked Senator Newman this afternoon were from that survey and from the department.Senator Newman and the government need to be aware that in quite a number of cases child care is now costing more than a private school for children in first year. I know that is true because my niece sends her children to a private school down south, out of Hobart, because it is cheaper than putting them in child care.The Howard government's reason for abolishing the operational subsidy was an attempt to force community based centres to become competitive with private centres which did not receive an operational subsidy. The private centres claimed that it was not a level playing field and they were forced to charge higher fees in order to be viable. As a result, they were not considered competitive within the industry. While this is logical, it is not the case in Tasmania. We have made that point time and time again. Tasmania is not in line with mainland states and therefore this sort of logic—or otherwise—does not apply to Tasmania. In the north-east, where the member for Bass did her survey, there are eight centres with only three private centres operating. Therefore, parents do have problems and not a lot of choices.I will go through some of the questions that were asked in the survey and the responses that were received. One of the questions was what the average number of days per week was that you used a child-care centre. The response was 3.5. The average cost to the family was $118 per week. Tasmania is a depressed economy—and I think Senator Newman made mention of that—so those sorts of amounts of money are difficult for some Tasmanian families to access. The response for the average number of children in child care was 1.5. The number of centres surveyed in that survey was four. We need to look very carefully at this issue, particularly in Tasmania. Sixty-nine per cent of the people who responded said that they used alternative forms of child care. (Time expired)15:33:009823Tchen, Sen TsebinSenator TCHEN86YVicLP10—I rise to speak on this motion proposed by Senator Evans to take note of the answer from Minister Newman on child care. Senator Evans's question specifically referred to supposed cuts in child-care centres serving defence families. However, he conceded that there may not be any cuts because the cuts may reflect actual demand, but he still has concern generally in view of the government's broader policy of reduced child care. That particular statement is incorrect. The government has a very strong commitment to improving child care.Senator Patterson, in response to Senator Evans's argument, raised the dismal record of the former Labor government in the way they dealt with provision of child care facilities, particularly in relation to the needs of defence families. I do not wish to dwell too much on the record of the previous Labor government because to argue that we start from a low base is not a productive argument. There is no point in debating how badly the community was served by the previous government. Rather, we should look at how this government is serving the community better.Senator McLucas made the throwaway comment that Senator Patterson's information seemed to be quite a few years out of date and that a lot of water had gone under the bridge. She is precisely right—a lot of water has gone under the bridge since the Labor government departed. In the last three years, the Howard government has increased spending in the child-care area by up to $3 billion, which is 20 per cent up on the Labor government record in the last three years they were in government. So there is no question that we have cut spending at all; we have actually increased spending substantially.It is important to note that the government's policy in the child-care area is not limited to throwing money at the issues. Apart from increasing spending, the Howard government has also focused on increasing the possibility of choices for families. This comes in the form of the introduction of child-care benefits, so that the money goes directly to the family and they can have the choice of the type of child care that they wish to put their children in. The allocation of the child-care benefit will be around $5.3 billion over four years from this year onwards, including an additional $6 million over three years from 2000-01.Another element in the government's policy is the increase in real support for low and middle income families, because it is the low income and middle income families which have real need for child-care support. For low income families with two children in full-time care, the government assistance is around 75 per cent of the average fee in centres, and the figure is around 80 per cent of average fees in family day care centres.The fourth element of this government's initiative, which the Labor government in their 13 years never addressed, is to improve quality assurance. As Senator Mason mentioned, 72 per cent of long day care centres now have been granted accreditation status for three years. This is something desperately important. It is not just a case of providing money for child-care centres; it is important that the child-care centre actually operates and provides services to the children in its care. It is not just a matter of counting the number of children or the amounts of money spent per child; it is the quality of care that is the most important thing. (Time expired)10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—The time for the debate has expired.Question resolved in the affirmative.982410001CLERK ASSISTANTThe Clerk—Petitions have been lodged for presentation as follows:98242510000VICE-CHAIRMANTo the Honourable President of the Senate 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 to independence.We therefore petition the House to require the Government and all responsible Ministers to: Withdraw Australia's original de jure recognition of Indonesia's annexation of East Timor; Suspend Australia's remaining military ties with Indonesia; Support calls for international institutions to suspend all financial assistance to Indonesia; Advise the Indonesian Government to direct forthwith the Indonesian Army to disarm the pro-Jakarta militia in East Timor; and Advise the Indonesian Government to authorise forthwith the UN to dispatch a peacekeeping force to East Timor And your petitioners, as in duty bound, will ever pray.the President10000the President(from 25 citizens)98253484LMcLucas Sen JanTo the Honourable the President and members of the Senate in Parliament assembled:The petition of the undersigned shows their concern of the proposal by the QFMA for a total closure of the collection of the Black teat species of Sea Cucumber and the cut of quota for the White teat species which would have an adverse effect in the industry.Your petitioners request that the Senate agree to a partial closure for the Black teat in the Cairns Section only and no change to the quotas for the White teat species.Senator McLucas84LSenator McLucas(from 34 citizens)9825610000VICE-CHAIRMANTo the Honourable the President and members of the Senate in Parliament assembled.The Petition of the undersigned shows: The need for amendments to the Commercial Television Industry Code of Practice to better reflect the community's standards.We the Petitioners therefore ask that the Senate urgently address the following issues:(1) That commercials and promotions are the same as or of a lower classification as the program being shown, regardless of the time of day or night that the program is being televised. (Refer Codes of Practice, Section 3 on Program Promotions).(2) That the Australian Broadcasting Authority be given the power to enforce penalties, i.e. `on the spot' fines when the Codes of Practice are breached.(3) That a `HOTLINE' be established as per Recommendation 3 made by the Senate Inquiry of February 1997, as stated: (a) a telephone/fax Hotline be re-introduced by the ABA for the public to register complaints about television programs. The Hotline could work in a similar way to the one operated by the former Australian Broadcasting Tribunal. And (b) that the ABA report on the operation of the Hotline in its annual report.(4) General (G) Classification zones (refer Codes of Practice, Section 2.12) the times be changed to: Weekdays 6.00am—8.30am and 3.00pm—8.30pm Weekends 6.00am—8.30pmParental Guidance Recommended (PG) Section 2.14, to be changed to: (Everyday) from 7.30pm—8.30pm to 8.30pm—9.30pm.the President10000the President(from six citizens)Petitions received.Notices98259825Senator Ferris to move, on the next day of sitting:That the Parliamentary Joint Committee on Native Title and the Aboriginal and Torres Strait Islander Land Fund be authorised to hold a public meeting during the sitting of the Senate on 20 October 1999, from 3.30 pm, to take evidence for the committee's inquiry under section 206(d) of the Native Title Act.Senator Knowles to move, on the next day of sitting:That the Community Affairs Legislation Committee be authorised to hold a public meeting during the sitting of the Senate on 21 October 1999, from 3 pm till 7 pm, to take evidence for the committee's inquiry into the Social Security Amendment (Disposal of Assets) Bill 1999.Senator Murphy to move, on the next day of sitting:That the Economics References Committee be authorised to hold a public meeting during the sitting of the Senate on 20 October 1999, from 3.30 pm, to take evidence for the committee's inquiry into the operation of the Australian Taxation Office.Senator Bartlett to move, three sitting days after today:That the Senate—(a) notes: (i) the passage in the New Zealand Parliament of a new Animal Welfare Act which contains specific protection for non-human hominids (also known as great apes), (ii) that the Act prohibits the use of all great apes in research, testing or teaching unless such use is in the best interests of the non-human hominid or other members of this family, (iii) that this protection is based on scientific evidence that great apes share not only human genes but also basic human mental traits, such as self-awareness, intelligence and other forms of mental insight, complex communications and social systems, (iv) that there are five great ape species: chimpanzees, bonobos, gorillas, orang- utans and humans, and all are in the same genetic family, (v) the statement by the New Zealand Minister for Food and Fibre, Mr John Luxton, that New Zealand is the first country in the world to legislate in this way, (vi) that the number of great apes has declined dramatically due to measures such as deforestation, commercial bush-meat trade, live trade, and civil conflicts, with all non-human great ape species being listed as threatened, and (vii) the claim by the Great Ape Project International that more than 3 000 individual apes are held in captivity around the world; and(b) calls on Australian governments to give consideration to following the lead of the New Zealand Parliament.Senator Cooney to move, on the next day of sitting:That the time for the presentation of the report of the Standing Committee for the Scrutiny of Bills on search and entry provisions in Commonwealth legislation be extended to 8 December 1999.Senator Bartlett to move, two sitting days after today:That the Senate—(a) notes: (i) reports of statements by the Minister for Immigration and Multicultural Affairs (Mr Ruddock) that Kosovars currently in Australia on safe haven visas faced the prospect of being placed in immigration detention if they do not leave Australia by 30 November 1999, and (ii) calls by the Labor Premier of Tasmania, Mr Bacon, and the Liberal Premier of South Australia, Mr Olsen, for those Kosovars who wish to stay in Australia to be allowed to; and(b) supports: (i) the calls by Mr Bacon and Mr Olsen and calls on the Minister not to forcibly deport any Kosovars currently in Australia on safe haven visas, and (ii) those Kosovars who do not yet wish to return to Kosovo being given the dignity of gaining some control over their lives by being provided with the same rights as anyone else in Australia to apply for other visas in the normal manner.15:38:009826Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I give notice that, on the next day of sitting, I shall move:That the provisions of paragraphs (5) to (7) of standing order 111 not apply to the following bills, allowing them to be considered during this period of sittings:Equal Opportunity for Women in the Workplace Amendment Bill 1999International Tax Agreements Amendment Bill 1999Telecommunications (Interception) Amendment Bill 1999.H15Campbell, Sen IanSenator IAN CAMPBELL—I also table a statement of reasons justifying the need for these bills to be considered during this sittings and seek leave to have the statement incorporated in Hansard .Leave granted.The statement read as follows—EQUAL OPPORTUNITY FOR WOMEN IN THE WORKPLACE AMENDMENT BILL 1999Purpose of the BillTo amend the Affirmative Action (Equal Employment Opportunity for Women) Act 1986 as follows:. adopt the following title and terms: the Equal Opportunity for Women in the Workplace Act 1999, the Equal Opportunity for Women in the Workplace Agency, and the Director of Equal Opportunity for Women in the Workplace;. insert an objects clause;. provide for reporting to be done biennially, rather than annually as at present;. provide an expanded system of waiving the reporting requirement for specified periods of time for organisations that satisfy particular criteria; and. replace the requirement for reporting on specified steps with a requirement for reporting focused on outcomes, based on actions taken to eliminate discrimination and promote equal employment opportunity.Reasons for urgencyThe Affirmative Action (Equal Employment Opportunity for Women) Act 1986 was reviewed in 1997-98 as one of a number of scheduled legislative reviews implementing the Government's commitment to the 1995 Competition Principles Agreement. This Bill implements the Government's response to the recommendations made by the independent review committee.The Bill will reduce the regulatory burden which the legislation currently places upon business and at the same time better ensure equal opportunity for working women. For this reason, the Bill is an important measure in meeting the Government's election commitments to the business community and to women, and should be progressed without delay.(Circulated by authority of the Minister for Employment, Workplace Relations and Small Business)INTERNATIONAL TAX AGREEMENTS AMENDMENT BILL 1999Purpose of the proposed measureThe Bill will allow domestic law effect to be given to double taxation agreements with South Africa, Slovakia and Argentina, and an Amending Protocol to our existing double taxation agreement with Malaysia.Reasons for urgencyThe double taxation agreement with South Africa was signed on 1 July 1999 and the Amending Protocol to the double taxation agreement with Malaysia on 2 August 1999, the double taxation agreement with Slovakia was signed on 24 August 1999, and the double taxation agreement with Argentina was signed on 27 August 1999. Failure to have introduction and passage, followed by royal assent, exchange of Notes and entry into force of the respective treaties by 31 December 1999 will mean that the treaties will not be able to take effect in domestic law in January/July 2000 (ie. at the earliest possible dates) but will be delayed for a full calendar year until January/July 2001, to the detriment of affected taxpayers.Result if Bill not dealt with in these sittings :There will be a one year delay in the treaties coming into domestic law effect, to the detriment of those who have, for example, invested abroad and who will benefit from reduced withholding taxes in those countries. In the case of the Malaysian Protocol, Australian taxpayers will continue to suffer unrelieved double taxation for a further year in respect of fees for technical services they receive from Malaysia.(Circulated by authority of the Treasurer)TELECOMMUNICATIONS (INTERCEPTION) AMENDMENT BILL 1999Purpose of the proposed amendmentsThe principal purposes of the proposed Bill are:. to enable nominated members of the Administrative Appeals Tribunal (the AAT) to continue to issue warrants authorising Commonwealth and State law enforcement agencies to intercept telecommunications and Commonwealth law enforcement agencies to use listening devices; and. to include the Anti-Corruption Commission of WA (ACC) and the Crime Commission of Qld (QCC) as intercepting agencies.Reasons for seeking Introduction and passage in the same sittingsThe provisions enabling nominated members of the AAT to issue interception and listening device warrants are subject to a sunset clause (s.3 of the Telecommunications (Interception) and Listening Device Amendment Act 1997) which terminates the power of nominated AAT members to issue warrants at the end of 1999.The administrative function of issuing warrants cannot be conferred on judges of the Federal or Family Courts without their consent. Most judges have withdrawn their consents because they consider the function is incompatible with their judicial duties. There has been no indication that the federal judges are likely to change their views. Therefore, if the provisions conferring warrant-issuing powers on nominated AAT members are allowed to expire, there will be no authority available to issue interception and listening device warrants. This will seriously impede the ability of police and other law enforcement agencies to deal with major crime, particularly offences involving the importation and trafficking in prohibited drugs. This outcome would also be likely to have an adverse impact on Commonwealth-State relations.The ACC was established by the Anti-Corruption Commission Act 1988 (WA). It deals with corruption, crime and serious improper conduct by "public officers". The WA Government is particularly concerned about police corruption in that State and wants the ACC to have full interception powers as soon as possible. The QCC was established under the Crime Commission Act 1997 (Qld). It has a responsibility to investigate criminal paedophilia and organised crime. Similarly to WA, the Queensland Government urgently wants the new Crime Commission to be fully equipped with appropriate powers to fight organised crime in that State.(Circulated by authority of the Attorney-General)15:39:009827Tambling, Sen GrantSenator TAMBLING6E4NTCLP10—I give notice that, on the next day of sitting, I shall move:That the Senate—(a) notes that 19 October 1999 is the 25th anniversary of the election of the first fully-elected Parliament of the Northern Territory; (b) commends the Northern Territory Legislative Assembly for its continuous advocacy and responsibility in parliamentary matters of debate and constitutional achievement;(c) recognises the contribution to the Northern Territory made by the Northern Territory Country Liberal Party, the majority party since 1974, the Northern Territory Australian Labor Party, the opposition party since 1977, and various minor party and independent members of the Legislative Assembly;(d) appreciates the ongoing need for close partnership between the Federal and Northern Territory parliaments and governments to achieve further economic advancements and social development for the Northern Territory community; and(e) congratulates the people of the Northern Territory on the significant progress that has been made since 1974, both economically and socially, but recognises the ongoing disadvantage of some sectors of the community, particularly Aboriginal people.6E4Tambling, Sen GrantSenator TAMBLING—I will be absent tomorrow, attending a special session of the Legislative Assembly. I trust that motion will be put in a formal manner by this parliament.Senator Brown to move, on Wednesday, 20 October 1999:That the following bill be introduced: A Bill for an Act to amend the Customs Act 1901 to prohibit the importation of radioactive substances for storage in Australia.Customs Amendment (Anti-Radioactive Waste Storage Dump) Bill 1999 .982815:40:009828Coonan, Sen HelenSenator COONAN2M6NSWLP10—On behalf of the Standing Committee on Regulations and Ordinances, I give notice that at the giving of notices on the next day of sitting I shall withdraw business of the Senate notice of motion No. 3 standing in my name for six sitting days after today for the disallowance of Determination No.1/1999—Determination of Education and Courses made under subsections 3(1) and 5D(1) of the Student Assistance Act 1973; and business of the Senate notice of motion No. 5 standing in my name for six sitting days after today for the disallowance of the Hearing Services Amendment Rules of Conduct 1999 (No.1), made under subsection 17(1) of the Hearing Services Administration Act 1997. I seek leave to incorporate in Hansard the committee's correspondence concerning these instruments.Leave granted.The correspondence read as follows—Determination No.1/1999—Determination of Education and Courses, made under subsections 3(1) and 5D(1) of the Student Assistance Act 197326 August 1999The Hon David Kemp MPMinister for Education, Training and Youth AffairsParliament HouseCANBERRA ACT 2600Dear MinisterI refer to Determination No.1/1999—Determination of Education and Courses made under subsections 3(1) and 5D(1) of the Student Assistance Act 1973 . This Determination specifies those education institutions and the courses offered therein which are approved for the purposes of the Act.The Committee notes that despite having been made on 22 June 1999, the Determination is deemed to have commenced on 1 July 1998. Unfortunately, the Explanatory Statement does not provide any indication of whether this retrospectivity may adversely affect any person other than the Commonwealth. If such is the case, then the Determination is rendered of no effect by section 48(2) of the Acts Interpretation Act 1901 . The Explanatory Statement is also silent on the issue of whether the Determination which is revoked by this instrument, and which was apparently defective, operated to the disadvantage of any person.The Committee would be grateful for your advice on these matters.Yours sincerelyHelen CoonanChairSenator Helen CoonanChairStanding Committee on Regulations and OrdinancesParliament HouseCANBERRA ACT 2600Dear SenatorThank you for your letter of 26 August 1999 concerning my Determination No. 1/1999 under the Student Assistance Act 1973.You have asked for clarification as to whether the typographical error in the revoked Determination No 2/1998 or the retrospective application of Determination 1/1999, which I made to correct the error, operate to the disadvantage of any person.By way of background, the Education Minister's Determination of education institutions and secondary and tertiary courses under the Student and Youth Assistance Act 1973 was used, up until 30 June 1998, to specify courses that students were required to be undertaking to be eligible for Department of Employment, Education, Training and Youth Affairs AUSTUDY payments delivered through Centrelink. The AUSTUDY scheme was replaced, from 1 July 1998 by the Youth Allowance, Austudy, and Pensioner Education Supplement payments. While these payments are administered by the Department of Family and Communications,unity Services, continuity of financial assistance to students was maintained as these payments are also delivered through Centrelink.To coincide with this change, the Student and Youth Assistance Act 1973 was amended to become the Student Assistance Act 1973 and a new Determination (2/1998) was made under this Act with effect from 1 July 1998. This Student Assistance Act Determination is referred to in the Social Security Act 1991 to identify courses that students must be undertaking to be eligible for the Youth Allowance or Austudy as full time students and to identify courses that certain pensioners and allowees must be undertaking to be eligible for the Pensioner Education Supplement. The Determination is also referred to in my policy guidelines to identify courses for the payment of ABSTUDY and the ABSTUDY Pensioner Education Supplement.The new Determination 2/1998 was not intended to change the coverage of courses approved for student assistance as previously provided for under AUSTUDY. On close inspection, however, it was discovered that the definition of "higher education institution" and the definition of "non-government higher education institution" in the Determination were in error. They referred to "paragraphs 34(3)(b)-(h) (inclusive)" of the Higher Education Funding Act 1988 where they should have referred to paragraphs 34(4)(b)-(h) (inclusive) of that Act to maintain coverage of the Australian Defence Force Academy, the National Institute of Dramatic Art, and the Australian Film Television and Radio School.The intention of the reference was clear, and payments of student assistance to students continued as if the typographical error in the reference to the Higher Education Funding Act 1988 had not been made in Determination 2/1988.The error in the reference did not result in the inclusion of any additional education institutions under the Determination or the payment of income support to students in courses contrary to Government policy.The retrospective application of my Determination 1/1999, correcting the error from the date of effect of Determination 2/1988, is beneficial and there will be no losers under the new Determination.Yours sincerely(Sgd) DAVID KEMPHearing Services Amendment Rules of Conduct 1999 (No.1), made under subsection 17(1) of the Hearing Services Administration Act 199726 August 1999The Hon Michael Wooldridge MPMinister for Health and Aged CareParliament HouseCANBERRA ACT 2600Dear MinisterI refer to the Hearing Services Amendment Rules of Conduct 1999 (No.1) made under subsection 17(1) of the Hearing Services Administration Act 1997 , which prescribe fees for the maintenance and replacement of hearing devices that have been supplied to voucher-holders free of charge.Schedule 1 to the Rules provides for a fee of $30 for the maintenance and replacement of batteries in a device that has been provided free of charge to a voucher-holder who is a participant in the voucher system. Prior to the making of this instrument, a person who was a voucher-holder, and a dependant of a participant in the voucher system, paid a reduced amount for the maintenance and replacement of batteries in a hearing device that had been provided free of charge to the voucher-holder (Hearing Services Rules of Conduct 1997, subparagraph 20(2)(c)(ii), as in force up to 30 June 1999). One effect of the amendment made by these Rules is to remove the reference to this category of person from the Rules of Conduct. Unfortunately, the Explanatory Statement to the 1999 Amendment does not refer to that fact, nor provide a reason for it.The Committee would be grateful for your advice.Yours sincerelyHelen CoonanChairSenator H. CoonanChairStanding Committee on Regulations and OrdinancesParliament HouseCANBERRA ACT 260022.9.99Dear Senator CoonanThank you for your letter to the Honourable Dr Michael Wooldridge MP, Minister for Health and Aged Care, concerning the Hearing Services Amendment Rules of Conduct 1999 (No. 1) made under subsection 17(1) of the Hearing Services Administration Act 1997. Your letter has been referred to me as the Minister for Aged Care with portfolio responsibility for Hearing Services.The amendments will give effect to new measures announced in the 1999-2000 Federal Budget for the Hearing Services Program, these include the payment of an annual maintenance fee of $30 for all voucher-holders for the replacement of batteries and the maintenance of a hearing device that has been provided free of charge to voucher-holders. Eligible dependants of voucher-holders are voucher-holders.This increase in the annual maintenance agreement fee is in line with CPI movements since 1991 when the maintenance fee was set at $25 (or $20 for eligible dependants). The increase is applicable to all participants in the voucher system, including eligible dependants of voucher-holders.Item 2—will amend Subrule 20(2) by inserting definitions for the circumstances and conditions under which a hearing device may be replaced and the fee payable, and the fee payable for an annual maintenance agreement for all participating voucher-holders.Under the Commonwealth Hearing Services Program all eligible clients receive an equitable level of service as an individual. It is very important to note that the annual maintenance fee of $30 provides clients with excellent value for money for repairs and batteries for their hearing aids. The cost of maintaining a hearing aid and purchasing batteries would be a significant financial burden for clients. The Office of Hearing Services estimates that the annual cost for batteries would be $40—$60, and is aware that a hearing aid repair can cost between $60—$120.For the annual maintenance fee the hearing service provider will supply and fit batteries, clean and service the hearing aid. replace any worn or broken parts and arrange for major repairs.Yours sincerely(Sgd)BRONWYN BISHOP9830Senator Chris Evans to move, on the next day of sitting:That the Senate—(a) notes that, in the interests of an open and informed public debate on social welfare reform, the Minister for Family and Community Services (Senator Newman) should provide all documents relating to the proposed social welfare changes outlined in the discussion paper that she was to have released during her speech on 29 September 1999; and(b) requires that the Minister lay on the table, no later than 3 pm on 20 October 1999, all documents prepared by the Department of Family and Community Services relating to the social welfare changes outlined in the discussion paper or the paper itself, including: (i) any assessment of the impact of the proposed social welfare changes on each federal electorate, (ii) any assessment of the impact of the proposed social welfare changes on various socio-economic groups, and (iii) any costings or modelling done on the proposed social welfare changes.Senator Bartlett to move, on the next day of sitting:(1) That the Senate: (a) notes the failure by the Minister for Family and Community Services (Senator Newman) to comply with the orders of the Senate of 30 September 1999 and 13 October 1999 to table the welfare reform discussion paper originally prepared for her Press Club speech on 29 September 1999; and (b) resolves that, until such time as the Minister purges the contempt in which she has held the Senate by tabling the document, question time on each day is to continue until 8 opposition and 3 Democrats questions, not including supplementary questions, have been asked.(2) This resolution is to remain in force until either the document is tabled or until the last sitting day of 1999, whichever is earlier.9830Items of business were postponed as follows:General business notice of motion no. 340 standing in the name of Senator Allison for today, proposing an order for production of Commonwealth-State agreements, postponed till 19 October 1999.General business notice of motion no. 345 standing in the name of Senator Woodley for today, proposing an order for the production of a document by the Minister representing the Minister for Transport and Regional Services (Senator Macdonald), postponed till 20 October 1999. General business notice of motion no. 311 standing in the name of Senator Carr for today, relating to the Victorian state election, postponed till 22 November 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 22 November 1999.Documents9831983110000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—In accordance with the provisions of the Public Service Act 1922, I present the annual report of the Joint House Department for 1998-99.Committees98319831983115:45:009831Cooney, Sen BarneySenator COONEYSF4VICALP00—I present report No. 26 of the Joint Standing Committee on Treaties entitled An Agreement to extend the period of operation of the Joint Defence Facility at Pine Gap , together with the Hansard record of the committee's proceedings and minutes of proceedings, and I seek leave to move a motion in relation to the report.Leave granted.SF4Cooney, Sen BarneySenator COONEY—I move:That the Senate take note of the report.This is a report that was a long time in coming from the committee—not so much because of the issue involved, which was whether or not there ought to be a continuation of the facility at Pine Gap, but mainly because of the difficulty the committee had in getting evidence about the issue so that it could make up its mind whether the facility was in the national interest of Australia. People would probably say, particularly given our present situation in East Timor, that of course Pine Gap is an essential facility and any facility that continues its functioning out of Alice Springs ought to continue.But that was not the issue. The issue in this case was whether or not evidence that could be used by the committee to say whether or not it was a good thing should be forthcoming from the Department of Defence and the Department of Foreign Affairs and Trade. It was the perception of the committee—and this is reflected in the report—that there should have been more evidence forthcoming from government. Of course defence facilities, instruments, that are used in the furthering of our defence ought to be handled delicately and with proper secrecy provided for them—secrecy against those who might want to know about them, because if the information becomes available the defence of our shores is somewhat prejudiced. But that is not the point. There is a point to which the committee should be able to go so that it can give the Senate and the people of Australia the results of its considerations, so that it can say, `Yes, there is sufficient evidence here for us to say that this is a good thing or a bad thing and it ought to be modified in a particular way.'What happened in this case was that the Department of Defence and the Department of Foreign Affairs and Trade did not cooperate with the committee to the point that was reasonable. As a result of that, the committee has reached the conclusion that the agreement between the United States and Australia should be continued, but it did not recommend in the way that it would have been able to do had the evidence that should have been made available to it been made available. The committee has said that there ought to be a system of protocols set up to enable that balance between what is proper for a committee, a parliament and the public to know and what is proper to be kept secret.There are other conclusions and Senator Schacht has a suggested remedy. The only problem I see with his remedy is that part of it requires permission to be given by the Minister for Defence before information to be obtained by a committee that he suggests should be set up passes it on. What has me a little concerned about that—no doubt Senator Schacht will cover it when he speaks—is that it still leaves the problem that we have now, that the Minister for Defence can say yea or nay as to what information the Treaties Committee, which the parliament has set up, is to have available to it.Hopefully, there will be some sense shown by everybody over this issue and, as time goes by, precedence and understandings will be developed whereby parliament can perform its duty to the country and the Joint Standing Committee on Treaties can do its work. This has, hopefully, been a learning experience for us all. I hope, and no doubt the other members of the committee hope, that from now on a greater degree of cooperation will be shown by the Department of Defence and the Department of Foreign Affairs and Trade than was the situation in this case.I acknowledge the work done by the whole committee because in this inquiry it had to work its way through some very difficult issues. I think we have come a long way as a committee with respect to the matters I have already raised. I also pay tribute to the secretary, Grant Harrison, and the inquiry secretary, Cheryl Scarlett, who had to do a lot of the work and feeling-through that went on in this inquiry. I am sure there are other people who want to speak about this matter, so I shall cease my remarks at this point.15:51:009832Coonan, Sen HelenSenator COONAN2M6NSWLP10—The review of the agreement to extend the period of operation of the joint defence facility at Pine Gap has undoubtedly posed the most thorny problem the Joint Standing Committee on Treaties has yet faced. I have been on the committee almost since its inception and certainly within my recollection that is a true statement.The problem arises out of the conflict between the duty of the committee to inquire and report to parliament on whether it is in Australia's national interest to become a signatory to a treaty and what I might call the secret nature of security agreements such as the Pine Gap extension agreement which traditionally, of course, restricts the information and would restrict the information that would be required to enable the committee to carry out its function and to form a considered view. The dilemma I think is particularly acute.The treaties committee has been charged by parliament to review all proposed treaty actions tabled in the parliament. This is an unambiguous and an unqualified duty, and there I think the problem arises. What the committee faced was a paucity of information from the Department of Defence about the purpose and operation of the joint defence facility. We were told really no more than was already publicly available and received no departmental evidence from which we could affirmatively conclude that the agreement should be extended. The most pertinent evidence given to the committee was provided not by the department but by Professor Paul Dibb of the Strategic and Defence Studies Centre of the ANU and Professor Des Ball of the same institution, who gave his evidence in a private capacity.Pine Gap was described as being of critical importance not only to the United States but also to the Australian government and its defence and intelligence agencies. The upshot is that the committee received no evidence which would have entitled the committee to reject the continuation of the joint defence facility and in fact, in my view, it would have been irresponsible of the committee had we not supported the continuation of the agreement in principle. However, it does very starkly point up the incompatibility between the adequacy of parliamentary scrutiny and the interests of national security, between accountability on the one hand and secrecy on the other. This clearly does need resolution.A moment's reflection indicates that from the executive's point of view there are reasons to limit the extent to which classified defence and intelligence information is divulged and to whom it should be divulged. At stake is no less than Australia's political, strategic and security interests, and the committee is mindful of that, but transparency not secrecy is a hallmark of a robust, modern parliamentary democracy. Clearly there must be a better balance struck between executive decision making and parliamentary oversight.A matter of some concern to the committee is the fact that information denied Australian parliamentarians is apparently available to designated United States Congress members, including the House of Representatives and Senate committees on intelligence, armed forces and national security and even some budget committees. I would not wish the Australian public to get the impression that there is no political oversight of the joint defence facility in Australia—far from it. The national security committee of cabinet is seized of this surveillance and of course comprises various members of the executive and indeed members of the opposition. The Leader of the Opposition certainly is briefed and perhaps the shadow minister as well. It is simply not, however, within the committee's view to speculate on the adequacy or otherwise of such operational oversight. The point to be made is that these oversight arrangements are quite different from and should not be substituted for treaty review responsibilities that parliament has entrusted to the treaties committee; it is a very different function.As I see it, the real issue here is: how can the treaties committee responsibly carry out its function of scrutiny of sensitive security agreements? The majority report has recommended that, apart from a proper briefing and the receipt of proper information that would enable the committee to form a conclusive and considered view, as well the Minister for Defence and the Minister for Foreign Affairs and indeed the treaties committee develop a protocol that will obviate the problem that we faced on this occasion and will set out arrangements for proper briefings and the receipt of otherwise sensitive information. This is something that I commend to the government. It is very important that that go ahead.In concluding my remarks about this particular aspect of the report, I wish to reiterate that in my view the treaties committee has been a stand-out success of the coalition government. It does fulfil a very important role to allow community consultation, accountability and accessibility on treaty making that was sadly absent. As I said, I commend the recommendation to the government.Along with Senator Cooney, I commend all members of the committee who, in a very responsible way, grappled with this problem constructively. I do not agree with the recommendations of the minority report that provides that, if a full briefing provision of the classified agreement and on-site access is not provided, then a joint national security committee be established. I know that some members of this parliament have long argued about the need for a parliamentary oversight committee of that kind and I make no comment about that because there may well be very good arguments for it but, in terms of linking it to the function of the treaties committee, I think that it pre-empts the government's response to what are well-considered recommendations made by the majority in the report of the committee. Even if the national security committee were to be instigated, it simply would not relieve the treaties committee of its obligations unless its terms are amended to exclude security treaties from its terms of reference. So I think in many respects it is a redundant recommendation. However perhaps well intentioned and well thought out, it is not one that I support.I conclude by reiterating that this was something that we as a committee grappled with in a responsible way. I do not think there is any suggestion that any member of this committee would do anything other than treat sensitive information in a responsible way. However, it is necessary to consider the balance in these matters. No doubt we will be reporting back to the parliament on future occasions about this matter.16:00:009833Schacht, Sen ChrisSenator SCHACHT4J4SAALP00—I rise to speak to the tabling of this report of the Joint Standing Committee on Treaties on the extension of the Pine Gap agreement. As Senator Coonan and Senator Cooney have mentioned, there is a dissenting report, which I have put my name to. I agree with both of them that the full committee grappled with the philosophical basis of how we could handle agreeing to overview an agreement when we were not given full information about what was in the agreement. This is the fundamental issue.Much, if not all, of the majority report in description I cannot disagree with. I disagree only with the final recommendation that the agreement to extend the Pine Gap arrangements go ahead. I believe the minority report has the best way of dealing with this, which defends the rights of the Australian parliament and its absolute sovereignty over these issues, whether it is the treaties committee or the parliament itself. That is, until the executive government agrees to allow the members of the Treaties Committee to have a classified briefing on the details of what is in the agreement and the operation of Pine Gap, as well as allow us to visit and see the operation of Pine Gap on Australian soil, we should not sign the agreement. If we get the information given to us from the government that Professor Des Ball gave to us, I