COMMONWEALTH OF AUSTRALIA PARLIAMENTARY DEBATES

SENATE Official Hansard

WEDNESDAY, 19 JUNE 1996

THIRTY-EIGHTH PARLIAMENT FIRST SESSION—FIRST PERIOD

BY AUTHORITY OF THE SENATE CANBERRA CONTENTS

WEDNESDAY, 19 JUNE

Petitions— Higher Education ...... 1753 Uranium ...... 1753 Gun Control ...... 1753 Higher Education ...... 1753 Gun Control ...... 1754 Notices of Motion— Consideration of Legislation ...... 1754 Employment, Education and Training References Committee ...... 1754 Introduction of Legislation ...... 1755 Consideration of Legislation ...... 1755 Aboriginal Deaths in Custody ...... 1755 Skillshare ...... 1756 Sales Tax ...... 1756 Order of Business— BHP Petroleum ...... 1756 Supply Bill: Answers to Questions ...... 1757 Native Title Committee ...... 1757 Statute Law Revision Bill 1996— First Reading ...... 1757 Second Reading ...... 1757 Brazil ...... 1758 Gun Control ...... 1758 Burma— Suspension of Standing Orders ...... 1758 Procedural Motion ...... 1759 Motion ...... 1759 Committees— Superannuation Committee—Report ...... 1769 Membership ...... 1770 Export Market Development Grants Amendment Bill (No. 1) 1996— Second Reading ...... 1770 Taxation Laws Amendment Bill (No. 1) 1996— Second Reading ...... 1793 Matters of Public Interest— Post-secondary Education ...... 1794 Aborigines: Traditional Land Owners ...... 1797 Gun Control ...... 1800 Commonwealth-State Relations ...... 1803 Notre Dame University ...... 1805 Tax File Numbers ...... 1806 Australian Geological Survey Organisation ...... 1808 Questions Without Notice— Wholesale Sales Tax on Motor Vehicles ...... 1809 Taxation: New South Wales ...... 1810 Wholesale Sales Tax on Motor Vehicles ...... 1811 Telecommunications Equipment Industry ...... 1812 Taxation ...... 1813 Environment Funding ...... 1813 Housing Interest Rates ...... 1815 Distinguished Visitors ...... 1816 Questions Without Notice— Aboriginal Health ...... 1816 Auditor-General ...... 1816 Aborigines ...... 1817 Wholesale Sales Tax on Motor Vehicles ...... 1818 Australian Customs Service ...... 1818 Senate Committees ...... 1819 CONTENTS—continued

Senator Crichton-Browne ...... 1819 Taxation Returns ...... 1820 Public Housing ...... 1820 Australian Federal Police ...... 1821 Wholesale Sales Tax on Motor Vehicles ...... 1822 Taxation ...... 1823 Senator Crichton-Browne ...... 1830 Notices of Motion— Industrial Relations System ...... 1831 Documents— Auditor-General’s Reports—Report No. 29 of 1995-96 ...... 1831 Committees— Scrutiny of Bills Committee—Report ...... 1834 Membership ...... 1834 Customs Amendment Bill 1996 ...... 1834 Customs Tariff Amendment Bill (No. 1) 1996— First Reading ...... 1834 Second Reading ...... 1834 Customs and Excise Legislation Amendment Bill (No. 1) 1996— Consideration of House of Representatives Message ...... 1837 Export Market Development Grants Amendment Bill (No. 1) 1996— Second Reading ...... 1837 In Committee ...... 1839 Third Reading ...... 1844 Taxation Laws Amendment Bill (No. 1) 1996— Second Reading ...... 1844 In Committee ...... 1858 Third Reading ...... 1865 Notices of Motion— Introduction of Legislation ...... 1865 Adjournment— Australian Geological Survey Organisation ...... 1866 Parliamentary Association for UNICEF ...... 1867 Bougainville ...... 1869 Aust-Home Investment Scheme ...... 1870 Drought ...... 1872 Documents— Tabling ...... 1873 Questions On Notice— Overseas Students—(Question No. 19) ...... 1874 Higher Education Funding—(Question No. 36) ...... 1876 Universities—(Question No. 37) ...... 1877 Road Funding—(Question No. 43) ...... 1878 SENATE 1753

Wednesday, 19 June 1996 Gun Control To the Honourable the President and members of the Senate assembled in Parliament: The PRESIDENT (Senator the Hon. The petition of certain citizens of Australia Michael Beahan) took the chair at 9.30 a.m., Your petitioners request that the Senate, in and read prayers. Parliament assembled should legislate to establish national Gun Controls binding upon all States. PETITIONS That a National Register of guns and those The Clerk—Petitions have been lodged for possessing guns be established, and that a penalty presentation as follows: of one year imprisonment be established for any person found to be in possession of an unregistered Higher Education gun. That the private ownership, or possession of To the Honourable the President and Members of automatic and semi-automatic guns of all calibre’s the Senate in Parliament assembled: The humble be made illegal and strong penalties introduced for petition of the undersigned citizens of Australia all those found to be in breach of these provisions. respectfully showeth: And your petitioners, as in duty bound, will ever That we are opposed to any moves to cut funding pray. to universities. We believe that funding cuts to universities can only have a negative impact on by Senator Patterson (from 25 citizens). society and will impede the development of our Nation. Higher Education Furthermore, that we are opposed to any in- To the Honourable the President and Members of creased to the annual amount payable by students the Senate in Parliament assembled: The humble via the Higher Education Contribution Scheme petition of the undersigned citizens of Australia (HECS). We believe that increases to HECS will respectfully showeth: discourage individuals from enrolling in universi- That we are opposed to any moves to cut funding ties. We believe that university entry should be to universities. We believe that funding cuts to based upon relative merit, not relative wealth. We universities can only be to the detriment of an believe that education has a direct social and educated and democratic society. We believe that economic benefit and appropriate levels of funding a broadly accessible and liberating higher education should be made available from public revenue. system is fundamental to efforts at creating a more Your petitioners therefore humbly pray that you just and equitable society. will not cut funding to universities or increase In particular we are opposed to any attempts to: HECS fees. introduce up front fees for any students, And your petitioners, as in duty bound, will ever including any attempt to allow universities to pray. charge up front fees to students enrolled in by Senator Vanstone (from 1,663 citizens). excess of Commonwealth funded quotas; increase the level of debt incurred by students Uranium through the Higher Education Contribution Scheme (HECS); To the Honourable the President and Members of the Senate in the Parliament assembled. lower the level at which HECS debts must be repaid through the taxation system; The petition of the undersigned strongly opposes any attempts by the Australian government to mine replace the grant based component of the uranium at the Jabiluka and Koongara sites in the AUSTUDY/ABSTUDY scheme with a loans World Heritage Listed Area of the Kakadu National scheme; Park or any other proposed or current operating expand the loans component of AUSTUDY/ site. ABSTUDY; Your petitioners ask that the Senate oppose any cut funding on a per student basis, in particular intentions by the Australian government to support operating grants; and the nuclear industry via any mining, enrichment and sale of uranium. cut the number of Commonwealth funded places already in the system or promised during by Senator Bell (from 48 citizens). the previous Parliament. 1754 SENATE Wednesday, 19 June 1996

Your petitioners therefore humbly pray that you Aviation Safety Authority Board, both of whom are will not cut funding to universities or increase the to have aviation experience. financial burden on current or future students by Introduction and passage in the Winter sittings raising fees or reducing access to financial assist- 1996 is required as the Government’s aviation ance. We call on the Parliament to at least maintain policy highlights the need for the Civil Aviation current funding to higher education with a view to Safety Authority to develop into a cohesive and increase funding per student and the number of close knit organisation, with a strong and coopera- student places available in the remainder of the tive relationship with industry. thirty-eighth parliament. The appointment of people to the Board of the And your petitioners, as in duty bound, will ever Civil Aviation Safety Authority who are competent pray. and at the same time have practical aviation by Senator Vanstone (from 416 citizens). experience will accelerate this process which is essential to the Government’s ability to quickly Gun Control implement its election commitment without the To the Honourable the President and Members of need for the terms of appointment of the current the Senate in Parliament assembled: Board to expire. The petition of the undersigned shows: If the bill is not dealt with in one sitting, imple- mentation of part of the Government’s aviation that the overwhelming majority of Australians policy will be delayed. support uniform, national gun laws and the associated compensation measures as agreed Circulated with the authority of the Minister between the Prime Minister, State Premiers and Transport and Regional Development, the Honour- the Chief Ministers of the ACT and NT. able John Sharp MP Your petitioners ask that the Senate: Employment, Education and Training continue to demonstrate its firm support for References Committee these measures; Senator CROWLEY (South Australia)—I take all possible action to expedite their give notice that, on the next day of sitting, I implementation; and shall move: resist all calls for the control measures to be watered down or abandoned. That the following matter be referred to the Employment, Education and Training References by Senator Bell (from 75 citizens). Committee for inquiry and report by 26 November Petitions received. 1996: The developments in adult and community NOTICES OF MOTION education in Australia since the 1991 report of the Standing Committee on Employment, Educa- Consideration of Legislation tion and Training entitled Come in Cinderella: Senator KEMP (Victoria—Manager of The Emergence of Adult and Community Educa- Government Business in the Senate)—I give tion, with particular reference to: notice that, on the next day of sitting, I shall (a) describing the structural and policy changes move: at Commonwealth level in adult education since 1991 and assessing the impact these That the order of the Senate of 29 November have had on the delivery of adult education 1994, relating to the consideration of legislation, in the community; not apply to the Civil Aviation Amendment Bill 1996. (b) examining any significant changes in the patterns and level of participation by adults I also table a statement of reasons justifying in education and training over the past 5 the need for the bill to be considered during years; these sittings and seek leave to have the (c) describing the range of provision of struc- statement incorporated in Hansard. tured adult education by community-based Leave granted. providers (including that provided by or- ganisations such as libraries, museums and The statement read as follows— galleries); The purpose of the bill is to amend the Civil (d) identifing those technological, demographic Aviation Act 1988 to allow the Minister for and economic trends which are likely to Transport and Regional Development to appoint an influence significantly the nature and extent additional member and a Deputy Chair to the Civil of adult education provision in Australia, Wednesday, 19 June 1996 SENATE 1755

with particular attention paid to the impact for the Allowance closed. The Bill also contains of the rapid expansion of computer-based minor technical amendments to Infrastructure Bor- resources such as the Internet; rowings provisions. (e) examining the extent to which the training, Reasons for seeking introduction and passage of the professional development and role of adult Bill in the 1996 Winter sittings educators has changed since 1991; and Priority status was obtained for these measures (f) proposing guidelines for the nature and level for the 1995 Spring Sittings. However, while the of contribution which Australia should make 1995 Bill passed all stages in the House of to the forthcoming Asia-South Pacific Representatives, it was not passed by the Senate Bureau of Adult Education Conference to be due to the pressure of business. The main reason held from 1 December to 8 December 1996 for the request to maintain priority status is that and the UNESCO International Conference existing statutory deadlines for registration and on Adult and Community Education to be pre-qualification for the Allowance mean that held from 14 to 18 July 1997. passage in the 1996 Winter Sittings is considered essential. Introduction of Legislation A project must be registered for the Allowance Senator KEMP (Victoria—Manager of before it can apply for a pre-qualification certifi- Government Business in the Senate)—I give cate which is a pre-requisite for eligibility for the notice that, on the next day of sitting, I shall 10% tax deduction when the relevant plant is either used for the purpose of producing asses- move: sable income or installed ready for use for that That the following bill be introduced: A Bill for purpose. an Act to amend the Development Allowance Auth- An application for a pre-qualification certifi- ority Act 1992, and for related purposes. Develop- cate is to be given to the Development Allow- ment Allowance Authority Amendment Bill ance Authority (DAA) before 1 August 1996. 1996. Therefore, it is essential and time critical that Consideration of Legislation the amendments on project restructures are both introduced and passed in the Winter sittings. Senator KEMP (Victoria—Manager of Otherwise they may not be passed until the Government Business in the Senate)—I give Spring Sittings in 1996, in which event it will be notice that, on the next day of sitting, I shall impossible for the DAA to register projects. As move: a result, the applicants cannot prepare and lodge valid applications for pre-qualification. That the order of the Senate of 29 November 1994, relating to the consideration of legislation, Legal advice from Attorney-General’s have not apply to the Development Allowance Authority indicated that the DAA has no power to accept Amendment Bill 1996. an application for pre-qualification prior to registration. There is also no discretion to the I also table a statement of reasons justifying DAA to accept an application for pre-qualifica- the need for this bill to be considered during tion after 31 July 1996 deadline. Eligible appli- these sittings and seek leave to have the cants under the amended provisions may miss statement incorporated in Hansard. out on the Allowance. Leave granted. Circulated with the Authority of the Treasurer The statement read as follows— Aboriginal Deaths in Custody Purpose of Bill Senator KERNOT (Queensland—Leader of the Australian Democrats)—I give notice There are currently limitations on the transfer of the Development Allowance benefit where ownership that, on the next day of sitting, I shall move: of a project is transferred to another entity after That the Senate— application for the allowance but before regis- (a) notes: tration; and across different entity structures after registration but before pre-qualification for the (i) the most recent Amnesty International Allowance. The amendments will allow all types annual report for 1996, and of project restructures of a bona fide nature and for (ii) that the report is critical of the continuing genuine commercial reasons, and are conducive to failure of Australian State Governments completing the carrying out of the project. To be to implement the recommendations of the effective, they will be retrospective and will apply report of the Royal Commission into from 1 January 1993, which is the date applications Aboriginal Deaths in Custody; and 1756 SENATE Wednesday, 19 June 1996

(b) expresses its dissatisfaction with the lack of ing I received a letter from the commissioner action by the States while drawing attention apologising for the incorrect advice provided to: to me by senior officers within the ATO (i) the cuts in grants to the States as a result which, by my proffering it to the Senate in of the recent Premiers’ Conference, and good faith, caused me to inadvertently (ii) the mooted expenditure cuts of the 1996 mislead the Senate. I table the commissioner’s federal Budget. press release of yesterday. I also table a copy Skillshare of the letter I received from Mr Carmody this Senator MARGETTS (Western Austral- morning. ia)—I give notice that, on the next day of Senator FAULKNER (New South Wales— sitting, I shall move: Leader of the Opposition in the Senate)—by That the Senate— leave—I will read this letter that has just been (a) notes: tabled by Senator Short with some interest. (i) that 19 June 1996 is the national day of There is absolutely no doubt, as I indicated action to save SkillShare, to protest after question time yesterday in my contribu- against the Government’s proposed 30 per tion to taking note of answers, that we have cent cut to SkillShare services around a case here of very serious ministerial negli- Australia, and gence on the part of Senator Short and also, (ii) the result of the 30 per cent cut to I believe, Mr Costello. SkillShare services will be the loss of 5 000 skilled SkillShare staff and the loss Senator Hill—What a load of nonsense! of services to 20 000 unemployed people Senator FAULKNER—It is alright for nation-wide; Senator Hill to guffaw from the sidelines (b) supports the Community and Public Sector when we have had one of his ministers just Union and National SkillShare Association campaign to save SkillShare; and come into this chamber to offer a mea culpa. Senator Hill put a number of positions to the (c) calls on the Government to maintain SkillShare funding and services to unem- Senate yesterday but in one he said, ‘How ployed people. could they have got it so wrong?’ They are your words, Senator Hill. No wonder you are SALES TAX humiliated and embarrassed not only with the Senator SHORT (Victoria—Assistant performance of the Assistant Treasurer (Sena- Treasurer)—by leave—Yesterday in question tor Short) but also with your own perform- time Senator Faulkner asked me a question ance. Senator Short said, ‘As my colleague concerning the requirements under section Senator Hill says, it is incredible that the 130B of the Sales Tax Assessment Act 1992 other side could have got it so wrong, once for the Commissioner of Taxation to publish again.’ notices in newspapers within seven days of I will read the letter that has been tabled the announcement of sales tax changes. by Senator Short. I will look with interest at Immediately on the conclusion of question this miserable mea culpa on his behalf. Let time, I provided the Senate with some addi- the record stand that the contribution that I tional advice that my office had received in and Senator Sherry made in response to the the interim from a senior officer of the Aus- miserable answers that were given to ques- tralian Taxation Office. That advice and what tions in question time yesterday of course I had provided to the Senate was subsequently were absolutely accurate. This is a very discussed within the tax office with the incompetent and inept performance from a Commissioner for Taxation, Mr Carmody. Mr very incompetent and inept minister in an Carmody took a different view from the absolutely hopeless government. officer whose advice I had conveyed to the Senate. ORDER OF BUSINESS In light of the circumstances, the commis- sioner issued a press release late yesterday BHP Petroleum afternoon clarifying his position. This morn- Motion (by Senator Margetts) agreed to: Wednesday, 19 June 1996 SENATE 1757