would imagine it would be unanimously agreed that, in our national interest, we continue with Pine Gap. Des Ball himself said that he would recommend the agreement be extended and that, in our national interest and in the interests of world peace, Pine Gap is a very useful facility. I do not disagree with that.The joke was—and this is a real joke—that we could make that decision based only on the advice given to us by a non-government person. If we relied on the advice given to us by the department, or the non-information given to us by the officers of the department under the direction of the minister, and if we had not had Des Ball's advice, we could not have made the decision with the same confidence. Therefore, we find it inappropriate that a parliamentary committee and the parliament approve a treaty—make a comment about a treaty and its contents—which we are denied access to. Senator Coonan has quite rightly pointed out the ambiguity of this position. Either we exclude treaties like the Pine Gap treaty from the work of the treaties committee, so we do not put ourselves in the invidious position of approving something we cannot read or get briefed about, or we change the rules and the committee members get a decent classified briefing and accept the responsibility as committee members that we are dealing with sensitive matters which cannot be publicised, as do the ASIO committee and the NCA committee.We have already established in this parliament that there are committees that deal with very sensitive classified matters and they have not leaked in detail in any way to the wider public to the detriment of Australia's national interest. I think it is an absolutely rude suggestion to say that we cannot trust members of parliament elected by the people—that we cannot be trusted with the national interest. Sooner or later at the senior level of government, at the executive level, the parliament has to be trusted.The parliament carries the appropriation bill that funds our contribution to the running of Pine Gap. We are asked: `Why did you approve the money?' We say: `We weren't told, but just trust us.' In the end you do need parliamentary scrutiny. We need that for the other security agencies such as ASIS, for which we are always told at estimates we can only be given a one-line figure. Labor and Liberal governments have done the same. We get no other information other than that we spend X amount on ASIS. There should be a national security committee, a standing committee of the parliament, that accepts the responsibility to overview the national security agencies of Australia, including Pine Gap, ASIS, JIO, ONA and the other agencies that provide advice—because they spend government money.But I have to mention what I find particularly objectionable about the Pine Gap agreement. If you are an American congressman or senator on the appropriate committee of the American parliament, not only do you get a briefing about what goes on at Pine Gap on an operational basis in broad terms; you are invited to go to Pine Gap, on Australian soil, and get a conducted tour to show you what goes on inside that facility. But Australian members of parliament at any level—other than members of the executive on the national security committee—are denied access to visit a facility on Australian soil. I find that particularly objectionable. On our own soil we are precluded from visiting a facility which members of a foreign parliament, albeit a friendly one, are able to get a briefing on. They have been getting regular briefings and visits for the last 20-odd years, and we are denied that request.Both Labor and Liberal governments have had this attitude, but time has moved on. The treaties committee has exposed the ludicrous arrangement we now have. Now is the time for the adjustment to be made. If the government cannot agree, as we say in our minority recommendation, to allow the treaties committee to get a briefing about Pine Gap so that we can study the agreement, we then have to establish a national securities committee of the parliament to oversee it on a regular basis, and that committee would have to make its report. Therefore, we do have, separate from the executive, scrutiny of very important facilities and expenditure of money in Australia.When we were told by Des Ball—not by the government—that not only is there an overhead agreement but also there are subsidiary agreements, protocols and arrangements that are secretly signed between Australia and America over Pine Gap, members of the committee asked: how can we judge this treaty on its national interest even in broad terms when we are told there are secret arrangements and agreements underneath it?I do not have any objection to those arrangements. I suspect they are operational and are there for a very good purpose. But unless you can give a briefing to the appropriate committee, how can you justify that committee approving something when it knows not what is in the agreement or what its operation entails? I would imagine that, if we were given a briefing as a committee, members would accept their responsibility—that they cannot leak the material. If they did leak it, the parliament would have every right to deal individually with that senator or House of Representatives member—through a severe penalty imposed by the appropriate chamber on someone who leaked something against the national interest. I think that penalty is big enough to make sure any member of the committee accepted that responsibility. So I do not think that it is good enough to say, `All the members of parliament are a potential security risk.' That is insulting to the sovereignty of the Australian people, who elect all the members of both houses of this parliament.I hope that the government, in a bipartisan way with the opposition, can work these issues through so that, in the near future, either the treaties committee will get the briefing or—just as importantly—we can establish a national security committee of this parliament with specific rights to get a briefing about what is going on in these arrange ments. That is in the long-term national interest of Australia but, above all else, it shows we have a transparent and democratic arrangement whereby the people of Australia, through their elected members, are trusted with matters of the national interest.16:09:009835Ludwig, Sen JoeSenator LUDWIG84NQldALP00—I wish to add a few short words in relation to the proposed agreement between Australia and the United States to extend the period of operation of the joint defence facility at Pine Gap from November 1998 to November 2008. A national interest analysis was prepared in support of the proposed treaty action. It described the facility as an intelligence gathering facility. Review has been difficult and time consuming. The test applied by the committee—and it is appropriate for it to do so—is to ask whether the proposed action is in Australia's national interest.The facility has been in operation since 1966. However, the defence department, in providing a national interest analysis, did not provide the range nor the depth of information that has been presented by other departments with other national interest analyses. As a consequence, it was considered that the committee's deliberations were at a disadvantage. When called upon to perform the treaty review functions, there seems to be a very strong disposition on the part of the defence department to maintain the level of secrecy surrounding the site, which sits at odds with the functions of the committee. This dilemma must be rectified if the value of the treaty review process is to continue.The recommendations of the committee are that: firstly, the Minister for Defence authorise his department to provide the treaties committee with such information and access as would allow us to determine whether the treaty action is in Australia's national interest; and, secondly, the minister, in conjunction with the Minister for Foreign Affairs and the committee, develop a means of ensuring more constructive and parliamentary consideration of sensitive security related treaties into the future. It seems clear from the report that all members were inclined towards the continuation of the joint defence facility, as it is in Australia's national interest. The principal support has been given. However, it was not unqualified, because of the lack of cooperation received by the defence department.It seems that the differences that emerged during the committee's deliberations have led to ways of resolving the dilemma that has been confronted. The methodology adopted by other members to resolve the dilemma has merit but, on balance, it is not in my view a cogent argument. When viewed in the proper perspective, the minority report sits by and large in agreement with the majority report. There are far more points of agreement than of opposition. The main argument advanced by all is that it is clear that the government must move to right the problem that has arisen. I seek leave to continue my remarks later.Leave granted; debate adjourned.983610000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Knowles)—The President has received letters from party leaders seeking variations to the membership of certain committees.Motion (by Senator Ian Campbell)—by leave—agreed to:That senators be appointed to and discharged from committees as follows—Environment, Communications, Information Technology and the Arts References Committee Participating member: Appointed: Senator Schacht.Finance and Public Administration References Committee Participating members: Appointed: Senators Hutchins and Lundy for the committee's inquiry into business taxation reform. Substitute members: Senators Cook and Conroy to replace Senators Lundy and Hutchins for the committee's inquiry into business taxation reform.Bills9836r924Billsr7729836Bills received from the House of Representatives.16:13:009836Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I indicate to the Senate that those bills which have just been announced are being introduced together. After debate on the motion for the second reading has been adjourned, I will be moving a motion to have the bills listed separately on the Notice Paper . I move:That these bills may proceed without formalities, may be taken together and be now read a first time.Question resolved in the affirmative.Bills read a first time.983616:14:009836Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I move:That these bills be now read a second time.I seek leave to have the second reading speeches incorporated in Hansard .Leave granted.The speeches read as follows—INTERNATIONAL TAX AGREEMENTS AMENDMENT BILL 1999This bill will provide legislative authority for the domestic entry into force of three new comprehensive double taxation agreements (with South Africa, Slovakia and Argentina), and an amending protocol to our existing agreement with Malaysia. The bill will insert the text of each of the agreements and the protocol into the International Tax Agreements Act 1953 as schedules to that act.The agreement between Australia and South Africa was signed on 1 July 1999, whilst the Malaysian Protocol, the Slovak Agreement and the Argentine Agreement were all signed during August 1999.Details of these agreements and the protocol were announced and copies made publicly available following the respective dates of signature.The new agreements generally accord with the other comprehensive taxation agreements concluded by Australia in recent years. The agreements and the protocol incorporate revised Alienation of Property Articles which are designed to overcome the adverse decision of the Full Federal Court in Commissioner of Taxation v Lamesa Holdings BV. The agreements with South Africa and Argentina are the first double taxation agreements to be concluded by Australia with an African and a South American country respectively and the agreement with Argentina will, in particular, benefit Australian companies with mining interests in Argentina.The Malaysian Protocol will operate to relieve Australian residents of double taxation on fees received for consultancy and other services supplied that are utilised in Malaysia, with effect from the 1993-94 income year.It and an associated exchange of letters will also extend the operation of the tax sparing measures in the Malaysian Agreement to relevant income derived during the 1984-85 to the 1991-92 income years. Those measures apply in relation to certain income derived by Australian residents that Malaysia exempts or taxes at a reduced rate under special development incentive provisions and had previously operated only up to the 1983-84 income year.The Government believes the conclusion of these new agreements and protocol will go a long way to strengthening of trade, investment, and wider relationships between Australia and each of these countries.The agreements and protocol will enter into force respectively when diplomatic notes are exchanged advising that all of the necessary domestic processes to give them the force of law in each country have been completed. The enactment of this bill, and the satisfaction of the other procedures relating to proposed treaty actions, will complete the processes followed in Australia for those purposes.It is not possible to accurately predict the eventual effect of these agreements and the protocol on the revenue, but it is not expected to be significant.Full details of the amendments are contained in the explanatory memorandum.I commend the bill.HEALTH INSURANCE AMENDMENT (DIAGNOSTIC IMAGING SERVICES) BILL 1999The bill addresses the problem of how people in rural and remote Australia can access high quality diagnostic imaging services through doctors who are not specialists, mainly general practitioners. At the same time, it seeks to treat fairly general practitioners across the country who have been supplying diagnostic imaging services to their communities for a number of years.The amendments proposed to the Health Insurance Act 1973 address these two issues by the introduction of a program of continuing medical education and quality assurance for medical practitioners providing diagnostic imaging services.As a condition of their exemption from the requirements placed on diagnostic imaging practices, these medical practitioners will now be required to participate in continuing medical education and quality assurance programs.The design of this program has been jointly agreed between The Royal Australian College of General Practitioners, The Australian College of Rural and Remote Medicine and The Royal Australian and New Zealand College of Radiologists.The amendments ensure that communities more than 30km from a radiology practice, continue to have access to such services through general practitioners and that those services are now provided for the first time under a quality assurance program. The amendments also impose the same conditions on general practitioners operating under the pre-existing diagnostic imaging practices' exemption.The new arrangements will be implemented in such a way as to ensure maximum continuity of service for the community.Ordered that further consideration of the second reading of this bill be adjourned till the first day of the summer sittings 1999, in accordance with standing order 111.Ordered that these bills be listed on the Notice Paper as separate orders of the day.Bills9837r6469837Message received from the House of Representatives returning the Regional Forest Agreements Bill 1998, disagreeing to the amendments made by the Senate, making an additional amendment to the bill and requesting concurrence in the additional amendment made by the House.Ordered that consideration of the message be made an order of the day for the next day of sitting.Bills9837r6709837Consideration resumed.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Knowles)—The committee is considering amendments (R8), (9) and (10) on sheet 1592 revised. The question is that the amendments be agreed to.16:15:009838Murray, Sen AndrewSenator MURRAY3M6WAAD00—I will conclude the remarks I began before we broke for question time. The Australian Democrats can see value in giving securities dealers the ability to certify investors as sophisticated and in allowing them to invest without the offerer of securities having to provide a very expensive prospectus document. Our amendments propose to retain the requirements of the provisions currently in the bill but add two further requirements. Firstly, the securities dealer will be obliged to give prospective investors a written statement of the dealer's reasons for being satisfied of the matters previously mentioned. Secondly, it will be a requirement that the prospective investor has signed a written acknowledgment that the person has not been given a disclosure document in relation to the offer.We believe that these additional safeguards, combined with the sanctions already imposed on securities dealers if they should abuse this provision, will work to minimise and potentially eliminate the risk of the occurrence of an event that Senator Conroy fears. Accordingly, I commend these three amendments to the committee.16:16:009838Conroy, Sen StephenSenator CONROY3L6VICALP00—I have a question for the government through Senator Campbell. When a licensed securities dealer represents a party in raising venture capital funds, does the legislation have a limit on how much he could raise from the investors it has defined as sophisticated and not require any disclosure documents? If there is no limit, doesn't this allow any party to raise as much capital as they want without providing disclosure documents if they raise it through a licensed securities dealer?H15CAMPBELLSenator Ian Campbell—There is no change to the existing law in that respect; the law remains the same.3L6Conroy, Sen StephenSenator CONROY—I thought this was a new category, though. Maybe I am wrong, but I thought there was a new category which opens up a capacity for people to go through.16:18:009838Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I did talk about it before the adjournment for question time. The existing category is section 66, which is basically about exemptions from the prospectus provisions. What this law reform does is put in place a series of hurdles that people must jump over. The current category is a very broad one. It basically means all you have to do is invest $500,000 and you are subject to an exemption. It does not put any restriction on whether you are a securities dealer or not. At the moment someone who is just going out to try to raise money for a company can get the benefit of section 66; they do not need to be a licensed securities dealer.What we are actually doing is saying that you have to deal through a licensed securities dealer to get the benefit of this exemption. It is not a restriction that applies under the current regime. The current section 66 allows anyone to go out and raise money in this way; you do not need to be licensed. We think that it is an enhancement of protection for investors to require a licensed dealer to have to firstly warrant that you are a sophisticated investor. That is not required under the current section 66, which has been in place since 1990, when the new law came into place.16:19:009838Conroy, Sen StephenSenator CONROY3L6VICALP00—I thought the existing regime had a $2 million, 12-month rolling cap.Senator Ian Campbell interjecting—3L6Conroy, Sen StephenSenator CONROY—I do not think I am explaining myself particularly well.16:20:009838Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I will just summarise it, if that will help. I will reiterate it as briefly as I can. Under the current regime, section 66 basically means that, if you offer someone securities, you have to sell them more than $500,000 worth and then you are exempt from the prospectus provisions. Under our provisions, we are saying you need something more sophisticated than that, particularly in the regime where, as you have rightly said, there will be a lot of people, probably in the next decade, for whom $500,000 will not actually be that much money.It still sounds like a hell of a lot of money to a poor underpaid member of the Senate, but you made a very sensible remark about people who get superannuation lump sum payouts or people who might inherit a family home in the capital cities of Australia. There are lots of typical family homes—particularly homes in the older suburbs that used to be working class suburbs, which are now becoming gentrified, spruced up and refurbished—that will easily be worth more than $500,000. There are going to be a lot more average Australian families who may well come across $500,000, so we regard the exempted provisions of the prospectus law to be very unsophisticated now. They are really saying that, if you have $500,000 to invest, you can get it taken off you by a company promoter.We are saying: let us be more sophisticated about the sophisticated investor test and put in an assets level. We have chosen $2 million. You could argue about an arbitrary figure like that until the cows come home, but we have selected $2 million in assets as a fairly significant amount. We have selected an income test as well, which is $250,000 a year—again an arbitrary amount which you could argue about until the cows come home. We have put in another protection—that is, an accountant has to actually warrant that this is what you have got or this is what you receive. We have also put in an alternative category that says a licensed securities dealer—who already has onerous provisions placed upon his conduct in relation to his relationship with his customers, one of them being the know your client rule—can then warrant that you are a sophisticated investor.The Democrat amendments which I think we are now debating I have no worries about accepting. I think the provisions as they stood were reasonable, but I think that Senator Murray's amendments say that the sophisticated investor has to provide a statement of assessment to the person who has an offer put to them and warrant that they have received that. So there is basically a paper trail there and an assessment process that has to be gone through. They are all significant improvements for investor protection, above what has been the case in the law for at least the past 10 years and probably longer than that.16:23:009839Cooney, Sen BarneySenator COONEYSF4VICALP00—I have a question for the parliamentary secretary. I understand what he says about the licensed dealer, but there is always a problem with a person giving you advice about the suitability of an investment and looking at your situation to see whether you come within the criteria where that person is also the person who is going to sell you the security. I know that in recent times a law has come in where a person who is guaranteeing another, for example, in some situations comparable to this, must get independent legal advice. If we as a parliament are going to go through the exercise that we are now and set out the considerable number of tests that we are, no matter whose legislation is accepted, why don't we go a step further and take up the pattern that is set by those who are going guarantor for investors and simply ask that the investor be given independent advice by somebody other than a licensed dealer who may be promoting the scheme?16:24:009839Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—We are dealing here with what has generally been an exemption from the prospectus provisions. The general provisions really say that we mandate that an investor must have seen a prospectus. This is the provision we are dealing with where we are saying that if you are sophisticated, if you can make assessments of risks and other information, then you can be exempted from that. I think the general idea that you are putting is totally in agreement with the philosophies of the government and ASIC in relation to providing information to investors. What we are doing here is creating a carefully balanced improvement and reform of what has been known as the exempt provisions of the prospectus law. At the moment I regard them as very broad and unsophisticated. They basically say that, if you have got $500,000, you can receive offers from anybody. Anybody who goes around wanting to raise a bit of capital to sell off any sort of scheme can make an offer to anyone, subject only to the very broad and unsophisticated test that they might have $500,000 to invest. We think that the approach we have taken significantly improves investor protection in this exempt category.16:26:009840Conroy, Sen StephenSenator CONROY3L6VICALP00—You are saying this is tighter than the existing system, which restricts the minimum subscription per person. What is happening now is that that is being got rid of. So you are describing a part as tighter, but the point I am getting to is that you are opening up access to a greater range of people because you are getting rid of the $500,000. If you have been defined as a sophisticated investor through this new whizzbang system, you are now able to get less than the $500,000. The concern which I have articulated and which you have conceded, or everyone seems to be in agreement with, is that people are going to be coming into this set of circumstances more readily than they have in the past. The example of inheriting a house is the perfect one. Certainly in some parts of Melbourne at the moment we are trying to outdo Sydney for lunacy on house prices, as I can personally attest.3M6MURRAYSenator Murray—Will the prices go up or down with the new government?3L6Conroy, Sen StephenSenator CONROY—Prices are only going up in Victoria due to the marvellous new government that they are about to get.H15CAMPBELLSenator Ian Campbell—I will respond.3L6Conroy, Sen StephenSenator CONROY—I have not quite finished making my point yet. It states under `Exemptions' that there is no doubt about the basic rule of part 7.12, division 2, that a person shall not offer for subscription or issue invitations to subscribe for securities of a corporation unless, under the first dot point, a prospectus in relation to the security has been lodged with the commission. The second point is that the minimum subscription per person is at least $500,000. We are allowing access through this sophisticated investor decision, which is a decision that is taken by the licensed securities dealer.I have to say that, given the way the legislation works, you are likely to see some behavioural shift. People are going to move out of the other mechanisms into the licensed security dealer stream, if I can refer to it that way. I actually think a significant amount of profitability is going to come from being a licensed dealer. I am also interested in how you get to be licensed. Who looks after those licences? There is actually going to be an economic benefit accrue, arising out of this legislation. I am sure that is no surprise to the licensed investment dealers of this country. Would it be the Securities Institute? I would be interested in who is in charge of this licensing regime, given that there is now substantial economic benefit likely to flow into this particular stream. The fundamental point that I am trying to get to is that you keep describing this as a tighter scheme than what we have got now. I cannot see that. I am surprised that you actually want to have much of an argument about this in terms of the controversy around it and do not know why you don't just close off this particular loophole. You now do not have to provide a prospectus for less than $500,000. Are you saying no, you don't, or yes, you do?If you have been defined as a sophisticated investor, you no longer have to be provided with a prospectus at all. The difference is that you are now opening up to subscriptions of less than $500,000. That is a substantial difference. That is the category I have been trying to get to, in my clumsy way. If you are trying to say that a macro level has all these tightenings, then I am saying that, no, in this one particular stream where there is a substantial economic benefit that will flow to licensed security dealers—it seems—you have opened up a less stringent set of rules. I am trying to get an understanding of that, so you might want to respond to that at this point, and I might have more questions.16:30:009840Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—It is a very important area and they are very good points. At the moment, if you want to receive an offer of securities without a prospectus— for instance, if someone comes and says, `I have an automatic ironing machine and I want to set up Automatic Ironing Machine Ltd, and I need $5 million to do it'—under the current laws you could find 10 people who could put in $500,000 each. On the face of it, it looks like if you have $500,000 to invest you are probably pretty sophisticated. That is the way the law is coined. It basically says that if you have half a million dollars to invest then you are sophisticated enough to figure out whether you are going to get duped into a silly investment. The cold, hard reality, however, is that a promoter of a company can go and literally find a so-called mum and dad these days who have $500,000, or access to it through mortgaging their home or whatever. It is very easy at the moment for anyone, not just a licensed security dealer but a totally unlicensed shark, really—3L6CONROYSenator Conroy—You have to buy a prospectus; that is the difference.H15Campbell, Sen IanSenator IAN CAMPBELL—No, you do not. As long as you are raising $500,000 from something the law says that you are sophisticated. What we are saying is that the exempt provisions have helped some companies get started but the trouble is that, even if you have a start-up company or a venture capital company that may be a very good idea, even very wealthy business angels in Australia will not necessarily put half a million dollars into a start-up venture. We believe that it is also a significant reform to say that if you have in place all these other investor protections saying that if you either have $2½ million in income—and I correct the Hansard because I have been saying $2 million is the assets test and we actually put that up to $2.5 million after consultation—$250,000 in income, or you can be warranted by a licensed security dealer as being a sophisticated investor, you can actually then invest less than the $500,000. We think that is sensible reform. Why, on any basis, you would say that just because you have $500,000 to invest you are sophisticated and therefore should not need to receive a prospectus we think is a silly and arbitrary law. That is why we are changing it.To answer a question you asked, securities dealers are licensed by ASIC. Most Australian stockbrokers and people like that are licensed securities dealers. We anticipate that it will be stockbrokers in the first instance who will use this provision. The stockbrokers we have consulted with, to a man and a woman, are already talking about putting in place a very sophisticated paper trail to cover their backsides in the event that an investor comes back to them and says, `Hang on, you said I was sophisticated. I put $50,000 into the automatic ironing machine and it didn't work. I wouldn't have done it because I wasn't really that sophisticated, but you said I was.' That is why I think Senator Murray's amendment, in many respects, is a good idea: the stockbrokers themselves were talking about putting that in place in the first place. The risk of them certifying that someone is sophisticated for the purposes of this provision and doing so in a frivolous sort of manner, or doing so because they just want to get someone to sign off, is that they will lose their licence. Their licence, as Senator Conroy has indicated, is a very important thing to them. They are very hard to get. They are not going to want to lose it. We think this does provide some more flexibility in the regime. It means that you do not have to have half a million dollars to invest, but you have to pass a potential series of other tests to do so. We think we have significantly improved investor protection.Senator Conroy is suggesting that we should just scrap this altogether. I do not think he is suggesting that we should scratch section 66, because that would be a significant backward step; it would in fact make venture capital raising in the less than $10 million zone almost impossible in Australia. But, going forward into the next decade, where there are going to be a lot more Australians with half a million dollars available to them, through mortgaging their existing property, inheriting one or getting a lump sum super benefit or whatever else, it is very important that we put in place a strict investor protection regime that does encourage venture capital raising.16:35:009841Conroy, Sen StephenSenator CONROY3L6VICALP00—Thank you, Senator Campbell, that was informative. I am not sure you actually helped your case. I thought you started off by arguing my case, or proving my case. If I could return to your automatic ironing machine example, where I have a concern is that a licensed security dealer hired by the company to go out and find the money can now contact every single investor of less than $500,000 that they have on their books, or put an ad in the newspaper—maybe there is an advertising restriction; I am being general in my description—and raise money and never have to provide the prospectus for what they are raising the money for to the people who they are raising the money from. The example that comes to my mind—and it is not a direct parallel—is Crown. Crown kept going back to the market and raising money all the time. There were arguments all the time about continuous disclosure and whether they were telling the complete truth. That, now, is transferred down the line to where you can get a securities dealer who maybe needs only $5 million. All of a sudden the company has a problem and does not quite work the way it was meant to. They can just keep on going, raising money from all these suckers to put into this company, without anyone ever realising that there was a problem—because he never has to declare it, through the prospectus or any other documentation.I am not really coming at this from the individual losing their money. I am now more concerned about the integrity of the market in terms of the impact of one dealer who could just keep going back and saying, `Here—I have this great project. Here is my initial set of documents. All I want you to do is put in another $250,000.' You put in another $250,000, and you could raise 30 of them, as the company makes loss after loss after loss, for reasons that are perfectly reasonable. I am just trying to get an understanding. You have a limit on one side, and I suggest that perhaps there should be a limit on the other side. Perhaps you could assist.16:38:009842Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—There is a whole series of protections in the law to stop people from being able to do that. There are the misleading conduct provisions, for example. The licensed securities dealer, in the first place, has to go through all of the requirements under 708(8)(c), which reads:. . . the dealer is satisfied on reasonable grounds that the person to whom the offer is made has previous experience in investing in securities that allows them to assess—And it goes through all of the different requirements. That is what has got to happen in the first place. As far as advertising goes, they are not allowed to do that. That is already against the law. If they make any false and misleading misrepresentations, they are breaching the law. If they do not make proper disclosures to ASIC through their accounts, they breach the law. There are the accounting standards provisions, which we are about to get to, which are a breach of the law.Virtually every single matter you raised is covered by existing provisions, and sometimes enhanced provisions, of the law. What you are looking at here is a significant improvement on the current provision whereby some people are exempted, because they are sophisticated, from the provisions of prospectuses. Instead of having a blanket exemption for anyone who may possibly have $500,000 to invest, we are saying, `Here is a range of sophisticated tests as to whether or not you can receive offers if you are sophisticated.' These provisions do not apply to the great bulk of Australian investors. The great bulk of Australian investors will have to receive a prospectus.16:40:009842Conroy, Sen StephenSenator CONROY3L6VICALP00—I guess I could best describe it by saying that, up until now, the parliament has set a standard for the capacity to access funds. I have a corporate law book in my hand, and it talks about—Senator Ian Campbell interjecting—3L6Conroy, Sen StephenSenator CONROY—That is right. That is the point: this is now setting a different standard, in one stream, because you now do not have to provide the prospectus to people you used to have to provide it to. So the parliament now, if it supports this particular aspect, is actually supporting a lowering of a standard of information to the market. I am concerned that this goes to the integrity of the whole market. I am not just talking about an individual investor's potential losses or potential problem. There is a lessening of integrity in the whole market. I guess we are going to agree to disagree, and we will have to wait until the first legal case in this area before you will possibly recognise that we have lowered the standard, that some people will lose money, and that the market's integrity is being lowered by this proposition.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Knowles)—The question is that the amendments (R8), (9) and (10) on sheet 1592 revised be agreed to.Question resolved in the affirmative.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—We will now go back to postponed opposition amendment No. 27. The question is that the amendment be agreed to.Question resolved in the affirmative.16:43:009843Murray, Sen AndrewSenator MURRAY3M6WAAD00—I formally withdraw Democrat amendment No. 7 in view of the fact that opposition amendment No. 27 has been passed. I seek leave to move Democrat amendments Nos 1 to 5 on sheet 1580 together.Leave granted.3M6Murray, Sen AndrewSenator MURRAY—I move:(1) Schedule 2, item 1, page 339 (line 12), omit "Chairman", substitute "Chair".(2) Schedule 2, item 1, page 346 (lines 23 to 27), omit "Chairman" (wherever occurring), substitute "Chair".(3) Schedule 2, item 1, page 347 (line 12) to page 348 (line 9), omit "Chairman" (wherever occurring), substitute "Chair".(4) Schedule 2, item 1, page 348 (line 10) to page 349 (line 21), omit "Chairman" (wherever occurring), substitute "Chair".