That general business notice of motion No. 11 The processes for the statute stocktake, and a standing in the name of Senator Margetts for today, program for the next 5 years, are still to be worked relating to a review of BHP Petroleum’s offshore out. safety arrangements, be postponed till the next day of sitting. However, this Statute Law Revision Bill begins the work of repairing the Commonwealth statute book. Supply Bill: Answers to Questions The bill deals with four aspects of repairing the Motion (by Senator Margetts) agreed to: statute book. That general business notice of motion No. 120 First, it repeals a number of acts whose operation standing in the name of Senator Margetts for today, is exhausted. proposing an order for the production of all an- Secondly, it corrects minor clerical and drafting swers to questions placed on notice by Senators errors in various current acts. Chamarette and Margetts during debate on the supply bills, be postponed till the next day of The kinds of errors being corrected are spelling sitting. mistakes, mistakes in punctuation, mistakes in the numbering or lettering of parts of acts (for exam- Native Title Committee ple, incorrect numbering of subsections or incorrect Motion (by Senator Chamarette) agreed lettering of paragraphs) and misdescribed amend- to: ments. That general business notice of motion No. 112 A misdescribed amendment is one that either standing in the name of Senator Chamarette for incorrectly describes the text to be amended or today, relating to the reference of a matter to the specifies the wrong location for the insertion of Parliamentary Joint Committee on Native Title and new text. the Aboriginal and Torres Strait Islander Land Although the intended effect of the amendments is Fund, be postponed till the next day of sitting. usually clear, it can be confusing or misleading to leave these errors uncorrected. STATUTE LAW REVISION BILL 1996 In particular, misdescribed amendments can delay First Reading the publication of official reprints, and can affect Motion (by Senator Kemp) agreed to: the accuracy of commercial consolidations of acts. That the following bill be introduced: a Bill for For instance, an amendment that purports to require an Act to make various amendments of the Statute a new provision to be inserted after a non-existent Law of the Commonwealth to repeal certain Acts, provision would probably be given some meaning and for related purposes. by a court if the general intention of the amend- ment was clear. Motion (by Senator Kemp) agreed to: However, it would be inappropriate to publish an That this bill may proceed without formalities official reprint when the act cannot be consolidated and be now read a first time. because the proper location of the new provision is Bill read a first time. not clear. Correcting errors of these kinds does not change Second Reading the law. Senator KEMP (Victoria—Parliamentary However, it ensures that consolidated acts can be Secretary to the Minister for Social Security) published, and without confusing mistakes. (9.43 a.m.)—I present the explanatory In some cases, this may have a significant impact medmorandum to this bill, and move: on the accessibility of legislation. That this bill be now be read a second time. I confirm to the Senate that the Ministerial Council I seek leave to have the second reading for Corporations has been consulted and, to the speech incorporated in Hansard. extent necessary, has approved the amendments to the Corporations Law which are included in this Leave granted. bill in accordance with the Heads of Agreement The speech read as follows— between the Commonwealth, the States and the Mr President, the Government’s Law and Justice Northern Territory on Future Corporate Regulation Policy foreshadowed a "statute stocktake" to repair in Australia. existing Commonwealth legislation, with a view to Thirdly, the bill brings up to date a large number having the repair process in sight of completion by of references in acts to the Remuneration Tribunal 2001. Act 1973. 1758 SENATE Wednesday, 19 June 1996

In 1988 the name of the act was changed from (ii) the posting of two mock bombs, and Remuneration Tribunals (plural) Act to Remunera- tion Tribunal (singular) Act. (iii) several other death threats made against parliamentarians because of their support Although the old form of the title in legislation for gun law reform; and does not create any legal problems, it is desirable that all references to the act reflect the current form (b) notes that this Parliament will not be of its title. swayed by threats of violence or other forms of intimidation as it seeks to act in the best Finally, the bill continues the process, which has interests of the wider Australian community. been going on for some years, of altering gender specific language in acts. BURMA The main element in this process is the insertion of feminine pronouns to accompany masculine pro- Senator CHAMARETTE (Western Aus- nouns wherever they occur. tralia)—I ask that general business notice of This bill, while not changing the law, makes many motion No. 114, relating to Burma, be taken useful improvements to the statute book. as formal. Ordered that further consideration of the Leave not granted. second reading of this bill be adjourned until the first day of sitting in the Spring sittings, Suspension of Standing Orders in accordance with the order agreed to on 29 Senator CHAMARETTE (Western Aus- November 1994. tralia) (9.46 a.m.)—Pursuant to contingent BRAZIL notice, I move: Motion (by Senator Spindler) agreed to: That so much of the standing orders be suspend- ed as would prevent Senator Chamarette moving a That the Senate— motion relating to the conduct of the business of (a) notes that: the Senate, namely a motion to give precedence to (i) in 1988, under a new constitution, the general business notice of motion No. 114. Brazilian Government acted to protect the There is, I believe, a recognition of the land of its indigenous people, which now urgency and importance of this chamber makes up 11 per cent of Brazil’s terri- tory, making a statement in relation to the situation in Burma. There is one important but small (ii) the same government, in 1996, under pressure from loggers, ranchers and reason for that and one larger and significant miners, passed a new law enabling com- reason. One reason is that today is the birth- mercial interest to appeal against the laws day of Daw Aung San Suu Kyi. It is a time which aimed to protect the indigenous when all eyes around the world are looking peoples’ lands, towards the situation in Burma and feeling the (iii) to date over 1 700 such appeals have pain of that situation on the birthday of Daw been lodged with the Brazilian Govern- Aung San Suu Kyi. That is the smaller reason ment’s Indian affairs agency, and for it being urgent today. The larger reason is (iv) Brazil’s indigenous people and land are that the situation in that country is increasing- in jeopardy from those who seek to profit ly concerning and we need to make a public from the destruction of the rainforest; and statement. (b) calls on the Australian Government to seek assurances from the Brazilian Government I circulated a motion for formality. I believe that the land rights of indigenous people are the reason we have not been able to arrive at being honoured and to continue to monitor a formal motion is not any unwillingness to developments closely. cooperate on the part of any of the parties in GUN CONTROL this chamber but because of the complexity and sensitivity of the issues in Burma. From Motion (by Senator Spindler) agreed to: discussions with both Senator Hill, the Leader That the Senate— of the Government in the Senate, and Senator (a) condemns: Schacht, acting on behalf of the Labor Party (i) the bomb threat made against a shopping in relation to this motion, it seems that I have centre in the city of Toowoomba, some competing amendments. Wednesday, 19 June 1996 SENATE 1759

I believe it is urgent that we get this debate We think this motion should be carried under way so that we can reach a consensus today in the Senate because today is the in this chamber to achieve the greatest pos- birthday of Aung San Suu Kyi—the Nobel sible good in making a public statement that Peace Prize winner of four years ago and will illustrate the concern we have about the probably the most well-known leader of situation in Burma and to say that Australia political human rights in the world now, a is taking seriously these concerns and is figure of world stature. I am also told that making a stand on those matters. I urge my various international radio programs on the colleagues to support the motion for suspen- short-wave band will be broadcasting today. sion of standing orders to allow us to debate These programs are listened to in Burma by a motion that will constructively assist in people interested in human rights to know giving a voice to the people who are con- that the world is thinking of them. If this cerned about democracy in Burma now. motion were carried today, that would be Senator HILL (South Australia—Leader of broadcast. I think it would be a great message the Government in the Senate) (9.48 a.m.)—I to those people listening in Burma that today, am opposed to the suspension of standing on Aung San Suu Kyi’s birthday, the Austral- orders. The correct time for debate of this ian Senate carried the motion. motion is during general business, which is on I do not want to delay the government’s Thursday. No case has been made out for business or use the Senate’s time, but I why it cannot be dealt with at the proper believe we could do this very quickly, in a time. It is becoming a habit of certain sena- matter of a few minutes, and get maximum tors to disrupt the business of the program on political impact on the human rights issue in days other than general business, just to Burma. Therefore, the opposition supports the pursue what they might regard as of political suspension of standing orders. benefit to them at the time. If we did that Question resolved in the affirmative. every day, no government business at all would be transacted in this place. I see no Procedural Motion reason at all why this matter cannot be dealt Motion (by Senator Chamarette) agreed with tomorrow, which is the correct time for to: dealing with notices of motion that are put up in this way. That general business notice of motion no. 114 may be moved immediately and have precedence Therefore in those circumstances, while I over all other business today till determined. recognise the importance of the issue—there is no dispute about the importance of the Motion issue—no difference will be made between Senator CHAMARETTE (Western Aus- today and tomorrow on the merits of the issue tralia) (9.51 a.m.)—I move: and I am opposed to the suspension of stand- That the Senate— ing orders. (a) expresses greetings to Daw Aung San Suu Senator SCHACHT (South Australia) Kyi for her birthday on 19 June; (9.49 a.m.)—On behalf of the opposition, I (b) notes: support the suspension of standing orders. I (i) with deep concern, the recent moves by believe that we could do this very quickly. the military regime in Burma against the When you look at the proposal that Senator democracy movement in that country, Hill has kindly given me for an alternative (ii) reports that the State Law and Order motion and when you look at the motion of Restoration Council is using ‘scorched Senator Chamarette, you see that much is earth’ tactics, in the form of looting and similar. The Labor Party would support burning villages in Kayah State, and Senator Chamarette’s motion, except that we (iii) with approval, the strong statement by the will move an amendment to paragraph (d) Minister for Foreign Affairs (Mr Downer) which we believe is more appropriately in response to renewed repression in worded in the circumstances. Burma; 1760 SENATE Wednesday, 19 June 1996

(c) welcomes moves by the State Legislature of longer say that constructive engagement is Massachusetts in the United States of achieving anything. We are standing by and America to ban state contracts with com- letting a disastrous situation get worse and we panies doing business in Burma; and are remaining silent. We become culpable (d) calls on the Government to actively discour- when we do that. age Australian companies from doing busi- ness in Burma. The motion I have moved calls on the government to actively discourage Australian I reiterate that what we are discussing today companies from doing business in Burma. We is not only an expression of greeting to Daw read news reports daily of increasing attempts Aung San Suu Kyi for her birthday today, 19 to exploit the situation in Burma, to exploit June, but also the deep concern that people the willingness of the SLORC to entice trade throughout the world have felt about the as a way of building up their support. This is recent moves by the military regime in Burma not acceptable. As global citizens we have to against the democracy movement in that voice our protest against it. That is the reason country. for the motion that is being put to the cham- Only recently, we have heard with grave ber today. I have heard from the government concern about the increasing number of and from Senator Schacht their concerns arrests of those people who were democrati- about the wording of this motion, so I wel- cally elected in Burma in the elections of come to the debate the suggestions that are 1990 to prevent them meeting together. The supplied and indicate that we will be prepared movement of people throughout that country to support anything that strengthens the stand has been curtailed by the military regime. of Australia and makes our voice much We have heard very disturbing evidence of stronger on these issues. scorched earth tactics being used in the form Senator HILL (South Australia—Leader of of looting and burning in villages in Kayah the Government in the Senate) (9.55. a.m.)— State. Heaven knows that the information is The government seeks to amend this motion. not as clear and comprehensive as we would I move: wish in relation to other areas and the prob- Omit all words after "Senate", substitute: lems that are being experienced by minority (a) congratulates Burma’s pro-democracy groups in Burma. leader, Daw Aung San Suu Kyi, on her We express our approval of the strong birthday and commends her courage and stance that this government and the Minister determination to bring democracy to Burma; for Foreign Affairs (Mr Downer) have taken (b) condemns: in response to the renewed oppression in (i) the State Law and Order Restoration Burma. We want to make sure that that stance Council (SLORC) for continuing to refuse to accept the verdict of the Burmese is supported at every level by this parliament. people freely expressed at a democratic That is why this motion does two things. It election, and expresses our concern and it urges this (ii) in particular, the latest heavy-handed government to take its responsibility very attempts by the SLORC to curtail politi- seriously and to go even further than the cal opposition by introducing draconian previous government was prepared to go. In penalties for those expressing political the United States moves have been made by dissent; and the state legislature of Massachusetts to ban (c) urges the Australian Government: state contracts with companies doing business (i) to maintain the embargo on the export of in Burma. As far as I know, that has not yet defence and defence-related goods to received total assent but there is pressure in Burma, and that regard. (ii) in concert with democratic governments world-wide to press the SLORC to re- We believe that it is time that Australia lease immediately all political prisoners, considered a stronger stance than the one we to desist from all practices of forced have taken so far because the situation in labour and to respect basic human rights Burma is deteriorating rapidly. We can no and freedoms and democratic expression. Wednesday, 19 June 1996 SENATE 1761