(5) Schedule 2, item 1, page 349 (line 22) to page 350 (line 21), omit "Chairman" (wherever occurring), substitute "Chair".Briefly, these amendments relate to gender neutral language. They require the use of the term `chair' rather than `chairman' wherever it occurs in the bill. Throughout the history of these amendments, all non-government parties and Independents have supported them. Most recently, the Labor Party supported these amendments with the Public Service Bill. These amendments are consistent with amendments which were accepted in the Corporations Law 1998, and they are consistent with amendments which have been established within the Acts Interpretation Act.16:45:009843Conroy, Sen StephenSenator CONROY3L6VICALP00—The opposition will support these amendments.Amendments agreed to.16:45:009843Murray, Sen AndrewSenator MURRAY3M6WAAD00—I move Democrat amendment No. 12 on sheet 1592 revised:(12) Schedule 2, item 1, page 346 (after line 4), after subsection 235B(1), insert: (1A) The report must include details of any change to the AASB's priorities or business plan that was made as a result of action taken by the FRC.Amendment No. 12 deals with the position of the AASB—the Australian Accounting Standards Board. The amendment will require the AASB's annual report to note changes to the AASB's priorities and business plan as a result of action by the FRC—the Financial Reporting Council. The Corporate Law Economic Reform Program Bill 1998 presently requires the FRC to approve and monitor the AASB's priorities and business plans. The ALP propose that the FRC should be able to advise and monitor only in relation to the AASB's priorities and business plan. The Australian Democrats take the view that it is appropriate for the FRC to approve the priorities and business plan of the AASB, which is contrary to the view of the Labor Party.As the legislation states, the FRC's role is to broadly oversee the process of accounting standards setting. The AASB's role is to create accounting standards. We think that the FRC should have more than an advisory role. We do not share the fears of the opposition, and we are not concerned that the FRC will somehow force the AASB to pursue an inappropriate agenda. However, we do recognise the potential for disagreement between the two bodies when it comes to setting priorities in the development of the business plan. We do not see that isolated disagreements present a problem, but we would be concerned if there were constant fighting between the oversight body and the standards setter. That is the reason that we formulated Democrat amendment No. 12, which requires the AASB's annual report to include the details of any change to the AASB's priorities or business plan as a result of action taken by the FRC. The reporting of changes to priorities as a result of action by the FRC will provide a good indication as to whether the FRC is trying to inappropriately direct the path of the AASB.Another point which must be made in the context of this amendment is that we intend to support opposition amendment No. 30 on sheet 1414. That amendment will specifically provide that the FRC does not have a power to direct the AASB in relation to the development or making of a particular accounting standard. Nor will the FRC have the power to veto a standard formulated by the AASB, and that preserves the essential independence which the AASB needs to have in the area of standards setting. So the FRC will not have any day-to-day control over the operations of the AASB, and any changes to the AASB's priorities or business plan that occur as a result of action by the FRC will be reported and will be publicly known.The Australian Democrats believe that the existing provision, combined with our amendment No. 12 and Labor's amendment No. 30, will provide an appropriate degree of accountability and independence for accounting standards setting. I repeat, Senator Conroy, that we will be supporting your amendment No. 30.16:48:009844Conroy, Sen StephenSenator CONROY3L6VICALP00—I indicate the opposition's support for this Democrat amendment. We welcome it as far as it goes, though—as I think Senator Murray has indicated—we are not comfortable that this goes far enough to bring the separations that we believe are necessary. I will outline shortly some of the goings-on and the shenanigans that have already been taking place about accounting standards and the pressures being brought to bear even now. But at this stage we will support the amendment.Amendment agreed to.16:49:009844Conroy, Sen StephenSenator CONROY3L6VICALP00—I move opposition amendment No. 28 on sheet 1414:(28) Schedule 2, item 1, page 339 (lines 13 to 18), omit paragraph (c), substitute: (c) to monitor and advise the Minister on the AASB's: (i) priorities; and (ii) business plan; and (ca) to approve the AASB's: (i) budget; and (ii) staffing arrangements (including level, structure and composition of staffing); andRecently there has been a noticeable amount of press coverage on accounting standards, and in particular that of companies seeking to manipulate the interpretation of a standard to fit their own ends. This has led to the Australian Securities and Investments Commission issuing notices about the importance of accounting standards to the integrity of the market. ASIC has had to ask a not so small number of companies to `please explain' with respect to their interpretation of the standards. It has also required some companies to meet an enforceable undertaking while others face legal action. The companies that come to mind which have recently crossed swords with ASIC include the Seven Network, GIO, Novogen Ltd, the St George Bank and the Australia Pacific Airports Corporation—leaseholders of the Melbourne airport. It is disturbing that these are well-known, established companies, yet they fall into the trap of being less than rigorous in their interpretation of accounting standards.A less than appropriate compliance with accounting standards by Australian companies will hamper efforts to promote disclosure and transparency. It would compromise the principle of true and fair value in determining the performance and worth of a company. Even under Australia's current rigorous standards, the circumvention of accounting standards is commonplace. Ms Jan McCahey, ASIC's chief accountant, underlines this point with her recent comment that ASIC have been:. . . trying to encourage financial statement preparers to move away from a focus on what we—that is, ASIC—might term a clever or tricky reading of the words in an accounting standard.What more can we expect under a relaxed accounting standards setting environment in which companies, through the mechanisms of the proposed Financial Reporting Council, are able to influence the direction of the activities of the Australian Accounting Standards Board?Under the current draft of the Corporate Law Economic Reform Program Bill 1998 , the government proposes that the FRC approves the priorities of the AASB, its business plan, its budget and its staffing arrangements and that it be responsible for the appointments of the members of the AASB. These powers are more than just about oversighting AASB activities. The FRC will effectively be running the AASB. There is a very real risk that, under the proposed new arrangement, the independence of the AASB may be compromised. The concern is not in any way a criticism of the current appointed members of the FRC, which the opposition welcomes, but over time the structure has the potential to corrupt the accounting standards setting system.A similar debate on the independence of the accounting standards body has been raging in the US for quite some time now. Arthur Levitt, Chairman of the United States Securities and Exchange Commission, has a valuable view to impart on the issue of maintaining the independence of the accounting standards setter based on US experience. He said:Preserving the independent decision making process can be far more important than who wins, loses or breaks even on any given issue.A tax by business on the US accounting standards setter and on the Financial Accounting Standards Board has led Mr Levitt to defend the independent accounting body, stating:The FASB has filled the role of impartial standards setter admirably for a quarter of a century. Nonetheless, the FASB critics are working hard in Washington to limit its independence. They sometimes take the ironic tack of arguing that the FASB is anti-business.Does this sound familiar? The US situation is absolutely similar to what we are seeing here in Australia. Mr Kevin Stevenson, a partner in the newly formed consulting firm Stevenson McGregor and reputable expert in standards setting, was quoted in the Melbourne Age on 6 October 1999 as having concerns over the terms `approve' and `monitor' in the bill. These give the interpretation that the FRC would have the power to limit the AASB's decision making freedom. The proposed role for the FRC signifies a lack of appreciation of the role that the AASB has played to date in ensuring that Australia has high standards of financial reporting and corporate disclosure, which has engendered investor confidence and market integrity.The opposition's amendment will ensure that the AASB's independence is not compromised and that the FRC does not become just another layer of bureaucracy in the development of accounting standards. It is important that an appropriate regime is put in place so that an effective partnership between the FRC and the AASB is developed to strengthen Australia's reputation as an efficient and transparent market. Does the minister have anything to say in support of this particular amendment?16:56:009845Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I will make a contribution as Senator Conroy is keen for me to do so. However, we regard the design of the FRC, which is very similar to the City of London model for accounting standards settings, and of the AASB, having the FRC basically setting out a broad policy oversight and a business plan and approving the budget but not getting involved in the standards setting, is the best model available in the world. We think that, after very close consultation with the professions, with the accounting profession in particular, and with best practice internationally, the model proposed is a huge step forward for Australia. Quite frankly, if you spoke to the best international accounting standards setters in the United States and Great Britain, you would find significant support for the model that we have got.In the bill, for example, there is no power whatsoever for the FRC to have any control over the accounting standards themselves. As I said, I think there is nothing objectionable at all in what Senator Conroy said about the independence of the body. What we are looking at here of course are the administrative arrangements and ensuring that the AASB actually get on and do the work, making sure that the accounting standards are developed in a timely manner, and making sure that they are developed in an accountable manner where their processes of developing the standards are available to be oversighted by the community generally—3L6CONROYSenator Conroy—By the community generally!H15Campbell, Sen IanSenator IAN CAMPBELL—Senator Conroy interjects with a sarcastic comment. One of the reforms, which you may not be aware of, is that we want the Accounting Standards Board to actually meet in public. We want their processes to be open to the world so people can actually see and understand how they work. Ensuring that accounting standards are abided by can only be encouraged, one would have thought, if people actually understand the process and know the importance of accounting standards. If you keep the process relatively secret, if you keep it in an `inside the club' sort of area of expertise—an area where very few people in the business world have any interest, let alone expertise—and if you open up the process, as we are doing, allowing some independent oversight of the process, it will in fact, in our view, encourage people to comply.16:58:009846Conroy, Sen StephenSenator CONROY3L6VICALP00—I thank Senator Campbell. I have a string of questions, but I just want to make a few comments first. The capacity for the business community to pursue its own interests is well documented in any area that you care to look at. The complaints that have led to this creation are coming from the business community. Senator Campbell parrots some of the more obnoxious complaints that we hear—for example, the AASB being secretive. I have no problem with them holding their meetings in public. I think last week in actual fact that is what transpired. They held their first couple of public meetings—I have no problem with that. But to suggest that the current manner of accounting standards setting is secretive is, quite frankly, a disgrace.The debates that take place on the board are quite vigorous. What was demonstrated at those hearings last week was yet again the desire of some companies in this country to use their influence through their hired accountants to intervene in accounting standards debates in the corporate interests that they are employed by. Last week we saw the farcical situation where the Accounting Standards Board made its third backflip or change in position on a very important accounting standards issue. One group of accountants are pursuing the interests of their employers and one group of accountants are attempting, supported by ASIC, to introduce some integrity into the accounting standards and the interpretations.We have had the ludicrous position where three times now, depending on who has turned up to the board, we have had a new accounting standard in this country. It has to stop. Senator Murray and the Democrats need to understand they are already pursuing their interests directly on the Accounting Standards Board. Senator Murray as well as Senator Campbell and I may have a variety of views on all the minutiae of the debate. But they are already prepared to pursue their business interests—what is in their own corporate bottom line's interests—to subvert the interpretation and the standards setting procedure in this country.It is an extraordinary claim to say, `If only people had more participation they would be more willing to be compliant.' It is absolutely outrageous that you are suggesting that they are not willing to be compliant with the law now. The Accounting Standards Board are there. They come through this parliament and they are part of the law. It is not a question of whether or not Kerry Packer is happy with the definitions that are put on `amortisation' or anything else. I am frankly not interested. I am frankly interested in market integrity. I am frankly interested in whether or not Australia can continue to attract capital into this country—not whether or not Kerry and Rupert or anybody else can twist your arm along with the rest of the big business in this country to make you roll over and introduce some sort of supervisor to turn the Accounting Standards Board into a pack of lap-dogs.That is what is really going on here. I have grave concern about this. We can put all the good corporate governance that we want into legislation, but there is no point in having good corporate governance if the fundamental basics of what is in a company's balance sheet is corrupted because big business are able to nobble the Accounting Standards Board as they attempt to do now and they have done last week. If you enhance that nobbling by putting them under the supervision of a whole group of people that have no interest in seeing an accounting standard that is not to their liking, then you are contributing to absolutely corrupting the good corporate governance in this country.You can set up executive remuneration disclosure. You can set up more 28 days or 21 days and increased amounts of time for papers to be available for shareholders. You can do all those sorts of things. But if the core information that is flowing to them is in fact rubbish, because it is meaningless to them, then what was the point? This is absolutely at the core of good corporate governance. If the numbers do not make sense on the paper, then it does not matter how long, how much exposure, who gets to have a say, whether proxies can vote or not or whether you can lodge proxies. It does not matter. You are falling for an absolute furphy. The secrecy point was raised: `Oh, they are more willing to comply if they have participated.' I am sorry. I cannot remember the last time anyone was more willing to comply with tax if they participated. I am not in the voodoo economics cult that some people in this parliament, on the other side of the chamber, are in.You have got a cave-in to vested business interests on this issue. It is very disappointing that we are at a stage where a few furphies get tossed around by Senator Campbell—`secretive', `compliance if they participate'—and we see the parliament being willing to constrain and restrict the setting of accounting standards in this country. If you care about corporate governance in this country, there is no more substantive issue than making sure accounting standards are independent and not subject to the whims of business. They do it now. They are absolutely at it right now. You may stand up and say, `Well, they are already doing it. What's the difference?' You are adding an extra layer of pressure. You are putting another mechanism in place for them to try and nobble genuine accountants that are about good standards, good information and having some use of the documents that you present to shareholders in the first place.17:05:009847Murray, Sen AndrewSenator MURRAY3M6WAAD00—I am really pleased you have made that speech, Senator Conroy, because I know you hold these views honestly and you feel strongly about them. We know the issues of self-interest and what affects those with large amounts of money at stake are at play in the political and economic and commercial world now. Everybody in the room would not be so naive as to think that they would not be at play in the future. That is the nature of self-interest. You have made a case that it happens right now. The question is whether this new system will control it better or worse. Your view is it will control it worse.The issue of independence has many sources. One of the issues is whether people are subject to pressure as a result of pecuniary interest. If I may use the Labor Party as an example, it would be mad to think that Labor Party policy is nobbled because they receive large amounts of political donations from big business. I do not think that that follows. If it did, it would point to the need for there not to be donations. But the fact is that there are, and the Labor Party still has an independent view. In other words, the presence of money does not automatically buy policy. I do not know if you were listening to that, Senator Conroy. I was merely making the point that if you take the example of your own party the idea that money being at stake affects policy is wrong. I do not think the fact that you get large donations from big business means that the Labor Party is nobbled by it. I think that you retain an independent view regardless of that.The second aspect of independence really relates to the independence of appointments. In view of Senator Conroy's strong feelings about independence, he should be arguing, I hope, to support my later amendment which allows for the independence of appointments. I presume Senator Conroy, in view of what you have said about independence, you will be supporting—and it will be the first time Labor has, I might say—the independence of appointments to the AASB, which guarantees independence.The third way in which you guarantee independence is the structure—how it is structured, how public it is, how these bodies are to operate. The way the government has structured the FRC and the AASB is fine. It will lead, with the improvements of your amendments Nos 29 to 32 and our earlier amendment, to a better structure. But it will not lead to independence unless the independence of appointments is guaranteed. That is the missing leg, and that is the one I will attend to a little later. I must say, Senator Conroy, that you cannot argue your case against structural weakness, which is what you are expressing, unless you also argue your case for independence of appointments, which is what I am arguing. I will be interested to see how you respond to that a little later. Our view is, on balance, on the structural side, that the government has got it right with the amendments that are before us, which we will support.17:09:009848Conroy, Sen StephenSenator CONROY3L6VICALP00—Senator Murray talks about the structure and getting it right. At 225(2)(c), the legislation says that the FRC's functions are to approve and monitor the AASB's business plan, budget and staffing arrangements. Anyone who knows how the real world works knows about strangling something with funding problems. There is no clearer example of this than America, where recently there was an absolute stand-off over the question of, funnily enough, the definition of options and shares and their value to the company. That was about disclosure of how much businessmen, businesswomen and the big business leaders were getting—not just their salary, but whether or not they could actually have a costing put against their options and shares. We have seen, tragically, in this country, some companies attempt to use the same sort of line. They have said, `Oh, look, it is too hard to work out; we won't do it; there's no value.' Some companies have actually put out reports saying there is no value to executive share options. This is a nonsense.What happened in America was that when the Accounting Standards Board said, `Just a minute, that's a nonsense; you're not getting away with this,' we saw business turn on them and seek to withhold funds through the FRC and seek to change the position. What we are doing is setting it up so it is possible, using budget, to control these things.But the most important one, which I have left till last, is point (i) in 2(c). It reads `to approve and monitor the AASB's priorities'. This is a situation where you are saying the structure is right, you are saying the structure is important, but you are saying that the FRC is approving and monitoring the priorities of the Accounting Standards Board. If that does not go to the heart of independence for the standards board, what does? They no longer have the power to set their own priorities—where they can direct their work, where their money goes to.You are completely neutering this organisation if you are supporting this bill and letting it go forward. You cannot credibly argue that everything will be all right if there is independence of appointment. If you were being consistent, Senator Murray, and the Democrats, you would be supporting the independence of appointment and independence for the board. But no, what we have seen is another cave-in to the government here, another cave-in to big business. If a company gives the Labor Party a donation, it does not get to approve and monitor the priorities of the ALP. It probably does for the government and the Liberal Party. I doubt whether it does for you, Senator Murray. But I can give you an assurance that any money that we get from the business community does not give them the right to approve and monitor our priorities. What is happening here today is that you are giving the FRC the right to approve and monitor the priorities. No amount of weasel words from the government on this can take it away. The Accounting Standards Board, the accountants in this country, know this is a fix. They know they are being nobbled. They are involved in a whole range of arguments where they are being influenced by the larger business groups already through their own forums. What they are privately saying—and they have even publicly been saying—is `We don't want any further oversight or any further meddling and nobbling by the big business community in this country.'We are asking you to support our amendment not because we oppose the FRC being able to oversight. Oversight in itself has connotations, but as long as it is clearly set out in the legislation what oversight means then I can live with it. What we are seeing here concerns the priorities—`approve and monitor the board's priorities'. I do not believe you are fair dinkum when you say you support the independence, because you are trying to be cute. If you were being genuine, you would be supporting both. You cannot try to turn it back on me and say, `Well, you're not being genuine because you're not supporting both.' If you are being genuine, you will vote for both. You will vote for your independence and you will vote for the independence of the board structure.On the question of appointments of individuals, we will get to that and I will happily make a contribution then. But at this stage, if you are fair dinkum, you cannot vote for `approve and monitor priorities'.17:15:009849Murray, Sen AndrewSenator MURRAY3M6WAAD00—Senator Conroy, have you just offered me a deal—that you will support my independence of committees if I support your amendment? Is that the commitment I heard you give—that you are actually supporting my two amendments on independent appointments?17:15:009849Conroy, Sen StephenSenator CONROY3L6VICALP00—We will come to the independent appointments shortly. No, I did not offer you a deal. What I said was that if you were being consistent you would vote for them both. What you are trying to say is that the reason you are not consistent is that I am not consistent. That was fundamentally your point. I will happily make a contribution and outline our position on that when we get to it. But right now, if you are fair dinkum and you are not just being cute, you will vote for them both. As I indicated earlier, I do have a couple of questions—without wanting to spend the next half-hour or so exchanging points of view with Senator Murray. Does CASAC approve its own priorities?ZF4CROWLEYSenator Crowley—Mr Temporary Chairman, I interrupt the committee for just a moment to draw attention to the presence in the gallery of the very great, splendid and victorious Australian netball team.UNKNOWNHonourable senatorsHonourable senators—Hear, hear!17:17:009849Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I apologise to the netball team for having to listen to a debate on reforming Australia's accounting standards, although it is very important to lots of accountants and other people. CASAC is just an advisory body. It gets references from all sorts of places, even including us.17:17:009849Conroy, Sen StephenSenator CONROY3L6VICALP00—With the proposed new structure in accounting standard setting, and in particular the FRC having the authority to decide on budget and staffing arrangements of the AASB, can the government outline what this might mean for the Australian Accounting Research Foundation, which has played a very important supporting role to the AASB?17:18:009849Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—That is entirely a matter for the FRC.17:18:009849Conroy, Sen StephenSenator CONROY3L6VICALP00—The answers may be the same for these questions, but I just want to get them on the record. Will the partnership that has existed between the standards board and the foundation be retained, or will the FRC establish its own research arm?17:18:009850Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—Again, that is a matter for the FRC and, again, that is something that might change from time to time. The requirements may be different from time to time. That is why it is a matter for the FRC.17:18:009850Conroy, Sen StephenSenator CONROY3L6VICALP00—Does the government have any idea how long it will take before a decision is made by the FRC as to the future of this arrangement?17:18:009850Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—My advice is that the FRC are having their first informal meeting in a few days time. These are matters that they will be turning their attention to as early as next week.17:19:009850Conroy, Sen StephenSenator CONROY3L6VICALP00—Has the government even thought about the Accounting Research Foundation—its role in accounting standard setting and the future of its staff—as a consequence of the proposed new arrangements?17:19:009850Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—When I was in the portfolio, I had extensive discussions and consultations with people from the foundation and the board. I think it does a crucial job. Accounting research is very important.17:19:009850Conroy, Sen StephenSenator CONROY3L6VICALP00—For those who may not be aware, the foundation provides the standards boards with research and administrative support, such as original research into relevant accounting topics, the provision of advice on matters relating to local and foreign financial reporting developments, and the preparation of papers for consideration by members. The foundation does a lot more: it has built a level of expertise that is admired around the world. It is of some concern that the foundation may now be wound up as a result of this legislation in what, again, I can only describe as a disappointing development. The expertise that is there now—which at times the business community does not like—is under threat of closure. The foundation has provided an enormous contribution to the integrity of Australia's markets, and it is disappointing that the government is heading in this direction. Simply passing the buck to the FRC leads me to ask: do you envisage, with the government's support, the FRC abandoning the foundation as its research arm?17:21:009850Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—It is now public that the accounting bodies, which basically fund the foundation, are pleading with the government to ensure that AARF is independent. I understand the FRC have that before them. The majority of the funding for AARF comes from the accounting bodies—so they fund it—and they believe the work that is performed by AARF should be made more independent. The structure that is proposed will create an independent research capability. I would have thought, from listening to Senator Conroy's contributions in the last two interventions, that that was very much in line with his plea for independence. That is what one would expect to occur.17:21:009850Murray, Sen AndrewSenator MURRAY3M6WAAD00—Under the coalition government and under the previous Labor government, were any government funds provided for the Accounting Research Foundation to run its affairs? How will that change?17:22:009850Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—The existing appropriation is $1.4 million a year, so it is significantly funded. We make a contribution. As I recall, thinking back to over a year ago when I was in the portfolio, the accounting bodies put in a similar amount of money—$1.5 million. So it is close to matching.17:22:009850Murray, Sen AndrewSenator MURRAY3M6WAAD00—The addition to my question was: how will it change?17:22:009850Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—It will be subject to advice from the FRC, but the legislation is silent on that.17:22:009851Conroy, Sen StephenSenator CONROY3L6VICALP00—That is my point. There is a potential here for an extraordinary degree of accountancy excellence going amiss because of this.Senator Ian Campbell interjecting—3L6Conroy, Sen StephenSenator CONROY—I will take that injection, thank you, Senator Campbell. The funding for the foundation is a legitimate concern. The government has been, in most instances, prepared to argue about not wanting black letter law; it wants to see business, the government and regulatory authorities working together in a more flexible way. Recently the Stock Exchange put a levy on its members for a set period of two years, I think it was, to provide funding into particular areas. That was completed recently and those funds are no longer available, but I would have thought that what we want to see is more of that. It is the sort of thing that your government has supported, having the business and these organisations working together. I am concerned that we are not going to be seeing that under these new arrangements. Unfortunately, you have not given me any comfort at all by passing it off to the FRC and you have indicated that there are no government funds—it is silent.H15CAMPBELLSenator Ian Campbell—That's not true.3L6Conroy, Sen StephenSenator CONROY—You were asked what the plan was and you said that it is silent.H15CAMPBELLSenator Ian Campbell—On the legislation side. Do you put the forward appropriations in a piece of legislation or do you put them in the budget?3L6Conroy, Sen StephenSenator CONROY—Unfortunately, you do not seem to have the answer to either of those questions, Senator Campbell. It would be nice if you were able to consult.H15CAMPBELLSenator Ian Campbell—It is a rhetorical question.3L6Conroy, Sen StephenSenator CONROY—Yes, well, you can ask yourself lots of questions. At this stage, you have not actually answered Senator Murray's question, which I thought was a very good question in terms of wanting to get some sort of guarantee about the foundation's ongoing position. There is actually a group of very talented people there who are very concerned about their future. You had the chance then to put their minds at ease but you chose to stay silent: `I'm not going to tell you because that's a forward estimate.' If I were sitting in their shoes right now, I would not be very happy with that as an answer to Senator Murray's question.I urge the Democrats to reconsider their position. They have an opportunity to stand up for a core market integrity issue here in making sure that accounting standards are not influenced in an overt way. Yes, they are influenced, as I have already said, in a covert way. We are having an overt and covert attack now on accounting standards, and the government pandering to the whining complaints from the business community on accounting standards is just that. I may or may not agree with some of the directions they go in but I have to tell you that Kerry Packer is not going to roll over if the accounting standard means that his masthead value goes down 40 per cent. He is not going to cop that. We are not talking about a $10,000 donation here. We are talking about 40 per cent of the asset value of PBL. That is an awful lot of money and an awfully great incentive to get Kerry on the phone.You know how powerful Kerry is. You are fully aware because, when it came to the Crown Casino GST amendments, I know that Jamie Packer was on the phone to you and I know that that is why five Democrats, including Senator Lyn Allison—who has misled this chamber by saying that she voted for that amendment—took the chicken walk out of the chamber and left the Labor Party with two Democrats to try to support the GST high-roller amendments. Packer did not want to lose $10 million and you and the four other Democrat senators who were here at that stage took the walk out of the chamber.3M6MURRAYSenator Murray—Mr Chairman, the dishonourable senator is imputing a motive for the way in which the Democrats voted and I think he should be exceptionally careful of doing so and should withdraw any imputation.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Murphy)—We are listening with careful thought to what is being said. If we find that Senator Conroy does impute improper motive, we will make sure he is aware of that and get him to correct it.3M6MURRAYSenator Murray—Mr Temporary Chairman, with the greatest of respect, I must contest your ruling.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Are you asking for a withdrawal?3M6MURRAYSenator Murray—I am, because the imputation was as follows: firstly, a phone call was supposed to have been made to me personally—it was not made; secondly, as a result of that phone call the Democrats voted because of that phone call; and, thirdly, that there was improper influence on the way in which a senator voted. That is an extremely serious allegation to make. I know that the senator is prone sometimes to exaggerated language, so I do not take the offence I might, but I would like a formal withdrawal please.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—I apologise to you. I misunderstood what you were saying at the outset. I do not disagree with you. I will ask Senator Conroy to withdraw.3L6Conroy, Sen StephenSenator CONROY—I withdraw any imputation that Senator Murray took from that. I did not, as Senator Murray has just indicated, suggest that he had received a phone call. I do not believe he did. I know that a member of the Democrats received a phone call because the Democrat in question has told me.What I am concerned about is the capacity to be influenced, which we are all subject to. The phone calls get made, the visits get made. Senator Alston is a regular out at Lachlan Murdoch's hacienda, wherever it is. We are all aware of the capacity for some very significant business interests to have their say. In case you are disappointed, Senator Murray, perhaps as soon as later this week you will get your chance to redress the wrong that was committed on the GST high-roller amendments. You will get a chance to tell us why you took the walk last time.You can put on the public record exactly why five of the Democrats abstained on the high-roller amendments, because we have 428 coming. We may have a 429th, when your mettle gets tested again. We will see whether the Democrats stay in the chamber then to vote on the GST high-roller amendments. There is not as much chance of it getting passed in Victoria as there was a week ago. They need the Victorian government to cooperate on that now. As there is not as much chance of it getting done down at that end, you are really going to need to help them fix it up here. You are probably going to get the chance again soon on that one. I hope you will make a contribution to that debate. I know you always enjoy making a contribution, especially if you are following me.The substantive point here is that some significant business interests will be offended and will react by starting a lobbying campaign about accounting standards. We are not on broadcast today, and that never bothers me, but it may surprise other senators in the chamber that we can have this sort of passionate debate about accounting standards. I think Senator Campbell was joking earlier that it is not the most exciting issue. Traditionally it is not an exciting issue, but when it comes to the core questions of governance and of how accounting standards are set, it goes to the very root, the absolute core, of making sure that business is accountable to its owners, the shareholders. I mentioned in my speech companies such as the Seven Network—now there's a surprise—GIO, Novogen, St George and the Australia Pacific Airports Corporation. These are major companies, Senator Murray. They have major interests at stake. They have been involved in some of these debates. It will not go away. It will only get worse unless you support our amendment.17:32:009852Murray, Sen AndrewSenator MURRAY3M6WAAD00—Let me put on record that the Democrats abstained from a number of votes during the debate Senator Conroy referred to because we decided we were not going to play Labor's game, which was throwing some amendments back at us which we had originally put and which were altered by the nature of the agreement between us and the government. I know it will not suit Senator Conroy's political point to accept it but that is the reason we did so. We do not accept his posturing on it, although I am sure he will continue to try to make political mileage out of it.To move on, my question to the parliamentary secretary is: with regard to the Accounting Research Foundation and appropriations made to them by government, it is true, is it not, that at any time over the entire period that governments, both coalition and Labor, might have been making payments to the ARF, they could have increased that amount, kept it the same as it is, reduced it or withdrawn it completely? In other words, even if Senator Conroy's amendment got up, if your cabinet so decided in appropriations, they might withdraw the government contribution to the ARF altogether. In that sense, is it not true that the ARF is annually subject to the insecurity of whether or not the government will fund them?As I understand it, you do not provide ARF funding on a cyclical basis, in other words on a three-year forward basis; it is on an annual appropriations basis. So to link this legislation with the funding of the ARF is wrong. If Senator Conroy's motion got up it would be open, as I understand it—it is a question to you—to the government to withdraw the funding tomorrow or increase it. But the two are not linked. Is it true, Parliamentary Secretary, that the government has made no decision yet as to whether it will continue with funding or not, that that issue is subject to further advice from the new organisation?17:34:009853Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—To answer your question directly—I might have said it at the end of the last question—this legislation and the opposition amendment before us in no way affect the funding. The funding for the process—that is, accounting standard setting—when we released this policy announced by the Treasurer, is guaranteed right through the ARF years. I think it is in the order of $10 million over three years, so it is three point something million dollars per year. That funding will be available for accounting research.I have said that we regard that as very important. I have said that people who currently fund ARF—that is, the accounting bodies—want it to be independent; they do not want it to be part of the ASB. We regard the FRC as the appropriate body to come up with a system that replaces the existing system. But the funding is not in doubt in terms of the overall process. To answer your question, you are quite right: this government or any previous government could have wiped out the ARF funding in any particular year. That was the point I made. Neither this legislation nor the amendment to it give any assistance to the long-term funding of ARF. It really is something for the `industry' to work out what is the best way to get the best bang for their buck and ultimately the best bang for the taxpayers' buck in terms of accounting research. Senator Conroy may think he knows better about how to develop an accounting research system in Australia than the accounting bodies. He may well do. I recommend that if he believes that there is a way to improve the quality of Australia's accounting research, if he has a strong view on that and if he thinks he knows better than the accountants how to do that, then he should talk to them about it. But I do not believe that I know better than them. I think that, when it comes to working out a system for the future that will guarantee that Australia maintains and improves its already incredibly high standard of accounting research, the best people to do it are the experts in that field.From our point of view, we have guaranteed funding right through the out years to ensure they have the taxpayer funded resources. As part of the negotiations on this, we, on behalf of the taxpayers, guaranteed our side of the bargain. I also ensured that the accounting bodies gave a very clear undertaking that they would guarantee their side of the bargain. It is a productive partnership, and we also think that, through the FRC, it would be possible to improve funding from sources other than the government.17:37:009854Conroy, Sen StephenSenator CONROY3L6VICALP00—I will just respond briefly to Senator Murray. The so-called GST high-roller amendments were not, in actual fact, Democrat amendments; they were not even Labor amendments. They do not fall into the category of having been amendments that we were throwing back up at you; they were government amendments. The question was whether or not we voted against government amendments. The GST high-roller amendments were not part of what you described as the ALP's game of throwing back at you your own amendments. You say it was all a part of some political game, and that may have been the case with other issues where we were making points by moving some amendments that you had moved yourselves, but in the particular instance of the high-roller amendments, it was not the case.To respond to Senator Campbell, I am not sure how, at any stage or from anything I have said this afternoon, you could assume I thought I knew best about the setting of accounting standards in research foundations or, more importantly, that I suggested that we did not want them to be independent. I was actually suggesting that I favoured a combination of the ongoing government funding—I do not think the Accounting Standards Board have requested that you take away their $10 million in the forward estimates—and, more importantly, a return to a levy situation. That was a special levy for a special purpose. The markets seemed to accept that; the Stock Exchange seemed to accept that. It was for a legitimate purpose. I believe that, as part of that coregulatory situation, it may be an alternative mechanism. I am not saying that it should be. But I am, like you, very keen to see the independence of the foundation, their standards kept and that they continue to have certainty in their funding. I am surprised that you think you can accuse me of not wanting to see them independent. Question put: That the amendment (Senator Conroy's ) be agreed to.17:44:00The committee divided. (The Chairman—Senator S. M. West)25Bishop, T. M. Bolkus, N.Brown, B. Campbell, G.Collins, J. M. A. Conroy, S.Cook, P. F. S. Cooney, B.Crossin, P. M. Crowley, R. A.Denman, K. J. *Evans, C. V.Faulkner, J. P. Forshaw, M. G.Gibbs, B. Harradine, B.Ludwig, J. W. Mackay, S.McLucas, J. E. Murphy, S. M.O'Brien, K. W. K. Quirke, J. A.Schacht, C. C. Sherry, N.West, S. M.37Allison, L. Alston, R. K. R.Bartlett, A. J. J. Boswell, R. L. D.Bourne, V. Brownhill, D. G. C.Calvert, P. H. *Campbell, I. G.Chapman, H. G. P. Coonan, H.Crane, W. Ellison, C.Ferris, J. Gibson, B. F.Greig, B. A. Heffernan, W.Herron, J. Kemp, R.Lees, M. H. Lightfoot, P. R.Macdonald, I. Mason, B. J.McGauran, J. J. J. Minchin, N. H.Murray, A. Newman, J. M.Parer, W. R. Patterson, K. C. L.Reid, M. E. Ridgeway, A. D.Stott Despoja, N. Tchen, T.Tierney, J. Troeth, J.Vanstone, A. E. Watson, J. O. W.Woodley, J.Carr, K. Payne, M. A.Hogg, J. Knowles, S. C.Hutchins, S. P. Eggleston, A.Lundy, K. Ferguson, A. B.McKiernan, J. P. Hill, R. M.Ray, R. F. Tambling, G. E. J.* denotes tellerQuestion so resolved in the negative.17:48:009854Conroy, Sen StephenSenator CONROY3L6VICALP00—by leave—I move opposition amendments Nos 29 to 33:(29) Schedule 2, item 1, page 339 (lines 22 to 30), omit paragraph (f), substitute: (f) to monitor the development of international accounting standards and the accounting standards that apply in major international financial centres, and: (i) to further the development of a single set of accounting standards for world-wide use with appropriate regard to international developments; and (ii) to promote the adoption of international best practice accounting standards in the Australian accounting standard setting process if doing so would be in the best interests of both the private and public sectors in the Australian economy; and(30) Schedule 2, item 1, page 340 (after line 21), at the end of section 225, add:Restriction on powers (5) The FRC does not have power to direct the AASB in relation to the development, or making, of a particular standard. (6) The FRC does not have power to veto a standard formulated and recommended by the AASB.(31) Schedule 2, item 1, page 341 (lines 20 and 21), omit paragraph (d), substitute: (d) to participate in and contribute to the development of a single set of accounting standards for world-wide use; and(32) Schedule 2, item 1, page 341 (after line 28), after subsection (1), insert: (1A) In carrying out its functions under paragraphs (1)(a) and (d), the AASB must have regard to the interests of Australian corporations which raise or propose to raise capital in major international financial centres.