It is the birthday of Burma’s pro-Democracy that has been called upon to save the people leader. It is a good occasion, therefore, to from internal trauma and suffering that would recognise her courage and her determination result from the instability of political uncer- to bring political freedom to her people. tainty. It is very difficult to convince generals Anyone who has been prepared to accept the who have been brought up within an isolated loss of his or her own freedom for as long as world such as we find in Burma that there is she did in an effort to focus the international no reason for them actually to be frightened community’s attention on the plight of the of change, that it can actually bring them Burmese people and to focus the attention of great credit if they are prepared to embrace it. the SLORC on the determination of the I only say that to try, in a simplistic way, Burmese people to obtain their political to demonstrate that this is a difficult debate freedom deserves the admiration of all of us. not only for us but internally within Burma. Certainly she is an example to the whole I have sat down in Burma and talked to international community of one who is pre- dissidents who have just been released after pared to suffer severe personal sacrifice to months, in some instances years, in prison, achieve a political end for her people which and in appalling circumstances in prison. We is just and fair. We admire her for that. We have heard of the psychological pressure that recognise her internationally for the democrat- is placed on them in isolation cells for months ic leadership that she offers the Burmese on end. Yet some of these dissidents say to people. me that the isolation of Burma, which is the It is also an occasion to internationally trend of Senator Chamarette’s motion, is the condemn the policies of the SLORC. Those worst thing for Burma’s future, that the best of us who have sat down with the SLORC chance of change for Burma is if it is opened generals from time to time and tried to influ- up to the world—opened up to pressure from ence them to a different way, both positively the international community and also opened and negatively, by pointing out the conse- up in such a way that the Burmese people quences that Burma as a country suffers by have an opportunity to appreciate the benefits not being accepted willingly within the that come from a different form of govern- international community, the consequences it ment, a democratic form of government, has suffered as a result of lack of access to where political freedoms are treated as im- international financial institutions and the like, portant. and the comparisons with other developing nations that are prepared to embrace democra- Some, including Aung San Suu Kyi herself, cy and become part of a civilised international argue to the contrary. They believe that by community that respects human rights and opening doors to the international community freedoms, those of us who have tried, in a and the international community responding positive sense, to persuade the generals that in terms of trade, aid and political contact, it a reform of their undemocratic regime would actually takes pressure off the generals to earn the respect of their own people and the reform. So the debate within Burma is a respect of the international community, complex one. The debate for those of us in understand just how complex the issue is. the international community who are trying to work out the best way to influence change in The generals will argue, as all generals in Burma is an equally complex one. these circumstances do, that their first respon- sibility is to maintain internal stability, that No-one has found the right formula. The that is an essential for the wellbeing of their ASEAN countries believe that a constructive people. engagement is more likely to bring about political change. Australia has held the view Senator Schacht—You have had the same that that is probably not so. With the excep- conversation as I have had. tion of the United States, Australia has prob- Senator HILL—You have heard this ably had the strongest anti-trade and invest- argument before? In this instance, through the ment policies of any country in the world. But history of Burma, it has always been the army that has not achieved the objective that we are 1762 SENATE Wednesday, 19 June 1996 seeking, either. In fact, this motion is being refusing to accept the verdict of the Burmese debated in an environment in which the people at their election. It particularly men- SLORC has just introduced new draconian tions and condemns the latest heavy handed laws to outlaw political meetings and political attempts by the SLORC to curtail political contact. So the correct set of policies for the opposition. It urges the Australian government international community is difficult to find. to maintain the embargo on the export of What is clear is that the only chance of the defence and defence related goods, and the international community influencing positive Australian government will do so. But that is change is if the countries of the democratic an instance where the whole international world work together, work through the issues community is in agreement on a sanction— and try to find a common position. There is breached in some instances, I regret to say. no chance that a country such as ours, operat- Nevertheless, it is mouthed by the whole ing in isolation, will have any effect whatso- international community. ever on the policies of the SLORC or make My amendment also urges the Australian any advance in seeking to achieve the politi- government to work with other governments cal advantage for the Burmese people that is internationally to explore ways in which we our objective. can press the SLORC to release currently held We think, by and large, that the policies political prisoners, to desist from practices of that were put down by the previous Labor forced labour, which is the only way in which government in this country were right—the you can characterise some of the labour benchmark set of policies whereby if positive practices that they pursue, and to press the changes do occur, they are acknowledged and SLORC to respect basic human rights and supported and if they do not, we continue to freedoms and democratic expression. I believe apply all the diplomatic pressure that is open the amendment is a better set of words to to us. We do not encourage Australian trade reflect the views of senators in this place and or investment in the country until we see an to encourage the Australian government to improved political outlook. But we do, both continue down the policy path that they are with the carrot and the stick, try to encourage presently maintaining. some positive change. We can see no better Senator SCHACHT (South Australia) set of policies than that at the moment. (10.08 a.m.)—The opposition generally Our concern with the Greens’ motion is that supports the remarks of both the previous there is no evidence that it is actually more speakers and the motion. We have no objec- likely to achieve the outcome that we are all tion to the proposal moved by Senator Hill as seeking. In fact, what concerns me is that it an amendment to Senator Chamarette’s is so easy for us in addressing an issue as motion. In a positive sense, all of the phrases complex as Burma to pass resolutions that in both motions could be supported by the might make us feel good, to feel that we have opposition. On behalf of the opposition, I done our bit by passing a resolution calling would like to move an amendment to para- on the Australian government to actively graph (d) of Senator Chamarette’s motion to discourage Australian companies from doing replace paragraph (c), where it now reads business in Burma, to use the words of the ‘calls on the Government to actively discour- Greens (WA). But if that does not achieve age Australian companies from doing business any positive outcome for the Burmese people, in Burma’, to now read ‘calls upon— then what is the real benefit of moving in that The ACTING DEPUTY PRESIDENT direction? (Senator Knowles)—Senator Schacht, at the For those reasons I have put down in the moment you cannot move that amendment form of an amendment an alternative set of until we have disposed of Senator Hill’s words. I think it encompasses everything that amendment. the Senate would want to say. It congratulates Senator SCHACHT—I foreshadow that I Daw Aung San Suu Kyi on her courage and will move a new paragraph (d) to read ‘calls determination. It condemns the SLORC for upon the Government to put SLORC on Wednesday, 19 June 1996 SENATE 1763 notice that potential trade sanctions must be cy—in an election that SLORC allowed, on the agenda if civil and political rights are which just shows us how out of touch they not restored’. We believe that is consistent were, won over 80 per cent of the seats in the with the opposition when we were in govern- parliament. From time to time Labor and ment on how we treated this—as I concede Liberal members in this country have prided from Senator Hill—complex issue of the ourselves on having a landslide win here and balance of trade sanctions and other sanctions there. None of us has ever been able to match on Burma and on the SLORC. the landslide victory that the NLD achieved The real reason these motions have been in the only free election that has been allowed moved—although it is taking up some time of in Burma since the 1950s. Of course, the the Senate this morning—is because there is SLORC immediately ignored the result. They no doubt that in the world at the moment were so shocked by it. They could not under- Burma is probably almost at the top of the list stand why the Burmese people would so of countries that democratic countries look at overwhelmingly vote for Aung San Suu Kyi. as a consistent abuser of human rights. Yes- The reason they do is that they recognise that terday in another context Senator Hill men- she is the one person in their country at the tioned that I had some interest in the issue of moment with the commitment to democracy Burma in the past. I have always had an to be able to run the country in a democratic interest in Burma. I had a chance to visit in way. 1989 and 1992 on a private basis. I am now It should also be put on the record on her very proud of the fact that in 1989 I was able birthday that she is the daughter of the found- to meet Aung San Suu Kyi just before she er of modern Burma, General Aung San, who was put away for six years under house arrest achieved independence for Burma in the late in Rangoon. 1940s from the British. Although she is her Today is Aung San Suu Kyi’s birthday. For father’s daughter, everybody in Burma recog- me it is very appropriate that I can associate nises that in her own right she has made her myself personally with these remarks on her way and established her credentials as the birthday. As former Chairman of the Joint major leader, not just because she is her Standing Committee on Foreign Affairs, father’s daughter. Defence and Trade, which looked into human All of us have been inspired by the fact that rights, I have had an opportunity to meet through six years of house arrest, completely many people around the world who have cut off from the rest of the world, even her made major issues of human rights. Aung San own family for most of that time, she never Suu Kyi is without doubt one of the most caved in to the SLORC and she never accept- outstanding figures on the world stage, pro- ed any financial assistance to provide food. moting not just human rights in her own She paid for provisions herself, even though country but the general principles of human that was very difficult at times. She never rights everywhere. The meeting I had with her gave in when the rest of us in the world was one of the most intellectually challenging would have given up in the end because of I have ever had in relation to the issues she that pressure that was being applied. raised and the way she put them. There is no Now we see those remarkable scenes each doubt, as is her right in my view, that if she week of up to 10,000 Burmese citizens were to be the democratically elected Prime gathering outside her residence to show their Minister of Burma, she would be an outstand- support for her. There is no doubt that if you ing leader in world terms. I hope some time had a general free assembly in Burma in the not too distant future that we may be millions would turn up, as they did in August able to welcome her to this country as the 1988 when she made her first address to the democratically elected Prime Minister of a public of Burma on the steps of the Shwe democratically run Burma. Dagon Pagoda. It was estimated by our We should point out that in 1990 the party ambassador at the time, who attended and she leads—the National League for Democra- observed that rally, that as many as three 1764 SENATE Wednesday, 19 June 1996 million people may have attended a rally at week they snatch it back, so then you have to which she spoke. Even if that figure was have a tougher position. exaggerated by 100 per cent, it is still over one million people. That is a size that we in Senator Hill—You have to try to interpret Australia have never contemplated, but again it in Burmese terms. shows the support for her. Senator SCHACHT—Yes. The SLORC is really an enigma to itself, let alone to the rest The other thing that should not be under- of us. SLORC is an insular group of army estimated about Aung San Suu Kyi is her officers. Most of them have never served ability to unify the country through her overseas. Most of them have only ever had a policies. Senator Hill has quite rightly pointed career fighting the insurgents around the out that when you have talks with the borders of Burma. When I was there and had SLORC, as he and I have both had, they say a meeting with a group of its colonels in the main justification for the military regime 1992—this was three years after the fall of is that they are the only organisation capable the Berlin wall—they were still proudly of keeping the unity of Burma. That is utterly pronouncing that Burma was neutral and non- false. Through most of the last 35 years of aligned between the superpowers. So when I Burmese history, there have been insurrec- said, ‘Just a moment. Russia has had a free tions and insurgencies by various minority and democratic election; communism has ethnic groups who have resented the heavy- been abandoned. The Berlin Wall has come handed military regime first of Ne Win and down. Who are you neutral between?’, the now of SLORC—unfortunately, its natural irony of my question went right over the top successor. of their heads. They still argued that Burma’s Aung San Suu Kyi has proposed a demo- neutrality was of major importance. cratic structure that would enable the This is the problem with the SLORC. I met minorities of Burma to have a fair say in the a former leader of the SLORC, General Saw running of their own affairs, to preserve their Maung, who rose from the rank of corporal to own culture and to preserve their own lan- be the head of the army and then the head of guage and education within a united Burma— the SLORC. That was an hour after I had met something the SLORC is not capable of Aung San Suu Kyi in 1989. The abilities of understanding. The only way they treat these each of them were like chalk and cheese. issues is to send the army in on military Aung San Suu Kyi was a leader of great campaigns against the minority groups within vision, courage and intellectual standing and Burma. It is clear that the National League for the other was an extraordinarily narrow- Democracy is the one political party capable minded general who had only spent his time of bringing together, at a national level, the serving in the Burmese army fighting insur- various views of the minority groups. gence. We have seen in recent days why this To my astonishment, one of the justifica- resolution is so important. The loosening up tions the general made for the military coup of the regime—and we all welcomed the fact in September 1988 that established the that they released Aung San Suu Kyi from SLORC was that at that time the American house arrest—was a step forward which we 7th Fleet was sailing across the Bay of Bengal all welcomed. This was the point Senator Hill and if they did not take action to restore army made. Unfortunately in Burma it is like one control of Burma the Americans would have step forward and two steps back, and wher- invaded Burma. I started to laugh at such an ever you are in the steps you do not quite absurd notion when I realised that he was not know what resolution you should carry. One just putting it to me as a propaganda point; he moment you might be a bit more optimistic firmly believed that American intervention so you give the SLORC a little encourage- into Burmese affairs via the 7th Fleet was a ment in a resolution or a public statement on real possibility. That gives you some idea of behalf of the Australian government. The next the mind-set of this military regime and why Wednesday, 19 June 1996 SENATE 1765 dealing with someone like Aung San Suu Kyi change, you will not get the change. So in the is such a threat to them. Australian parliament I think we always have In Rangoon there is a lake in the middle of to try to argue that we have the balance about the city. At one end of the lake is Aung San right. There are shades of grey in it. I think Suu Kyi’s residence. For six years the army from time to time we have to be ready to surrounded it to stop people getting in to say change our judgment according to circum- hello to her and offer their support. The army stances as they evolve. was there to keep the people from showing I would like to conclude on one very their support. At the other end of the lake is personal point about Burma. When I was the residence which the former military chairman of the first human rights committee dictator Ne Win lives in. It is also surrounded of this parliament, I dedicated the first report by the military, but, as local people will tell that we produced to a young man I met in you, that is to keep the people from trying to Burma in 1989. He was Maung Maung Kywe, get in and get rid of Ne Win. The army offers who, as a 16-year-old high school student at him protection from the people who resent his the local high school in Rangoon during the maladministration for nearly 30 years. demonstrations of 1988, organised every day As some other people have commented, one for the high school students to march in the way or the other these two figures have streets to demonstrate for democracy. I have become the nub of the political outcome—that to say that that took a lot of courage, because is, which one will, in the end, come to the a number of them were shot and killed, fore and become leader. It is clear to me that, arrested and tortured, some of them were overwhelmingly, the Burmese people want murdered in prison and some of them just Aung San Suu Kyi. disappeared. Despite those threats, those young high school students still marched in I believe that on the issue of trade sanc- the streets every day knowing what the threats tions, which Senator Chamarette mentioned in to them were. her motion, which we have mentioned in our amendment and which Senator Hill has I met him when he was on the run in mentioned in paragraph 4 of his, it is not Burma as a dissenter. Every day he would go unreasonable to give fair warning that, if the down to the marketplace and surreptitiously present repression and imprisonment of hand out leaflets calling for democracy, political prisoners continues in Burma, at an knowing that if he was caught he would appropriate time, irrespective of what ASEAN probably get, at the very least, very rough countries or other countries may do, Australia treatment. When I asked him why he was reserves the right to take trade sanctions in a doing this, he said, ‘I want to have democracy positive way against Burma. for Burma.’ When I asked him what that I agree with Senator Hill. It is very hard to meant, he said, ‘It means I get the right to say exactly when you should apply sanctions, elect the government I want, and in three or how much encouragement you should give four years time I get the right to unelect it if the SLORC to change, how much of a carrot I disagree with it.’ I thought, ‘I studied you would give and how much stick you politics for three years at Adelaide University would use along the way. How much carrot and that is a good enough description of you give and how much stick you use is a democracy for me,’ which I got from a 16- balanced judgment. I have no doubt that you year-old kid. cannot get the SLORC to change by offering I returned in 1992 and asked quietly the them pure carrot, because they will take that woman who at one stage gave him shelter if as a vindication that they do not have to I could meet him. She informed me that he change. That is the ASEAN position, by and had been killed fighting for democracy in large. I do not think that will be successful. Burma. I must say that that was one of the I also believe that if you have an absolute most awful moments I had in my political reliance on the stick, without offering the life, because only a few minutes later I had to SLORC a way out to save some face for the go and have dinner with the colonels of the 1766 SENATE Wednesday, 19 June 1996

SLORC, those responsible without doubt for just picks civilians out from villages any- his death. I thought it only reasonable that he where—anyone they feel like. It does not get some memory somewhere else in the matter how old you are, how young you are, world, in an Australian parliamentary docu- whether you are pregnant, or whether you ment, about his contribution to democracy. have small children. Nothing matters. If you For us this is a resolution of words. As Bill are an individual who can carry what the Hayden said, in diplomacy words are bullets. army needs to be carried, then you are picked They are the ones that make the change. We up out of the village and you just go with the should recognise that in Burma literally tens army. of thousands of people have quite courageous- You just drop everything—your children, ly paid with their lives to try to get democra- your ageing grandfather; you may be the cy for that country. No matter how little the aging grandfather—and you go with the army time we take from time to time in this place until either they decide they do not need you, to support those very brave people, including which does not happen all that often, or you the memory of Maung Maung Kywe, I think drop dead, which does happen far too often. we should do it. Forced labour is a real and very destructive I believe that the motions we have before problem. us are very adequate for the occasion. This is Talking of destruction, there is also the an occasion for Aung San Suu Kyi personally destruction of entire villages, the burning of in which we recognise that she is one of the villages. If anybody is suspected of being great figures for human rights and democracy against the SLORC, then the entire village in the world. might go. There is torture all the time, every- Senator BOURNE (New South Wales) where. There is repression and pervasive fear. (10.25 a.m.)—I would like to join in with About four years ago I asked the then everyone who has spoken so far in this foreign minister Senator Gareth Evans where debate. The main theme of what has been said the heroin on Australian streets came from. I so far in this debate—I do not think it will go think that the answer was that about 80 per on for much longer—is that Daw Aung San cent of it comes from Burma. There are Suu Kyi is one of the world’s great heroes. I plenty of heroin poppy-growing areas in think that everybody in this chamber would South-East Asia, outside Burma. If 80 per say the same; in fact, probably most people cent of it comes from within Burma then in Australia would say the same. We do wish there is a reason for that. The reason is not her as happy a birthday as she can possibly just that that is the best area to grow the have under the circumstances of her current heroin poppy. The reason must be that it is habitation in Burma. easier to get the heroin out of Burma, and I have been a member of the Human Rights there must be a reason for that too. Burma is Subcommittee of the Joint Committee on an absolute disaster area. But it well and truly Foreign Affairs, Defence, and Trade almost should not be. The reason that it is is obvi- since it was started. I think that I missed the ously the SLORC. first meeting before I was actually put on to I remember the first time that I heard the that committee. We have looked at Burma term ‘SLORC’. I think it was in 1990. To over the years, from 1990 until now. We Senator Schacht, who at the time was the handed down a quite short but fairly thorough chair of the Joint Foreign Affairs, Defence report, a quite recent one, in the last parlia- and Trade Committee, I said: ‘What a dread- ment on the situation in Burma and human ful acronym. Fancy calling something the rights in Burma. SLORC. It sounds like a horrible, enormous The report demonstrated that human rights squishy monster that comes and gets you.’ in Burma is at an abysmally low level. It has Senator Schacht said, ‘Yes, it is an enormous, to be one of the worst places, as Senator squishy monster that comes and gets you. It Schacht said, in the world today for human is a very accurate acronym for this body.’ rights. Forced labour is everywhere. The army And it is. Wednesday, 19 June 1996 SENATE 1767

It is one of the most dreadful regimes in the to do, if enough people put pressure on those world today. If we cannot agree in this parlia- who do have the power to change things, it ment that we should take extremely strong will change. That is how all change happens action against such a repressive regime, then in this world. I hope that is what I am contri- we have a problem. If there is any regime in buting to every day, and I hope every member our region that we should be taking incredibly of this chamber is also contributing to that strong action against, this is it. It is very every day. We say enough about the things obvious. that are wrong in this world and, my good- I have two motions and an amendment in ness me, if anything is wrong in this world, front of me at the moment, and I would say the situation in Burma has to be very high on that I agree with everything in all of them. I that list. If we say as loudly and as long as think that we do have to take action with we can enough things about what is wrong in countries around the world. That is essential. this world, eventually those things will change The Leader of the Government in the Senate and the world will become a better place. (Senator Hill) is absolutely right when he says You have to believe that. You have to take that. I also agree with Senator Schacht when every action that you can personally take to he says that we have to tell the SLORC that achieve that end. That is what I am doing, we are now considering whether trade sanc- and what I firmly believe this chamber is tions ought to be on the agenda. doing. I would vote for Senator Hill’s motion. I would vote for Senator Chamarette’s mo- They have to know that we are not going to tion. I will also be voting for Senator just sit here forever and put up with what they Schacht’s foreshadowed amendment. are doing. What they are doing is wrong. It is not right. They have to have very, very strong Senator CHAMARETTE (Western Aus- signals from this parliament that what they are tralia) (10.32 a.m.)—I am exceedingly grate- doing is wrong. We have to be able to tell ful for the comments made by my colleagues them that. in this place which illustrate so vividly the reasons for the deep concern felt in this One of the things Senator Hill said at the chamber and in the world. There is a dilemma end of his remarks was that we will feel good here. I believe it is our responsibility to make if we pass some of the things in this motion the strongest possible statement that we can but they will not achieve anything. That is an at this point in time. interesting comment coming from somebody who is a minister and who has been in oppo- I certainly support Senator Hill in his role sition. I do not actually expect to be a as the Leader of the Government in the minister in the near future. I expect to be in Senate and in his proposing an amendment to opposition for a fair while. my motion. There is certainly nothing in his amendment that I could possibly disagree Senator Schacht—We would all be in with. I commend the government for taking shock if you were. the firm stand that it has, which is reflected Senator BOURNE—Senator Schacht would in the words of this amendment. be shocked if I were a minister. If I were the My only problem is that in looking at my foreign minister, things would change. How- motion I see sections that are simply not ever, speaking as somebody who is in opposi- covered by Senator Hill’s amendment. These tion and probably expects to be there for quite sections are: a while, words are all we have in opposition (b) notes: to try to change things. We will take whatever actions we can to try to change things but ...... these are the actions that we have available to (iii) with approval, the strong statement by the us. Therefore, this is what we will do to try Minister for Foreign Affairs (Mr Downer) in response to renewed repression in to change things. Burma; Yes, it does make a difference. If enough (c) welcomes moves by the State Legislature of people say they think this is the wrong thing Massachusetts in the United States of America 1768 SENATE Wednesday, 19 June 1996

to ban state contracts with companies doing The ACTING DEPUTY PRESIDENT business in Burma; (Senator Reynolds)—Senator Hill, I am I would like to add here that I was a bit advised that it does not matter when leave is tentative when I announced that in my origi- granted. Senator Chamarette, are you happy nal speech but I am assured that the Massa- to seek leave after Senator Hill has moved his chusetts legislature passed unanimously in amendment? both houses the motion to ban state contracts Senator Chamarette—Fine. with companies doing business in Burma and Amendment (Senator Hill’s) agreed to. is simply waiting the governor’s assent. So, while I was expressing tentativeness about it, Motion, as amended, agreed to. they were able to show the kind of conviction Senator CHAMARETTE (Western Aus- and strength to their voice that I believe we tralia) (10.37 a.m.)—Madam Acting Deputy should be showing here in this place. The President, I seek leave to move my motion other section of this motion not covered by No. 114, accepting the amendment by Senator Senator Hill’s amendment states: Schacht to paragraph (d). (d) calls on the Government to actively discourage Leave granted. Australian companies from doing business in Burma. Senator CHAMARETTE—I move: I have no difficulty with the foreshadowed That the Senate— amendment to this section put by Senator (a) expresses greetings to Daw Aung San Suu Schacht—that is, instead, we should call upon Kyi for her birthday on 19 June; the government to put SLORC on notice that (b) notes: potential trade sanctions must be on the (i) with deep concern, the recent moves by agenda if civil and political rights are not the military regime in Burma against the restored. democracy movement in that country, (ii) reports that the State Law and Order I appreciate that it would be very difficult Restoration Council (SLORC) is using for Senator Hill to support those latter parts ‘scorched earth’ tactics, in the form of of my motion and also the amendment as looting and burning villages in Kayah foreshadowed, so I am going to do something State, and very unusual. I understand that standing order (iii) with approval, the strong statement by the 84(3) provides that: Minister for Foreign Affairs (Mr Downer) The President may order a complicated question to in response to renewed repression in be divided. Burma; (c) welcomes moves by the State Legislature of Therefore, my motion could be divided into Massachusetts in the United States of two motions. I also understand that by leave America to ban state contracts with com- you can do anything in this place. So, by panies doing business in Burma; and leave, I am going to request that I move this (d) calls on the Government to put the SLORC motion in total, accepting Senator Hill’s on notice that potential trade sanctions must amendment. Then, by leave, I would like to be on the agenda if civil and political rights move it again as a second motion, accepting are not restored. Senator Schacht’s amendment. So I seek leave Senator HILL (South Australia—Minister to do that. I express my tremendous appreci- for the Environment) (10.38 a.m.)—I think I ation of the seriousness and the sensitivity should put on the record, as Senator with which everybody has conducted them- Chamarette foreshadowed, that the govern- selves in this debate. ment is opposed to that motion. There is Senator Hill—I think the timing is wrong. much within it that we would support but I I think my amendment should be put and, if am concerned about a number of aspects of it is accepted, the amended motion should it. then be put. Senator Chamarette should then Firstly, I do not know as a matter of fact seek leave to nevertheless put her original whether these villages in Kayah State are motion. being torched as alleged. Secondly, I do not Wednesday, 19 June 1996 SENATE 1769 think it is appropriate for us to be welcoming reference in this motion is modestly put so I the move made by the state legislature of do not think it is a real problem. Massachusetts. That was the way that legisla- Senator Hill also referred to that part of the ture thought it could best pursue its objectives motion that welcomes the moves of the state in relation to Burma. Were we to accept this legislature of Massachusetts. He was con- motion, it could be suggested by some that cerned that we do not have the actual wording we were endorsing that move as a particular of its resolution. It is not an unusual practice political tactic, which we are not. in this place to quote in shorthand the resolu- Thirdly, if our current trade policy is to tion of another organisation, be it the United neither encourage nor discourage, it could be Nations, UNESCO or the Commonwealth argued that SLORC is always on notice. Parliamentary Association. I do not think we Trade is a legitimate vehicle to be used to should be embarrassed about that. influence political outcomes. If successful, My amendment to Senator Chamarette’s trade restraint is a first and overwhelming motion puts SLORC on notice, and I think concern. I have already put my reservations that is reasonable at this particular time. about unilateral action; I think it would have SLORC should be aware that there are mem- no chance of succeeding at all. bers of this parliament who are willing to take the next step unless there is an improvement The bottom line is that it is not the current in the situation. I believe that is a useful policy of the government to put SLORC on mixture of carrot and stick to SLORC on this notice in that way by that particular political issue. Although it might appear in parlia- vehicle. Therefore, it would be inappropriate mentary terms a bit clumsy to have two for the government to support the motion in separate resolutions, it means that Senator Hill its amended terms. Nevertheless, I recognise has succeeded with his amendment on behalf that the numbers in the Senate are such that of the government while the Senate as a the motion will pass, and we would not seek whole has carried another resolution which is to deny it. a bit stronger. Senator SCHACHT (South Australia) All in all, I think the government has (10.40 a.m.)—We would have preferred it if addressed this issue well today. Although we the motion moved by Senator Chamarette might be going a bit further than Senator Hill with our amendment were the only resolution. would have liked, the general thrust of what We have no objection to the items in Senator this parliament is doing is more than accept- Hill’s amendment—in the spirit of giving able to the Australian people; I think they everyone a place in the sun on this issue, would demand this level of action. If Radio there can be no objection to the content of Australia and the other national radio pro- Senator Hill’s amendment—but we believe grams can broadcast the outcome of this that Senator Chamarette’s motion, as amended motion, there will be many millions of people by our amendment, puts greater pressure on in Burma who will welcome it as a sign of SLORC. There is nothing untoward or unrea- support and a sign that they are not forgotten. sonably negative about Senator Hill’s amend- ment but, because of SLORC’s recent actions, Question resolved in the affirmative. we want to take things a step further, putting COMMITTEES a bit more stick on SLORC rather than a bit more carrot. Superannuation Committee Senator Hill said he was a bit concerned Report about the reference to scorched earth tactics Senator WATSON (Tasmania)—I present with the burning of villages in Kayah state. the 19th report of the Senate Select Commit- We do not have the exact number of villages tee on Superannuation entitled Reserve Bank that were burnt down but over the last seven officers’ superannuation fund, together with years more than enough atrocities have been the submissions and the Hansard transcript of committed to fill pages of a resolution. The evidence. 1770 SENATE Wednesday, 19 June 1996