(33) Schedule 2, item 1, page 342 (line 11), at the end of subsection (3), add "and, in particular, to ensure that any disclosure and transparency provisions in the standard are appropriate to the Australian legal or institutional environment.".The government might hate to admit it but the drafting of the provisions on international harmonisation does give the impression that Australia has committed itself to taking up the accounting standards of one international forum. While I am sure this was not the intention, it is important that we get this right. We need to clearly articulate what Australia intends to do in adopting and in helping to develop accounting standards for use worldwide. Any such accounting standard should, of course, go through appropriate scrutiny and debate, and the international community must have given a thumbs-up for its credibility and integrity. Mr Colin Parker, the Director of Accounting and Audit for the Australian Society of Certified Practising Accountants, has added his concern. He said in the Age on 6 October 1999:The international landscape is quite fluid as to who will be the driving force for the development of truly international accounting standards.Therefore the legislation should not lock us into the verbatim adoption of any one set of accounting standards.As I did earlier, I would like to refer to a statement by Arthur Levitt on the matter of international harmonisation, as we are faced with a similar proposition. The views of the respective US authorities and that of the opposition on this matter are consistent. Mr Levitt said:The decision regarding acceptance of IASC standards will be based on the substance of those standards. There is no doubt that their acceptability to US investors will depend on how well those standards measure up to our own. That is not to say that capital markets around the world must accept US accounting standards. It is not to say that international standards must produce financial reporting with the same credibility and integrity produced by US standards. They need not reproduce the words of the US GAAP but they must yield the same results in terms of credibility and integrity.The amendments that the opposition, with the support of the Democrats, have put forward in this regard are important for clarity and certainty. Our amendments will ensure that Australia will work actively and cooperatively in the development of global standards and that their adoption locally would be assessed based on relevant concerns, including the needs of capital raisers and investors. I shall close with a last note from Mr Levitt about the significance of the debate on accounting standards setting. He said:Accounting standards are the foundation of fairness in financial reporting. Without such rules the investor would stand unprotected, uninformed and unaware of misleading or deceptive disclosures by those who may seek to distort financial reality.Amendments agreed to.17:51:009855Murray, Sen AndrewSenator MURRAY3M6WAAD00—by leave—I move amendments Nos 1 to 3 on sheet 1569 revised and amendment No. 1 on sheet 1591:(1) Schedule 2, item 1, page 345 (line 15), after "writing.", insert "Appointments must be made in accordance with a code of practice determined under section 235D.".(2) Schedule 2, item 1, page 346 (after line 20), at the end of Subdivision A, add:235D Procedures for appointment of members (1) The Minister must by writing determine a code of practice for appointments to the Council and for appointing the Chair of the AASB that: (a) sets out general principles on which appointments are to be made, including, but not limited to: (i) merit; and (ii) independent scrutiny of appointments; and (iii) probity; and (iv) openness and transparency; and (b) sets out how these principles are to be applied to the selection of members. (2) The code of practice must include a requirement for any person appointed to make a declaration if he or she is a member of a political party. (3) After determining a code of practice under subsection (1), the Minister must publish the code in the Gazette . (4) Not later than every third anniversary after a code of practice has been determined, the Minister must review the code. (5) In reviewing a code of practice, the Minister must invite the public to comment on the code. (6) A code of practice determined under subsection (1) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901 .235E Independence of the Council In appointing members of the Council, the Minister must ensure that the balance of interests on the Council is such that no one interest may dominate the Council or derogate from its independence.(3) Schedule 2, item 1, page 347 (line 14), at the end of subsection (1), add "Appointments must be made in accordance with a code of practice determined under section 235D.".Schedule 4, page 428 (after line 24), after item 22, insert:22A Subsections 172(4), (4A), (4B) and (5) Repeal the subsections, substitute: (4) Nominations must be made in accordance with a code of practice determined under section 172A.22B After section 172 Insert:172A Procedures for nomination of members (1) The Minister must by writing determine a code of practice for nominations to the Panel that: (a) sets out general principles on which nominations are to be made, including, but not limited to: (i) merit; and (ii) independent scrutiny of nominations; and (iii) probity; and (iv) openness and transparency; and (b) sets out how these principles are to be applied to the selection of members. (2) The code of practice must include a requirement for any person nominated to make a declaration if he or she is a member of a political party. (3) After determining a code of practice under subsection (1), the Minister must publish the code in the Gazette . (4) Not later than every third anniversary after a code of practice has been determined, the Minister must review the code. (5) In reviewing a code of practice, the Minister must invite the public to comment on the code. (6) A code of practice determined under subsection (1) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901 .172B Independence of the Panel In nominating members of the Panel, the Minister must ensure that the balance of interests on the Panel is such that no one interest may dominate the Panel or derogate from its independence.Two of these amendments relate to the independence of appointments: one, the appointment of members to the FRC and AASB; the other, the nomination of members to the takeover panel. With respect to both, I draw the attention of the chamber to the Democrats' minority report to the report on the Corporate Law Economic Reform Program Bill 1998 by the parliamentary Joint Committee on Corporations and Securities, produced in May 1999, and in particular to pages 72 to 76, which cover those matters.Our concern over the appointment of members to boards, authorities, councils or whatever else within the government's purview has again and again been put to this chamber, and we intend to continue to put it. This is an issue on which the application of pressure eventually does result in change, as was found in the United Kingdom. Our concern is that wherever appointments are made to the governing organ of public authorities, whether they be institutions set up by legislation, independent statutory authorities or quasi-government agencies, the process by which these appointments are made is, and is seen to be, transparent, accountable, open and honest. We believe that `jobs for the boys and girls' should be an anachronism in 1999. There is a widespread public perception in that many appear to believe that government appointments result in patronage of handsomely remunerated positions. This perception can damage the reputation of these bodies, as in the public eye they are then seen as being controlled by persons who lack the appropriate independence and who may not be as meritorious as they might be.Whilst this is often not so and many outstanding appointments have been made by both the previous and the present government, the Democrats nevertheless are of the opinion that this is a matter which has to be addressed. In truth, there is little empirical evidence that can be brought to bear to rebut the perception of people being appointed because they are close to the government of the day. It is still the case that appointments to statutory authorities are left largely to the discretion of the minister with the relevant portfolio responsibility. In the absence of umbrella legislation to correct this situation in a systematic fashion, the Democrats will have to argue for each piece of legislation dealing with these bodies to include standard provisions setting out an accountable regime governing such appointments made by ministers.This bill restructures the accounting standards setting process and the takeover panel process. Those persons will hold their posi tions on the terms and conditions determined by the minister under the act, and the minister will be empowered to appoint various people. A useful but insufficient requirement is that, with regard to the AASB, the appointee must have knowledge of business, accounting, law or government. By and large, the minister is given broad unstructured discretion. These provisions are an example of the unjustified latitude given to executive government in making key personnel appointments.The Nolan committee, which reviewed the processes for making public appointments in the United Kingdom, set out the following principles to guide and inform the making of such appointments: (1) a minister should not be involved in an appointment where he or she has a financial or personal interest; (2) ministers must act within the law, which includes its safeguards against discrimination on grounds of gender or race; (3) all public appointments should be governed by the overriding principle of appointment on merit; (4) except in limited circumstances, political affiliation should not be a criterion for appointment; (5) selection on merit should take account of the need to appoint boards which include a balance of skills and backgrounds; (6) the basis on which members are appointed and how they are expected to fulfil their roles should be explicit; and (7) the range of skills and backgrounds which are sought should be clearly specified. That basic framework has been adapted by us in preparing our amendments. So we have international precedent accepted by the United Kingdom government, the conservative government, and carried on by the Labour government. We believe that these are principles which in due course this parliament must adopt.I would point out that, with regard to remarks made earlier about the independence of these authorities, we specifically require that the balance of interests on such boards or authorities in terms of my amendments should not derogate from the independence and the balance of interests required in those two appointed bodies. Accordingly, I have formally moved those three amendments together, by leave,17:57:009858Conroy, Sen StephenSenator CONROY3L6VICALP00—I promised Senator Murray that I would make a contribution and, for the sake of Senator Campbell, I will keep it brief. I am disappointed that Senator Murray has proposed the amendments in this form. I would have thought that adopting the so-called McGarvie model style of appointment was anathema to Senator Murray. I know that he is a much bigger fan of Peter Reith's direct election model. Senator Murray, you should have held out in this particular debate and stuck true to your principles that these board members should face some sort of direct election before our getting to vote on these. I think you should have taken the bit between the teeth and gone the whole hog on this one.I do not think we can support the position that you are putting forward at this stage. I do not think it goes far enough to warrant support from our side of the chamber. I think you have fallen between two chairs. I am always interested in who guards the guardians, and I would be concerned about who appoints the people on the board who then make the choices. You can always find ways to achieve an outcome if you absolutely set out to achieve an outcome. I do not think your amendments necessarily help achieve the public transparency you believe would be gained by them and I do not believe that they are amendments we will support at this point in time.17:59:009858Murray, Sen AndrewSenator MURRAY3M6WAAD00—I must say that I have not been surprised by the response. This is the 13th time that I have now put these amendments. I am making a little collection, which I will publish in due course, of the responses that I have been given by different people to explain their points of view. Therefore, I thought the parliamentary secretary's silence was very wise because I will find it amusing, I think, when I eventually leave this place and have presented these amendments 422 times to have discovered all the various reasons why it is not possible. I must say that it is the very first time that `direct election' has been given to me as an answer.Amendments not agreed to.18:00:009858Conroy, Sen StephenSenator CONROY3L6VICALP00—We oppose the following item in the bill:Schedule 2, item 1, page 344 (lines 5 to 23), section 231.An additional concern to the opposition, as expressed to us by reliable sources in the field of accounting standard setting, is the proposed requirement that the AASB undertake a detailed cost-benefit analysis of every standard it develops. This requirement fails to understand the complexity of the request. In addition, the requirement would wrongly bring into focus the issue of short-term costs for preparers of disclosure documents rather than the wider economic benefits of a transparent market. CLERP discussion paper No. 1 flagged the difficulty in quantifying the costs of compliance to accounting standards. It is also acknowledged that the indirect costs to the economy are difficult to specify, but the government has failed to give appropriate weight to these concerns. Furthermore, it does not give appropriate regard to the potential conflict that might arise from the fact that, while most of the costs involved with many accounting standards are shouldered by the preparers, significant benefits accrue to users.This provision is designed purely to sabotage standards developed by the AASB. A scrutiny of the standards comes down to one criterion—costs. Again, this is a provision which reflects a government that has succumbed to the sales pitch and has bought the idea that the AASB does not take full account of business concerns and that there is no sufficient consultation in the process. This is wrong. This provision has to go. Again we see this government seeking to try to portray the Accounting Standards Board and its work in the worst possible of lights. It is again succumbing to business interests. It is again saying, `We can find a way to cost compliance.' How do you put a cost on a cost-benefit analysis? Tragically for those in this chamber, I studied cost-benefit analysis at university.H15CAMPBELLSenator Ian Campbell—Did you pass?3L6Conroy, Sen StephenSenator CONROY—I did, actually. I do not know how, but I did. What we have here is nothing more than nobbling. How do you quantify an improvement in integrity? How do you put a dollar bottom line on the integrity of the market? Why do you want to try to put a bottom line? Is there going to be an argument at some point from members of the FRC when the cost-benefit analysis is produced? Will there be the argument: `It's just too costly to business. Look at the cost-benefit analysis. There are no real gains here; it is all cost to business'? That is what is at stake. What is again at stake is this government's pandering to the big business interests that it needs to pander to. That did not save them in Victoria, but it obviously believes that if it avoids some of those mistakes made in Victoria it can still hang on.What we have here is an attack on the Accounting Standards Board, disguised as, `What could be more reasonable than a cost-benefit analysis?' How do you quantify that? That is the challenge for the government when it writes down that this has to be done. How do you quantify the benefit side of improving the integrity of the market? Yes, you will be able to find the short-term costs for companies having to comply. What is to happen? Senator Murray and the Democrats, I ask: what is to happen in the situation where the cost-benefit analysis shows a negative? Does this mean this is the excuse the FRC and its big business backers will use to sink an accounting standard? Is this how you are going to sink the amortisation argument, the masthead question for Kerry and Kerry, who are already being active on this issue, and some of the big accounting firms who are already doing what their masters and owners are telling them to do in terms of these questions?The cost-benefit analysis is a dangerous piece of legislation that is designed to do nothing more than find a way to nobble accounting standards and make it look reasonable. How will it be possible to stand up and say, `It improves market integrity, but it might cost a few thousand dollars for each of the firms to implement'? In the case of PBL and this issue, 40 per cent of its balance sheet may suddenly be gone because its masthead valuations are being questioned. I urge everybody in the chamber, the government included: do not succumb to this. Cost-benefit analysis is as flaky as any other bit of economic modelling. It is about the assumptions you put into it and it is about who pays the piper. This is about nobbling accounting standards yet again.18:06:009859Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—How appropriate it is that you are in the chair, Mr Temporary Chairman Chapman—and hopefully we are getting towards the end of the committee of the whole debate on CLERP. I have two points. Firstly, the FRC have nothing to do with whether an accounting standard is made or not; they have no control over that process. One of the amendments we have just voted on has actually ensured that; they have no veto power under the government's bill. Now that it has been amended, they certainly have no veto power—that is belt and braces. Secondly, the cost-benefit analysis idea was, I thought, an entirely non-controversial, sensible approach taken by the government that, when the Accounting Standards Board looks at making what are, effectively, regulations—so effectively in fact that they are all disallowable through this place, every single one of them—they are delegated legislation made by this body. They are very important instruments, as we all agree around the chamber, so they should be subject to cost-benefit analysis.As I understand it, all legislation that goes through this place—at least under this government, and I think under the former government—is required to have, as part of the process, a regulatory impact statement. This is entirely in line with that. We are asking the people who are making the accounting standards to go through a process. It is nothing more and nothing less than that. If Senator Murray's amendment, which is coming up next, gets up, it will certainly ensure that the cost-benefit analysis is gone through. You go through a process, as you do with a regulatory impact statement. I think it is an incredibly positive move. I would suspect that the Accounting Standards Board does this informally anyway, but it is a constructive, sensible, analytical process towards developing a standard which becomes effectively a regulation.In my discussions, mostly on an individual basis, with members of the Accounting Standards Board—and some appointments may have changed since I left the portfolio—they all thought cost-benefit analysis was a good idea. I have not heard of any objection to this. To try to paint this as some sort of hidden agenda on the part of the government—asking the standards board to go through a sound analysis process in the development of standards—is unusual, to say the least.18:08:009860Conroy, Sen StephenSenator CONROY3L6VICALP00—I just want to briefly respond. If the parliamentary secretary is suggesting for a moment that any of us—other than probably Senator Watson—is actually in a position to seriously debate an accounting standard when it comes before this chamber, he is having the rest of us on.Senator Ian Campbell interjecting—3L6Conroy, Sen StephenSenator CONROY—I might, actually. But joking aside, there is no serious suggestion that we will perform any role of scrutiny by the time the standard reaches this chamber. The Senate is not a scrutinising body, and nor should it be. The question is whether or not the FRC has the qualifications, and this is where I again take issue with you, Senator Campbell. The FRC has no more qualifications or role than anyone in this chamber has to actually supervise and monitor the priorities—that is, where they go in the standards setting. Just because they run a big business and you have stuck them on the board, it does not mean they know anything about an accounting standard. For you to start suggesting that we can actually use this as a forum—`Don't worry, the Senate is here to check on the accounting standards passed by the Accounting Standards Board'—is a total furphy. By the time it gets here, the nobbling has been done. If there were any attempt by any senator, myself included—and I am sure Senator Murray would not want to get into it either—to have a lengthy debate about mastheads or anything else that came before the chamber, we would be run out of court. People would throw stones at us, justifiably.This is not the appropriate forum to have this debate. This is not the forum where it will happen. The forum where it should happen is the Accounting Standards Board, independent of the FRC. The cost-benefit analysis is not the same as you have tried to describe—a regulatory impact statement or what is involved in working out how much money goes here and there. A cost-benefit analysis absolutely depends on the assumptions that go into it—net present values and all those sorts of things. Issues like definitions of what constitutes a cost and a benefit will allow you to come up with anything you want to come up with. That is the nature of a cost-benefit analysis. As I said, I have spent some time studying them in my much younger days.I do not believe that the points you have raised adequately deal with making sure that the standards reach the Senate in a non-nobbled form. We will not be in a position to deal with the nobbled version in any way, shape or form, unless Senator Murray and I are feeling particularly heroic at the time. We would not want to expose ourselves to our lack of understanding of these issues any more than we currently do. So I do not believe that the assurances that you are seeking to give in that last situation can possibly be valid. Question put: That section 231, schedule 2, item 1 stand as printed.18:16:00The committee divided. (The Chairman—Senator S. M. West)38Allison, L. Alston, R. K. R.Bartlett, A. J. J. Boswell, R. L. D.Bourne, V. Brownhill, D. G. C.Calvert, P. H. *Campbell, I. G.Chapman, H. G. P. Crane, W.Eggleston, A. Ellison, C.Ferris, J. Gibson, B. F.Greig, B. A. Heffernan, W.Herron, J. Kemp, R.Knowles, S. C. Lees, M. H.Lightfoot, P. R. Macdonald, I.Mason, B. J. McGauran, J. J. J.Minchin, N. H. Murray, A.Newman, J. M. Parer, W. R.Patterson, K. C. L. Reid, M. E.Ridgeway, A. D. Stott Despoja, N.Tchen, T. Tierney, J.Troeth, J. Vanstone, A. E.Watson, J. O. W. Woodley, J.24Bishop, T. M. Bolkus, N.Brown, B. Campbell, G.Collins, J. M. A. Conroy, S.Cook, P. F. S. Cooney, B.Crossin, P. M. Crowley, R. A.Denman, K. J. Evans, C. V.Faulkner, J. P. Forshaw, M. G.Gibbs, B. Ludwig, J. W.Mackay, S. McLucas, J. E.Murphy, S. M. O'Brien, K. W. K.Quirke, J. A. *Schacht, C. C.Sherry, N. West, S. M.Abetz, E. Hogg, J.Coonan, H. Ray, R. F.Ferguson, A. B. Carr, K.Hill, R. M. Hutchins, S. P.Payne, M. A.McKiernan, J. P.Tambling, G. E. J. Lundy, K.* denotes tellerQuestion so resolved in the affirmative.18:19:009861Murray, Sen AndrewSenator MURRAY3M6WAAD00—I move Democrat amendment No. 11 on sheet 1592 revised:(11) Schedule 2, item 1, page 344 (after line 23), at the end of section 231, add: (4) The Minister may direct the AASB to give the Minister details of a cost/benefit analysis carried out under this section. The AASB must comply with the direction.This amendment deals with the issue of cost benefit analysis. The way the Corporate Law Economic Reform Program Bill 1998 reads at present is that the cost benefit analysis is a private working paper. Senator Conroy made the legitimate point that, if a particularly difficult accounting standard comes to be debated in the House of Representatives and the Senate, the minister might like to be better advised as to what informed the AASB in arriving at their opinion. Therefore, the amendment I am moving is that the minister may—not must, but may; it is a discretion—direct the AASB to give the minister details of a cost benefit analysis, which as I have just said is private, and the AASB must comply with the direction. That will enable the minister in contentious or difficult circumstances, or when accounting standards may be particularly sensitive, to ascertain exactly what guided the AASB to arrive at their conclusion and may therefore assist the minister to establish whether the parliament should or should not support the AASB's recommendations. To us, that is an added accountability safeguard. Accordingly, I commend the amendment to the Senate.18:20:009861Conroy, Sen StephenSenator CONROY3L6VICALP00—I indicate the opposition's support for Democrat amendment No. 11.Amendment agreed to.18:21:009861Conroy, Sen StephenSenator CONROY3L6VICALP00—As I indicated last week, I seek leave to have government amendment No. 5 reconsidered. Government amendment No. 5 arose out of the defeat of the mandatory bid proposal. I do not want to waste the time of the chamber, unless Senator Ian Campbell would like us to have a debate about the issue. I believe this amendment is consequential.Leave granted.3L6Conroy, Sen StephenSenator CONROY—I indicate that the opposition will be opposing government amendment No. 5. Given the time of the day, I will just indicate that it is a consequential flow-on from the mandatory bid proposal. The amendment read as follows:(5) Schedule 1, item 5, page 111 (after line 15), at the end of section 602, add: (2) Subsection (1) has effect subject to the other provisions of this Chapter.10000CHAIRMANThe CHAIRMAN—The question is that government amendment No. 5 be agreed to.Question resolved in the negative.Bill, as amended, agreed to.Bill reported with amendments; report adopted.9861Motion (by Senator Ian Campbell) proposed: That the bill be now read a third time.18:23:009862Conroy, Sen StephenSenator CONROY3L6VICALP00—I want to thank those who have been involved in this debate. Senator Campbell, many members of the department and the minister's staff have worked on this over many hours and, in some cases, over many years. I want to congratulate them and thank them all for their cooperation during the debate. I certainly would like to thank Senator Murray, notwithstanding our numerous vigorous exchanges, and Lee Jones from his office, who I know has worked extensively with my own office on this. In particular, I would like to express my thanks on the record to my adviser, Arnold Jorge, and to Tim Fawcett from Simon Crean's office for their many hours of work on this in supporting me.ZS6QUIRKESenator Quirke—You haven't thanked me yet!3L6Conroy, Sen StephenSenator CONROY—I do not think I will ever thank you, Senator Quirke! I just wanted to put on the record my thanks to all those involved in the debate.18:24:009862Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I would like to thank all honourable senators for their contribution. I did go through in some detail to thank the team who were responsible for these historic reforms to Australia's Corporations Law that will undoubtedly mean an increase in business opportunities, and therefore jobs, in Australia. I did miss one person, however, and that is Australia's Treasurer, Peter Costello. He probably does not need many pats on the back, but he deserves one anyway. If it had not been for the Treasurer's significant commitment to a major overhaul of Australia's Corporations Law, it would not have happened. He took a very close personal interest in it. It was one of the great privileges of my life to work so closely with him during that two-year period. I commend the bill to the Senate.Question resolved in the affirmative.Bill read a third time.Bills9862r9139862Debate resumed from 11 October, on motion by Senator Boswell:That this bill be now read a second time.18:25:009862Evans, Sen ChrisSenator CHRIS EVANSAX5WAALP00—I wish to speak to the Family and Community Services Legislation Amendment (1999 Budget and Other Measures) Bill 1999 and, in doing so, outline the Labor opposition's position in relation to this bill. It is unfortunate that today's debate starts at a time when the Minister for Family and Community Services is in contempt of the Senate for refusing to release the welfare reform discussion paper that she so heralded prior to her contribution to the National Press Club a couple of weeks ago.Clearly, any debate on social security and welfare in this country would be enhanced by having a proper public discussion of the government's intentions. But the government has chosen not to reveal its intentions in relation to welfare reform when dealing with a more substantial review of the welfare system. Obviously, today we get to deal with one aspect of its approach, and these are the measures that were announced in the 1999 budget. On the whole, the measures will be supported by the opposition. This bill is an omnibus bill, and there is a range of measures which we find uncontroversial or, in some parts, mildly beneficial. But there is one major issue in this bill that the opposition will be taking issue with. Before I start, I note that, while we are only on the second reading debate, the minister has already put out a press release describing the outcome of the debate. I congratulate her, but it is a pity that she is not as quick at putting out other papers that she has in her possession.BE4NEWMANSenator Newman—We have received your amendments.AX5Evans, Sen ChrisSenator CHRIS EVANS—Senator Newman, you have not only received our amendments; Mr Swan, the member for Lilley, made clear our position in the House of Representa tives some weeks ago. It is interesting that the minister is more interested in the debate via press release. I quote from the last line of it, because it is an interesting context for this debate:If Labor can't stomach such an inherently reasonable albeit small reform, how can it expect to play a part in the emerging debate on the future of welfare in the 21st century?The answer to that is: we do want to be part of a constructive debate. We think that the government therefore ought not to hide documents and refuse to release to the public the discussion about its intentions in welfare reform, and that the starting point for a proper and constructive debate would be for the minister to come clean with the Senate, to not be in contempt of the Senate and to release the documentation that she was so proud to beat up and to provide advance publicity for only a few weeks ago.There is real concern about the government's agenda in welfare. We will deal with one particular issue today, but we are also now very concerned about the broader agenda that the minister has. We are not sure whether the Prime Minister endorses that agenda or whether he just has a different view on the timing of its release. But as we saw with the education document that came to light the other day and with Peter Reith's document in relation to industrial relations, this government has a secret agenda in terms of welfare. It is one that we in the opposition are trying to bring out for proper debate to ensure that it is exposed and that the people who are affected get a right to have their say about the impact of government changes rather than have to play catch up. If the government is serious about that debate, then it ought to come clean with the Australian community rather than seek to hide its agenda for welfare in this country. The Australian people deserve better than they are getting and the minister has a duty to provide a better service to both the parliament and the Australian community.Turning to the specific issues of the bill, the opposition supports the measures that include the widening of the definition of independent income for the purposes of the youth allowance family income test to include income earned working for a family-owned business or farm. We also support the extension of entitlement to student loans. We note that the bill allows for the sharing of tax file numbers between the agencies which, from July next year, will contribute information to the Family Assistance Office—that is, the ATO, Centrelink and the Health Insurance Commission. Given the government's track record with Centrelink, the concerns about privacy and the various reports from the Auditor-General, Labor has a duty to closely monitor the performance of the new family assistance officers to ensure that privacy and other concerns are protected.Sitting suspended from 6.30 p.m. to 7.30 p.m.AX5Evans, Sen ChrisSenator CHRIS EVANS—As I was saying before the dinner suspension, there is one aspect of this Family and Community Services Legislation Amendment (1999 Budget and Other Measures) Bill 1999 which the Labor Party will be opposing, that is, the bill seeks to make other changes to the income support of separated parents with joint custody, in a measure which we think is highly unfair to single parents and their children. Essentially, we feel that the government is not recognising the caring responsibilities of single parents. At present, when custody is shared on a roughly equal basis, the department's officers must decide which parent is entitled to parenting payment (single). The government has identified a problem in this arrangement—that when custody is shared equally or almost equally it is difficult to decide to whom the parenting payment (single) should be paid. Sometimes this decision may be seen as arbitrary. It may have to be determined by minor differences in responsibility or circumstance. It may even be determined by who applied first. The opposition has no difficulty in acknowledging that is an issue that needs to be addressed.The government has arrived at a characteristic solution to this problem facing low income earners with shared custody. It has decided that when neither parent has more than 60 per cent of the care neither parent shall receive parenting payment (single). Rather, both would be entitled to the less generous Newstart allowance—with a modified activity test as yet undefined—or youth allowance. It seems that the government has gone for the averaging down approach rather than averaging up. As with all these measures in social security, it seems to find issues that need to be addressed, but they are always addressed at a saving to the government. They are always addressed by means of a measure which reduces the entitlement to those people receiving benefits.The simplicity of its approach no doubt has some superficial attraction for some. It is estimated to save the government somewhere between $2 million and $3 million a year when in operation. However, we think it is a harsh and ill conceived measure which will cause financial hardship and is likely to make it more difficult for parents to cooperate on custody matters by imposing a substantial penalty on any parent whose share of custody slips below a 60 per cent level. The budget documents estimate 2,700 people might be affected in 2001, but I note that the government has an arrangement whereby the current parenting payment (single) recipient will not be affected. It seems rather like a grandfathering clause, like one of those we had some objection to in the CDEP matter. I am surprised if that is the case. Perhaps we will hear more about that later.The question of which parent receives parenting payment (single) is financially significant, not only because the rate of the parenting payment is some $12 a fortnight higher than Newstart or youth allowance but also because the parenting payment has more supplementary benefits, mainly the pensioner concession card and, where applicable, the pensioner education supplement. Those parents who are to receive youth allowance or Newstart will be an estimated $50 to $80 a fortnight worse off, depending on their circumstances. Furthermore, the income test for the parenting payment is less strict. This is perhaps the most significant difference between the pension and the allowance benefits. The former has a fortnightly income-free area of $102 and it is $60 for the allowances.Newstart and youth allowances also have a steeper taper. On parenting payment (single), every dollar in excess of the income-free area reduces the benefit by 50c in the dollar, while the taper rate is the same for the allowances for income from $61 to $140 per fortnight. Income over $140 per fortnight reduces benefits by 70c in the dollar. Single parents taking up part-time work will face much higher effective marginal tax rates if they are on the allowances rather than the parenting payment (single). These are the sorts of consequences that the government has not seen fit to give emphasis to and has not sought to publicise but which we think have real impacts on real people. This is clearly where the savings to the Commonwealth come from. We think that the approach it is adopting should therefore be rejected.We also believe that the measure would discourage agreements among parents to share custody. If there is anything guaranteed to discourage agreements and discourage shared care, it is the possibility of parents losing up to $66 per fortnight. Again, in our view, there is a gap between the government's rhetoric and its action. We all say we want flexibility. We all say that we want non-legalistic and non-adversarial approaches to resolving custody issues, but then we adopt a measure which we think would have the exact opposite effect. If custody is shared equally or within 10 per cent, then both parents are penalised. Both have a $60 a fortnight incentive to hold out for 60 per cent custody or higher, based on issues that have nothing to do with the care of the child. The government does not appear to have thought through enough the effect that this bill is likely to have on those relations between separated parents and their children.As I said at the outset, the basic flaw in the government's approach to this issue is that it does not adequately recognise the financial responsibilities of single parents to care for their kids. When custody is equally shared, neither parent will have the additional assistance which is built into the parenting payment (single) that helps meet the extra costs of children. There are extra costs which must be met by parents who share custody, particularly for suitable accommodation. These needs will remain and yet some $60 a fortnight will disappear from the incomes of those single parents who will be affected by the legislation. The demands of a child do not lessen simply because the government changes the arrangements.Nor does the bill recognise the caring responsibility of parents with shared custody. How is the wellbeing of a child promoted by a measure that would ensure that when custody is equally shared both parents are subject to a work activity test, albeit a modified one? The implication of this is that neither parent is assumed to be the primary carer. The child will not have one for the purposes of this legislation. Parents receiving the parenting payment (partnered) are not required to undertake a work activity test in recognition of their parenting responsibilities. I am not clear in my own mind what is the government's thinking and rationale behind the measure here—whether they are saying something about the value of single parenting or whether they think the needs of children are different. It is a question that the government need to answer.We in the Labor opposition accept that the current arrangements in determining the parenting payment can be arbitrary and less than ideal, but we do not see that the government's proposal to move to a lowest common denominator approach is the answer. We believe that, in the context of the government's supposed overhaul of welfare, the changes to shared care probably are pre-emptive. In pursuing these changes without broader consideration of parenting payment, the child support system, education and training opportunities, labour market assistance and reforms of Newstart, these measures on their own seem to be no more than a means of cutting costs.If the government is serious about recognising the role of the small number of parents currently sharing in the care of a child and receiving Newstart or youth allowance, there are better alternatives than the approach it has adopted. I am sure it never gave a moment's thought to putting both parents onto the parenting payment. The move to place both parents on Newstart assumes that parents currently receiving parenting payment and sharing care of a child will not of their own accord seek part-time work or take up study. This is despite the relatively generous pensioner education supplement and better tapers on the payment as opposed to Newstart.For all those reasons, the Labor Party will be opposing this measure in the bill. The rest of the measures will be supported by us, but we think the government ought to have a look at this issue again in the context of its overall approach to welfare—its overall approach of encouraging people from welfare to work—and ought to have a look at the rationale that underlies its thinking about the treatment of single parents. We know that the minister's discussion paper that has been much in the news lately contains propositions that affect single parents, and perhaps we ought to be having a debate about this particular measure as part of that broader debate about their entitlements and the way that the community supports them in bringing up children.As I say, I indicate on behalf of the opposition that we will be opposing a section of the legislation, but we will be supporting the other measures contained in the bill.19:39:009865Bartlett, Sen AndrewSenator BARTLETTDT6QLDAD00—I rise to speak on behalf of the Australian Democrats in relation to the Family and Community Services Legislation Amendment (1999 Budget and Other Measures) Bill 1999 . The bill gives effect to a range of different measures—as is often the case with social security and related legislation, often relatively minor in the grand scheme of things—in one piece of legislation. Most of the measures derive from the government's most recent budget, the 1999-2000 budget, but there are a couple of other measures.Most of the measures are relatively straightforward. A couple are beneficial ones which, the Democrats acknowledge, do assist, particularly in relation to extending the category of people who can be eligible for a student financial supplement scheme loan. There are a couple of aspects in relation to the operation of this scheme that continue to cause the Democrats concern, but nonetheless, in relation to the particular proposal that is put forward here to extend availability to persons who fail the ordinary youth allowance assets test, this amendment is beneficial. The other components that deal with the commencement of data on family assistance measures, data matching aspects and the family actual means tests are ones that the Democrats do not have a problem with and are happy to support.The main area of contention, of course, in this legislation relates to eligibility for parenting payment and the changes being made there for that relatively small number of parents who share custody arrangements for a child roughly equally—as is detailed here, between 40 and 60 per cent of care for a child. It is an area that is obviously inherently, and almost invariably, going to be somewhat messy in various circumstances, and I am sure it is because of that that the government has sought to modify the arrangements with the aim of trying to improve that situation.The Democrats have some concerns about some aspects of the changes that have been made, but I will not go on at length now, given that amendments will be dealt with at the committee stage. I will speak at more length at that time. The concerns the Democrats have relate basically to whether or not the flexibility that it is being suggested is being added here is actually going to be what is provided and whether the actual consequences—and I am not implying that they are intended consequences—will lead to a situation that will be more disadvantageous for the majority of parents that are in the situation that this amendment tries to deal with.Some of the issues that the minister or the government has raised relate to providing extra incentive for people to get into the work force, an area where, I think all senators agree, assistance is important, whether it is into the work force, into education or into other areas. Assistance for going into education is particularly relevant here because the changes will move one of the carers down from sole parent payments or parenting payment (single) to Newstart allowance, and therefore they will cease to be eligible for the pensioner education supplement; the telephone allowance, which is a fairly small amount; and also, sometimes very significantly, assistance in relation to the relevant card, the pensioner concession card, which provides significant extra concessional assistance over and above the health care card that is provided to Newstart allowance recipients.On top of that, there