Ordered that the report be printed. Motion (by Senator Minchin)—by leave— Senator WATSON—I move: agreed to: That senators be discharged from and appointed That the Senate take note of the report. to committees as follows: The object of this report was to examine the Economics References Committee allegations of improper bond trading by the Appointed: Senator Bishop from 1 July 1996. investment committee of the Reserve Bank of Participating members: Senators Abetz, Australia Officers’ Superannuation Fund, Brownhill, Calvert, Campbell, Ellison, Evans, referred to as OSF. The committee recognised Kemp, Ian Macdonald, Sandy Macdonald, the important position of the Reserve Bank of MacGibbon, McGauran, Minchin, O’Chee, Australia in the economic life of Australia. Panizza, Tambling, Troeth, Watson and Woods. Accordingly, it regards as crucial the uphold- Environment, Recreation, Communications and the ing of the Reserve Bank’s integrity in all its Arts References Committee aspects. On the evidence before it, the com- Discharged: Senators Baume and Troeth mittee is satisfied that the integrity has been Appointed: Senator Knowles and O’Chee. both upheld and been seen to be upheld. Finance and Public Administration Legislation In the committee’s view, perceptions are Committee integral to public confidence, and public Senators Boswell and Panizza to substitute for confidence in our financial institutions is Senators Gibson and Watson for the public hearing on the Aboriginal and Torres Strait fundamental to our financial system as a Islander Commission Bill 1996 on Friday, 21 whole. Thus, the committee felt that it was June 1996. imperative to deal with the concerns that were Foreign Affairs, Defence and Trade Legislation and raised. The committee believes that this References Committees inquiry has done that comprehensively, and Appointed: Senator Hogg (from 1 July 1996). those concerns have been demonstrated to be Regulations and Ordinances Committee—Standing without merit. Committee In a very thorough coverage, the committee Appointed: Senator Hogg (from 1 July 1996). heard evidence from Mr Bernie Fraser, the Discharged: Senator Carr (from 1 July 1996). Governor of the Reserve Bank, Mr Alan Rural and Regional Affairs and Transport Refer- Cameron, the Chairman of the Australian ences Committee Securities Commission, and Mr Pat Barrett, Appointed: Senator Gibbs (from 1 July 1996). the Commonwealth Auditor-General. We Uranium Mining and Milling—Select Committee found that the original allegations could not Appointed: Senator Bishop (from 1 July 1996). be sustained. EXPORT MARKET DEVELOPMENT Given the seriousness of the allegations of GRANTS AMENDMENT BILL (No. 1) insider trading, the committee felt it was 1996 imperative to deal with the concerns that had been raised. The committee has demonstrated Second Reading that the allegations have been completely Debate resumed from 18 June, on motion without merit, and they have been now laid by Senator Kemp: to rest. I thank the Senate. That this bill be now read a second time. Question resolved in the affirmative. Senator COOK (Western Australia) (10.48 a.m.)—I was in mid-sentence when my Membership speech was interrupted last night. The remain- The ACTING DEPUTY PRESIDENT ing part of the sentence refers to the AIIA, (Senator Reynolds)—The President has the Australian Information Industries Associa- received letters from the Leader of the tion, which, in surveys of its membership, Government in the Senate and the Leader of found that the multiplier for this scheme was the Opposition in the Senate seeking vari- a multiplication of one to 30. The best exam- ations to the membership of certain commit- ple of the multiplier that the EMDG scheme tees. provides is set out in evidence to the Senate Wednesday, 19 June 1996 SENATE 1771 committee by Mr Oliver of Austrade, who other countries are, we are therefore at a said: commercial disadvantage in foreign markets. The multiplier found by Professor Bewley, who No evidence has been provided to us as to headed that evaluation, showed that across the what the other schemes in nations competing scheme, if you considered all claimants, it is 10 to with Australia are, but what is known one additional exports. So last year just a touch under $200 million was paid out under the scheme. anecdotally by me is that there are a number That in turn generated $2 billion worth of incre- of huge industry supports to companies in mental exports. That is the assumption. If you look Japan, Italy, France, Germany, the USA and at claimants that are what we call ‘experienced’ in Britain—schemes that actually help those the scheme—and they would be claimants from exporters win markets. If you were to dimin- year three onwards and have some export experi- ish this scheme or remove it, it would be like ence—the multiplier is up to 25 to one, depending asking Australians to compete in the Olympic upon the industry and the number of years that the company has been in the scheme. Games over the 100 metres event in Blund- stone boots saying to them that the extra The multiplier is an effective one. This handicap that they carry is an incentive to do scheme makes money for Australia. That is better. It is a mockery; it is a joke, and the the first of my two points that I want to make government is aware of that. at this stage. I think those facts speak for themselves. The second point is that the EMDG scheme This scheme is vital for the health of the is taxed. The government gets back— export sector. Why industry is concerned— according to the findings of the report calcu- concerned in some detail about this bill but lated by Professor Bewley—42 per cent of all concerned, more importantly, about the its outlays. Therefore, in the year 1994-95, intentions of the government—is that the where the outlay was $211 million, the rumours everywhere are that the scheme will Australian government only outlaid $122.38 be abolished. The government cannot sit back million. Given the projection that the outlay and say, ‘You can’t assume that it will be,’ in the year 1998-99 will be $292 million, it because these are inspired rumours; they are will really be $169.36 million—$88.62 leaks from within the bureaucracy; they are million and $122.64 million on those two leaks from within government meetings. What figures respectively will be returned to general has been transmitted to corporate Australia is revenue for other uses by the government. a view that the future of this scheme is I just want to emphasis those two points. uncertain. Therefore, can you expect Austral- The multiplier shows that this is an effective ian companies to invest money in the exercise scheme. Forty-two per cent of the outlays, where this scheme actually repays them on according to the most recent calculation, are their efforts while there is uncertainty hanging returned to the government in revenue. So over it and they may not get their money when we focus on the total cost of the back? scheme, reduce that by 42 per cent because The very existence of the rumours about the that is the real cost to the government of the future of this scheme is denying the impact scheme. the scheme provides for Australia in foreign More importantly, though, the export trade. Indeed, given the level of the current market development scheme has to be com- account deficit, you would wonder why pared not to its performance domestically in anyone with a smart brain or even half a the Australian economy or costs to the smart brain would give source to those ru- government for running the scheme, or indeed mours. even the multiplier, but rather to what other But there are sustained leaks, and it is not countries in the world provide to their com- just about the EMDG scheme. It is about the panies, because we are now in the globalised DIFF scheme; it is about the 150 per cent tax economy. Australian industry competes on the deduction for research and development; it is world market. If Australians are not supported about NIES; and it is about a whole range of by their government and companies from industry support schemes—all of which 1772 SENATE Wednesday, 19 June 1996 undercut the confidence of industry about the this scheme. It did so by the Hon. Tim security of those schemes in the future and Fischer MP, the then shadow minister for lead to a more conservative approach by it. trade, who spoke at the National Press Club Of course, I will not go now into the mythical on 15 February 1996. It was repeated on black hole that these cuts are supposed to pages 1 and 8 of the coalition’s industry and feed, but it is passing strange and odd in the commerce policy document, released by the extreme that a government would stunt Hon. John Moore MP. Of course, some growth in order to balance its budget when it industry associations, in evidence to the can balance its budget by accelerating growth inquiry, said that they had spoken to Mr and getting higher returns from its tax base as Fischer about that, and he gave them assuran- a consequence. ces that the scheme would not be tampered I think it is important that every company with. If it is, the government is repudiating its in Australia realises that the Commonwealth election promise. That will give us perfect government, the coalition, backed down in the right to defend the scheme and hold the face of state pressure on sales tax on motor government to what it told the electorate at vehicles. The Prime Minister (Mr Howard) election time. backed down at an NFF meeting on diesel I make this comment to the government: the fuel rebate and rural research and develop- government should not assume that, because ment by giving them a wink and a nod that this is a bill we introduced when we were in those two schemes for that sector will remain. office, we will support it now. It should never It does show that there is some give by the assume that, because we did not make the government if significant pressure is applied. election undertakings that you made. Many of I simply encourage Australian companies and the industry associations before the inquiry their industry associations to apply that said that when they heard those election pressure to protect this scheme. The letters of undertakings they did not assume that this protest have been many, but I think the efforts government, the current government, would can be redoubled and made sure. pursue these changes. What was told to those When I say that if the scheme is diminished industry associations, if you go back to the or abolished we will oppose it, I say that with Hansard of the hearing, suggests that they a considerable degree of weight. One of the have perfect grounds for saying that. I make leaks that came to me was that on 4 June the the point that not all said it, but some said it. ERC met and decided that they would impose There is a degree of ambiguity about it, so the a 24.3 per cent cut in running costs for government should stand by its industry Austrade. Austrade administer this scheme. If undertakings. their running costs were cut by a quarter, the The other thing that is clear from the ability to administer this scheme at maximum hearing is that this government had not efficiency, despite the redoubtable skills of consulted any of the industry. The evidence the administration capability of Austrade, is that when we were in government we did would be called into question. Companies consult about this proposal, but this govern- would be waiting a lot longer for payment ment did not. Therefore, there is that reason- and that, of course, exposes them to high able question of whether they ever intended interest on the borrowings that they may have to proceed with the scheme. undertaken to finance their activities in the There are a number of matters which I am first place. going to have to pursue in the committee Even if the scheme is kept intact but stage of this bill concerning the actual detail Austrade is savaged, we will oppose all of of the proposals put before the chamber. I just that. We will oppose it because of itself it quickly say, in the few minutes available to ought to be opposed. Importantly as well, the me now, that what is clear in reducing the government in its election promises—and I maximum per annum grant from $250,000 to want to make this point with as maximum $200,000 is that the government has not emphasis as I can—said that it would enhance consulted industry on that. There is some Wednesday, 19 June 1996 SENATE 1773 information known about the number of market readiness test—tries to establish companies affected in the band $200,000 to whether or not a particular business is strong $250,000. enough to maintain its export push. Savings When you look at the industry break-up of are estimated to be in the order of $32 million the evidence given to the inquiry by Austrade, between 1996 and 1999 and have already the industry sector most seriously affected is been incorporated in the forward estimates. the manufacturing sector. That is the one in The bill must be seen in the context of this which we have had the maximum growth in government’s overall trade and industry exports over the last several years under the policy, which even its own minister has previous Labor government, and it would described as ‘dreadful’ in certain aspects that appear that this would be the group that have been put forward since this government would be most severely affected by reducing took office. During the campaign the Liberal the ceiling. However, I make the point that and National parties assured voters that they that has not been looked at by this govern- attached ‘a high priority to the effective ment, nor has the impact been looked at on allocation of funding that assists the growth the small business area, where they can of Australian exports through providing conglomerate together such as they do in the support to businesses’ and they vowed to furniture industry and present themselves as introduce changes which would introduce a an association and get that ceiling. greater level of coherence and accountability The other area of importance is administra- into these programs. This bill introduces tive complexity. This government promised greater complexity but it is very doubtful the electorate in stentorian terms that it would whether it introduces a greater level of coher- reduce red tape on business by 50 per cent. ence. This bill actually increases it. The evidence from everyone is unanimous on that point. The coalition has said that the role of This is the voice of business saying, ‘You are Austrade and the range of export assistance now increasing red tape on us,’ and this packages offered to businesses is a corner- government is proceeding to do that. While I stone in the processes of developing an export understand that Austrade is having consulta- culture. Yet since then we have seen or heard tions to try to make that easier, it is still a little but repeated threats and speculation load that business will bear and is in itself a about the axing or severe curtailing of trade deterrent to business in actually applying for and industry assistance programs now lam- the scheme. basted as business welfare, irrespective of the My time is up. There are a lot of other national benefit these schemes have rendered. things I would like to say, but I conclude on The government has seemingly turned its this point: we will give passage to this bill, back on its pre-election commitment to but it will be with the major reservations I develop a strong proactive and interventionist have referred to. If the scheme is abolished, industry and trade policy. No longer does the we will oppose it tooth and nail all the way government appear intent on building upon down the line. and enhancing existing support programs Senator SPINDLER (Victoria) (11.00 which clearly underpin economic growth, a.m.)—The Senate is debating the Export encourage exports, reduce the current account Market Development Grants Amendment Bill deficit, create jobs and contribute to greater (No. 1) 1996. The purpose of the bill is to public savings by increasing the tax revenue. reduce from $250,000 to $200,000 the maxi- Instead, we hear of cuts to the export market mum grant payable to applicants other than an development grants scheme, the development approved trading house, to introduce a series import finance facility scheme, the research of measures to improve accountability and and development tax concession and the tariff risk measurement and to introduce registration concession scheme. It is unfortunate that the and grants entry testing of first time claim- government is trying to please financial ants. In fact, that testing—the so-called markets by cutting $8 billion from the deficit 1774 SENATE Wednesday, 19 June 1996 but is doing so without any discernible ration- One is, indeed, tempted to vote against the al policy framework. whole bill, to say, ‘What’s the use,’ and, in Bert Evans, Chief Executive of the Metal effect, to challenge the government to come Trades Industry Association, has said that back when it has irrevocably decided to addressing Australia’s national saving prob- continue it, as it certainly should. However, lem: it is hard to imagine that even this govern- ment would wish to damage Australia’s . . . by way of cutting our nation’s productive and efforts to reduce our current account deficit. export capacity will render only a short term book- The Democrats will, therefore, address the keeper’s benefit . . . Cutting these schemes is not saving. On the contrary, we are contemplating substance of the government’s bill and the cutting public investment in programs which measures it is proposing. currently make important contributions to national saving through their positive impact on exports, and Before I do that, let me put one more ultimately, on the current account deficit. suggestion to the government which it may One can only say, ‘Hear, hear!’ Such con- wish to incorporate in its further consider- cerns have been echoed by the Premier of ations of this scheme. It is one that the Aus- Victoria, Jeff Kennett, who attacked the tralian Democrats have often raised, that is Commonwealth government over these pro- the threshold entry figure, which is currently jected cuts, claiming they would discourage at $30,000. Very clearly, when that was business investment and possibly stall national introduced it cut out a lot of people in small economic growth. I am delighted to be able business, including those who are not able to to put on record that I wholeheartedly agree get together into consortia to benefit from the with Premier Jeff Kennett. scheme. Senator Cooney—On this occasion. There are some areas in industry which continue to be in that position. We have had Senator SPINDLER—And in a very representations from recording artists in the limited ambit of the statements that he is industry producing CDs who are struggling to making, Senator Cooney. Mr Kennett said: hold their own against Sony and other major You only have to talk to the federal ministers up competitors with ample capital to support there to know that they’re going to these expendi- their efforts. Recording artists, however, are ture revenue meetings and they’re being told what usually individuals with very little capital to do. Treasury mandarins are now back in control and must be laughing themselves stupid. strength and substance who are facing costs in producing their recordings which further As I said, for once I am able to wholehearted- sap their capacity. I believe the government ly agree with Mr Jeff Kennett. The ACTU should give consideration in its further exam- and the Australian Manufacturing Workers ination of the scheme to allowing a lower Union have joined industry critics and have threshold in particular circumstances such as warned that Australia risks losing $4.5 billion the one I have described. a year of net exports by the year 2000 and up to 80,000 jobs if the government proceeds The EMDG scheme was established in 1974 with plans to scrap trade and industry pro- and is the government’s major export incen- grams. The fact is that governments have an tive program designed to encourage small and important role to play in the economy and in medium business enterprises to seek out and support of small business—a role the present develop export markets and to promote an government is doing its utmost to shirk. It is export culture in the business community. not surprising therefore that the government’s Administered by Austrade, the scheme cur- policy inconsistencies are reflected in its rently provides cash grants of up to $250,000 approach to the export market development per annum for approved enterprises and is scheme. Even as it is threatening to cut the based primarily on expenditure incurred by an scheme out, the government is seeking Australian person or company seeking to amendments to improve it and to make it create or expand exports of their products in more cost-effective. overseas markets. Wednesday, 19 June 1996 SENATE 1775

Apart from two insignificant changes, the indicates a failure to develop export markets bill is the same as the one introduced by the and possibly an ineffective use of public former government in November last year but funds. To that extent, we certainly share the which lapsed with the dissolution of parlia- government’s concerns in this area. ment. The present parliament has signalled However, we are being asked to approve a that it may further amend or, as I have said test which will be administered by public before, even abolish the scheme in the context servants who are not necessarily experienced of the forthcoming budget deliberations and in business. It is a fairly subjective test at the that any such decision will not be influenced moment on the basis of the information that at all by the introduction of this bill. we have before us. We were very tempted to The Democrats hope that it will be influ- delete the market readiness provisions by an enced by the passage of this bill because, like amendment. However, we have been provided the opposition, the Democrats are saying we with a list of the criteria that the government will grant this bill passage with some reserva- intends to develop in consultation with indus- tions and some concerns which we will ask try. While at the moment the list is little more the minister to address. But we are doing so than that, it simply enumerates the various with the expectation that the government will factors that will be looked at. come to its senses and continue this scheme We have already suggested to the minis- after it has been adjusted to make it yet more ter—and I repeat the statement here in the cost-effective. chamber—that we would expect the govern- The bill was sent to the Foreign Affairs, ment to produce a list of criteria which is Defence and Trade Legislation Committee. A clear, detailed and appealable so that a busi- common concern among witnesses concerned ness which is rejected on the basis of that test the grants entry test or market readiness, can appeal to the AAT if the judgment that is which it was felt would introduce an addition- made by the person concerned in the depart- al level of administrative delays and costs and ment is found to be wanting. We have been undermine the non-discretionary nature of the assured that these criteria will be provided to scheme by allowing Austrade officials to the Senate as a disallowable instrument. I determine whether an exporter is ready to certainly suggest to the minister that the export. Democrats will reject that instrument if it The market readiness test is introduced by does not measure up to the test we are sug- schedule 9 of the bill, administered and gesting; namely, that it is objective and formulated by Austrade and which first time detailed. applicants will be required to pass. For claim- We believe that once again the applicants, ants who fail, the test is to serve as a diagnos- particularly those in the category which is tic instrument to facilitate counselling and considered to be doubtful, should be support- referral to appropriate services. It is the view ed by advice and training on information of the Democrats that this counselling, refer- rather than be closed out of the scheme. I ral, support, advice and so on should be would like to receive some more information available at all times, not just when a com- and assurances from the minister on that point pany is diagnosed as being likely to fail. We when he responds later in this debate. should not let companies get to that point and There is one other provision that has caused through Austrade we should provide the us some concern; that is, a reduction in the means of support for our export industries to grant level from $250,000 to $200,000, which continue that push overseas. was stated by many to be retrospective in its The screening mechanism is designed to application to people who are already in the filter out those with little chance of success system. However, this measure was an- thereby reducing the number of firms drop- nounced by the previous government in the ping out of the scheme at a later stage before May 1995 budget. Therefore, we feel that it they progress to graduation after eight years. can hardly be called retrospective in that the The drop-out rate is of concern because it applicants concerned had ample notice of it. 1776 SENATE Wednesday, 19 June 1996

We will therefore reluctantly pass this bill but ket Development Grants of 50% available look forward to a lower threshold in specific to the tourism industry". cases, particularly recording artists which I This bill before the Senate today is a very mentioned before. important one—not so much because of the More importantly, we believe that the terms of the bill but because of the debate government should take notice of the research that surrounds the future of the export market that has been done on the cost effectiveness development grants scheme in this country. of this scheme. A report by Price Waterhouse The scheme provides cash grants to assist states: Australian exporters in seeking out and Typically, mature exporter firms in most industries developing export markets. Exporters are will generate 15-25 times the grants paid to them reimbursed 50 per cent of overseas marketing in additional exports. expenses above $30,000. The scheme’s That, in any terms, surely is an adequate and primary purpose is to support small to medi- indeed an excellent return for the investment um sized companies in their export endeav- of public funds. Since our whole efforts in ours. our industries should be directed towards The bill we are considering today is identi- improving our balance of payments and to cal to one introduced by the previous Labor becoming competitive in international mar- government and the amendments contained kets, it would be suicidal indeed for the therein seek to limit grants payable from government to remove that particular scheme. $250,000 to $100,000 maximum, to introduce I flag the Democrats’ opposition to such a a grants entry test to limit grants to higher move. risk applicants and to provide greater guid- Senator CHRIS EVANS (Western Austral- ance to small exporters, and to introduce ia) (11.16 a.m.)—I wish to address a few accountability and legal measures. remarks to the Export Market Development This bill has been considered by the For- Grants Amendment Bill. Prior to making eign Affairs, Defence and Trade Legislation those remarks, I would like, on behalf of Committee. The inquiry conducted by that Senator Cook, to formally move the amend- committee was very useful in allowing indus- ment that he flagged on behalf of the opposi- try to voice its concerns, not only about the tion. I move: bill we are considering today but also about At end of motion add ", but the Senate: the future of the scheme and the government’s (a) is of the opinion that the EMDG scheme is: reluctance to endorse the future of the scheme. (i) a successful scheme which enhances Australia’s export performance, The particular concerns with the bill have (ii) a source of job creation and benefits been well covered by Senator Spindler from Australia’s balance of payments, and Victoria in his speech, particularly the con- (iii) a successful export incentive for small cern about the new grants entry tests. Senator and medium sized enterprises; Spindler indicated that some assurances have (b) expresses grave concern at the Govern- been given regarding the use of regulations in ment’s mooted abolition of the scheme this regard. I am sure the Senate will closely which would be: monitor those to ensure that the scheme (i) a cynical and blatant breach of an express continues to operate successfully and fairly. election commitment to retain and expand Despite the loss of Senator Spindler from the the scheme, and Senate after 1 July, I can assure him that we (ii) counter to any reasonable assessment of will be keeping a very close eye on the the evidence given to the Senate Foreign matter. Affairs, Defence and Trade Legislation Committee in the course of the commit- The reason I decided to participate in this tee’s consideration of the bill; and debate today was the concern of industry (c) condemns the Government for its failure to groups in my own state of Western Australia meet its election commitment to extend the and elsewhere about the future of the scheme. EMDG scheme by making full Export Mar- They are concerned that the government is Wednesday, 19 June 1996 SENATE 1777 intending in the budget to either abolish the quired. It is a partnership rather than a hand- EMDG scheme or severely reduce its applica- out. tion. This concern is very real and has been It has also been found that the scheme is heightened by the failure of various ministers very cost effective. Austrade estimates that for to give any assurances to industry about the every $1 spent on EMDG $25 is generated in future of the scheme. I understand that there exports. The 1994 Price Waterhouse review is always a bit of pre-budget argy-bargy and for Austrade that Senator Spindler referred to a normal policy of ministers to ‘neither con- found that the net cost of the scheme was firm nor deny’, but this scheme is very only 58 per cent of the amount spent on important to the future of high-tech and grants. That is around $115 million. manufacturing industries in Australia. It is vital to the development of our export culture. The study found that 42 per cent of the cost I really do think that on this occasion the of the scheme was recouped by the govern- government ought to give an unequivocal ment because of the tax payable on the grants commitment to the future of the scheme. themselves and the additional exports gener- ated. With the EMDG, Austrade estimates that This scheme has been a success. There are the annual IT&T and multimedia sector various industry assistance programs where exports to North America will rise from $60 people can have a legitimate argument about million in 1996 to $140 million in the year their efficacy and success. This particular 2000. Without it, the exciting proposition of scheme is not one of these. Introduced by the breaking into the lucrative North American Whitlam government in 1974, it has been market will be stifled. So the scheme is almost an unqualified success. In the last providing real success and very tangible financial year, 3,500 companies utilised the benefits for the Australian economy and for EMDG scheme. Ninety per cent were small our trade performance. The coalition, prior to businesses with turnovers of less than $5 the election, seemed to recognise this. The million. Twenty per cent had turnovers of less coalition trade policy, ‘Meeting the Challeng- than $1 million. They were predominantly es’, at page 30 stated: high technology and information technology We will maintain the export market development companies—the smart companies that are grants scheme. needed to take Australia’s economy forward. That view was confirmed by Tim Fischer at We heard at the Senate committee inquiry of the National Press Club on 15 February 1996 the many success stories, where the assistance when he said: ‘EMDG stays,’ in a style that provided by this scheme had allowed com- only Tim Fischer can bring to such things. panies to expand into markets that they would The reasons why there is concern about the not otherwise have been able to access. future of the scheme are numerous. I suppose at the back of people’s minds is the fact that The EMDG scheme has been reviewed on the Liberal Party went to the 1987 federal a number of occasions. On each occasion the election with a policy of seeking to abolish reviews have found that the scheme has been the scheme. There is a widely held view that working well. Despite some modifications, it Treasury has some concerns with the scheme has continued to provide very beneficial and would rather see it largely amended or assistance to industries in broadening their scrapped. I think the recent abolition of the export markets. The last review in 1994 again DIFF scheme has heightened industry con- showed that the scheme was meeting its cerns about the whole future of industry objectives. assistance measures. The government’s con- I wish to stress quite clearly that the EMDG stant mantra about the $8 billion black hole is not a handout to companies. Firms must and the search for easy targets for cuts means spend at least $30,000 before becoming that generally people are concerned about a eligible for the scheme and often do not range of government assistance schemes. receive any moneys for two years. High levels There is enormous industry concern that the of commitment from the company are re- scheme may be abolished. This was highlight- 1778 SENATE Wednesday, 19 June 1996 ed in the evidence given to the Foreign fivefold to $17.5 billion. The export boom in Affairs, Defence and Trade Legislation Com- manufactures and services has added almost mittee when we inquired into this bill. I quote $30 billion a year to Australia’s output and Mr Peter Campbell of the Australian Publish- perhaps created as many as 500,000 jobs. If ers Association, who said: it continues to grow at anything like the rates Last year we studied with great interest the policy of the past 10 years, the next tranche of statements of both parties and took great comfort benefits will be two to three times that size. from the fact that both the coalition and the Labor government promised to continue the scheme into If the scheme is eliminated, either com- the year 1999. As well as that, our industry group panies will move offshore to take advantage had a meeting with the then shadow minister Mr of the concessional tax arrangements for high- Fischer, who gave us his personal insurance that tech firms in other countries, which will result the scheme would continue to that date. We in jobs being lost as companies relocate received a letter from him last week which con- offshore, or companies will simply exploit cluded by saying ‘The process, as you say, has still local markets and ignore the opportunities not been resolved and will be an ongoing process. Consequently, I am not able to comment on the presented by overseas markets. Companies do future of the scheme.’ need assistance to take that step to develop those export markets. The scheme is not a Mr Russell Chandler, from the Australian handout; there is an important role and a Institute of Export, expressed concern also. justifiable role for governments to play in He said: assisting those companies to build their We can only assume that this extreme action is markets and, therefore, to build jobs and being contemplated by the Expenditure Review income for Australia. Committee on the basis of ignorance of the scheme, its needs, benefits and history, poor departmental Government policy of the past decade has advice, a perceived lack of support in relation to placed a priority on encouraging companies the other areas of potential cost cutting, or on the to look at export opportunities. At a time basis of pre-existing attitudes to government when this culture is starting to impact on supported schemes in general. Australian business, the prospects of this These are just indications of the widespread government turning its back on industry are industry concern at the implications of the very alarming indeed. Mr Trevor Tappendan, elimination of the EMDG scheme. There were of Ernst & Young, National Entrepreneurial a number of submissions to the committee Services Division, has said recently: which gave very telling evidence as to the The EMDG has been a saviour to Australian small success of the scheme. I was particularly businesses getting into new export markets. It has struck by the submission from the Lonely created an environment for them to increase our Planet book publishing company that talked exports. about their particular history of involvement I cannot believe the government would be so with the scheme and their experience of stupid as to damage something that has taking Australian publishing and Australian brought such good results. Senator Spindler ingenuity to new markets. A range of com- also referred to the recent report put out by panies like that gave very real, very concrete the ACTU and the AMWU entitled ‘A Pre- examples of how the scheme had assisted liminary Assessment of the Coalition’s Pro- their firms. posed Cuts to Trade and Industry Develop- People need to be aware of the implications ment Assistance’, which looked at the impact of the elimination of this scheme. In the last of abolishing industry development programs. 10 years Australia’s trade and export perform- It highlighted the potential loss of jobs, loss ance has been significant in the development of growth of new exports and the range of of the economy of this country. Exports have flow-on effects that come from that. In sum- more than doubled: $39 million to $92 billion. mary that report estimated that, if all the Most of that growth has been in non- mooted cuts were implemented, there would traditional areas. Services exports trebled to be a potential loss of $4,500 million to the $21 billion and manufactured exports grew GDP in lost import replacement and export Wednesday, 19 June 1996 SENATE 1779 expansion and a potential loss of up to 80,000 tial for the government in the budget process jobs from Australian industry. to do real damage to Australian export mar- These are very important considerations in kets. I think it will be useful if I refer briefly relation to the scheme and in relation to to a quote by one of the economic writers, government policy generally. They are about Tim Colebatch, in the Age. Talking about supporting industry and export market devel- these sorts of schemes and the government’s opment. From a WA perspective, I know attitude, he said: there is a large range of Western Australian What is alarming in the coalition’s policies and companies that have benefited from the Budget agenda is the evident lack of any strategy scheme as they have sought to expand into for ensuring they will continue— markets, particularly in South-East Asia. ‘they’, of course, being the trade and industry A large number of high technology com- programs we have been referring to. He went panies have been involved. It is interesting on: also that a large number of companies and Trade and industry programs are being tossed up as activities associated with the WA universities targets for the axe with no sign that ministers . . . have been beneficiaries of the scheme as we are weighing their importance to achieving the try to move into smart industries and develop growth the Coalition and Australia need. Australian industry in new directions. EMDG It is for this reason that we have taken the has been a very important scheme for a range opportunity, in debating this bill today, to of companies in Western Australia. I have make the very strong point that the export been impressed by the submissions I have market development grants scheme is funda- received from those companies and from mental to expanding our export markets, others who see the scheme as being highly particularly in high technology areas, and desirable and effective in allowing them to assisting a range of industries in Australia. grow and develop exports for Australia. We are very strongly supportive of the There is real concern on this side of the scheme and we urge the government to chamber regarding the axing of the EMDG, continue and expand the scheme following its especially following the government’s an- budget deliberations. If there is any attempt nounced plans to abolish other industry to downgrade or abolish the scheme, the development programs such as the develop- opposition will be taking a very serious view ment import finance facility. We have used of that and doing all in its powers to assist this debate today to express those concerns. industry in maintaining the scheme. The amendment I have moved on behalf of Senator Cook goes to the heart of those Senator COONEY (Victoria) (11.34 concerns. It reiterates the success of the a.m.)—An essential dimension of this debate, scheme in enhancing our export performance, as appears from what has been said by the in creating jobs and providing a successful speakers before me, concerns an apprehen- export incentive for small and medium-sized sion, an anxiety or fear, about the future of businesses. The amendment also expresses its this scheme. This is not a good thing. Austral- concern at the mooted abolition of the ian industry and commerce, some of which scheme. Finally, the amendment seeks to have been referred to in the previous speech condemn the government for its failure to by Senator Evans, are entitled to be reassured meet its election commitment to extend the about the future of the scheme. It seems to EMDG scheme by making full export market me that that has been the matter that has development grants of 50 per cent available concerned everybody who has turned their to the tourism industry. mind to this legislation. The amendment moved by the opposition Perhaps the best way of going about the today is not addressing strictly the clauses of debate is to refer to the report from the Senate the bill, but is designed to give voice to the Foreign Affairs, Defence and Trade Legisla- industry concerns and our very real concerns tion Committee. That is a committee of this about the future of the scheme and the poten- chamber, and it is another indication of just 1780 SENATE Wednesday, 19 June 1996 how successful the committee system is for available than there was before—would the proper processing of legislation. indicate that the scheme is to continue. You The chair of that committee is Senator would have thought that people would have Judith Troeth, who, I think you would agree, had faith in the government continuing the is a most competent and experienced chair. scheme on the basis that the government has She was previously chair of the Scrutiny of introduced legislation very similar to what Bills Committee, which I now have the was introduced by the previous government. honour of heading. I know how good she is When the report that I have referred to from from the work that she has done there. The the committee that was chaired by Senator other members of the government party who Troeth is read it becomes quite clear that the are on that committee are Senator David people who gave evidence to the committee MacGibbon and Senator Baden Teague, are quite fearful of the future of the scheme. people with vast experience. They came into It is proper that I read paragraph 12 of the this chamber even before you and I came into report, which states: it, you with considerable grace, Madam In evidence to the Committee two areas of concern Acting President Knowles. The two people were raised: first, matters relating to aspects of the from the opposition party who are on that Bill including the impact of the reduction of the committee are Senator Cook and Senator grant, the grants entry test, a possible increase in Evans, from both of whom we have heard. the complexity of the administration of the Scheme and the possible retrospective application of the The point I want to make is that that was amendments; and secondly, the question of the an all-party committee with the coalition continuity of the Scheme. parties being in the majority. It is interesting Later in the report—at paragraphs 42, 43, 44, to see what they have to say. They turn to the 45, 46, 47, 48, 49 and 50—the issue of the question of the background to this scheme continuity of the scheme is developed. It is and that has already been described. It would too long for me to read it during this speech, be worthwhile, I think, for the purposes of but the whole thrust of it is that industry is those listening, to hear what the committee clearly concerned about the future of the had to say about it. It said: scheme. As we heard from the people who The Export Market Development Grants (EMDG) have debated this issue today, and Senator Scheme is established by the Export Market Cook who debated it last night, this is causing Development Grants Act 1974 and is managed by great uncertainty in commerce and industry. Austrade. It provides taxable cash grants to assist It is not right that commerce and industry Australian exporters in seeking out and developing should be kept in that state of apprehension. export markets. Exporters are reimbursed 50 per cent of overseas marketing expenses in excess of In the give and take across this chamber $15 000 having attained a minimum expenditure when the opposition seeks to find out what is threshold of $30 000 for that year. The Scheme’s going to happen in terms of expenditure for primary purpose is to support small to medium sized companies in their export endeavours. Com- the purpose of gaining a political point, it is panies who record export sales above $25 million reasonable for the government to fence that a year are ineligible to apply for a grant. approach and say, ‘Well, wait and see.’ But that proposition, which may be correct in That theme has been developed by previous terms of the political exchange across the speakers. The general thrust of it is that this chamber, is not a proposition that has any is a scheme to help small to medium-sized validity where commerce and industry are Australian companies enter overseas markets. concerned. The people who provide the On the face of it, it is quite an outstanding lifeblood of this country, the people who scheme. It is a scheme which has been operat- manufacture, the people who produce ser- ing since the 1970s. vices, the people who sell those services and The fact that this bill has been introduced the people who provide the wealth of this and contemplates the continuation of the country are entitled to get a clear message scheme—though a continuation in a different from government. That clear message should way in the sense that there is less money come at the earliest opportunity. It should not Wednesday, 19 June 1996 SENATE 1781 be held up simply to gain a political advan- Senator Cook might not either, is that we tage. have our travel arrangements made for us. We There may be some other reason why the have a very easy way around the world. government refuses to give assurances to the Whether we are going to go down the ski people who produce the wealth of this coun- slopes of the mountains of the world or try. I see Senator Herron across the chamber, whether we are going overseas to educate a person to whom we must give great respect. ourselves, we have a very easy passage. But If he is responding to this issue, he might tell my children, when they go travelling with those people in Australia who want to know backpacks on their backs, use this book. It is about the future of their business exactly why an Australian publication—and Senator Cook no clear message can be given now. would agree with this—which has been acclaimed around the world. It is a very Perhaps I should indicate to Senator Herron, famous book. through you, Madam Acting Deputy Presi- dent, the people who did give evidence at this It is published out of Melbourne, if I re- hearing. They include the Australian Business member correctly. It is another success story Chamber, the Australian Chamber of Com- for the state of Victoria. Senator O’Chee, you merce and Industry, the Australian Chamber have successes in Queensland, I understand, of Manufactures, the Australian Electrical and but this is one of the famous ones from Vic- Electronic Manufacturers Association Ltd, the toria. What Lonely Planet wants to know is Australian Publishers Association, the Austral- what your government is going to do about ian Institute of Export (NSW) Ltd, the Aus- this quite remarkable scheme—and I use that tralian Information Industries Association, word advisedly—outlined in the Export Mark- Blades Mi-Sporting Products Pty Ltd, Export et Developments Grant Amendment Bill. and Commercial Research Services Pty Ltd, It is in that context that the amendment the Furnishing Association of Australia Ltd, moved by Senator Chris Evans on behalf of Lonely Planet Publications Pty Ltd, the Senator Cook is made. I will just go through MTIA, Sunlovers Cruises, the Tasmanian the amendment. It says: Apple and Pear Growers Association and the Tourism Council Australia. At the end of motion add ", but the Senate: That list covers a very broad range of (a) is of the opinion that the EMDG scheme is: industry and commerce in this country, (i) a successful scheme which enhances including information industries, sporting Australia’s export performance, products, Lonely Planet Publications, tourism, Nobody could disagree with that. I would not the metal industries, the business chamber and have thought that, since at this stage the so on. All these people and all these groups government is going to continue the scheme, have expressed, as I understand this report, an there would be any problem with everybody apprehension about the future. That apprehen- agreeing with that. It goes on: sion is apparently not to be taken from them (ii) a source of job creation and benefits until, at the very earliest, 20 August. Australia’s balance of payments— Senator O’Chee—What is Lonely Planet From the speeches that have already been Publications about? given, it is quite clear that that is correct. It Senator COONEY—Lonely Planet Publi- goes on: cations was mentioned by Senator Evans and (iii) a successful export incentive for small and Senator Cook, who attended this hearing. medium sized enterprises; Senator Cook—It is a world ranking guide Those three propositions are all propositions to travellers. It sells everywhere in the world. that I would think nobody would have any Senator O’Chee—I don’t do as much difficulty with and should pass. The amend- travel as you, Peter. ment then goes on to say: Senator COONEY—I think why we do not (b) expresses grave concern at the Government’s use it, Senator O’Chee, and probably why mooted abolition of the scheme which would be: 1782 SENATE Wednesday, 19 June 1996