is a much tighter income test applying to people on Newstart than to parenting payment (single), and that is a particularly important issue when we are trying to use concepts such as `incentive' to get into the paid work force. There is no greater disincentive than the extremely severe income test that applies to Newstart allowances.One of the areas that I hope is looked at—and certainly the Democrats will continue to raise it as we look at the overall shape of our welfare system into the future—is the ever growing disparity between the payments and the related entitlements for people on pension and pension related payments compared to those people on allowances. It is no surprise that there is an incentive for government—probably the temptation is almost irresistible for government, whether it is temptation or whether it is the ever present Treasury or expenditure review people looking over their shoulders—to look, when they are modifying conditions, at pushing people onto allowances rather than pension related payments.This is one of the concerns that the Democrats fear may be underneath some of the so-called reforms that the government is considering to the overall welfare system. There is a significant gap just in basic payment between pension related payments and allowances. That gap will increase when the GST related compensation kicks in. Of course, there is quite a significant difference in the income test and, again, that difference will increase further when the GST related compensation package kicks in. It always generates a problem when you are looking at moving somebody from a pension related payment to an allowance related payment.One other matter of interest, which I may as well mention now rather than at the committee stage, is that the explanatory memorandum on this section of the legislation suggests that, by the year 2002-03, there will be a saving for the government of $2.2 million, but in the first year of operation there will be a $3.3 million cost. I would be curious as to why, in relative terms, there is a significant cost in that first year of operation. Is it because systems will have to be set up, or is there some grandfathering clause—something like that? That does not need to be answered instantaneously by the minister. It can be dealt with at the committee stage, if she wishes.In some respects this is relevant to what some of the problems may be with this change, because, once again, you are looking at sole parents. It is widely acknowledged that these people are amongst the most disadvantaged in the community, particularly people that share custody arrangements, where both parents—in different households, presumably—have to have a facility available to care for the child in their own home, whether it be the spare bedroom, clothing or whatever. In a sense, you have an extra load there than you may have if just one parent has full custody of the child. When there is any reduction in total financial assistance being provided, there is a potential problem, because already these people are in a situation where they are amongst the least well-off.Those are some of the Democrats' concerns in relation to this issue. I am quite willing to concede that it is a vexed issue. Nonetheless, it is one that we do have concerns about in terms of how it will operate in practice and the impact it may have on individual people. As I have said, the other aspects of the bill are ones that the Democrats do not have any concerns with and are quite happy to support. At the committee stage of the debate I will expand, if necessary, a bit further on the issues relating to income support arrangements for separated parents.19:47:009867Harris, Sen LenSenator HARRIS8HCQldIND00—In rising to speak to the Family and Community Services Legislation Amendment (1999 Budget and Other Measures) Bill 1999 , I would like to put to the Senate the following issues. In the bill, we have a contradiction of published Liberal Party policy and a newly created amendment to the bill. I am uncertain as to whether this is intended or whether the party is so out of touch with average Australians that it has overlooked the impacts of the policy change on income support arrangements for separated parents.Let me remind members of the chamber what the coalition was advocating prior to their election. It is such a travesty of justice that, like many political parties, you gain power and then forget your platforms, leaving them aside ready for the next election when you can dust off the jackets and resubmit the same rhetoric. `Our families: our strength our future' was the headline. I agreed with a great deal of what the coalition espoused to stand for. Families are the very heart of Australian life. They are the best social welfare system devised. Stronger families and stronger family life do mean a stronger and better Australia. The coalition's rhetoric was similar to Pauline Hanson's One Nation Party, which stated that safe, secure and happy societies require, as a guiding principle, strong and functional family units.The coalition's method of achieving this positive gain, like that of the Labor Party, is doomed to fail. When will commonsense prevail? You have again adopted a slash and burn approach, not a genuine reform of the welfare system. The economic rationalists—who look at short-term financial gain and forget about the social, emotional and long-term economic costs to our society—are guiding you. Such costs will, in the long term, end up costing the Australian taxpayer and, more importantly, the Australian society dearly.The government's proposed changes to income support arrangements for separated parents have the potential to further frustrate the position of many non-custodial parents. In their already difficult attempts to gain some access, let alone custody of their children, the proposed changes could inflame mediation and counselling arrangements between separating parents. Depending on how much access you get to your children depends on whether you forgo significant welfare payments. In fact, this legislation could effectively disadvantage both parents by making neither of them eligible for parental payment, particularly if they act in the most responsible manner of sharing custody arrangements on a fifty-fifty basis.I think the government should start at the beginning when attempting to save money from the parenting payment. Let us see where the problem really lies. We are concerned for those non-custodial parents who, after their marital breakdown—and now through government mismanagement and ineptitude—may be forced to relinquish their rights to parenthood. We are concerned with successive governments which have policies that do not encourage parents to share equally their offspring. In fact, although joint parenting is in the Family Law Reform Act, it appears to be regarded as unworkable by many judges, counsellors and parents.In America, legislation has introduced policies that show a definite move towards shared parenting arrangements. Agreements with parents that involve various forms of joint custody have resulted in American children now spending roughly equal periods of time with the two separated parents, even when the separation involved conflict. In America, parents are encouraged to make joint decisions about major impacts on their children's lives—for example, school, health and sport. Surveys are pointing to a high success rate with this model. In fact, children are happier having good contact with both parents, even if this contact relies on children moving from one home to another on a fairly regular basis. Children say they prefer that model because they get to see both mum and dad.This does not come as a complete surprise to Pauline Hanson's One Nation. We believe that children should have good and open access to both parents, not be burdened with a policy like the policy we have in Australia at the moment, which in most cases deems that the mother is the best primary care giver and deserves to be delivered custody of the children. One Nation does not live in the dim dark ages. We have recognised for a long time that children need both parents to grow up in a stable environment. If they cannot have both parents under the one roof, then they are entitled to access to both parents. This policy change proposed by the coalition will result in parents not wanting shared fifty- fifty custody because the child will lose financial benefits.Let me be very clear about this comment that the child will lose the benefits. These include concessional pharmaceuticals and associated concessions including public transport, council rates, vehicle registration, electricity and gas concessions. They will lose access to pensioner education supplements and approximately $13 per fortnight. Some in this chamber may say, `Only $13 per fortnight or $338 per year!' I guess it sounds like a pittance to some, but I have not forgotten what it feels like to struggle financially. I have not forgotten that a small amount of $7.50 per week can buy milk, bread, fruit, vegetables or meat for a child's nourishing meal. On Newstart, the enforced alternative, they will also face higher effective marginal tax rates because the benchmark for tax concessions is much higher with Newstart.I am in despair at the government's policy that willingly places responsible parents who are prepared to share custody of the children in a joint fifty-fifty arrangement into a position of receiving less welfare benefits. The fact is that these people share arrangements for their children and consequently have to maintain a household suitable for a child. They need an additional bedroom for, if the accommodation is not suitable, their access to the child can be stopped. Are these not the very people we should be encouraging? Are these not the people putting the care and support of their children before their own disappointments and despair with each other? Does the government prefer that we keep the ritual of the custodial and non-custodial parent? Is the government aware that the non-custodial parent generally only gains access to their child approximately 80 days per year? I ask you all to reflect on your upbringing and that of your families now. If you could only access one parent for approximately 80 days of each year, would your relationship with the absent parent be secure and strong or would it have diminished? The government's policy is tearing away that final commitment to work together for the good of the children. In fact, financially it will harm the same children. Let us move away from the economic rationalist view of the world that requires a dollar driven profit in every decision. Let us use some good old commonsense in how to deal with this problem of family breakdowns because we all know that some marriages do break down. The continued application of outdated cultural values which underlie the perception that the female is the best primary care giver and decision maker must be challenged. Men are good parents and should be afforded equal opportunity to gain custody of their children.A parent who earns the family income should not be penalised for earning that income by being denied equal opportunity to become a custodial parent. Joint custodial arrangements should be pursued vigorously by the parents, case managers, courts and all parties to the dispute. Joint custody allows parents, in consultation with the children, an opportunity to share management and information of their offspring's lives in important issues like health, school and recreation. Property settlements should be set with an eye on joint custody and fifty-fifty splits of property and assets. Both parents will need to provide homes and equipment for their children. Both sides should have an equal opportunity to provide safe, secure and happy environments.The Family Court merely provides an adversarial setting for family disputes. It creates a them-and-us scenario and is costly to the litigants. Generally, however, one party receives legal aid while the other accrues massive debts. Family tribunals would ease this adversarial situation and allow for only the most contentious of cases to proceed to court.It is important that sufficient funds are provided to direct towards preventing the breakdown of marriages. Along with coalition policy, I agree that the emphasis of all strategies should be on preventing or overcoming family breakdowns by assisting families to work through problems before they reach crisis point.I note that the government have allocated $16 million to improve the availability of services in mediation, counselling and dispute resolution for families facing difficulties. In addition, they have allocated $3 million for mediation and conferencing by state and legal aid commissions. Another $16 million will go to establish 25 new supervised contact services for parents. I am yet to be advised that these services are now fully operational and providing service. I hope that they are.The latest round of welfare cuts will impact on parents who have agreed to fifty-fifty custody of their children. These families will need to access this new service. They will have to negotiate their care arrangements so that the children do not suffer. Furthermore, the government has indicated that this will probably only affect about 2,700 families. I ask the government to consider how many children will be involved and how many grandparents will suddenly find their access visits curtailed. Just how much will this impact on the extended family?We support the government in legislation that enshrines joint custody as a preferred outcome for all custody and access settlements. We are mindful that joint custody would only be granted to those parents who are responsible in their upbringing of the children. This is another area that can open a Pandora's box of litigation. Pauline Hanson's One Nation Party has a policy to assist in dealing with the issue. I will discuss it at an appropriate time.I urge the government to amend this section of the legislation that impacts so severely on responsible parents who have fifty-fifty joint custody arrangements for their children. Remember that we are asking for this change to protect the wellbeing of many Australian children.20:01:009869Murphy, Sen ShayneSenator MURPHYFX5TASALP00—The Family and Community Services Legislation Amendment (1999 Budget and Other Measures) Bill 1999 demonstrates yet again the callous and uncaring approach to welfare recipients by this government. Indeed, it demonstrates its incompetence in dealing with the overall social security system and helping those most in need. It is helping them become self-reliant, as Senator Newman puts it. The government states that the purpose of the bill is to achieve one of the major out comes identified in this year's budget related to the stronger families strategy, which is designed to ensure that families, young people and students have access to financial assistance and family support services.The bill seeks to amend the Social Security Act 1991 to introduce these budget measures. In reality, though, the bill is typical of the government's approach to the wrecking of the welfare system in this country. It is just a forerunner of what is to come for the poor, the unemployed and the disabled. In fact, were it not for Mr Howard, the Prime Minister, canning the green paper or white paper—perhaps it was a pink paper—by the minister, Senator Newman, we would have had an opportunity to hear from the horse's mouth exactly what they have planned for welfare recipients in the future.This is the address which, despite all the leaks beforehand, amounted to an announcement to form a committee. There was no discussion paper for the committee; indeed, there was no discussion paper for anybody. We got the announcement that Mr McClure, as best we can ascertain, rang up the day before and asked to chair this committee. We have had a censure motion moved on the minister, yet she still has not produced the white, green or pink paper.To put this into context, we need to look in part at the government's record since coming to office not even four years ago. They cut $1.8 billion from labour market assistance programs and $851 million from child-care funding. There are now 770,000 children growing up in families where neither parent has a job, which is an increase of 96,000. We have seen a sharp rise in income inequality, where the top 20 per cent of households are now earning 12.8 times more than the bottom 20 per cent. This is up from 12.5 times in 1995-96. The proportion of households dependent on welfare for their principal source of income has surged to almost one in three while the average cost to each taxpayer of financing the rising welfare cost has hit $5,000 per person. I know that the minister knows all this because she is the one who provided a lot of this information.Unemployed people now spend an average of seven weeks longer on welfare, and four in 10 have not had any full-time work in the last two years. More than 62,000 of all people out of work for longer than two years cannot read or write. The number of people on the disability support pension has blown out by 80,000 and the number of people on sole parent pensions by 43,000. Add on top of that the introduction of the GST, which will come into effect on 1 July 2000. The government has had to increase the compensation for that to four per cent. We know that that is now going to be eroded totally and then some by the inflation rate, which will be around five per cent.Australia will face a further blow-out in its welfare budget as a result of these things by approximately $5.5 billion in the first year of the GST. It is a very important figure when you look at what the government is doing and what it has been doing over the last four years. That means that it will go from somewhere in the order of $44.5 billion to over $50 billion. As the minister said, that affects approximately one-third of all budgeted measures. A direct result of the government's need to compensate for the impost of the GST and the cuts it has made in labour market and other welfare programs is that people have gone out of the work system.Of course, all of that sits against a backdrop of statements by the minister who, for example, made a budget statement on 11 May this year saying, in part, that the government will be strengthening and supporting Australian families and, further, that the government is committed to social policy reforms that foster and support an adequate social safety net embracing prevention as well as cure. The Prime Minister said, I think in June this year, in a speech entitled `Toward a family strategy' that this government is dedicated to doing what it can to strengthen its support for family life.You would think that, with statements like these, they would be embracing programs of genuine reform, such as the Jobs, Education and Training program, JET, which has been cut in half from $16 million a year to $7 million a year—BE4NEWMANSenator Newman—It has not.FX5Murphy, Sen ShayneSenator MURPHY—We will see about that, Minister. You can get up and explain it all away as best you can, but your record is not too good at the moment, let me tell you. You ought to bring a few of your pink, yellow, white and green papers in here and maybe we will get to the bottom of a few of these things. Also, the More Intensive Flexible Services pilot program, or MIFS, which provided people with real opportunities to move into the work force, was cut by $200 million. This government has simply tightened the criteria and watched those less well off fall completely through the safety net.This bill is a further example of this: the `cut funds at all costs' approach. It is made abundantly clear when we look at the financial circumstances of parents sharing the care of a child. This measure will change the income support arrangements for a child where the child is dependent on more than one person, and the adults are not members of the same couple but are sharing the care of the child. If this measure is introduced, it will mean that both parents caring for a child will be taken off the parenting payment and placed on the Newstart allowance. Parents will stand to lose up to $50 per fortnight. This will rob them of the entitlements and benefits they need to bring up children. They will lose $12 a week when they move from PP to Newstart. They will lose their pharmaceutical allowance, their access to the pensioner education supplement and their telephone allowance, and they will face higher effective marginal tax rates because the taper is much higher for Newstart. A single parent earning $300 a fortnight from casual employment will lose $90 more if they are receiving Newstart compared with staying on parenting payment. This measure means that people in a shared care arrangement receive the lowest rate of payment, are under the most restrictive income test and receive the least concessions.Labor, of course, is opposing this measure because it is regressive. It will deprive sole parents of much needed financial help unless their responsibility for a child reaches a certain level. It is the latest in a long line of welfare cutbacks and blunders by this minister and the government. I would like to go to the seminal speech delivered at the Press Club by Senator Jocelyn Newman on 29 September this year. It was supposed to launch a green paper—it could have been a white paper—but we ended up with no paper because the Prime Minister got wind of this would-be paper, despite the fact that we had the minister's press people up in the gallery running around the place saying this was going to be it, this was the new agenda for welfare in this country for the future. Well, we are still waiting, despite a censure motion on the minister and despite a return to order to produce the document. We cannot get it. I think it exists in the form of an opinion that Senator Newman, the minister, has and the government have, but I think they are very reticent to bring it out. They are very reticent to tell the people of Australia what they really have in store for them, particularly those less well off.I would like to read a paragraph from the minister's speech. The last paragraph on page 2, of 8 pages, says:A modern safety net is not about blaming the victim, or penalising or punishing disadvantaged people. Nor is it necessarily about more government intervention or throwing money at problems.We are right so far, except that it does not quite seem to be the case with regard to the first part of that statement: `A modern safety net is not about blaming the victim.' If you look at the government's record, it would seem it has done nothing other than blame the victim. It has embarked upon a process to set up a social security system that makes it increasingly difficult for people to actually proceed to better themselves—as the minister says, to make them self-reliant, to go from dependence to independence. The speech goes on:It is about helping people avoid or move out of welfare dependency and giving them real opportunities. And, it is about people on government payments accepting responsibility and an obligation to help themselves by making a contribution to the economy and society as much as they can.On the one hand, this government wants them to make a contribution all right—financially—and wants to take all the money off them. When it does that, it takes away the money that funds opportunities in terms of employ ment, training and education where they might actually begin taking a few steps towards helping themselves.One of the measures in the process that the minister has set down and has identified in her speech—but it was leaked from the speech or the white, green or pink paper which has somehow disappeared off the face of the planet—was that the saving measures were aimed at sole parents who would have to start looking for work when their children reached the age of 12 or lose their welfare payments. Single income couples with children aged between 12 and 16 would have lost their parenting allowance of a minimum of $60 per fortnight.Of course this is relevant. What the government is hiding from the people of Australia is relevant. What this minister has locked away somewhere, in the form of a green paper or some sort of paper, is relevant to this bill because of the fundamental principles underlying both of them. They are a further attack on the living standards of parents on very low incomes. It is very clear, from this bill and the above measure that I have just mentioned, that this is the only solution the government has: moving people from dependence into the work force, which is further cost cutting.Their philosophy is to blame the recipients. It is much easier doing that than thinking up programs to assist people to move to independence. The government continue to attack the most vulnerable in the community. They do not do anything to assist them—and this is very important—by putting funding back into labour market programs. They have cut the labour market programs that have been proven to help people. In recent weeks we have seen Senator Newman, the minister, floundering around in this place on issues such as child care, where funding cuts of $850 million have led to the closure of 280 centres since 1996.BE4NEWMANSenator Newman—And what of the opening of them—the net gain?FX5Murphy, Sen ShayneSenator MURPHY—Minister, these are your department's figures, and you could not answer a question today from Senator Denman. Fees have soared by at least $20 a week in the last two years. Let me ask you about this, Minister: when we go into committee, maybe you would like to tell us how that helps people in difficult circumstances get back into the work force. The government report released on 10 August, Child care in Australia , showed that since 1991 fees have risen 56 per cent but Commonwealth welfare benefits have risen only 29 per cent in the same period.Of course we saw the minister trying to use some misleading statistics to justify the government's position on child care, but the facts are these. Actual expenditure on child care in 1996-97 was $1,066 million, in 1997-98 it was $999 million and on the department's last estimate in 1998-99 it was $989 million. The expenditure on child care is falling and yet the minister came into this chamber and tried to convince us that the government are spending more on child care. We know that is blatantly untrue.In my state—which is also your state and where you come from, Minister—in particular in Bass, as was mentioned by Senator Denman in a question to you, funding cuts to child-care centres have amounted to $660,197 and, as a result, 62 per cent of parents have made changes to their child-care arrangements due to increased costs. Fifty per cent of the parents surveyed by the member for Bass had made changes to their work arrangements due to increased costs. They are paying an average of $118 a week for child care. Private school fees are now less expensive than long day care fees and some parents, mainly women, have been forced to leave the work force altogether because of the cost of child care.On a national level, the latest statistics show that 13,000 women left the work force in January 1999; that is, 13,000 in one month. They simply gave up work, and one of the reasons for this exit is that child-care costs are too expensive. So, Minister, you might like to explain a little bit about that when you get on your feet.These people are not sharing in any of the benefits of growth. Instead, welfare dependence is growing at a time of relatively strong economic growth because the government has abolished essential programs and has cut back measures which could have prevented it. Senator Newman, the minister, has only one objective in her ministerial portfolio and that is to cut more out of the social security budget. Under the cloak of mutual obligation, the minister will be trying to achieve deeper cuts to family benefits and the pension in a desperate attempt to halt the growth in the numbers of families receiving parenting payments and the surge in DSPs. If the government and the minister were serious about mutual obligation, they would not have abolished programs such as JET.BE4NEWMANSenator Newman—We haven't. Tell the truth. You are misleading the Senate.FX5Murphy, Sen ShayneSenator MURPHY—And the MIFS pilot was cut. I do not think, Minister, that you are in any position to tell me about misleading the Senate. As I said, that was the case with funds for both of these programs and, at the end of the day, what was it for? A saving of $200 million. That might seem like a lot but, if you compare that with the $5.5 billion blow-out in the welfare budget, it does not amount to much.It is about smart spending, Minister. Surely it would have been a bit smarter if the government had actually invested some of the money in giving people the means of standing on their own feet. An example of this is the lack of investment in early intervention programs, with specific reference to literacy and numeracy programs in the early years of formal schooling. This government spent only $2 million on parenting skills. That amounts to 0.00036 per cent of the total amount spent on parenting payments.To reconstruct our welfare system, we have to invest in people and their skills and aid them with programs, not slash programs. These are people who are not benefiting from the relatively strong economic growth that we have had. These are people who are trapped because the government cuts that have already been applied, as well as the ones that the government has planned, are going to make things even more difficult. I think that, at the end of the day, this government and this minister in particular have a lot to answer for—and it is a pity, Minister, that when you get up you do not try to answer some of the questions.We will oppose certain measures in the bill and we will support others because they are important and they are changes in the right direction. But the areas where you are cutting things and making things more difficult for people are the areas that we will oppose, and they are the ones that you and your government ought to start to address. For once, Minister, you might get on your feet and actually deal with some issues for a change.20:21:009873Gibbs, Sen BrendaSenator GIBBS6L6QLDALP00—Looking at some of the proposals in the Family and Community Services Legislation Amendment (1999 Budget and Other Measures) Bill 1999 in front of us, I start to wonder how much the Howard government really cares about welfare. It is not that I think this government and this minister go out of their way to harm families on purpose. No, I do not accuse them of that. The government professes to have the best of intentions at its heart most of the time. But in its relentless pursuit of the bottom line, it seems to be all too willing to let the people who most need its help wear most of the pain of budget cuts. Take this piece of legislation, for example. While there are some noteworthy aspects to it, which I will discuss later, it is unfortunately flawed. Hidden alongside several harmless and, indeed, some good changes is an amendment that will cause tremendous harm to children from separated families. Our amendments will turn this bill around. Our amendments will make this botched attempt at welfare reform fairer for all the people involved.Before I discuss this bill in detail, however, let me talk about the government's welfare record. There are now 770,000 children growing up in families where neither parent has a job. That is an increase in welfare of almost 100,000 since the Howard government came to power. Almost one-third of all Australian households now depend on welfare as their main source of income. People in the unemployment queues in this country now spend an average of seven weeks longer on benefits. The biggest blow is that all of this is happening in an era of strong economic growth. All of this is happening at a time when interest rates and inflation are low, unemployment is trending downwards and business growth is high. All of this is happening at a time of strong world economic growth, and it is happening for two reasons.The first reason is that most of this economic growth is going to the top end of town; the growth is not being shared fairly. It is happening because the government's `cut first, ask questions later' approach to welfare is hurting people. The opposition does not dispute that there is some need for welfare reform. Unfortunately, this government seems to believe that `reforming' something means that you have to cut funds to it. Unfortunately, this government has cut $1.8 billion from labour market assistance schemes in the name of reform. That is an awful lot of money being taken away from people who are finding it hard to move off the unemployment queues.Last month Senator Newman was travelling around the country, telling anyone who would listen of her plans for a speech identifying radical welfare reform. Alas, the Prime Minister got to her first and told her to pull it. After seeing the dressing down received last week by Dr Kemp with the unmasking of his plans for higher education in Australia, I am not surprised that Senator Newman's paper was withdrawn; maybe it was in her best interests that it was. If this bill is anything to go by, the government's approach to reforming welfare will have to be carefully watched. It will have to be watched because, among a number of good measures in this bill, there are some changes that cause concern.Before I talk about those concerns, however, let me discuss some of the measures in this bill that the opposition supports. They are measures that simplify some aspects of child support. They are measures that relax restrictions on low and middle income earners, particularly those outside the cities. They are intelligent measures. They are good measures. We support changes to the family means test which will allow young people to help with the family business without losing their ability to access the Youth Allowance. The amend ments also allow income gained through work on a family farm to be exempted from the family means test, and that is a good move.We also support changes relating to parenting payments for absent children. This amendment recognises that, in a lot of cases, a child in the care of a recipient may be absent for up to eight weeks. The changes allow for there to be a commonsense approach to the payment of benefits while children are on school holidays, for example. Just because a child might be away from a parent for a few weeks, it does not mean that person does not need to maintain a decent house that is fit to raise a child in. The cost of raising a child does not stop as soon as they walk out the door. We have also agreed to extending access to student financial supplement scheme loans. In the aftermath of the government's changes to higher education, it is very important to extend access to these loans—although we wish we did not need to. This amendment recognises that a parent may not be willing or able to use certain accumulated assets to support their tertiary aged children.But there is one measure in this legislation that is of particular concern to the opposition—that is, the change to rules governing welfare payments to separated parents who share custody of a child. Much of the history of reform in the area of separation and child support in the last 25 years has been about encouraging, as much as possible, agreement between the parties. That is, of course, the right thing to do. It is much better for the partners involved if they can come to some form of mutual arrangement. It is also much better for any children involved. In the end, it is also much better for the whole community. Obviously there are times when an amicable settlement cannot be reached, and for that we have a court system that seems to work fairly well most of the time. It is not always pleasant, but overall it works. Now, however, the government seems to be saying to the community that it is okay for people to fight over the custody of their children.BE4NEWMANSenator Newman—This is voluntary.6L6Gibbs, Sen BrendaSenator GIBBS—The government seems to be saying this but, if I am wrong, it can correct me by supporting our amendments.Senator Newman interjecting—6L6Gibbs, Sen BrendaSenator GIBBS—Yes. That might not be the government's intention, but that will be the reality of this measure in the legislation; it will be the reality of this new measure because parents who have come to an arrangement about the shared care of children after separation will be encouraged back into court to fight to get the money they need to raise these children. If this new measure is introduced, both parents sharing care for a child will be taken off the parenting payment and placed on Newstart or the Common Youth Allowance. The effect of all of this is that they will have their entitlements cut—surprise, surprise. The latest round of welfare reform by the Howard government is about saving money. It is not about helping people, it is not about helping families, it is not about helping children; it is about money.What I cannot understand about this change is that it will not save huge amounts of money. The actual savings from the measure are relatively small in budgetary terms, but the social cost is enormous. So, how much is this measure likely to save the government? It is less than $5 million over the next four years. This measure will pit families against each other for less than $5 million. In the past, separated parents may have been able to come to an amicable agreement concerning the custody and raising of their children. Now, the government is saying to separated parents, `Don't bother trying to balance your responsibilities. Don't bother trying to come to any sort of agreement, because we're going to make it a lot harder for you to do that.' While budget information suggests this change might impact on only 2,700 new claimants for the parenting payment, that does not excuse it. We should not allow this particular measure through simply because it is going to impact on only a small number of people.In the past, a person who had 60 per cent or more of the caring responsibility for a child was eligible for the single rate of parenting payment. The amendments here alter this so that where two parents share the care of a child, between 40 per cent and 60 per cent each, neither parent will qualify for the single rate of parenting payment. If the Senate lets this amendment pass, a parent providing 60 per cent of support for a child will be forced to support that child, and themselves, from the Newstart and Youth allowances. Those allowances are hardly enough to support an adult in a decent manner, let alone an adult and a child.If this measure is introduced as it stands, parents taken off the parenting payment could lose more than $50 a fortnight. Firstly, they will lose $12 a fortnight when they move from the parenting payment to Newstart. They will lose their access to the pharmaceutical allowance. They will also lose access to the pensioner education supplement and their telephone allowance. They will also face a higher effective marginal tax rate because of the construction of the Newstart Allowance. All of this might make sense if the money being taken from one parent, whose parenting role was reduced, was given to the other. Unfortunately, this is not the case. Unfortunately, the government is using these changes to claw back a few dollars from the people in our society most in need. As a result, families as a whole who are separated are going to be at least $50 a fortnight worse off. And who are going to be the biggest losers out of all of these changes? Ordinary Australian children.These changes will be detrimental to children because they will encourage parents who have come to an agreement about shared custody of a child to start fighting all over again. It is an inevitable consequence that more parents will be forced to go to court to contest custody arrangements because they will not be able to afford the loss of the parenting payment that would occur under this new scheme. The government also seems to be forgetting that the cost of raising a child is a lot more than just the food they eat. Of course, children do eat a lot of food, but if you were to believe the government that is about the only thing parents have to provide. The government is wrong. Parents have a duty to provide children with a whole range of things. Parents have a duty to provide children with a decent place to live. They have a duty to provide children with appropriate learning opportunities. More than that duty, however, children have a right to expect such things. Unfortunately, all these things cost money. Achieving all of that is often hard enough to do when a couple is together. It is even more difficult to do when they are separated. The government is saying to separated couples, `Even when you share the responsibility of raising a child, we are going to make it harder for you to raise that child in a decent and fit manner by cutting your access to benefits.' That is not something we should allow.In summary let me say that, in making these proposed changes, the government will adopt a measure that fails to recognise the additional costs associated with raising a child. It would result in people in shared care arrangements receiving the lowest rate of payment, the most restrictive income test and the least concessions. These changes increase the administrative complexity surrounding the issue. Most importantly, the government has adopted a measure that fails to recognise the sensitivities that can arise in family disputes over children. This measure will encourage people who have come to some sort of arrangement about the shared care of children to go back to court.Finally, I would urge the Senate on behalf of ordinary Australians who have had to go through the terrible plight of separation not to pass this bill in its present form. If the Senate passes all of these amendments without change, we are giving our encouragement and approval for separated couples to use the custody of their children to gain extra support from the government. If the changes are passed without amendment, we are saying to people that it is okay for them to use their children as pawns to get a little more money from an already miserly government. That is the not message the ALP want to send to the adults of Australia, and it is one we especially do not want to send to our children.20:36:009876Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—I thank senators for their contributions to this debate on the Family and Community Services Legislation Amendment (1999 Budget and Other Measures) Bill 1999 , but I feel obliged to make a few comments on some of the contributions.Senator Harris talked about stronger families and the fact that the government has made it very clear that it wants to do something to strengthen families. We are very seriously working with the rest of the nation, at all levels of government and community, to do something that will really help to strengthen Australia's families. Only on Saturday I launched the first pilot program of pre-marriage education vouchers. A lot of the problems that Senator Harris referred to, that come about because of people's encounters with each other and then with the Family Law Act, can be avoided. If Australia's families do not break up, an awful lot of these social problems that cost individuals and the nation—not just in dollar terms but in pain terms—could be avoided. The government is very committed to the prevention of problems with families and to early intervention, before circumstances lead to a crisis. I think it is only fair that due recognition be given to the fact that the government is following through with its commitment to strengthen families. The nation will be seeing more efforts in that area over time.As I said, the first pilot program of pre-marriage education vouchers was launched in Tasmania on Saturday. Another pilot program will be launched in Perth in Western Australia in a week or two, and in March a further pilot program will be launched for people in country areas who cannot easily get access to marriage relationship services and pre-marriage education. It is very important that we do not think just about how to deal with people whose lives have become adrift but to make sure they do not become adrift in the first place. I think there is too much acceptance in this country that marriage breakup is becoming the norm. It was not the norm years ago; I do not see why it should be the norm now.The question of shared care is in the Family Law Act, and I know Senator Harris was largely talking about his concerns with the Family Law Act. This measure will help those people who choose to share the care. It is for volunteers. That is why there are only 2,000-odd people who, it is believed, will be affected by it and who will get the benefit of it. I emphasise that this is a benefit for people who are currently disadvantaged. I think there was a suggestion by Senator Harris that people will miss out on pharmaceuticals. If he is talking about the pharmaceutical allowance, that is correct, because that travels with a pension. But concessional pharmaceuticals are available to both parents, because both parents will be entitled to a health care card. I hope I have set the record straight for Senator Harris in a few areas.Perhaps I should now address some of the inaccuracies that Senator Murphy seemed to be gleefully engaged upon. Let me make it absolutely clear, as I made clear in the Senate over the last few weeks and as I tried to interject on Senator Murphy tonight: JET has not been cut. The Jobs Education Training Scheme was a Labor government program which we believed was effective and which we kept, and we have expanded it. We have widened the eligibility to include partnered parents, carers and now parents in this program. In this measure before the Senate tonight, both parents will be eligible for help under the JET Scheme.The Labor Party appear to be deliberately claiming that funding for the JET Scheme has been cut. It has not; it has been expanded, as has the eligibility. What has happened is that the training element of the JET Scheme is now recorded in the training costs in another portfolio. That is why Labor are able to get away with what is misinformation.Senator Murphy was also talked about the MIFS program. He does not know what he is talking about; he is using a grossly inflated figure. MIFS was a pilot program always, which I extended by a further 18 months, and it is now about to be evaluated. So that was a red herring if ever there was one.Senator Murphy talked about the parenting skills program, and I happen to be a great believer in this program. In the years that we were in opposition, I—as the family spokesman in 1994—and other colleagues tried to get the Labor government to put more money into pre-marriage education and parenting skills. These were small programs which got very little, if any, attention from Labor over all the years they were in government. We have increased the expenditure in these programs to try to prevent problems in families. So that was a pretty hollow gesture from Senator Murphy.I will refer once again to the so-called funding cuts to child care in Bass. I cannot remember how many parents were actually surveyed by the Labor member for Bass, Ms O'Byrne, but I know that it was fewer than 100 parents—and the methodology has not been revealed but it would appear to be very suspicious. It was a politically biased sample, I would suggest, and the survey has no credibility as far as I am concerned. I have plenty more material if we want to talk about that on another occasion.I am disappointed with the contribution of Senator Gibbs, because she was not prepared to acknowledge that there are good things in this legislation. I would say to her: so too is the measure for shared care. I say that very advisedly, because if the parents are volunteers, nobody is compelling them to go for a shared care measure. The courts are trying to encourage shared care. It seems a nonsense to have a social security system which penalises a parent for agreeing to be in shared care. Under the legislation as it currently stands, one parent—usually the one who does not get to Centrelink as fast as the other one—is disadvantaged. That is grossly inequitable and I was trying to do something about it.This has not been designed as a savings measure. It has been designed to encourage parents to share the care of their children, because we believe it is good for children to have constant contact with both parents. If I could mandate it, I would be delighted, but I am not suggesting that we should mandate it. Parents who want to give the very best to their children by sharing in their care should not be disadvantaged by an inflexible social security system which means that the parent who gets to Centrelink late is disadvantaged. That parent could still be sharing the care but may well not be eligible for Newstart allowance because they cannot certify that they are able to satisfy the activity test.So the parenting responsibility, which we all regard as vitally important, is a means of preventing one of the parents, if they were honest, from getting any income support at all because, under the current arrangements, they have to be able to say that they are able to satisfy the activity test that they are looking for work. What is proposed here is that where parents are agreeable—and nobody is forcing anybody; it is simply a voluntary arrangement between, sadly, relatively few parents, 2000-odd—both could be eligible for a Newstart allowance with a reduced activity test which recognises that half of their time is engaged in the care of children, and we believe that to be a very important activity. That then means that they would be expected to do less in terms of searching for part-time work than we would otherwise expect of people who were unemployed.I think that is reasonable. It certainly has the long-term benefit of making sure that neither parent becomes long-term welfare dependent. They both maintain contact with their children, they both have the potential to maintain contact with the work force, they both get an income support payment, they both get a health care card and they both have access to the JET Scheme. I think that is a pretty fair equation, and I am quite surprised to hear that people are finding a reason to criticise it. I would have thought that all senators would have said, `Isn't that terrific! That really takes the concept of shared care that step further, and it isn't just judges encouraging people in the Family Court to do it; it actually means that the social security system does not stand in the way of them doing it.'I am very disappointed that senators have seen it as a negative measure because in subsequent years there are some savings. In the first year there are start-up costs and there are also of course JET costs. But there are swings and roundabouts on these things: if people are getting the training and the assistance for child care, et cetera, then they will be partly providing some of their own income, which is good from a self-worth point of view and it is also good for enhancing their standard of living.What more can I say? It is meant to be a beneficial measure which will improve the lot for Australia's families. It certainly gives kids the chance of getting to know, to live with and to love both parents. It certainly prevents the parents from being long-term welfare dependent. It enables them to maintain a really meaningful, continuing engagement with their children. It is amazing how something so beneficial could be so sadly misunderstood or misrepresented.I think I will leave it at that and we can then proceed to the committee stage. Senator Gibbs referred to amendments that would improve the government's proposal for the shared care of children, but so far all I have seen from the opposition is simply four amendments which are to oppose the government's measures. So I cannot see that the opposition has anything better to suggest. If they did, that would be very interesting. Obviously they are not proposing to see that both parents get the parenting payment—although I would point out that if there are two children then both parents do have the opportunity to get the parenting payment. I emphasise: it is voluntary.Question resolved in the affirmative.Bill read a second time.9878The bill.20:49:009878Evans, Sen ChrisSenator CHRIS EVANSAX5WAALP00—Madam Chair, as you are aware, the opposition has circulated amendments in my name which seek to oppose four items in the Family and Community Services Legislation Amendment (1999 Budget and Other Measures) Bill 1999 which relate to the question of shared care. I addressed that issue in my speech in the second reading debate, as did Senator Bartlett, and the minister replied. So I do not intend speaking at length on it in the committee stage. I used the second reading debate to address our concerns about that issue. It seems sensible to me that we take those four together, if that is procedurally possible, because I think the four all go to the same question.10000CHAIRMANThe CHAIRMAN—Is it the wish of the committee that those four amendments be taken together? There being no objection, it is so ordered.AX5Evans, Sen ChrisSenator CHRIS EVANS—The opposition will be opposing schedule 1, items 2, 3, 4 and 11, in the following terms:(1) Schedule 1, item 2, page 3 (lines 6 to 9), TO BE OPPOSED .(2) Schedule 1, item 3, page 3 (lines 10 to 14), TO BE OPPOSED .(3) Schedule 1, item 5, page 4 (line 3) to page 5 (line 3), TO BE OPPOSED .(4) Schedule 1, item 11, page 6 (lines 9 to 24), TO BE OPPOSED .I just want to make a couple of points. As I said, I have outlined why we have concerns with the government approach. We have not sought to put an alternative approach because we think that the attitude to any change that we make in this area ought to be based on a broader consideration of the parenting payment, the child support system, education and training opportunities and other issues which go to the question of providing better incentives for parents to both share the care and also seek participation in the work force while representing their parenting role.We think this is an ad hoc measure that just happens to save the government money. I suppose we would be more convinced of the government's sincerity if it had actually sought to put both parents on the parenting payment. Our attitude is that this is not the way to address what we see as an inadequacy in the current system. I think everyone concedes that the current system is not the perfect outcome. We would encourage the government to have another look at ways of achieving some of those stated objectives without having the effect of removing a range of benefits from one of the parents, as is contained in this current measure. We think there ought to be a better way, and we ought to look at that in the broader debate we are having about welfare changes. We are going to oppose these items on this occasion for the reasons I outlined, and we encourage the government to have another look at the issue in the broader context. I encourage the chamber to oppose those sections which would implement the shared care of children provi sions proposed by the government in the 1999 budget.20:52:009879Bartlett, Sen AndrewSenator BARTLETTDT6QLDAD00—I will speak on the sections of the bill that are being addressed by the committee. I also want to say something in response to some of the minister's comments. It will give the minister no comfort whatsoever, but I do think a few speakers have been a little hard on the government and the minister this evening in relation to this measure. Whilst I have pointed out that it does move things down to an allowance rather than a pension related level—that seems to be a consistent action when some of these sorts of so-called harmonisation measures are put forward—I think the motivation of the government has not been solely driven by dollars and cents and that they are quite genuine in some of the things they are trying to address through this measure. The concern I have is that I am not convinced it is going to be an improvement, not just in terms of the important issue of overall levels of income available to people. Despite all the talk about motivation and incentives, dependency and things like that, which we all acknowledge to a degree, people's overall level of income is important to them as it is to all of us, and measures that may decrease that—albeit for a small number of people—should be looked at closely before they are agreed to.I am not convinced that some aspects of the approach that the government has taken to this will work and are necessarily right, regardless of the motivation. It will still be a measure where the social security system will stand in the way of people being able to determine the best outcomes for their own individual circumstances. It may be an improvement for some, but that will clearly not be the case for others. It is not always a voluntary arrangement in reality. You are looking at financial pressures that apply to people, at the difference that will apply to someone who has a 59 per cent or 60 per cent care arrangement rather than 61 per cent care. You are looking at whether they are then able to get the pension rate; whether they are then able to get the extra health care card; whether they are then able to get the pensioner educa tion supplement; whether they are then able to get the more favourable income test. Those sorts of pressures will be there, and they will impact on people when they are working out their custody arrangements and, in some cases, will inevitably generate some increased tensions.Obviously, there is no perfect system that will immediately remove all tensions between separated parents who are trying to work out custody arrangements. But I do have concerns that, in the majority of cases, this may lead to an increase rather than a decrease in the number of people who suffer from that extra tension. This is particularly true in a situation where, often in these circumstances, people's custody arrangements will fluctuate from one part of the year to another. That will potentially lead to a situation where they will be bounced between a pension rate and an allowance rate or they will or will not be subject to a work test. These are the sorts of complexities that will be introduced. That does not occur in the current situation.Those are circumstances that will potentially be visited upon people under the changes that are being proposed. There are difficulties in formulating an activity test that could realistically be applied to a parent who can look for work only on a part-time basis. That is not identified and put in place in the legislation, as I understand it, and the government has indicated that it will address that via case management agreements with people. It needs to be a bit more concrete than that if you are looking at having people subject specifically to work or activity tests agreements that are obviously going to be different to those for people looking for full-time work.People who are caring for a child 60 per cent of the time are obviously not always in a position where they can look for full-time work or accept full-time work. They can be addressed under those individual agreements. But I think it is a little dangerous to leave these unspecified in a legislative sense, given the variation in treatment that can occur in different parts of the country and in different offices. I think some areas will lead to a likely outcome, and obviously all of us are just speculating on how the change would impact on people. The government has put this forward with the view that it will lead to a better outcome for people and for children, which is, of course, of paramount importance. The Democrats are not convinced that is going to be the case. For that reason we are not, at this stage, able to support the measure. We are happy enough to believe that the government has put this forward in good faith. But we think the measure will not address the problem in the majority of cases.The other question I want to clarify with the minister, which I suppose is academic given we have indicated that we are not going to support it anyway, relates to item 11 of the schedule, which appears to me to be a grandfathering clause. I want to clarify that it is the case that the government is putting that forward as a grandfathering clause in this measure so that it does not affect those people who are in the current situation.20:58:009880Harris, Sen LenSenator HARRIS8HCQldIND00—I would like to raise two issues. The first is support for the government's pilot programs. Any program that will benefit the parents in these situations is to be supported wholeheartedly. The second is the government's intention to emphasise premarital issues and help people be aware of the responsibilities they are entering into. Marriage is an institution that is ordained by God for the protection of children, and I commend the government for drawing attention to this responsibility prior to people entering into marriage.However, I find it perplexing that when people find themselves in this most unfortunate situation the government can then ask them to voluntarily enter into this arrangement but then, I believe, add an incentive by saying that, if the parenting is carried out 50 per cent by each parent, it is only going to support one half. If the parents agree voluntarily to accept a 50 per cent responsibility and care for their children 50 per cent of the time, the government's argument would carry much more weight if it made an arrangement to split the parenting payment in such a way that it supported those people by supporting them equally—not saying to one or the other that if it is 60 per cent one parent will receive the parent payment.In conclusion, I strongly support the government's pilot programs and their program of education but find it perplexing that they are not going to split the benefits of the parent payment for those people who voluntarily enter into a fifty-fifty arrangement.21:01:009881Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—Can I respond to a couple of things that have been raised? I appreciate Senator Harris's support for the sort of measures that the government is introducing to strengthen families and I value him putting that on the record. I wanted to make clear that any split of care that is voluntarily arrived at between parents in the range between 40 and 60 per cent entitles both parents to a modified activity test on the Newstart allowance with a health care card and the JET scheme entitlement. It is not as he was describing. If two parents decided the split was that one would do 40 per cent and one would do 60 per cent or both would do 50 per cent, in those circumstances both of them would be entitled to claim Newstart allowance with a reduced activity test.In response to Senator Bartlett, the current legislation is already capable of providing for the modified activity test arrangements in the circumstances which are contemplated by this measure. It is not a novel concept for this department and for Centrelink to implement a modified activity test—for a whole variety of reasons. People have different circumstances. They may be living in an area of very high unemployment, in which case they would be asked to make fewer job applications in a fortnight than somebody who is living in an area of high job opportunities. There may be some kind of part-time elder care involved in the family which might be taken into account in an activity test. There is a range of things. People's individual circumstances can be taken into account. Senator Bartlett is on his phone so he is probably not hearing me very well. He expressed some concern as to how this was managed. Since the time when he was a social worker in the Department of Social Security, this has become more flexible. It is managed now and it can be extended to this group of people who would be on Newstart allowance.I think the current system is what is so unfair: that one parent can have the parenting payment and the other one will get Newstart or nothing, because of the restriction on the time they have for looking for work as required currently under the Newstart. We have made it clear that it is government policy to be supporting both parents in attachment to the work force as well as deep and meaningful attachment to their children.10000CHAIRMANThe CHAIRMAN—The question is that schedule 1, items 2, 3, 5 and 11, stand as printed.Question resolved in the negative.Bill, as amended, agreed to.Bill reported with amendments; report adopted.9881Bill (on motion by Senator Newman) read a third time.Bills9881r7179881Consideration resumed from 13 October.Schedule of amendments made by the House of Representatives—(1) Schedule 2, item 53, page 22 (table item 3, 4th column), after "1066A-B1", insert "(including any amount required to be added by point 1066A-C1)".(2) Schedule 2, item 53, page 23 (table item 4, 4th column), after "1066A-B1", insert "(including any amount required to be added by point 1066A-C1)".(3) Schedule 2, item 54, page 39 (line 31), omit "1231A(1A) ", substitute "1231(1A) ".Motion (by Senator Newman) proposed:That the committee agrees to the amendments made by the House of Representatives.21:07:009881Evans, Sen ChrisSenator CHRIS EVANSAX5WAALP00—It would probably assist the committee's deliberations if the minister would outline why she is moving this motion and what the arguments for moving it are. As I understand it, the amendments are amendments that the government moved in the Senate in the first instance and that were defeated. I thought it would facilitate the debate if we had a clear understanding of what the minister is proposing on this occasion. The additional explanatory memorandum indicates that they are largely technical amendments, but I think there is one substantive issue that goes to those in receipt of the youth disability supplement payment as well as CDEP payment. I am not clear, from the brief discussion I had with one of the minister's advisers, what they are intending. I understand they have a new argument or a new line as to why they want the measure insisted upon.Minister, you are looking quizzical. I am not trying to be difficult; I am trying to understand what you are doing. You moved that the amendments be agreed to. What are they, and why?21:08:009882Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—There are two amendments relating to the youth disability supplement and one technical amendment. The government considered the debate that took place in the Senate, which was, I think it is fair to say, fairly overblown for such relatively minor changes. There are five people affected. You would never have known by the debate that there was such a minor effect. You could say that any one person affected is important, and of course that is so, but these are people who have been receiving a double dipping, and I think that most of us do not believe that that is the way the welfare system should be operating. This is an attempt to make the social security system more efficient and logical, and fairer and more equitable to everybody. It is more of a preventative measure than something that is out to do anything about those five people. It is trying to get the system into a position where there is not this anomaly.21:09:009882Bartlett, Sen AndrewSenator BARTLETTDT6QLDAD00—I thank the minister for that extra input. I recall this debate from when the bill was last in the chamber in relation to the issue, and, whilst it may seem that it was an extended debate for a minor measure that was affecting a small number, it was nonetheless appropriate for the Senate, in its role as a chamber of scrutiny and review, to ascertain as precisely as possible exactly what we were being asked to pass. As I think I commented at the time, the amendments themselves, which are basically just a jumble of numbers, letters and brackets, do not indicate that at all. It is completely appropriate for the Senate to seek accurate information from the government, putting forward any legislation or any amendment, about exactly what it is they are putting forward and what impact it will have on people.I do not think that it is necessarily appropriate to suggest that the debate that we had previously was unnecessary. From my point of view, it was completely necessary, to clarify exactly what we were being asked to agree to. Occasionally one forgets in the middle of all the toing-and-froing around this place that we are actually making laws that affect people, and if we get it wrong it can affect them in unforeseen and negative ways. So it is quite appropriate for the Senate to spend as much time as necessary to clarify what the amendment is about.Having said that, I have looked at the matter in the interim and had some indication from the minister's office about what these amendments were about. I mention again that I really dislike that phrase `double dipping', and it does make me rather less prone to support the government when it keeps using it because it does, in my view anyway, have an implication that people are doing something inappropriate or somehow doing something sneaky. Obviously, the five, six or four people that will be affected by this are currently entitled to it; they are receiving their payments and applied for them in good faith because they believed they were entitled to them under law. I do not think it is helpful to imply that somehow or other they are doing something dubious, and in my view that is what the phrase `double dipping' implies.Nonetheless, I do feel that the measures are appropriate in terms of the intent of the overall legislation to get clarity, unanimity of purpose and consistency in the operation of the social security legislation. I have refrained from moving a grandfathering clause in relation to the five people that are affected on this particular occasion. Given the nature of the amendments, and having had the further opportunity to look at them, the Democrats are willing to agree with the amendments proposed by the other place and the motion of the minister.21:13:009883Evans, Sen ChrisSenator CHRIS EVANSAX5WAALP00—I indicate that the reason I wanted the explanation from the minister is that it seems to me that the principle in relation to this group of people is much the same as with those on parenting payment (single) that we discussed in relation to CDEP. I admit the numbers are small, but Senator Bartlett makes the very proper point that that does not alter the importance of the debate for these people or for their entitlements. I too have a great deal of concern about the minister's use of language in referring to people who are `double dipping', and with the press release that followed the last debate. She does her claims to be coming into the debate with a genuine interest in these people a disservice by then playing the bludger card, the double dipper.BE4NEWMANSenator Newman—I don't play the bludger card.AX5Evans, Sen ChrisSenator CHRIS EVANS—You play it all the time, Senator Newman. It is most inappropriate. There are a whole set of connotations associated with the phrase `double dipping'. The words were used quite deliberately; they were used quite deliberately in your follow-up press statement in the last debate. I do not think it does you any credit at all and I think it is most unfortunate that you choose to reflect on people who are only accessing the entitlements that they have under the law of this land. You may well have an argument about whether or not that law ought to be changed, but that does not give you the right to denigrate those people accessing their legal entitlements. That is what occurs. That is what occurs every time, Senate Newman, and I am happy to give you copies of your press releases where you have done it. It is important that we indicate that this is not a question of double dipping.Senator Bartlett has indicated on behalf of the Democrats that they want to box on in relation to the youth disability supplement payment. I suppose that is probably right, although I am inclined to box on on the basis that the principle that applies with the other group of people on parenting payment (single), who also access the CDEP program, is the same. But that is obviously an argument for another day. I understand, Senator Bartlett, that you have enough complexities coming to terms with how to work through that one without perhaps adding this group. Given the Democrats' indication, I will recognise the reality of that. However, we are keen to protect the interests of those people we talked about in the earlier debate. I hope that the Democrats, other minors and the Labor Party are able to secure some justice for those people when the bill comes before us next time. Like Senator Bartlett, I have taken a keen interest in the government's willingness to adopt grandfathering clauses when it suits them but argue high principle against them when it does not. I will be following that debate with great interest.Question resolved in the affirmative.Resolution reported; report adopted.9883Bill (on motion by Senator Newman) read a third time.Bills9883r8249883Debate resumed from 21 June, on motion by Senator Ellison:That this bill be now read a second time.21:17:009883O'Brien, Sen KerrySenator O'BRIEN8O6TASALP00—The Stevedoring Levy (Collection) Amendment Bill 1999 was referred to the Senate Rural and Regional Affairs and Transport Legislation Committee to enable the Senate to properly scrutinise the provision of further funding for the restructuring of the Australian stevedoring industry. The reason for the referral was simple. The Minister for Transport and Regional Services, Mr John Anderson, failed to provide a proper explanation as to why an additional $100 million was required, or how it might be spent, when the bill was debated in the House of Representatives. Mr Anderson was also asked a number of questions without notice about the funding increase but failed to give satisfactory answers.Before I go to the detail of this bill, I think it would be useful for the Senate if I go back over what led us to this debate. In April 1998, the federal government helped Patrick Stevedores engineer the illegal dismissal of 2,000 waterfront workers. The government had earlier offered Patrick, and other stevedores, assistance to pay out workers considered surplus to requirements and who were prepared to accept a redundancy package, through the Maritime Redundancy Facilitation Scheme. A fully owned Commonwealth company, the Maritime Industry Finance Company, was established to fund the redundancy payments. MIFCo was provided with a government guarantee for its borrowings and the money borrowed by MIFCo was to be repaid through the imposition of an industry levy.The Stevedoring Levy (Collection) Act 1998 and the Stevedoring Levy (Imposition) Act 1998 established the administrative apparatus by which redundant employees were to be paid out. Both acts were the subject of an inquiry by this committee—that is, the committee I referred to earlier—in June 1998. During that inquiry the opposition raised concerns about section 18 of the Stevedoring Levy (Collection) Bill, which appeared to give almost unlimited discretion to the minister as to how funding could be spent. The opposition was also concerned that there was inadequate opportunity for the parliament to scrutinise MIFCo.There was also concern that the package was designed to provide significant assistance to the two major stevedores, Patrick and P&O, and not the industry as a whole, but that the industry would have to pay the levy. It was considered unfair that some stevedores would have to pay for the restructuring of their competitors. The opposition proposed that the bills be amended to ensure that only companies seeking to access funds should pay the levy. We also noted that only Patrick and P&O were consulted about the contents of these two bills.The Minister for Transport and Regional Services, Mr Anderson, introduced this bill into parliament on 2 June 1999. In his second reading speech, Mr Anderson said that the additional funding provided through the bill was needed to meet the greater than anticipated cost of redundancies. Mr Anderson also said that the additional funding would ensure that there were sufficient funds available for non-redundancy related reforms. However, in response to a question without notice from the member for Hinkler, Mr Neville, Mr Anderson told the House of Representatives that funding for non-redundancy reforms had been reduced by $10 million, not increased as he had inferred in his second reading speech.According to Mr Anderson, the breakdown of the original $250 million package was as follows: $148 million for redundancy packages; $50 million for interest; $2 million for administration; $10 million to top up redundancy packages paid to workers by the Western Australian government that are below the industry standard; and $40 million for non-redundancy reforms. The breakdown of the proposed $350 million package, as proposed by the amending bill, is as follows: $195 million for redundancy packages; $105 million for interest; $6 million for administration; $4 million for Western Australian redundancy packages; and $30 million for non-redundancy reforms. The new package also has $10 million allocated for contingencies. The fact that Mr Anderson has been forced to come back to the parliament to seek support for an extension of the guarantee for MIFCo's borrowing from $250 million to $350 million confirms the lack of proper planning that has surrounded the government's maritime adjustment strategy since March 1996. The then First Assistant Secretary in the Cross-Modal and Maritime Transport Division of the Department of Transport and Regional Services, Dr Greg Feeney, told the Senate committee inquiring into the bill that the redundancy funding in the first package was based on a number of exits expected by Patrick Stevedores. He said that his understanding was that it was calculated that, based largely on the Patrick exercise, they expected in the order of 800 redundancies. He said that the government expected the average payout for them to be around $100,000. That meant $80,000 for Patricks.The department told the committee that they thought P&O's restructuring would not be as extensive as that of Patricks and, using roughly the same assumptions, it was thought that $60 million would be sufficient. Then an amount was allowed for smaller stevedores. Dr Feeney told the committee that those calculations were properly done by Mr Gillespie, the officer in charge of the waterfront maritime team in the then Department of Workplace Relations and Small Business. He said that the revised figure of $195 million for redundancies was based on the actual payouts for workers leaving Patricks and estimates for P&O and other stevedores.Dr Feeney told the committee that the exposure of the Commonwealth to the activities of MIFCo is limited to the company's loans and its obligations to repay the principal, the interest and any administrative costs. He said that the level of funding for redundancies in the amended package was too high, as the original figure was estimated at $195 million but the actual figure could be more in the order of $185 million to $190 million. Dr Feeney told the committee that the total cost of the loan over the whole period would be of the order of $300 million.I also sought an explanation as to why the cost of administering the scheme had jumped from $2 million to $6 million. Dr Feeney said that when the original estimate was done there may not have been a full understanding of the intricacies of the operations of MIFCo and even of the collection of the levy. Dr Feeney's explanation is surprising, given the fact that the then Department of Workplace Relations and Small Business, in developing the MIFCo arrangements, considered using the existing Stevedoring Levy Act to facilitate redundancy payments to eligible workers through the Stevedore Industry Finance Committee; that is, there was a model already in place.I also sought an explanation for the reduction in funding for non-redundancy reforms from $40 million to $30 million. Dr Feeney said that the provision of funding for non-redundancy reforms was a `top down' calculation. He said that the government had decided that the provision of $30 million was a reasonable upper limit. Dr Feeney said that the focus had been on getting the redundancy funding in place but that the department had provided the minister with guidelines for the administration of funding for non-redundancy reforms. He said that the guidelines would not be the subject of regulation and that there had not been any specific allocation of funds for areas such as training or logistics.The Executive Officer, Cross-Modal and Maritime Transport Division, Mr Brocklebank, told the committee hearing that there was not a commitment to spend all the $30 million. He said that that depended on the minister's view of the applications. The committee asked the minister, Mr Anderson, for a copy of the guidelines to be applied in the assessment of applications for funding for non-redundancy reforms, but the minister refused to provide those guidelines.I now want to comment on the government's waterfront adjustment benchmarks. On 8 April 1998, the government announced a number of benchmarks against which the effectiveness of its plan to restructure the Australian waterfront could be measured. The minister responsible at the time, Mr Reith, said that the government expected the benefits of the package to flow immediately. He said this, however:. . . the Government expects that significant progress will be made towards achieving the key benchmarks . . . within six months.The performance benchmarks set by Mr Reith were a national five-port average of 25 crane movements per hour by April 1999; 97 per cent of ship calls finding a berth available within four hours of the schedule time by April 1999; industrial action per 1,000 employees no more than the national average by April 1999; and no more than 64 work related injuries per 1,000 employees and no fatalities by 1 January 2000.Dr Feeney gave considerable weight to these benchmarks at the committee hearing. He said that they were the factors the government expected to change as a result of the restructuring. He said that they were the factors taken into account in looking at submissions for redundancy funding. Funding, however, has already been provided, not in response to the achievement of the benchmarks but only on a non-binding commitment to them. The government failed to meet these targets. Mr Brocklebank said:I think the last figures for the March quarter this year gave a crane rate of around 19.1 national average, which I think is the highest national average to that point.The actual number was 19.9, not 19.1, but it is still well below the target of 25. The June quarter data is now available, but the numbers are still well below Mr Reith's benchmark.The Department of Transport and Regional Services was not able to accurately quantify the level of industrial disputation in the stevedoring industry. Therefore, it is not possible to determine whether that target was achieved—the target, again by last April, for industrial action per 1,000 employees of no more than the national average. The department was also unable to advise the committee on whether or not the industry was on track to meet the occupational health and safety benchmark. Nor did the Department of Employment, Workplace Relations and Small Business initiate action to publish separate industrial dispute figures commencing July 1998, as Minister Reith had committed to do. The Department of Transport and Regional Services has advised the committee that it intends to publish this data in the future. However, the Department of Employment, Workplace Relations and Small Business has also failed to commission an independent report to assess occupational health and safety in the industry as promised by Minister Reith in April last year.I now want to go to the issues of stevedoring charges. In evidence to the hearing into the Stevedoring Levy (Collection) Amendment Bill 1999 and the Stevedoring Levy (Imposition) Bill 1998, the Deputy Director of the National Farmers Federation and a director of P&C Stevedores, Mr James Ferguson, said that Patrick Stevedores would enjoy a dramatic reduction in costs as a result of the passage of the two bills and the resulting funding of redundancy packages for its workers. Mr Ferguson said:Yes, we have done our sums very carefully. Using the example of Patrick's, we believe that, with appropriate redundancies, the potential ongoing savings for Patrick's are well in excess of $50 million . . . Mr Ferguson said that these savings could be used both to lower charges and to meet the costs of the redundancies over time.Mr Ferguson gave considerable weight to stevedoring rates. He said that the vast majority of stevedoring costs were labour costs. He said that the settlement between Patrick and the Maritime Union of Australia would save the company in the order of $70 to $80 per container. Evidence to the committee in relation to this bill confirmed not only that the government has fallen well short of its performance benchmarks but also that port users have received little benefit in the form of lower stevedoring charges or overall shipping costs.The Chief Executive of the Australian Shipping Federation, Mr Lachlan Payne, told the committee:The experience so far has been that there have not been rate reductions across the board, although there have been in some sectors. During most of this year rates have remained constant. This is an expectation that rates will rise in some areas. In a few areas certainly the anticipation of increases outweighs the anticipation of reductions.Mr Payne also said:I am a bit perplexed as to what that says about the waterfront reform program, I must admit.Mr Payne said in response to a question about the impact of the reform plan:I could not speak about particular cargoes but there are ship operators who are expecting higher not lower rates since the reform process.I asked Mr Payne specifically about stevedoring charges on the Australia-South-East Asia trade. He said that he knew his members were unhappy with their situation.The chairman of Patrick, Mr Chris Corrigan, told the committee that his company's stevedoring charges had declined. However, he said that in a recent round of contract negotiations Patrick had sought an increase but had failed to secure one. These contracts were negotiated after there had been a significant drop in the Patrick work force and an associated significant drop in the company's cost structure.Mr Corrigan said that there was no commitment to the government that stevedoring rates would decline. He said:. . . I would point out to you that it is not one of the benchmark objectives. This expectation is not something that we entered into a commitment to do.Mr Andrew Burgess, Director of Australian and New Zealand ports for P&O, said to the committee that his company's charges had declined significantly since 1994. The steady decline in stevedoring charges referred to by both stevedores reflects the effectiveness of the Waterfront Industry Reform Authority, or WIRA, process. It is in contrast to the recent upward pressure on rates referred to by Mr Payne and conceded by Mr Corrigan.Dr Feeney told the committee that the movement in stevedoring charges was a function of the market in which the stevedores operate. He said that stevedoring charges would reach the level the market can bear. He said that stevedoring charges were only a small part of the overall costs paid by shippers. I submit, however, that they are an important part.In the committee hearing, I also asked about shipping charges and whether improved efficiency would be reflected in lower rates. Dr Feeney advised:Shipping charges are another component. Shipping charges are historically very low at the moment. Freight rates are at a historical low. The expectation is there is pressure for shipping rates to go up.Now we have the likelihood of the shipping charges going up while stevedoring charges are not going up but going down; that is, people sending goods across wharves are not getting any benefit, and that is not likely to change for some time.Dr Feeney attempted to defend the government, as he is obliged to; he is a very professional