(i) a cynical and blatant breach of an express scheme will continue. That is the very best election commitment to retain and expand the thing that could happen. But if it is not to scheme. continue, they should be given as much notice I can imagine that the government may have as possible. some difficulty with the language of that part The best thing the government can do is of the amendment, but if there have been guarantee that the scheme will continue. The these assurances given by ministers in the second best thing the government can do is now government in the past, then the expres- that, if they are going to stop the scheme, sion of a disappointment that that election they should tell these commercial and indus- promise is to be broken is a reasonable trial people now that it is going to discon- proposition. The amendment goes on: tinue. The worst thing that could happen is (ii) counter to any reasonable assessment of for them to be left uncertain, which is what the evidence given to the Senate Foreign the government is presently doing. Affairs, Defence and Trade Legislation Com- mittee in the course of the committee’s con- Senator MARGETTS (Western Australia) sideration of the bill. (11.51 a.m.)—I rise to speak briefly to the That seems to be a proposition that is undeni- Export Market Development Grants Amend- able, but the evidence given to the committee, ment Bill 1996. As honourable senators may from the way I have read it in any event, remember, I have been fairly critical of the would certainly support the proposition put export market development grants scheme in forward by Senator Evans for Senator Cook. the past, but I note that this bill is basically The third part of the amendment says: about implementing the Auditor-General’s recommendation to make the scheme more (c) condemns the Government for its failure to accountable. As such, it is not a new bill. meet its election commitment to extend the EMDG scheme by making full Export Market One of the two other aspects is the reduc- Development Grants of 50% available to the tion of the maximum grant from $250,000 to tourism industry. $200,000, beginning in the 1995-96 financial Again, the language is such that the govern- year. We do not have any problem in princi- ment may have considerable problems about ple with this. Since the measure was actually supporting it. The general proposition con- announced at the last budget in May 1995 by tained in the amendment is that this is a good the then government, and introduced in scheme that was guaranteed, while the present November of that year, we feel the industry government was in opposition, to continue, should have had enough time to understand and that it does produce, for the outlays that that reductions were under way. are made, a great return. If I remember There is an issue of potential retrospectivity rightly, and Senator Cook might be able to that was raised. The issue concerns what to help me, the committee reported that the do about businesses that knew the grants were multiplier for the return for the outlay was to be cut but then, when the bill was not something like 15 to 25 times. Senator Cook passed before the election, planned for higher has acknowledged that that is correct. It grant levels on the assumption that the bill would seem, simply by that proposition, to be either would not be passed or would apply a foolish thing to take away a scheme that has from the next year only. I can understand that a multiplier such as that. people may have got themselves into trouble This is a scheme that clearly should con- in relation to that, but I think they were tinue, and the legislation should continue. It certainly taking a bit of risk and skating near is interesting that the government has chosen the edge if they made business-critical deci- to continue this scheme by introducing this sions on that basis—in the face of the budget legislation. The one thing missing is a guaran- announcement and the introduction of the bill. tee that the scheme will continue into the It is an issue of concern, but I will say that future. For the sake of the commercial health I am not really inclined to support the notion of these exporters that rely upon the scheme, that businesses taking risks on legislation a clear message should be given that the failing to pass should have legislation chan- Wednesday, 19 June 1996 SENATE 1783 ged for their protection and benefit. I will volved in litigation. You are also a target of note that any business which was facing the claims of favouritism and improper action, no same legislative scenario and which behaved matter how scrupulous you try to be. as if the legislation would pass would be disadvantaged relative to the risk-takers. How do service industries then prove their viability? That is a difficulty that goes on and The second issue is the grants entry test. on. If you are providing a consultative service This is also of concern to me. The committee for export overseas, then the difficulty is that report, in relation to what the test is seen as, you bring the team together. What do you says: look at when you are looking at the viability undermining the open access principle of the of that kind of proposal? scheme by imposing on first time claimants thres- hold criteria. It was also seen as being contrary to Should it be assessed project by project? the non-discretionary nature of the scheme... That is an important issue. Often a company I do think that this is a way of reducing will build into their total plan the fact that expenditure, in spite of Austrade’s denial. they rely on such government assistance to This was confirmed in my mind by the fact get a first proposal under way, on the basis that, when we were given a briefing, this was that it gives them experience, something to introduced as a way of ensuring that money put in their CV. Project by project, it might is not wasted. We do not support waste, but not actually be bringing in a profit. If you I believe that measures to reduce expendi- base it on a project by project basis, how do ture—which this is—should be clearly ex- you then check with the company whether or plained as such. not that is part of their overall plan and whether it will be of benefit to their general Evidence has focused on the fact that a business if they proceed in that particular percentage of the businesses which get export manner? market development grants subsequently fail. The obvious aim of this measure is to reduce There is also a tendency, no matter how such situations by pre-assessment. With the discretionary schemes start, for a more and grants going down and being more discretion- more discretionary approach to be adopted. ary, perhaps the minister will clarify whether Often those who are charged with making this means there will be more grants available judgements are themselves assessed in terms to more businesses, especially the service of outcomes, so they become more and more industries which have had more difficulty, conservative. What I am highlighting here is particularly finance difficulties, getting assist- that once you make something discretionary, ance because of the nature of their business. no matter what your intention, you get on a Perhaps we could get some clarification from slippery slope. the minister on that. I am satisfied that the intention is reason- The idea of pre-assessment is a vexatious able, but I question the eventual outcome. I one. Once you enter it, it does eliminate the would say that it is problematic, but I would open access principle, although the access prefer to see some hard criteria which can be might still be generally available. Discretion used as existing criteria are. We would prefer involves an assessment rather than a simple to see you take a little more time and develop criterion, such as has been applied in this such defined criteria so that you can maintain program to date. The problem is that, even the open access aspects of the scheme while with the best will in the world, once you get meeting your concerns. Perhaps this could be people deciding whether a business is a good dealt with by some guidelines in relation to one you get into either picking winners or the discretionary criteria, and that would make excluding losers and you are in trouble, you it fairer all round. Perhaps the minister would are off into the subjective decisions of some like to help us out with whether or not there panel. Pretty quickly, you are liable to reach are guidelines to be written in so that people a state where some disgruntled applicants take clearly know the basis on which this assess- you to court or a tribunal and get you in- ment will take place. 1784 SENATE Wednesday, 19 June 1996