officer. He said that the important thing was to look at it from a total logistics chain point of view, suggesting that the land component of costs is quite significant.The Patrick dispute cost taxpayers millions of dollars directly, port users tens of millions of dollars and the Australian economy hundreds of millions of dollars. There was an expectation by shippers and their customers that they would be able to recoup some of these massive losses through lower costs and a more efficient maritime transport sector. However, the evidence presented to the committee suggests that the government has failed to achieve any of the performance benchmarks it set itself in April last year.The evidence to the committee also confirms that there is now upward pressure on both stevedoring costs and shipping costs. We now know from the department that there was never a commitment sought from the stevedores or offered by them to reduce their charges in response to significant and direct assistance from the government to lower their cost structure. We have evidence to the committee suggesting that, while the government is seeking to extend the limit of funding for its maritime reform package from $250 million to $350 million, the actual additional funding required is in the order of $50 million, not $100 million.Dr Feeney told the committee that funding required for redundancies would be less than the $195 million provided for in the $350 million package. He also said that funding of $30 million for non-redundancy reforms was just an estimate. He said that the cost of meeting MIFCo's borrowings would be in the order of $300 million.Despite claims by the Minister for Transport and Regional Services, Mr Anderson, that additional funding is needed to ensure there are sufficient funds for non-redundancy reforms, the level of funding for that purpose in the new package is actually reduced by $10 million. Furthermore, there are no approved guidelines for the provision of funding for these reforms despite the fact that the package is now 18 months old. The distribution of this funding also appears to be entirely at the discretion of the minister.Finally, the Department of Transport and Regional Services has advised that the costs facing shippers could further increase if the Treasury decides that a goods and services tax should apply to the levy. It is the intention of the opposition to move amendments to this bill. Specifically we will propose that the appropriation for MIFCo be limited to $300 million and funding collected by the levy be used only to meet the costs of redundancy packages for workers seeking to exit the industry.21:36:009888Mackay, Sen SueSenator MACKAY9L6TASALP00—I do not intend to traverse in too much detail the issues covered by Senator O'Brien, who has had a longstanding interest in this matter and has pursued it assiduously through many estimates rounds. However, I would like to restate briefly some of the comments that were made and go to the issue of the transparency of government processes. As we all remember, in April 1998 the federal government assisted Patrick Stevedores to engineer what transpired to be the illegal dismissal of 2,000 waterfront workers. The government had earlier offered Patrick and other stevedores assistance to pay out workers considered surplus to requirements and who were prepared to accept a redundancy package through the Maritime Redundancy Facilitation Scheme.As Senator O'Brien has already indicated, MIFCo is a fully owned Commonwealth company. It was established to fund the redundancy payments. MIFCo was provided with a government guarantee for its borrowings. The money borrowed by MIFCo was to be repaid through the imposition of an industry levy. As he has already indicated, the Stevedoring Levy (Collection) Act 1998 and the Stevedoring Levy (Imposition) Act 1998 established the administrative apparatus by which redundant employees would be paid out. Both acts were the subject of an inquiry by this committee in June 1998. As the senator has already indicated, the opposition raised concerns about section 18, particularly in relation to the degree of discretion given to the Minister for Transport and Regional Services as to the expenditure of the funding.We were also concerned about the lack of opportunity to adequately scrutinise MIFCo from the parliament's point of view—I think Senator O'Brien has outlined that. We were also concerned that the package was designed to provide significant assistance to two major stevedores, Patrick and P&O, not to the industry as a whole—but the industry as a whole would have to pay the levy. It was considered unfair that some stevedores would have to pay for the restructuring of their competitors. This continues a rather alarming trend that has occurred under this government over the past three years. This trend goes to the issue of the concentrated attack on the transparency and accountability framework that is essential for good public policy and good management.I would like to refer to matters that Senator Cook raised last week when he brought to the attention of the Senate yet another example of the trend to use discretionary funding. That is the mechanism used by this government to distribute program funds with regard to the Appropriation (Supplementary Measures) Bill (No. 1) 1999 and Appropriation (Supplementary Measures) Bill (No. 2) 1999 , in particular clause 3, which refers to the conversion of CNG or LPG for commercial vehicles with a weight greater than 3.5 tonnes. Senator Cook took the opportunity in this debate to highlight the following subclauses. Subclause (2) of Appropriation (Supplementary Measures) Bill (No. 2) 1999 says:A grant of financial assistance to a State may be made:(a) on such terms and conditions as are set out in a written agreement between the Commonwealth and the State; or(b) without any terms and conditions.But it did not stop there. Subclause (3) took it that one step further:A grant of financial assistance to a person, or a body, other than a State may be made:(a) on such terms and conditions as are set out in a written agreement between the Commonwealth and the person or body; or(b) without any terms and conditions. That is right: without any terms or conditions. So why bother having the preamble in relation to that?Senator Cook took the opportunity to raise it. This is a government program worth $896 million over four years, and the government can—through that subclause—essentially give the money away without any rhyme or reason to justify their decision, without any capacity for the Senate or the parliament as a whole to scrutinise that. The federal government can give the money not just to state government organisations but to anybody they see fit to give it to. As Senator Cook—and he did public policy in Australia a great service in relation to this matter—said at the time:`Without any terms and conditions' provides a carte blanche for the government to legally hand out money . . . without insisting on reciprocal performance, without insisting on, as the provisions provide, any terms or conditions whatsoever.This is yet another example of the trend towards what can only be called slush funding or, as the public service may accurately term it, discretionary funding. The Stevedoring Levy (Collection) Amendment Bill 1999 is another example of the government introducing a program without any terms and conditions relating to financial grants—in this case, a program worth $300 million in the amended form. I note that towards the end we will be ensuring that it will not be the full $350 million that Minister Anderson wants; we are going to move that the $50 million—the non-redundancy section of the stevedoring levy—be removed.Unfortunately, it is not the only program in this agency that is subject to lack of transparency—that it is opaque would be to put it mildly. One may need to rename the portfolio the `Department for Transport and Regional Slush Funds', if you look through all the various funding provisions that there are. Both ministers—and I see Senator Macdonald in this chamber—are in it up to their necks on the issue of discretionary funding. I would like to take a quick look at some of the programs that the ministers refer to and how the decisions are determined in relation to funding. The Rural Transaction Centre Program, as we continually hear from Senator Macdonald in the Senate, is worth $70 million over five years. Who gets the final determination in relation to that? Minister Macdonald. The Rural Communities Program is worth $28.5 million over four years. Who gets the final say in relation to that? Minister Macdonald—no surprise.YW4MACDONALDSenator Ian Macdonald—Who do you think should get it? You should?9L6Mackay, Sen SueSenator MACKAY—No. What we would like, Minister, is some transparency in relation to the decision making. Rural Plan is worth $6.5 million over three years. Who gets the final decision in relation to that?YW4MACDONALDSenator Ian Macdonald—The government is elected to make decisions.9L6Mackay, Sen SueSenator MACKAY—We are not talking about a reference group here. We are not talking about a decision that you can access under FOI. We are not talking about something that the parliament can examine. We are not talking about something that the people of Australia can look at to see whether their taxpayers' money is being put to an appropriate use. We are talking about something which is clearly shrouded in secrecy, something that is completely at the discretion of the minister. The use of discretionary funding in this government is getting out of control.The local government incentive program is worth $7 million over two years—and who gets the final say, with very little process in between? Minister Macdonald. It does not stop there. Let us have a look at who is on the reference group to determine who attends the Regional Australia Summit, which is to be held in Canberra next week. There are six people in the reference group. Out of those six people, we have two sitting coalition members and another recently retired former coalition member. So 50 per cent of the reference group are either sitting coalition members or ex-coalition members. I ask you, Mr Acting Deputy President, what kind of an outcome is that? Do you think that is fair? I do not think so.I notice that the summit participants' names are now available, and we have had some feedback as to some people who were unable to get in. Now, we are prepared to give it a go—obviously the issues in regional and rural Australia are really critical—but we do object to not just money for the boys and girls in relation to the continuing and exponential growth in discretionary funding by this government, but also jobs for the boys and girls without adequate parliamentary scrutiny. I wonder whether in fact the lessons in Victoria have been learnt by this federal government, and I hope they have. I wonder whether the actions of the former Premier of Victoria, Mr Jeff Kennett, have been adequately scrutinised by this government. If they had been, I think that we would have seen an about-face in the way that these types of programs are handled because the public these days is simply not prepared to allow this type of thing to go on unchecked.We have seen the untrammelled use of commercial-in-confidence as a way of obfuscation and hiding information by this government, something which I know that a number of people, including the Clerk of the Senate, have a great deal of interest in. We have seen two senior ministers dodging, ducking and diving in relation to the Federation Fund money and what went on in relation to that. We have had the real agenda on higher education revealed by the leaked cabinet submission, with the total and complete humiliation today of Dr Kemp in relation to that. We have already had Minister Reith's great vision for Australia, which was leaked earlier this year, and the one yet to come, of course, is the secret document of Senator Newman which she has refused to provide to the Senate.Just to get back briefly to the issue, what we have here is a situation where the minister wishes to appropriate an additional $50 million to non-redundancy funds, something that the industry by and large does not want. In the committee hearing we asked the two major stevedores how much of those funds they would in fact be interested in accessing. P&O said nothing and Patrick's said $1 million—that is out of $50 million. So one wonders where the rest of the money is going to go and one cannot help but believe that in fact it may be more slush funds for the government. That is something that we will not tolerate and we will be moving amendments to the contrary.Essentially our amendments, which will be moved by Senator O'Brien on behalf of the opposition and, as I understand, will be supported by the Democrats, are aimed at introducing some transparency and accountability into this bill and some capacity for parliamentary scrutiny in relation to this bill. Hopefully, they will start a trend into the future of ensuring that we do not hide behind the use of commercial-in-confidence, we do not have our mates on references committees making recommendations direct to the minister without any capacity for the parliament to scrutinise them, and we do not have a situation whereby we get FOI claims with huge black ink all over them and it requires papertrails of many, many weeks in order to track precisely where the funding has gone. This government has made an artform of obfuscation and it has made an artform of ensuring that the process is not transparent but as opaque as possible, and I think that the amendments to be moved by Senator O'Brien will, in one small way, go towards ensuring that this type of unacceptable behaviour is stopped.Debate interrupted.Adjournment989010000PRESIDENTThe PRESIDENT—Order! It being nearly 9.50 p.m., I propose the question:That the Senate do now adjourn.989021:49:009890Coonan, Sen HelenSenator COONAN2M6NSWLP10—Tonight I want to talk about a new concept, the one of cyberdemocracy. The exponential growth of the Internet as the world's largest electronic network, now connecting over 100 million people in more than 130 countries, and its subsequent economic impact have not gone unremarked upon in this place. What has not received as much attention is the potential for the Internet to change the way that we politicians interact with members of the community, and they with us. The potential for the Internet to impact upon the parliamentary process has been described in varying terms, such as `cyberdemocracy' through to `an electronic republic'. This latter concept has been developed by Lawrence K. Grossman in his book aptly titled The Electronic Republic :This is the first generation of citizens who can see, hear, and judge their own political leaders simultaneously and instantaneously. It is also the first generation of political leaders who can address the entire population and receive instant feedback about what the people think and want. Interactive telecommunications increasingly give ordinary citizens immediate access to the major political decisions that affect their lives and properties.The Internet has already gained political significance as increasing numbers in the community use it to learn about government policies and actions and to contact elected representatives. In contrast to other communication mediums such as the familiar ones of radio, television and print, the Internet replaces the simple sender-receiver model of communication with a more interactive approach, allowing ideas to be challenged rather than merely accepted. The ability for people to log on and both send and receive information from the comfort of their own homes increases their access to information and, consequently, their potential influence over government, organisations and other Net users.The use of the Net in the political sphere has dramatically altered the relationship between politicians and their constituents, in particular in relation to the speed of communications between them. The growth of the medium has been witnessed, I am sure, by all my colleagues in their electorate offices during the lead-up to the INTERFET troops entering East Timor. Prior to that time I had received, I suppose, a few dozen phone calls and faxes, but emails virtually in the hundreds came in calling for action. Just a couple of years ago, the number of phone calls and faxes would have far outnumbered email messages. Likewise, unlike five years ago, members of the public can now gain vast amounts of information about departments and government agencies without having to speak personally to one of their representatives.Many of the coalition's recent initiatives for regional Australia have been focused on the provision of government services via the Internet, making government information more accessible for those people living in rural and remote areas. No longer is it necessary for people to travel very long distances during office hours to ensure they get the assistance they need. The Internet is changing the way that politicians and their staff interact with the community and is making this communication both speedier and more efficient.The use of the Internet has also become an essential tool of political campaigning, although it may be said that Australian political parties have not yet fully explored the possibilities offered by it. In recent years, politicians have come under fire from the public for being out of touch and aloof from their constituents and for failing to listen to the electorate's concerns. If we are to reverse this current trend in popular thinking and revitalise the public's faith in our parliamentary system, the opportunities posed by the net should be seized by us all.In an electronic democracy, individual citizens would be empowered to communicate directly with leaders, express their opinions, ask questions and, ultimately, make their own judgments about laws, policies and affairs of state. But there are some disadvantages. While there is not much doubt that the net and access to elected representatives offer the Australian community new possibilities for political learning and action, there are some dangers in simultaneous and instantaneous opinion making. Significantly, there is the risk that our current system of representative government, whereby elected officials in a representative capacity act on behalf of their constituents, may be replaced by direct democracy where individuals have what could be called `a seat at the table' of the government.You might ask: what is wrong with that? Potentially, there would then be the risk that populism could dictate government thinking and decisions when, in fact, sound policy based on reflection and formulated for the majority in the national interest is what the country needs. Allowing a direct vote for particular measures may be no better than following knee-jerk public opinion polls. As Wendy Lewis, author of the article `Digital Democracy: Restoring Citizens' Trust' and creator of The Civic Mind web site, has written:If every issue were put to a vote of the people, decision making would become no more than instant poll taking, with all of the negative consequences of any snap judgment. Unlike direct democracy, representative democracy ensures free and fair debate, taking into account the widely disparate needs of a diverse society. In contrast, relying on cyberpolls could easily lead to decision making that fosters governance by minority.There is no doubt that majority views can also go off the track but, by and large, our system of checks and balances does allow for proper consideration and a balanced view.There is also a problem in that the Internet could be controlled, I suppose, by elite groups. The ability for the net to make parliamentary democracy more representative is somewhat perversely limited by its very availability to us all. There is the real risk that knowledge of how to use the net may be concentrated with some and not others. The technologically poor or disadvantaged within the community may be excluded from access because of financial costs or lack of information, skills or know-how. The government is helping to counteract this possibility with the funding that it provides for various Internet schemes across the country. Politics on the net may be as trivialised as it is in other media. As is beginning to be seen in the United States, the potential exists for commercial interests to control the web in a manner similar to the control that is presently exerted over other mass media.In his introduction to Media, Culture and Society, which examines electronic democracy, editor Colin Sparks comments:The problem is that technical changes which have made opposition easier have also further empowered the already powerful.He goes on to explain that, because the technology is available both to those who would oppose and to those who are already powerful, technological change `does not shift the balance of forces either for or against democratisation'. Sparks argues that, as minority groups do not have the ability to gain more or better access than elite groups, democracy is not necessarily enhanced by the web—which is an interesting viewpoint.So what is the way forward here? Despite these concerns, the imminence of an electronic republic requires that it be dealt with now. It is time that all members of parliament acknowledged the significant part that the Internet will play in creating new forms of participation between the community and its elected representatives. Online political participation will only increase as a computer savvy younger generation grow up and log on to learn more about their government and politicians. We must consider how we can best provide information to the public and properly inform public opinion.In mid-November I will be joining other parliamentary colleagues by establishing a web page that will, I hope, be interactive and meaningful. My web page will include poll questions, a questionnaire to gain public opinion on various issues, links to valuable sites, a posting board where I can contact constituents directly online, as well as the usual information about the government and my parliamentary role. I will also be including a youth survey and a youth issues page—developed by our 16-year-old work experience student, Catherine Lister, who comes from PLC at Pymble—to foster greater participation by youth, who are turning to the web in droves to gain information.The Internet is a valuable way to connect with our nation's youth and to exchange information on issues that will be important for future generations of Australians. While digital democracy is a new and emerging form of political participation, by itself it is not a substitute for our current system of government. However, it is an essential tool for reconnecting the community and the government in a way that builds both trust and accountability.989221:58:009892Ludwig, Sen JoeSenator LUDWIG84NQldALP00—It appears that shortly everyone will be stampeding to have their own web page on the Internet, and I too eventually will have to join that crowd.I will turn to the issue which I would like to inform the Senate about tonight. I noticed a special report in the Queensland Country Life, headed `Uncertainty surrounds levies'. Written by Graham Fuller and published on 7 October, the article states:Growing uncertainty surrounds State Government plans to dispense with the statutory arrangements that currently apply to Queensland's peak producer bodies.Proposed changes to the present system of compulsory primary producer bodies, currently representing cane growers, dairy farmers, fruit and vegetable growers, pork producers and commercial fishermen, probably will result in them no longer being able to collect levies from their members.Instead, funding will come from voluntary membership fees.Strange goings-on seem to be occurring in country Queensland. It seems that the Queensland Canegrowers, a hard-nosed bunch of farming zealots, have more in common with New South Wales labour unions than might rightly be expected. At the recent NSW State Labor Conference, the NSW Labor Council outlined its proposal to seek legislative backing for a new system in workplace agreements. Basically, the system, as I understand it, is a corollary of enterprise bargaining.As reported by Nina Field in the Financial Review on 8 October 1999, Michael Costa explained:It is about removing the ability of non-union members to "free ride" by benefiting from union negotiated pay increases.The article goes on to explain that it is resource intensive for unions to enterprise bargain on behalf of members. This idea got a run in Workers Online in June 1999. In that publication, David Chin, a solicitor at Jones Staff, contributed an articled entitled `A fair case for free-rider laws'. In essence, paraphrasing his argument, he said, `The proposal to enable unions to charge non-members a service fee for negotiating enterprise agreements is consistent with the principle of freedom of association. The article went on to say that the proposal, in a nutshell, `involves enabling union negotiated enterprise agreements to contain a clause in the negotiated agreement which provides for non-union members who are covered by the agreement and receive the increased wages and benefits of the agreement to pay fees at the same level as a contribution for union members during the term of the agreement'.The agreement, of course, would be voted on and would need the support of a majority of employees and the concurrence of the employer. Free riding is not stood for in the business world; in fact, the RACQ does not provide a service for non-members. Similarly, the cane growers, as I have quoted from their special report, do not like free riders in the system either. The proposal does not require workers to join a union. It simply requires these workers to pay for a service, as I understand it, that they benefit from in the way of higher wages or improved conditions, and they have been given the ability to vote as well. In addition, unions have a responsibility under the present system to maintain the award system and fulfil their obligations that the legislation places upon them. Enterprise bargaining has increased those obligations and, as a consequence, financial burdens have also increased. A more equitable regime seems inevitable, as the current system effectively entrenches free riders in the system. Unions, it seems, accept the obligation to bargain on behalf of all workers, including non-members, and to sign off on agreements for all workers at a workplace. No account is factored in for free riders—non-members who are happy to have a union bargain on their behalf but who do not particularly want to be obliged to join.The present legislation does not permit the union bargaining to be restricted to unions only, nor should it. This would be quite discriminatory. Notwithstanding, many employers have adopted this practice of encouraging some employees into individual contracts while leaving some who do not agree with the ideology of the company to remain on lower rates of pay. The idea is not new. That good old free enterprise country of the world, the USA, uses it. Canada uses it—they call it the Rand clause. If Mr Reith is so wedded to the market, perhaps he should stop worrying about unions and accept change. Mr Reith, the Minister for Employment, Workplace Relations and Small Business, could hardly contain himself. He jumped the gun and put out a press statement headed `Non-union workers forced to pay into union/ALP slush fund', in September 1999. Obviously, the Hon. Peter Reith failed to comprehend the actual policy proposal. But that is not surprising. He also apparently failed to consult with the National Party.However, enough about this: let us go back to why it is so relevant to the Queensland Canegrowers Council. In a recent special report, as I have mentioned, in Queensland Country Life, Ian Ballantyne, the general manager of the cane growers, stated in the article:. . . the key issue at stake is the right of every cane grower to be represented. The organisation is especially concerned about even small numbers of growers opting to become `free riders,'—the term crops up again—thereby reducing Canegrowers' voice and capacity to represent and service the whole industry.Mr Ian Ballantyne went on to say:The strength of our organisation has always been grower unity, 100 per cent membership and a mandatory levy system.Mr Graham Cossart, a cane grower in the Bundaberg area, chipped in in the same article:Our organisation, Canegrowers, has served us well for about 75 years and I can't see any reason for the statutory levy system to be abolished. Even though it's compulsory, I don't have a problem with the concept.. . . . . . . . .Farmers like me aren't into agri-politics and we rely on Canegrowers to lobby the government for us on a whole range of issues.In addition, the Canegrowers Council appears in the commission and argues against wage increases for workers and suchlike. Maybe Mr Reith should be checking his own backyard first. I guess the debate about this issue is far from over. However, it does seem that when you place unions and cane growers together, they have more in common than you might otherwise expect.989422:04:009894Bourne, Sen VickiSenator BOURNETW4NSWAD00—Last week a letter was sent to my office from three Australian Falun Gong practitioners. It concerned the death of a Falun Gong practitioner in China, Ms Zhao. This is a little of what was said in that letter:We feel deeply grieved for the death of Ms Zhao. What is more alarming was the fact that she was tortured to death simply because she was not willing to stop practising Falun Gong. We have been trying our best to draw worldwide attention to the torture of Falun Gong practitioners in China so as to avoid this tragic event happening. Unfortunately, it did happen.The letter also refers to an article on the Internet, outlining the details of Ms Zhao's death. The article reads, in part:On Sept. 27, 1999, Ms. Zhao was taken away by the Zhangxing County police when she was working in the farm fields. The police asked her if she would continue to practice Falun Gong. She said "yes", and they started to torture her. She lost consciousness in the morning on Oct. 7 and was to sent to the county hospital for emergency recovery. After she regained consciousness she was taken back by the police and tortured again until 3 PM. She died before arriving in the hospital.She was tortured at least with police electric clubs and rubber clubs, and electrified with old-style rotary telephones. The police repeatedly asked if she would continue to practice Falun Gong, and she always answered with "yes". Her skin was broken all over her body except on her face".That is the end of the quote. An autopsy report apparently concluded that Ms Zhao had died through a beating with blunt objects. My office has been sent many reports and photos of people apparently arrested and tortured over recent weeks, allegedly because they are Falun Gong practitioners. To date, it seems that there has been limited independent verification of these stories. But the reports are uncomfortably similar to each other and to other verified practices undertaken by Chinese authorities in the past.So, what is Falun Gong? Falun Gong, also known as Falun Dafa, is a meditation system. In the words of its practitioners, it is an `ancient cultivation system of improving one's mind and body.' It has its origins in Qhigong, but focuses on `Gong' cultivation of energy rather than `Qhi'. Mr Li Hongzhi, the leader of the movement, first introduced the system to China in 1992. The aim of the system is to cultivate one's heart, mind and inner nature. Basically, the benefits aimed for are reduced stress levels, peace of mind and enhanced health and energy levels. The main principles of the teaching are upholding virtues, forbearance, dealing with losses and gains equally, and rectifying unhealthy habits.It is estimated that more than 100 million people in 30 countries practice Falun Gong. The Falun Gong practitioners have conducted a survey to determine the health effects of the system. In short, they found that 80 per cent of practitioners reported an improvement in physical health and 96 per cent reported an improvement in mental health.On July 22 this year, however, the Chinese Ministry of Civil Affairs denounced Falun Gong as an illegal organisation, and practitioners were banned from practising in public or in private. Amnesty International reports that this is just a new example of the Chinese authorities' tactic of `harassing, detaining or criminalising citizens who are peacefully exercising basic human rights.' Others liken it to the anti-rightist campaign in 1957, the Great Leap Forward in 1958-60, the Cultural Revolution in 1966-76, or the campaign to eliminate spiritual pollution in 1983 and 1984. This campaign has similar overtones. The Chinese media is rife with unbelievable re-education stories, and people denouncing the practitioners and discrediting stories from the international media. As well, pressure is put on practitioners through employment, housing and pensions.Originally, the founder, Li Hongzhi, registered Falun Gong with the Qigong Research Association of China. Qigong is a popular method of breathing and exercise. However, after disagreement about the foundations of Qigong, Li Hongzhi withdrew the movement from the Qigong Research Association of China, thereby removing the official recognition.Prior to its banning, Falun Gong was not registered anywhere and it was not recognised as a legitimate body. Therefore it had no legal protection and no legal status. When the Chinese government banned Falun Gong, authorities proceeded to arrest hundreds of practitioners. According to a Hong Kong human rights group, 300 people were arrested in cities around the country, and I have unconfirmed reports from Australian practitioners that this number is now much, much higher.The Chinese government then embarked on a concerted effort to discredit the movement. Part of this was the media reports which went to great lengths to outline the insidiousness of the movement and the falseness of its leader. The Chinese government has also tried to extradite Mr Li Hongzhi from the USA, where he currently resides. The USA has refused on the grounds of religious freedom. To aid his case, President Ziang Zemin recently gave President Clinton a book with photos of practitioners who had allegedly killed themselves in macabre ways because of their superstitious beliefs. The book, however, did not convince President Clinton that Falun Gong should be stamped out.It is not clear why the Chinese government has banned this religious movement. According to the Beijing Review, it is because:. . . it was not registered by law, it had engaged in illegal activities, advocating superstition and spreading fallacies, hoodwinking people, inciting and creating disturbances and jeopardising social stability.The Chinese Vice Minister of Civil Affairs, Li Baoku, said in August this year:In recent years, Falun Gong organisations have instigated and hoodwinked their followers in various places to harass and besiege Party and government departments and media institutions. They have also organised a number of large scale illegal gatherings.They apparently harassed and besieged the party through silent meditation, because that is what they do most.In 1981, the UN General Assembly adopted the Declaration on the Elimination of All Forms of Intolerance and Discrimination Based on Religion or Belief. In July, Mr Wu Zhongze, Director of the Non-government Organisation Management Bureau under the Ministry of Civil Affairs, told a press conference that China's constitution protects the freedom of religious belief and normal religious activities. And that is true. Article 36 of the Chinese constitution says:Citizens of the People's Republic of China enjoy freedom of religious belief. No state organ, public organization or individual may compel citizens to believe in, or not to believe in, any religion; nor may they discriminate against citizens who believe in or do not believe in, any religion.Unfortunately, that does not seem to be happening here.Mr Wu pointed out at the press conference that the Regulations on the Registration and Management of Mass Organisations stipulate that mass organisations should be registered and their activities should abide by the constitution, the laws, the regulations and the policies of the country. The organisations should not violate fundamental principles of the constitution or jeopardise interests of the nation or the people, nor should they jeopardise the interests of other organisations and citizens. However, according to Mr Wu, Falun Gong had been engaged in unlawful activities, advocating superstition, spreading fallacies, hoodwinking people, inciting and creating disturbances, and jeopardising social stability. That of course would include gathering in parks to practice movements together and to meditate.One of the worrying things about China claiming that they subscribe to religious freedom is that they in fact have a history of religious intolerance, of arbitrary detention and torture. Falun Gong is not alone in being targeted by the Chinese authorities. Amnesty International reports:A nationwide "anti superstition" campaign which has been in progress since at least mid 1998. The official media has repeatedly denounced traditional practices such as feng shui—geomancy, and fortune telling. "Unauthorised" temples have been demolished, and adherents of charismatic or unorthodox religious and millenarian groups have been assigned without trial to re-education through labour camps. Their alleged leaders have also been sentenced to death or long prison terms for allegedly defrauding followers, "organising cults to obstruct the implementation of the law" or duping female followers into sex as a "sacred summons," which is considered rape."The penalty for subversion is death, so the consequences of claiming the right to practise Falun Gong can be severe. I am also concerned that the practitioners have free and fair trials. I consider that, given the current cli mate of fear and misinformation, that would be impossible without international monitors.The current situation is terrible. These people must be able to practise any form of meditation. There is no threat to national security. They practise together in parks and public spaces because they consider it enhances their energy. It is not to subvert any social order. I urge the Australian government to pressure the Chinese government, through all available avenues, to: firstly, reassess the status of Falun Gong and to recognise it for what it is—a peaceful, non-political meditation movement; secondly, allow independent observers in to monitor the condition of prisoners in the gaols; and, finally, monitor trials of these prisoners to ensure that those trials are legal and fair.989622:14:009896Calvert, Sen PaulSenator CALVERT5F4TASLP10—As you would be aware, Madam President, I am a rare speaker on the adjournment, but this is the first opportunity I have had to put on the record a matter that has concerned me for some time. In fact, it goes back to when I had the pleasure of leading a bipartisan delegation to Taiwan in July, at the invitation of the Taipei economic and cultural office. I note that Senator Conroy, who was one of the members of our delegation, is in the chamber tonight. As well as other matters, we discussed business prospects in Australia, and we had the opportunity to view some business organisations in Taiwan. Since returning, they have had an horrific earthquake, and I want to reiterate how much sympathy the Australian parliament has for Taiwan, which has suffered horrific loss of life as a result of that earthquake.Madam Deputy President, you may recall that, on many occasions, I and my colleagues in this place have raised the question of the Parkville Piggery that was owned by the former Prime Minister, Mr Keating. Of course, we all saw it on the 60 Minutes program. I think Mr Achilles Constantinides became a family name there for a while with the exposure he was getting in the media. The piggery was sold to Indonesian interests—the Soeryadjaya family. Since then we have had the situation where the Attorney-General, Mr Williams, has decided to take no further action about the matter.But what I want to talk about are the unintended consequences of the publicity that that operation received and the effect that publicity has had on a joint venture group in Taiwan who bought this business from the Indonesians. The consortium consists of the Taiwan Sugar Corporation, the China Development Bank, Steff Houlberg—a Danish partner—and ESS Food. Senator Conroy was approached by Mr Benny Hu, one of the directors of the China Development Bank and well known outside of Taiwan as an entrepreneur and investor for the Taiwan government, because they were having problems raising finance in Australia purely and simply because of the publicity about what had been happening with the Parkville Piggery. That was having an effect on their chances of raising money.What the consortium propose with this piggery and other ventures is quite exciting news for Australia. One of the things that we as members of the Australia-Taiwan Parliamentary Friendship Group have been trying to do for some time has been to get Taiwan to invest some money in Australia in large investments, because we see Australia as a very safe place to invest. The Taiwan Sugar Corporation have been quite a large investor in Australia, as most people would know—and as I am sure Senator Boswell knows. They are the largest state owned agribusiness company in Taiwan. They are one of the leaders in pig raising technology in Taiwan. They produce something like 500,000 pigs a year, and they have a turnover of over $US1 billion. So they are quite a significant corporation.Their partner, the China Development Bank, are one of the most experienced and largest investment companies in Taiwan. They have 56 per cent of the market share and over 250 investors. They went into partnership with a Danish partner, Steff Houlberg. They are the second largest slaughterhouse group in Denmark. Using leading technology, they slaughter something like 2.7 million pigs a year, and their turnover is $US850 million. Another partner in the consortium is ESS Food, the largest distribution company in Denmark—selling 324,000 tonnes of pork worldwide. Their turnover is $US1.4 billion. So we are talking about four companies that, you would have to say, are large players by any means.They purchased the Parkville Piggery, and one of the first matters that confronted them was the existing environmental problem that we all know about—a very large smell. I suppose Senator Heffernan, who is sitting in front of me, would probably confirm that there has been a stink around this piggery for many years. But in this particular case we are talking about a real environmental problem that has been identified. The Taiwanese group indicated to us in the delegation that they were going to spend something like $A3 million to combat that problem and reduce the odour levels that have been identified as level 6—but six out of what I do not know. Level 3 is acceptable, but they want to reduce the level down to level 1 or 2. So, obviously, the efforts they are making are quite significant. They expect to have that completed by April 2000.They propose to use the Parkville Piggery that they purchased from the Indonesians who purchased it from Mr Keating as a breeding sow establishment. They propose to build a new advanced pig slaughterhouse in Queensland—a huge operation. They want to build, own and operate that particular slaughterhouse. It will have a maximum slaughterhouse capacity of something like 600,000 pigs a year and will employ something like 600 Australians, which is quite significant in job terms. It would be a very modern, intensive piggery. They are proposing to have 21,000-odd sows in four stages which, over a period of time, will produce approximately 450,000 pigs a year. It would certainly be a state-of-the-art establishment. Very importantly, they expect to export 80 per cent of that product to Japan.Being a good Tasmanian, I did ask the representatives of the consortium why they would want to set up in Queensland when they could find a very good place in Tasmania—I am sure we could find somewhere in Tasmania to set up a piggery to employ 600 people. They explained to me that, if you were going to export into Japan, the pork has to be produced in tropical conditions to get the right sort of flavour to appeal to the taste of the Japanese. So under those conditions—and being, I suppose, a senator of Australia—I have to go along with what they want to do.I take this opportunity tonight to place on the record that time has passed on. Regardless of what has been said about Mr Keating and the former piggery, the opportunity is there now for Taiwanese interests, along with Australian joint ventures, to develop a massive export industry into Japan. I implore those investors and banks who have been rather loath to invest in this development because of the fear of publicity in the media to think of the big picture rather than what has happened before. I commend to the Senate and to Australia the proposed venture by the Taiwanese in Queensland which will provide quite significant numbers of jobs. I hope that my colleague Senator Conroy would support my comments here tonight.989822:22:009898Conroy, Sen StephenSenator CONROY3L6VICALP00—I rise in complete support of Senator Calvert and his contribution. As he has indicated, the piggery has had a very colourful past over the last few years. While the hurly-burly of politics is just that, and lots of things get said in this chamber by all sides, this is a situation where the national interest has moved on. I would like to congratulate Senator Calvert in recognising that and in recognising a unique opportunity. Certainly, following the indication from his colleagues, we want to see the establishment of this piggery as soon as is possible.This is a unique opportunity, as Senator Calvert has said, for Australian jobs, Australian dollars and Australian exports. We have moved beyond the arguments of the past; a line has been drawn in the sand. I rise today to share with Senator Calvert, and to pass on to anybody who can see a good opportunity, the view that the debate over the piggery is finished. We now have new owners who have assessed this project as a real winner. If companies have been reticent to be involved in this new project, then Senator Calvert and I say to them today that that is passed and that you have an opportunity to contribute to the Australian national interest.I share and support Senator Calvert's comments that we should now look at the big picture. We should look at what all Australian governments of all political persuasions are about, and that is jobs for young Australians, export opportunities for companies and more dollars coming into Australia. As Senator Calvert has outlined, this is a state-of-the-art project that has been held back by politics in the past. We are hoping to say through our joint efforts tonight that politics should no longer hold this project back.We have some of the biggest corporations in the world interested in helping Australian companies work towards exporting to Japan, as Senator Calvert has indicated. I describe this as a unique opportunity because the flavour created by breeding and slaughtering pigs in Queensland means that they are regarded as premium quality on the Japanese market. There are huge value added dollars and profits to be made, providing we can put together the right sort of package here in Australia and not be held back by the politics.I do not want to speak for too much longer. I think Senator Calvert has covered all of the relevant aspects, but certainly the message from the coalition and the Labor opposition is that this project deserves to go ahead unencumbered by past debate on the former owners of the piggery. We encourage all concerned to treat this project on its merits. It is deserving of consideration. If people believe the plans that are in place and the project stack up financially, they should not fear that their names will be dragged through the mud. They can have confidence that they will be involved in an excellent project with very positive prospects for Australian jobs and people's futures.989822:27:009898Murray, Sen AndrewSenator MURRAY3M6WAAD00—In my adjournment speech in the Senate on 5 March 1997, I outlined my concerns over loose taxation exemptions extended to the club sector through the mutuality principle. In a most inadequate assessment on pages 228 and 229, the Ralph report assessed this issue. They missed a chance to address a major tax avoidance matter.The club sector has continued to grow exponentially since I raised my concerns in 1997. Large clubs throughout Australia have diversified into a broad range of commercial activities that are outside their original community based charter. The industry is now involved in operating accommodation properties, ski lodges, cinemas, IMAX theatres, gymnasiums, travel agencies, bus services, hairdressing businesses, bakeries and butcher shops through huge taxpayer subsidies. These enterprises have been enjoying major taxation concessions and exemptions and, in many cases, have resulted in small and local taxpaying businesses being unable to compete with their larger tax-free competitors.In addition to the multimillion dollar expansion projects undertaken by clubs that I highlighted in 1997, there has been additional building completed and planned for the future. For instance, there is the Twin Towns Services Club in Tweed Heads construction of a $46 million project incorporating a parking station, retail stores, an overhead pedestrian bridge, a hotel and apartments. Additionally, a major buying group, formed in conjunction with Harvey Norman, further emphasises the big business approach of the major clubs. These expansions are undoubtedly commercial enterprises and should be taxed appropriately.Sporting clubs, where sport is the dominant activity, are presently exempt from paying tax on all their net income, while clubs that partake in more diverse activities are assessed on the Waratah principle, which I believe is now outmoded. The Waratah principle is related to identifying different tax rates for each type of income stream and applies subjective tests under the self-assessment taxation regime. This self-assessment has led to great difficulty in the policing of this tax exemption by the Taxation Commissioner.The loophole in the mutuality principle must be reformed. The large super clubs continue to dominate, adding to the concerns of not only private business but also smaller clubs that are, in fact, operating within their original charter and are within their right to claim the mutuality principle exemption.It has become obvious that the smaller clubs are facing the same pressures from super clubs as private enterprise. The larger clubs within Australia not only continue to expand but have begun `McDonaldising' their venues. A number of clubs now operate in excess of five venues under the one banner, with no signs of these clubs slowing their aggressive expansion plans. This form of corporate takeover has resulted from the largest clubs enjoying super profits and being in a cash rich position that has enabled them to continue to capitalise and expand.The Australian Democrats support the notion of community based organisations and clubs and view smaller, tax exempt club enterprises as legitimate community organisations. The large super clubs, however, are clearly major multimillion dollar commercial enterprises that must be taxed appropriately. Adding further weight to this argument is the relaxed membership process that is employed by the club sector, coupled with marketing initiatives reflecting only nominal regard for the club laws preventing advertising to the public and designed to attract not only local residents but also international tourists. Interestingly, I have been made aware of at least one club now operating marketing offices in overseas locations encouraging overseas tourists to utilise club facilities.The recently released Productivity Commission Draft report into Australia's gambling industries examined the mutuality principle in detail. Based on Australian clubs' operating profits of $561 million for 1997-98, on page 20.10 of its draft report the Productivity Commission estimated that the government would collect $202 million per annum in taxation revenue if the club sector were taxed at the company tax rate. Other industry sources have suggested that the commission's figures are conservative. The majority of this revenue is generated from the club industry's access to gaming machines and other gambling facilities. In its draft report the commission stated:There has been a large expansion of part of the club sector in some States and an increased concentration on gambling as their main business. This has skewed the traditional nature of clubs—and has led to the development of super clubs. This then raises the question of whether the club cocktail of mutuality, and a heavily and rapidly growing dependence on gambling revenues by a segment of the club industry, is one which policy makers should accept without restraint.It is clear that we, the law-makers, should not encourage the continued expansion of this industry through providing taxation exemptions not afforded to other sectors of the community. The mutuality principle is being rorted and is a gross example of an abuse of the taxation system.The mutuality principle has made it possible for clubs to invest in thousands of gaming machines with no regard to the community's best interests. In New South Wales, for example, the Penrith Panthers Club is currently undergoing major expansion and is on track to be the largest gaming machine provider in New South Wales—larger than Star Casino—and the second largest in Australia, being only slightly smaller than Crown Casino. The Productivity Commission also found that some clubs currently obtain 80 per cent or more of their total revenue from gaming machines—again higher than is found in some casinos. The commission has stated:In summary, the Commission considers that the exemption of club mutual income from tax, combined with the inability to distribute surpluses to members, has the potential to result in excessive capital allocation in club facilities and other investments.In my adjournment speech in March 1997, I suggested that there could be merit in ensuring that a figure of, say, four per cent of turnover must be placed back into the community in which these clubs operate. Another alternative is to set a threshold figure at which clubs demutualise and become tax paying entities. I suggest a figure of $1 million turnover as an appropriate amount, a figure used in the Ralph Review of Business Taxation as its basis for the definition of a small business.Another alternative to this policy approach would be to amend the definition in section 23(g) of the Income Taxation Assessment Act 1936 to require such clubs to satisfy a purpose test each year comparable to the sole purpose test that applies in superannuation legislation. The government faces considerable problems with ensuring that business taxation reform remains revenue neutral. It has consistently stated that all sectors of the community should pay their fair share of taxation. But it has ignored the rich commercial club sector throughout the reform process, despite the major concessions currently extended to the sector. Conservative estimates of $200 million in tax forgone are truly significant.If the government wishes to ensure revenue neutrality and a fairer and more equitable tax system, it is imperative that this issue be addressed and tightened to reflect a truly progressive, efficient and fair tax system. As I asked in 1997, will the government now review this situation? If it did so and applied appropriate tax rules, it would also assist small business competitors that are being unfairly disadvantaged, would provide revenue to assist in reducing the current revenue shortfall due to the business taxation reform process and would further contribute to the government's budgetary needs. The time has come for the club mutuality principle to be reformed and for $200 million to be raised to fill the black hole which presently exists with the Ralph package.990022:35:009900O'Brien, Sen KerrySenator O'BRIEN8O6TASALP00—In the adjournment debate last Thursday, I detailed how a number of candidates were disadvantaged in the selection process for the position of Assistant Director, Aviation Safety Compliance in the Civil Aviation Safety Authority. Tonight I want to talk about the role played by the executive recruitment firm Spencer Stuart in the process that led to the appointment of Mr Laurie Foley to that position. According to Mr Skehill in the report that followed his review of the procedures that led to Mr Foley's appointment, the initial proposal from Mr Wes Willoughby, a special consultant to the Civil Aviation Safety Authority, was:. . . that Spencer Stuart be engaged for that purpose without seeking further expressions of interest from other executive search consultants.It appears that Mr Willoughby did not follow that course because of the insistence of the Manager, Human Resource Management that there be a proper selection process. I must say that the selection process for the recruitment firm was then carried out in a very efficient manner indeed. CASA contacted six executive recruitment agencies on 15 April 1998. Spencer Stuart provided a detailed proposal just five days later and was given the job on 24 April. A contract was forwarded to Spencer Stuart on 28 April. It contained a clause that stated:CASA must place a purchase order with the consultant before the consultant begins to carry out the consultant's services.However, Mr Willoughby ignored that requirement and authorised Mr Wheatley to commence work immediately. Mr Wheatley did not sign the contract until 5 March. This suggests that Mr Willoughby ignored the terms of the contract he was entering into on behalf of CASA or simply ignored those terms.According to Mr Skehill, some time before 18 May Mr Wheatley prepared a report in relation to Mr Foley based on their meeting on 7 May. Mr Skehill comments that the actual timing of this report is uncertain because it did not bear a clear date. Mr Skehill reported that Mr Wheatley made referee contact with two people not nominated by Mr Foley on 25 May, and it appeared, from Mr Wheatley's notes, that they were both not supportive. On that same day, Mr Wheatley contacted one of the three referees nominated by Mr Foley. That referee was, not surprisingly, supportive. The other two referees nominated by Mr Foley were contacted on 2 June, and again, not surprisingly, they supported his application. So two independent referees did not support Mr Foley and three referees nominated by him were supportive. Mr Wheatley then wrote to Mr Toller on 1 June in the following terms:Wes and I discussed all the contenders last week and agree on the attached list, which contains full reports on Foley and . . . And there Mr Skehill's report names a candidate for another position. The quote goes on:I also append summaries of four new `possibles'.Note that on that date Mr Wheatley had received reports from three referees, two not supporting Mr Foley and one supporting. I assume that that was reflected in the report to Mr Toller. Mr Skehill discovered, however, that neither Mr Wheatley's file nor the authority's files contained a copy of those lists said to be attached to that letter.Mr Toller told Mr Skehill that he had no recollection of the letter or the attachments. According to Mr Skehill, Mr Wheatley said he did not have copies because `consistent with his usual practice such would have been maintained on his IT system and then deleted'. This claimed practice is contradicted by other evidence to Mr Skehill's inquiry by Mr Wheatley. Mr Wheatley told Mr Skehill that he had recovered an old file containing information on Mr Foley collected during the recruitment process for the director's position. That process had taken place some considerable time earlier. We can only conclude from this that Mr Wheatley kept some files and not others.On 3 June Mr Wheatley wrote formal records of the favourable referee reports. These reports were eventually attached to the final report from Spencer Stuart on candidates for Assistant Director, Aviation Safety Compliance provided to the authority on 26 June. Mr Skehill appears to make no reference at all to the fate of the unfavourable referees' reports. I assume, for some reason, they were not included in that report. If those negative assessments were not passed on by Mr Wheatley, that is a serious omission on his part, and that is a matter I will pursue further.Also, on 26 June, Mr Wheatley interviewed two internal candidates identified in the Skehill report as applicants 12 and 33. According to Mr Skehill, the final Wheatley report `appears to have been prepared prior to that date and did not provide a rating for applicants 12 and 33'. It then says, in brackets: `[although the outcome would not have affected his recommendation on Foley.]'It is important to note that a board member, Mr Pyne, told Mr Skehill that he insisted that applicants 12 and 33 be interviewed because they rated third and fourth for the position. Despite this view, Mr Wheatley did not even bother to provide the board with a rating for those candidates, based on his interviews with them, in his final report. In fact, it was Mr Willoughby, not Mr Wheatley, who reported to Mr Toller on the outcome of applicant 12 and 33 interviews, and that advice was not provided until some time after 26 June. Then, on 29 June, Mr Wheatley told Mr Toller that, even though he had lodged a formal report some days earlier, the rankings for the safety compliance position were Foley, Mr Y, applicant 12 and applicant 33.The Skehill report states that the report on Mr Foley contained the fact that Mr Wheatley prepared a final report to the board in late May. As I said earlier, it is not clear whether that report reflected the two negative referee reports.The report also contained a report on Mr Y. However, that report had been prepared some considerable time earlier as part of an assessment for Mr Y for the position of director. I assume therefore that it did not reflect Mr Y's interview with Mr Willoughby and Mr Wheatley on 11 May 1998. According to Mr Skehill, Mr Y was considered a strong candidate for the Assistant Director, Aviation Safety Compliance position after that May interview. I intend to seek clarification of that point.The manner in which Spencer Stuart handled the application from Mr X is also of considerable concern. Mr X was advised by Spencer Stuart that he should only lodge an expression of interest and that after an assessment of that application he may be provided with a copy of the selection criteria and invited to lodge a formal application. Mr X then wrote to Spencer Stuart, expressing an interest in the position, on 15 May. That letter was acknowledged by Mr Wheatley four days later. Mr X then discovered that another applicant had been provided with the selection criteria without any sort of application being lodged. He then complained of the manner in which Spencer Stuart was running the selection process and was immediately provided with a copy of the selection criteria.On 19 May Mr Willoughby told Mr Wheatley that Mr X had not performed well in the position in which he was acting. Mr Wheatley did not check that advice and Mr Skehill concluded that it was in fact wrong. On 29 May Mr Willoughby told Mr Wheatley that Mr X should be dropped off the list because he had another position. Mr Wheatley did not check that claim, and it, too, was wrong. Mr Wheatley then wrote a holding letter to Mr X on 1 June, meaning thereby that, technically at least, he was still a candidate for the job. However, Mr Wheatley failed to include Mr X on the list of candidates he provided to Mr Willoughby, who subsequently submitted them to the board on 19 June. He also failed to make any mention at all of Mr X in the final Spencer Stuart report dated 26 June. According to Mr Skehill, Mr Wheatley could not explain why Mr X had been excluded and `could only attribute this to administrative oversight'.This omission by Mr Wheatley meant that the board and Mr Toller did not even know Mr X—who was a senior authority employee acting in a position that involved a number of the functions to be undertaken by the Assistant Director, Aviation Safety Compliance—was a candidate for the job. Mr X was also a candidate that, as it transpired, appeared to have a number of supporters on the CASA board. Mr Skehill states in his report, and I quote:That is perhaps a pity—that is, that Mr Wheatley did not seek other views on Mr X—as there had been some differences of view between Mr X and Mr Willoughby about the role, authority and resources of the position in which Mr X was acting, and these may have coloured Mr Willoughby's views of Mr X.Mr Skehill states further:Mr Pike says that there were some members of the Board who may have had doubts about Mr X's performance but says that those best qualified to judge would have regarded him as having performed at a high level in difficult circumstances.Spencer Stuart was paid $200,000 plus 12½ per cent, plus costs, to do the job. It is obvious that our money's worth was not provided in this case.990322:46:009903Crossin, Sen TrishSenator CROSSIN7Y6NTALP00—This evening I would like to present the Senate with a description and a report of my recent trip to the Bailiwick of Guernsey, which is something that I know you, Madam President, would also be interested in. It occurred on my way to the 45th Commonwealth Parliamentary Association General Meeting in Trinidad, on which I do not intend to provide a report tonight. That will occur when those who went on that delegation present their report to the Senate. It arose out of my membership of the Joint Standing Committee on National Capital and External Territories. So why, you may ask, would I have taken the opportunity to go to Guernsey? Currently before this parliament there is legislation in respect of Norfolk Island, which I do not intend to go into tonight. That committee was led to discussions about comparing arrangements on islands such as Guernsey—or another island in the Channel Islands, Jersey—with the arrangements that Norfolk Island has with Australia. While I was on the other side of the world I took the opportunity to fly from London to Guernsey to have a look at that Bailiwick and to meet the people involved in running the island.The Channel Islands are regarded, geographically, as part of the British Isles. The two Bailiwicks of Guernsey and Jersey are independent jurisdictions separate from the United Kingdom and in that respect are quite different from Wales or Scotland and Northern Ireland. Guernsey has a population of around 59,000, of whom 38,000 were born locally. It would be true to say that the scenes from the top of the cliffs and the views of the beaches are picture postcard perfect, although probably not as good as what you might see around some of the coastline of Australia. I am sure that people in Guernsey who receive a copy of this speech will forgive me for being a little biased about that. Guernsey is certainly a very beautiful and historic place and, as you move around the small island, you can almost sense the history of the place and the way in which the people are ever so proud of that history. For Australians trying to picture what it would be like, they may well remember the television show Bergerac, which was filmed either on that island or on an island similar to it. It is where Victor Hugo lived between 1855 and 1870 while he finished his work Les Miserables. We in Australia would all be familiar with that, being a very famous stage production.The Guernsey Tourist Board has produced a terrific booklet that outlines life on the Bailiwick of Guernsey. I am not an expert on Guernsey history, so I would need to refer to this booklet in outlining some of the historical nature of that place. You need to look at where Guernsey has come from in order to appreciate some of the aspects under which they live today. Geographically, Guernsey is much closer to France than to England. It lies only 30 miles from the Normandy Coast, as against 80 miles from Weymouth, which is the closest point on the United Kingdom coast. When islanders talk about the mainland they actually mean the United Kingdom, to which they are bound by centuries of sentiment, economies and politics. Back in 933 AD the Channel Islands became part of the Norman realms. This followed the treaty of St Clair-sur-Epte. Later in 1066, William, the Duke of Normandy, landed his conquering army in Sussex and became William I of England. His Duchy of Normandy included the Channel Islands and these became part of the combined realm of England and Normandy. Some 138 years later, King John lost most of the Duchy of Normandy, but Guernsey and the other Channel Islands remained loyal to the British Crown.One of the things that struck me when talking to the people on Guernsey about their relationship with the United Kingdom was that they were very strong in the resolve that their allegiance is to the Crown of the United Kingdom as opposed to the parliament of the United Kingdom. Of course, the Germans invaded the Channel Islands in July 1940 and the islands were occupied for nearly five years by Hitler's forces. Thousands of local people were evacuated to the United Kingdom, but a generation of children have since grown up in the towns and villages. The Guernsey people are proud of the fact that their fealty to the English Crown has been by choice and not by conquest. Indeed, as islanders sometimes pointed out to me with tongue in cheek, it was their duke that conquered England in 1066, because he arrived first on the island of Guernsey.Citizens from the United Kingdom can go to Guernsey without a passport in a similar way to the majority of the Australian population who visit Norfolk Island. They find that the United Kingdom provides them with perhaps a sense of being home but also of being abroad. The Channel Islands, of which the Bailiwick of Guernsey forms part, occupy an unusual position in Her Majesty's possessions for they are not part of the United Kingdom, nor are they sovereign states or colonies. Guernsey has its own government. It makes its own laws and fixes its own taxes. It has no representatives in the British parliament, nor do the citizens of Guernsey vote in British parliamentary elections. The basis of the island's constitution is an ancient loyalty to the British Crown, as I have said, as opposed to the British parliament. It has been allowed for centuries to run its own affairs while being able to export its products duty free to the British mainland.The British government could legislate for the island but it has never done so, I am told, in the interests of good government. The government of the United Kingdom is responsible only for defence and international relations in respect of Guernsey, but they tell me that the Guernsey government is first consulted about these matters. The administration is responsible through the Queen and the Privy Council, the ultimate court of appeal being the judicial court of the Privy Council.Under protocol 3 of the United Kingdom's Treaty of Accession to the European Union, Guernsey is within the European Union for the purposes of trade but out of it for almost everything else. On the other hand, the island does not qualify for EU financial aid.The island parliament is called the States of Deliberation, which is usually referred to simply as the `States'. It has 57 members, 45 elected by popular vote, 10 elected by parish councils and two representatives from the nearby island of Alderney. Alderney has a population in similar numbers to Norfolk Island. Tax is paid to Guernsey for essential services and a levy is paid through property tax. However, Guernsey makes up the shortfall in funding and development of infrastructure.It is interesting to note that Guernsey has only recently changed its eligibility laws for those wanting to be registered on the electoral roll. Until recently, you had to be either a British subject or from a country of the Commonwealth or the Republic of Ireland and have lived on the island for two years. With the recent change, in order to register, you only have to have been a resident on the island between 1 September and 31 October of that year in which you seek registration. You must have been resident for a period of two years immediately preceding that date or at any time before that date for a period or a period of at least five years in total. They have actually expanded their representation but are still trying to maintain the uniqueness of having lived on the island for a number of years before you get an opportunity to vote for their parliament. Guernsey receives no grant of any kind from the British government. The island has a self-supporting economy. This is mainly in financial services and tourism.Before finishing tonight, I particularly want to pay tribute to the people I met on the island. They include Mr Talmai Morgan, the Director of Fiduciary Services and Enforcement; and Mr Philip Marr, the Director of Banking, who spent time explaining to me at length the economic infrastructure of the island. I also met with Mr David Robilliard, the Head of External and Constitutional Affairs. Finally, I met Mr Mike Torode, who is a senior member of the States of Guernsey. I spent quite an interesting time chatting to him over lunch and having a personal tour of the island. I want to place on record my thanks to Anne Robilliard, the Deputy of the States of Guernsey, who had an opportunity to further discuss and clarify the issues of Guernsey at the CPA conference.Senate adjourned at 10.56 p.m.Documents99059905The following documents were tabled by the Clerk:Currency Act—Currency Determination 1999 (No. 5).Financial Management and Accountability Act—Financial Management and Accountability Orders (Amendment) 1999 (No. 4).Answers to Questions on Notice9906The following answers to questions were circulated:9906(Question No. 1414)14149906Faulkner, Sen JohnSenator Faulkner5K4NSWALP00 asked the Minister for Industry, Science and Resources, upon notice, on 2 September 1999:With reference to the effect of the goods and services tax (GST) on the internal operations of the Minister's portfolio (that is, not relating to the services provided to the public), and in relation to each of theagencies within the portfolio:(1) What preparations have been undertaken to date in regard to the introduction of the GST on 1 July 2000.(2) (a) What has been the total cost of those actions already undertaken; and (b) how much of these costs relate to: (i) consultancies, (ii) staff training, (iii) computer software, (iv) extra staff, (v) stationery, and (vi) other (please specify).(3) Was the cost of undertaking this work included in theportfolio's 1999-2000 budget appropriation; if so, how was this funding identified; if not, what other area of funding has been used for this purpose.(4) What future preparations are planned or expected to be required in regard to the introduction of the GST on 1 July 2000.(5) (a) What is the total cost of the actions planned, or the estimated cost of expected actions; and (b) how much of these costs relate to: (i) consultancies, (ii) staff training, (iii) computer software, (iv) extra staff, (v) stationery, and (vi) other (please specify).(6) Was the estimated cost of undertaking this future work included in the portfolio's 1999-2000 budget appropriation; if so, how was this funding identified; if not, what other area of funding has been usedfor this purpose.(7) Is there expected to be any change in the ongoing running costs of the department/agency after the commencement of the GST; if so, what is the extent of the difference in costs. (8) Are there any other GST-associated costs which the portfolio agencies will incur prior to the commencement of the GST; if so, what are those costs.9906Minchin, Sen NickSenator MinchinJX4SALPIndustry, Science and Resources10—The answer to the honourable senator's question is as follows:(1) Preparations undertaken to date within the Industry, Science and Resources portfolio for the introduction of the GST include:* establishment of GST working groups;* examination of the impact of the GST and development ofimplementation strategies;* engagement of consultants to help identify compliance effects of GSTlegislation and oversee implementation of these;* examination of GST requirements for financial management information systems;* attendance at seminars and liaison with other government agencies; and* commencement of staff training.(2) Expenditure incurred to date includes expenditure relating to the provision of services tothe public. The portion of cost relating to the internal operations of the portfolio is not separable.(3) No additional funds were allocated in the 1999-2000 budget appropriation for GST implementation. These costs have been met from existing funds.(4) Future preparations within the Industry, Science and Resources portfolio for the introduction of the GST are expected to include:* refine and finalise GST implementation strategies;* modify accounting systems and procedures to comply with the GST legislation;* ensure that financial management information systems (FMIS) are GST capable, upgrade systems as required, provide relevant training;* implement systems, policy and procedural changes to ensure GST obligations are met;* ensure that computer systems are GST compliant; * test internal procedures, undertake internal audits to ensure readiness for implementation of GST;* review existing contracts (as appropriate), obtain legal advice on contract clauses relating to the GST; and* focus on internal awareness, conduct further staff training.(5) The overall cost of actions planned within the portfolio has not been determined, but is expected to be small in relation to overall budget running costs.(6) No additional funds were allocated in the 1999-2000 budget appropriation for GST implementation. These costs will be met from existing funds.(7) It is not expected that the introduction of the GST will result in major changes to the ongoing running costs of the department and portfolio agencies. The extent of any difference in costs has not been identified at this time.(8) At this stage, no other GST-associated costs (relating to the internal operations of the department and portfolio agencies) have been identified.9907(Question No. 1428)14289907Brown, Sen BobSenator BrownQD4TASAG00 asked the Minister representing the Minister for Defence, upon notice, on 15 September 1999:With reference to the proposal to locate the East Coast Armaments Complex at Twofold Bay in New South Wales:(1) Have the feasibility studies and environmental assessment referred to in the answer to question on notice no. 607 (Senate Hansard, 11 May 1999, p.4796) been completed; if so, can copies be provided; if not, when will they be completed and released.(2) (a) What is the process and timetable for the Twofold Bay proposal; and (b) have there been any changes or other developments relating to the proposal since March 1999.(3) Are any other locations under consideration for all or part of the original East Coast Armaments Complex concept.9907Newman, Sen JocelynSenator NewmanBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—The Minister for Defence has provided the following answer to the honourable senator's question:(1) Detailed technical and environmental investigations are nearing completion. The findings of these investigations are being incorporated into the proposal that will be referred to Parliament for consideration by the Parliamentary Standing Committee on Public Works (PWC) and the Draft Environmental Impact Statement that is proposed for public exhibition commencing 8 November 1999. The statement of evidence to the PWC will be available through the PWC Secretariat following referral of the proposal in Parliament, which is expected in October 1999. The Draft Environmental Impact Statement (EIS) will be available after publication, scheduled for early November 1999.(2) (a) The process is as outlined in the answer part (1) above. The proposed timetable is:. Referral to Parliament October 1999. Public exhibition of draft EIS 8 November—17 December 1999. Parliamentary and environmental approval February/March 2000. Contract let mid 2000. Construction complete end 2001(b) No.(3) Yes. The original East Coast Armament Complex concept for Point Wilson had two components: ammunitioning of Navy ships and bulk importation of Defence explosive ordnance. The proposal for Twofold Bay will cater for the Navy ammunitioning requirement currently conducted in Sydney Harbour. The importation of explosive ordnance is being addressed separately in the current market testing of Defence explosive ordnance storage, maintenance and distribution. The location for import of Defence explosive ordnance will be decided by the successful commercial operator.9907(Question No. 1431)14319907Bartlett, Sen AndrewSenator BartlettDT6QLDAD00 asked the Minister representing the Minister for Agriculture, Fisheries and Forestry, upon notice, on 17 September 1999:What proportion of the funding for the Australian Quarantine and Inspection Service Live Animal Export Program is:(a) paid for by industry through export licences, auditing costs and other fees collected from the export industry; and(b) directed towards fulfilling its responsibilities to protect the welfare of live animals for export, as distinct from its veterinary health responsibilities.9907Alston, Sen RichardSenator AlstonLD4VICLPCommunications, Information Technology and the Arts10—The Minister for Agriculture, Fisheries and Forestry has provided the following answer to the honourable senator's question: (a) Government policy requires the Australian Quarantine and Inspection Service's (AQIS) Live Animal Export Program and all other operational programs to operate on a fully cost recovered basis. All program expenditure is therefore recovered from the live animal export industry in the form of fees for services provided.(b) The Live Animal Export Program is responsible for the provision of export documentation to accompany live animal export consignments. Export documentation is only issued when AQIS is satisfied that all importing country animal health requirements have been met and appropriate animal welfare practices have been followed in the preparation of the consignment for export. As the animal welfare practices are part of the overall industry and AQIS inspection, auditing and certification processes, it is not possible to separate the resources allocated to veterinary health responsibilities and animal welfare responsibilities.9908(Question No. 1481)14819908Faulkner, Sen JohnSenator Faulkner5K4NSWALP00 asked the Minister representing the Minister for Defence, upon notice, on 20 September 1999:(1) What are the: (a) formal qualifications; (b) relevant experience; and (c) employment classification/grade, of each departmental officer who has made initial stage decisions regarding requests under the Freedom of Information Act since 3 March 1996.(2) What are the: (a) formal qualifications; (b) relevant experience; and (c) employment classification/grade, of each departmental officer who has made internal review decisions regarding requests under the Freedom of Information Act since 3 March 1996.9908Newman, Sen JocelynSenator NewmanBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—The Minister for Defence has provided the following answer to the honourable senator's question:(1) and (2) The Minister is not prepared to authorise the diversion of resources from other work, including the processing of requests made under the Freedom of Information Act, that would be required to provide the level of detail sought by the honourable senator. However, the following information describes, in broad terms, the arrangements for FOI decision-making in the Department of Defence and the Defence Force.By authority of section 23 of the Freedom of Information Act 1982 (FOI Act), the Secretary to the Department of Defence has granted decision-making authority for FOI to various offices and ranks throughout the Department and the Defence Force. The Secretary has devolved authority so that decisions on requests are made in offices with jurisdiction over the documents or information involved and by persons who have competence to judge the status of the documents or information under the FOI Act. Otherwise the formal qualifications and relevant experience of the individual decision-makers are not recorded.Officers holding the rank of Colonel (equivalent) and Australian Public Service Executive Level 2 officers, or higher, may authorise the disclosure of documents. A commanding officer of a Defence Force unit may authorise the disclosure of documents provided that the officer occupies the rank of Lieutenant Colonel (equivalent). Brigadier (equivalent) officers and Australian Public Service officers in the Senior Executive Service may refuse access to documents. Authority to make decisions about FOI application fees and charges is exercised by an officer other than the one who decides whether or not to grant access to the document/s requested.Authority to make decisions about requests for amendment or annotation of records of personal information is held by senior managers in the Defence Personnel Executive and by Managers of Defence Corporate Support Centres.Authority to undertake internal review of decisions made on requests under the FOI Act has been devolved to the Chief of the Defence Force, the Deputy Secretaries, the Service Chiefs and Deputy Chiefs, Group managers, some deputy Group managers, the Director General Defence Corporate Support—Bases, the Director General Defence Legal Office and General Counsel.9908(Question No. 1599)15999908Allison, Sen LynSenator Allison1M6VICAD00 asked the Minister for Communications, Information Technology and the Arts, upon notice, on 28 September 1999:(1) Is it a fact that Telstra now wants to cut $2 billion in costs and 9000 jobs; if so, does this measure have the Government's and the Minister's support.(2) Is a $2 billion cut in the public interest; if so, why; if not, will section 9 of the Telstra Corporation Limited Act 1991 be used by the Minister to provide directions to the Telstra Board in the public interest.(3) What discussions have taken place between the Minister and Telstra regarding this issue.(4) As a result of these cuts: (a) how many jobs will be lost in regional and rural areas; and (b) what will be the breakdown, by state.(5) What are the implications of these cuts for services in rural Australia. (6) Has the advice of the Australian Communications Authority been sought in respect of these cuts; if so, what was that advice.9909Alston, Sen RichardSenator AlstonLD4VICLPCommunications, Information Technology and the Arts10—The answer to the honourable senator's question is as follows:(1) Telstra's announcement of a cost reduction initiative is part of its continuing search for improvement. Telstra has indicated that the objective is not staff reductions, but improved ways of working. Telstra has not identified a particular figure on cost reductions and while job reductions in the long run have not been ruled out, any numbers are just speculation. As the Government has noted on many previous occasions the day-to-day operation of Telstra is a matter entirely for its Board and management, it is not for the Government to intervene.(2) As noted in the response to Question (1), no specific figure for cost reductions has been identified. The Government does not intend to intervene in the operations of a partly owned Commonwealth Government Business Enterprise to instruct it as to what expenses it should and should not review. Telstra is well aware of the legislated requirements in respect of customer service standards and service obligations.(3) No discussion has taken place on this issue between the Minister and Telstra.(4) See answer to Question (1)(5) Telstra has indicated it remains committed to service improvement in rural Australia.(6) No advice has been sought from the ACA in respect of this issue.