We would have trouble supporting singing scheme, if you considered all claimants, it is 10 to the praises of the export market development one additional exports. So last year just a touch grants scheme. As I said, in the past we have under $200 million was paid out under the scheme. That in turn generated $2 billion worth of incre- had some concerns. So I am unable to support mental exports. That is the assumption. If you look the wording of the opposition’s amendment. at claimants that are what we call ‘experienced’ in Senator SCHACHT (South Australia) the scheme—and they would be claimants from year three onwards and have some export experi- (11.58 a.m.)—I rise to speak on the Export ence—the multiplier is up to 25 to one, depending Market Development Grants Amendment Bill upon the industry and the number of years that the and to support the amendment moved by my company has been in the scheme. colleague Senator Chris Evans on behalf of Senator Cook. As Senator Cook indicated in This is the scheme the government is con- his remarks, we support the bill itself, but sidering abolishing to save $200 million, with this second reading amendment which which will cost us $2 billion in fewer exports. clearly states our support for the EMDG That means the current account deficit goes scheme. As outlined in the amendment, we out by $2 billion to save $200 million on a believe that it is necessary to state now in the short-term basis. Senate why this EMDG scheme should be We do have economic vandals loose in the continued, despite the dreadful speculation ERC and in this new government. That is the now coming from government sources that best way you could describe them because this scheme may be abolished by the ideologi- vandals apparently do know what they are cally driven right-wing agenda of the new doing occasionally—that is, they deliberately government to cut expenditure in a blind way, go out to wreck something. It may be that we without any thought to the consequences. just have a bunch of dills in this new govern- As minister for small business in the previ- ment who do not understand what they are ous government, and before that chairman of about and do not understand the conse- the foreign affairs, defence and trade commit- quences. tee of the Australian Parliament, I have seen When we were in government we were the advantages to Australia of both the export lectured by the then opposition that we did market development grants scheme and the not understand the importance of reducing the DIFF scheme, which has already been an- current account deficit. To now have this new nounced as being abolished by the govern- government speculating that it wants to get ment. Both of these schemes are very import- rid of the export market development grants ant to the economic future of Australia. scheme to save $200 million, even though it I find it incomprehensible that there could will add at least a $2 billion deficit on the be members of the new government sitting current account deficit, is extraordinary. around the ERC table saying that we can get It is probably not surprising that this is a short-term saving of a couple of hundred starting to occur in this government as its million dollars by abolishing the export honeymoon is rapidly coming to an end. market development grants scheme. They do When you have ministers of the calibre of Mr not understand that evidence now before the Downer, Mr Fischer and Mr Moore respon- Senate Foreign Affairs, Defence and Trade sible for administering these schemes in the Legislation Committee covering this area says foreign affairs area, the trade area and the that the multiplier effect of EMDG is at least industry area and for explaining them to their 10 to one and may be up to 25 to one. This cabinet colleagues, who may not be as fully means that, for every dollar that we put into aware of the ins and outs of this particular that $200 million, we can get back hundreds scheme, you would think they would under- of millions of dollars more. Mr Oliver from stand their importance. Information would be Austrade, before the Senate legislation com- available to them from their departments, mittee of 5 June, said: from Austrade itself, which I have just quot- The multiplier found by Professor Bewley, who ed, from the Department of Industry, Science headed that evaluation, showed that across the and Tourism, from the foreign affairs depart- Wednesday, 19 June 1996 SENATE 1785 ment and its trade people as well as, over- Senator SCHACHT—I withdraw. I think whelmingly, from business. Yet that seems to we have a foolish foreign affairs minister, and have all disappeared, and the decision to his performance recently in America proves abolish DIFF is a start. it. It is only just starting to come out in articles, such as Mr Sheridan’s article today. In today’s Australian there is an article by There was an article in the Sydney Morning Mr Sheridan which really makes the case of Herald on 15 June and an article in the the stupidity of this new government in Financial Review on 14 June. Mr Downer, in abolishing the development import financing speaking to a major foreign affairs forum in facility, commonly known as the DIFF America about 10 days ago, attended by other scheme. He says that decision: representatives of the Australian parliament . . . represents a triumphant combination of mad both from the government and the opposition, left and mad right dogma. started off his speech by telling Catholic That is what he says about getting rid of the jokes. The journalist who wrote this article in DIFF scheme. Yes, there are a few people in the Financial Review, Mr Stutchbury, said: the aid area who would like the DIFF money Why on earth would he publicly "confess" to spent on direct foreign aid. If they are suc- Georgetown president, the Rev. Leo O’Donovon, cessful in getting rid of the DIFF scheme, that his Canberra press secretary was once a Jesuit priest but was now "happily married though"? And does anyone believe that that money would be why would he make a point of revealing that his transferred under this government across to own seat contained a smaller proportion of Catho- direct foreign aid? Of course not. It will be lics than any other of Australia’s 148 federal taken as a saving and spent somewhere else; electorates? it will not be transferred across to direct aid This is the representative of Australia at large in the aid budget, administered by AusAID, in America, one of our closest allies, making and made available to many of the excellent stupid comments. It is at the level of Mr NGOs who have overseas aid programs. Downer’s performance of the ‘things that I have been approached by some of those batter’, the thing that cost him the leadership organisations and I pointed out that fact to of the Liberal Party. He is at it again but this them. It is all very well to argue philosophi- time he is disgracing Australia overseas. This cally that DIFF money should be in the direct is the man whom we expect to understand aid budget and should not be counted as why it is important to maintain the DIFF direct aid but they are giving succour to this scheme and the export market development government’s ideologically driven agenda to scheme. Yet all he can do when he is over- reduce aid full stop. The saving in DIFF will seas representing this country is make himself not be flowing across to an increase in direct out to be an embarrassing fool by telling anti- aid; it will go somewhere else. Catholic jokes at a Jesuit college. The article by Mr Sheridan goes on to point I think we all understand that Mr Downer’s out that in the DIFF area, as I have just humour has never grown up since high pointed out, in the export market development school, and that is what cost him the leader- grants area, according to an assessment by ship of the Liberal Party. Therefore, I think it AusAID, ‘. . . each dollar of DIFF generates should be put on notice that, if this sort of $5 of export income. Thus, to save $100 performance continues, Mr Howard will have million, we are going to destroy $500 million to ask him to step down as foreign minister. in export income.’ As Mr Sheridan says: We cannot put up with this sort of embarrass- ‘This is truly stupid.’ I think we have a stupid ing performance overseas. foreign affairs minister. The same article mentions Mr Fischer Senator O’Chee—On a point of order— turning up at a meeting with the equivalent US secretary and putting his Akubra hat on The ACTING DEPUTY PRESIDENT the desk, which went down like an indication (Senator Knowles)—Order! I would ask you that we are country bumpkins. It certainly did to withdraw that, Senator Schacht. not impress the Americans. You might say 1786 SENATE Wednesday, 19 June 1996 that this is our culture, but I do not think it is. points about Treasury. If Mr Costello always When you are overseas you adapt your pres- accepts Treasury’s views we will end up entation to the norms of the particular country doing nothing because Treasury will not you are visiting in order to make the best spend a cent. In relation to the DIFF scheme, possible impression. Mr Fischer was asked Treasury itself said: about his trade policies, and this is his reply: . . . it is highly unlikely that the DIFF-related Clearly they now are comfortable with, and expect resources would otherwise be idle. that, I as Minister for Trade will be pursuing the bilateral with great energy and activity as well as And further: the regional, APEC and the like, as well as the . . . the DIFF program could cause some misalloc- multilateral, WTO and the like. ation of resources. This is our trade minister. Can anyone tell me As a former minister, I argued against that what that means? What would happen if Treasury view, as did my colleague Senator officials from his department had to explain Cook as a former industry minister, and as to another official in a foreign affairs depart- did many others. When Treasury was selling ment what that meant? If that appeared in a us that line, its own dry economic line, we memo or a cable and people had to go out worked out that it was not necessarily in the and talk it up because it was what our trade interests of Australia. This is not about getting minister said, there would be mass confusion. the budget deficit down and fiscal rectitude, Nobody can understand that gobbledegook. things which we support. This is the differ- These characters—Downer and Fischer—are ence between the madness of wiping out being let loose to do great damage to export industries and promoting them. Australia’s— The ACTING DEPUTY PRESIDENT If we take the Treasury line to its ultimate (Senator Knowles)—Order! Senator Schacht, conclusion, in 1787 when the First Fleet was you will refer to the honourable members in about to set out to establish European settle- the other house by their titles as well as their ment, Treasury would have said that it was surnames. not a cost benefit plus for Australia or Great Britain. It would have said that it was a Senator SCHACHT—Mr Downer and Mr misallocation of resources. That is the Treas- Fischer are being let loose to do great damage ury line all the time. to Australia’s reputation. The articles appear- ing in the press point that out. A program as On this side of politics, we make no bones important as the export market development about the fact that government should inter- grants scheme is under threat because, clearly, vene in the marketplace from time to time to they do not understand its importance. reallocate resources in order to get a better outcome for society. That is not what Treas- I find it staggering that a coalition which ury believes. The monoculture of economists claims to understand business better than the in Treasury have a different view. Labor Party, the Greens, the Australian Democrats or anyone else, which claims to Senator Cook—What about all the DIFF have a closer organic relationship with the schemes our competitors have? business community, is blithely making these Senator SCHACHT—Yes. When you changes despite the fact that every Australian remind Treasury that all our competitors in exporting business is asking them, ‘Do you Asia have a DIFF scheme, it seems to ignore understand what you are doing?’ But they just that. There is no response. Treasury still says proceed in the way they are going because that it is a misallocation of resources. The they are ideologically driven and, more more absurd assertion coming from Treasury importantly, they do not have the ability to is that we should be the first ones to make an assess the outcome that is best for Australia. example by getting rid of DIFF; then, hope- Mr Sheridan, in his article, also puts his fully, our competitors will get rid of their view about Treasury’s assessment of the DIFF equivalent schemes. That is the naivety of scheme. I think he makes some very good Treasury’s argument against DIFF schemes Wednesday, 19 June 1996 SENATE 1787 and export market development grants in three parts and expresses, if carried, that schemes. the Senate: I say to you, the new government, that if (a) is of the opinion that the EMDG scheme is: you continue to allow the Treasury view to (i) a successful scheme which enhances continue, you will be a one-term government. Australia’s export performance, Your performance already indicates that you (ii) a source of job creation and benefits will be a one-term government because it Australia’s balance of payments, and shows that you do not understand the appro- (iii) a successful export incentive for small and priate measures to take to develop growth in medium sized enterprises;. . . our export areas. That is the first part of this amended motion. Today we have speculation about the end I have already spoken to that and made a of the export market development grants number of points, but perhaps I should reiter- scheme coming on top of the DIFF scheme. ate them quickly. If the maddies in the Liberal Party fall for The first point concerns the excellence of that, if that is in the budget, there will be a the EMDG scheme. As given in evidence to great couple of weeks here when we read the Senate committee, this scheme creates a back what government senators when in one to 10 advantage and for experienced opposition said about these schemes and how exporters a one to 25 advantage. The evidence we as the then government were not doing given came from Austrade and is based on enough. You will have to sit there and cop it calculations done during a review of the and explain why you have done a double scheme overseen by Treasury and Finance back somersault and why all these schemes which was then reported. The calculations which you said were good when you were in were done by Professor Ron Bewley who is opposition are now going under. the professor of econometrics at the Universi- The line about the $8 billion deficit will not ty of New South Wales. We heard in evi- wash, and you know it. All you will accom- dence that, whilst the scheme currently ranks plish by knocking over these schemes is a at approximately $200 million on the outlays reduction of the economy, a reduction of our side of the budget, it generates $2 billion in export potential. Mr Moore might have been exports, according to the calculations done by an excellent stockbroker but I do not think this independent authority. that he has much of an idea about industry. Mr Downer might have been an excellent Any diminution of the scheme will reduce member of the Adelaide establishment and an the ability of Australian companies to com- excellent lawyer working for the chamber of pete in foreign markets and therefore earn less commerce, and Mr Fischer might have been income for Australia. If the scheme is abol- an excellent farmer, but they have failed to go ished, we will be cutting off our noses to the next step, to be ministers who understand spite our faces, because we will make a how industry works in this country. saving of about $122 million—and I will explain that calculation in a minute—for an We very much look forward to the debate outlay of $200 million. But we will be losing on the budget. Senator Calvert, I hope that $2 billion worth of income to the nation between now and 20 August you can con- because of the exports generated by this vince your government not to knock off this scheme. That is a classic case of cutting off scheme on top of the DIFF scheme. If you do, your nose to spite your face and that is why it will be a very bruising day for all of you in the opposition wants this stake put in the government when you find out what you have ground now. We want Australia to understand done to the economy. that, if this government moves to abolish this Senator COOK (Western Australia) (12.15 scheme as it is rumoured everywhere that it p.m.)—Earlier in this debate Senator Chris intends to, that will be a classic case of Evans moved an amendment to the second destroying Australia’s international competi- reading and I wish to take a few minutes to tiveness and blunting the ability of Australian address that amended motion. The motion is companies—in particular small to medium 1788 SENATE Wednesday, 19 June 1996 sized companies—to win export markets In the second part of this amendment to the overseas. motion we express grave concern about the mooted abolition of the scheme. The import- On average the multiplier is 10 to one. For ant thing to remember is that this is a consis- experienced exporters it is 25 to one, accord- tent rumour. The bureaucracy leaks, industry ing to the independent findings. That means knows about it and industry is up in arms. that experienced exporters can make even There is no other explanation for the number more money out of this scheme for the nation. of industry organisations that came before the The Australian Information Industries Asso- Senate committee of inquiry and gave evi- ciation—the body covering the manufacture dence of their concerns about the abolition of of software, computer parts and computers— this scheme. All of them put a stake in the says that the multiplier is 30 to one for ground and said that this scheme should stay. experienced representatives of their show. All of them said in unanimous harmony that, What more critical element of industry could if the government abolished this scheme, it there be than the enabling technology of would be a retrograde step. There is no information technology? clearer understanding of where industry stands on this than the actual words of industry itself When we say in this amendment that it is and that has to be borne in mind. a successful scheme, we base that assertion on the clear and independent findings of a recent The other significant fact is: what did review of the scheme and what it means to industry believe was the government’s man- the nation. If the scheme is then blunted, date when it came to office? In order to undermined or set aside as the rumours assess what the mandate of this government suggest, Australians will lose jobs, the current is, one has to go to their election undertak- account deficit will blow out even further and ings. On three occasions we know that this small and medium sized companies in this government, in the run-up to the election, country, which have taken the government’s made it abundantly clear to industry that this word at face value and gone into exports, will scheme would stay and, in fact, it would be undermined and undercut. become better and bigger. That is not being complied with by this bill, and some industry A report has come to me that on 4 June this organisations said that they believed this bill year the estimates for Austrade came before would not come forward because of the the ERC. Of course the government has undertakings given in the pre-election period declined to verify this, but it is a programatic by this government. fact that it occurred on that date. Austrade was told by the ERC to find 24.3 per cent in If the scheme is to be removed, it flies in savings, that is, a 24.3 per cent cut in its the face of a specific undertaking given by running costs. Austrade administers this the Minister for Trade (Mr Fischer) at the scheme and it takes a lot of manpower in National Press Club in February. It flies in the Austrade to do it effectively. It is what face of a specific undertaking in an election Austrade should do and Austrade exists to campaign document released by the Minister support Australian companies in overseas for Industry, Science and Tourism, Mr Moore, markets. If Austrade’s running costs are cut when setting out the government’s proposals by a quarter, by linear calculation one would on this scheme. It flies directly in the face of assume that it will be a quarter less effective private and personal assurances, which were in administering the scheme. Austrade is an reported to the Senate committee by industry ingenious and administratively adept organisa- associations, given in meetings between them tion, so it will not be as much as that, but and the Minister for Trade in his chambers there will be a significant impact on the prior to the election. ability of Austrade—the agency appointed to For those reasons, this opposition will fight do this—to support Australian companies in as hard as it can to ensure that the govern- the field in their export efforts. There will be ment is held to its election undertakings, that job losses in Austrade as well. the expectations of industry are delivered on Wednesday, 19 June 1996 SENATE 1789 and that the government does not repudiate its There is a precedent for this. This bill that public position. Of course, if the bean count- we have before the chamber now is substan- ers have their way and it is repudiated, the tially, but not entirely, the same as a bill that government must wear the responsibility for was produced by the former government and that. was introduced for debate in November of last The third part of this motion that is before year. While it is not entirely the same, it is the chamber relates to a condemnation of the substantially the same, and one does not take government for its failure to meet its election exception to the differences. commitment to extend the EMDG scheme by There is a precedent for this government to making full market development grants of 50 introduce a bill of the former government but per cent available to the tourism industry. I attach to it an advantage to a special interest have in my notes—and I do not have suffi- group because it believes it is appropriate. cient time to go through all of them—copious That was the customs excise bill relating to copies of Hansard and a debate in this cham- the diesel fuel rebate scheme, where the ber on 20 June last year. This was a debate announcements of the previous government in on the EMDG scheme. This was a debate the 1995-96 budget gave rise to a bill to which was led for the then opposition by modify the scheme to cut out unfair claims Senator Warwick Parer, now a minister in this upon the scheme so the scheme met its government, and he led in his capacity at that original direction. That bill came up here, but time as the shadow minister for tourism. He it came up here with an extra clause attached sought to amend the bill to increase the to provide a particular advantage to farmers. payments to the tourist industry. I do not criticise the farming community for I might say that he made an excellent case. that. Obviously the government had promised It is good reading. He made an excellent case them that at the fist opportunity they would about the importance of the tourist industry to insert into the diesel fuel rebate scheme a Australia: why it is an area of major growth, provision that provided additional advantage why it is an area of major income, and why beyond the advantages that were there, and it is so important and significant to the cur- the government may have been wanting then rent account deficit. The growth in tourism in to deliver on an undertaking that it made. But Australia over the last several years—the why does it draw a distinction? Why is it all years of the Labor government—is a story in right for farmers when it is not all right, in itself, but it is a dramatic story; it is a story the case of the tourist industry, to do what the about an inexorably upward moving graph government promised the industry it would do and about increasing the income earned to at the first opportunity when it introduced this this nation and to tourist operators because of bill? Why does the government regard this more and more tourists flocking to our shores. industry, which has been the star performer in Senator Parer then sought to increase in the Australian industry over the last decade, as a bill at that time, 20 June, advantages to the second-class citizen to the farming community tourist industry, which the government at that when it comes to delivering on promises? As time rejected. But in the election undertakings a consequence, we have a provision in this these undertakings were underpinned again. motion which, if carried, will condemn the My question really is: can the tourist industry government for its failure to do that. trust this government? This is the first oppor- Before I conclude, there is another quite tunity this government has to deliver on those significant fact that ought to be said in sup- promises to the tourist industry, and they are port of this motion as well. One of the key not in this bill. They have not delivered on election promises of the government was to them, and they have not shown the slightest reduce the level of compliance costs by small inclination to do so. Therefore, when can the business, to reduce the amount of red tape tourist industry expect that this government that small business had to deal with when will own up to its electoral undertakings and seeking government assistance or conforming deliver on those promises? to government requirements at the law. The 1790 SENATE Wednesday, 19 June 1996 government has climbed on high and with a hand it is increasing the amount of red tape flourish of bugles announced that it has set up by virtue of this provision. It is not just a committee that will examine this. We wait increasing it a bit; it is increasing it dramati- with baited breath to see what the findings of cally. this committee will be if and when it actually The committee looking at the red tape issue returns a finding. for the government start not from scratch but We know already that there has been some from behind scratch in the amount of work backtracking by the government, because the that they have to do. As I say, I wish minister responsible for small business has Austrade well and I wish the committee tried now to soft pedal on the amount of red reviewing the red tape well. I hope they tape that will, in fact, be cut. The small succeed. My cynical nature tends to think that business summit last week turned out to be an they will not and that the government’s absolute fizzer as no real changes were made election promise was an empty rhetorical but, nonetheless, the matter is under study. promise, full of sound and fury, signifying We will continue to follow that debate and nothing. It will be seen through on the first see what the study produces. This bill intro- couple of occasions that small business run up duces the complexity. against this sort of legislation. I know it outrages many people in small business who I had the opportunity—which I acknow- are feeling used and duped by this type of ledge was extended to me by the Parlia- rhetoric from the government. mentary Secretary to the Minister for Trade, Senator Brownhill, because of my concerns I conclude by saying that this is a bill of about the administrative complexity that this some importance to the opposition and, I bill will add to small business—to be shown know from their contributions, to the minor by Austrade a pro forma document which parties. On current performance, this scheme Austrade is consulting industry about so as to generates $2 billion worth of exports for finalise their position on the regulations for Australia. That is an independently and arms- the execution of the provisions in this bill, length refereed figure, not one plucked out of should it be proclaimed. That document the air by me. This bill provides an opportuni- produces a form that requires businesses to ty for industry in Australia to put a stake fill out 10 pages of quite detailed material on clearly in the ground saying that this their performance, the nature of their ac- scheme—a $2 billion advantage to this na- counts, the market they expect, the competi- tion—should continue and that the govern- tors they expect to meet in that market and a ment, which promised to continue the scheme, number of other things—10 pages of con- should be held to that promise. siderable detail in order to comply with the The bean counters in Treasury and Finance requirements of the scheme. have been after this scheme for a long time— I think Austrade is an excellent organisation I saw the submissions coming forward during and I wish it well in reducing those 10 pages the former government. They do not like this to one or two pages. I hope they succeed. My scheme. If they succeed in overwhelming the cynical nature suggests that they have the task industry minister, the trade minister and the ahead of them but I wish them well in their others who have a vested advantage in de- endeavours. The point is that the 10-page, fending this scheme, then we in the opposi- detailed proposal that small business needs to tion will fight them. It will be a tooth and fill out in order to comply with the require- nail, down to the wire fight. The government ments to access this scheme is a huge paper will not be let off the hook. That is a firm burden. The election promise of the govern- promise from me. I have great pleasure in ment to reduce compliance costs by 50 per supporting the motion moved by Senator cent has taken a smashing blow because, Chris Evans and I trust that the Senate will while the government is saying to small see the wisdom of it and carry it. business on the one hand that it wants to Senator HERRON (Queensland—Minister reduce those compliance costs, on the other for Aboriginal and Torres Strait Islander Aff- Wednesday, 19 June 1996 SENATE 1791 airs) (12.34 p.m.)—I thank Senator Cook for Senator Bolkus—You may want to do that, his gracious contributions and the previous but there may have been other comments as speakers for their remarks. Senator Cooney well. paid tribute to Senator Troeth. As is his usual Senator HERRON—Do I have your wont, he made a very erudite contribution and permission to incorporate it? I thank him. I share his regard for Senator Senator Kernot—Is it a transcript? Troeth’s contribution as well. It was in con- Senator HERRON—It is. tradistinction to Senator Schacht’s contri- bution. Senator Kernot—A correct transcript? Senator HERRON—It is. Then it has Madam Acting Deputy President, your ‘(Laughter)’, Senator Kernot, and it goes on: predecessor in the chair had to reprimand He is happily married though. Senator Schacht and tell him that he should And another thing is, and this is another rather put the normal appellation before the sur- unfortunate coincidence, that if you take the 148 names of people in the other house. It is for electoral districts of Australia, mine has the small- a very significant reason that that is done, as est proportion of people of the Roman Catholic you know. Senator Schacht should not throw denomination. That is, of course, a characteristic of South Australia which is very much dominated by stones, because he is in a glasshouse. A small people from the Church of England and what used slip of the tongue in the pronunciation of his to be the Methodist Church and is now the Uniting own surname might lead to an appellation that Church. could be misconstrued. It is in his own inter- But I am not here to talk about religion. I am here ests that he should do that. to talk about the Australia and New Zealand Studies Centre which, I think, is a truly excellent In his contribution, Senator Schacht attack- initiative and we as Australians are delighted to see ed the Minister for Foreign Affairs, Mr this centre of study established and to provide the Downer. I take the opportunity of reading into support we do provide for it. the Hansard the words that Mr Downer This is the context that Senator Schacht actually used when he addressed the George- misrepresented. town Library when making a gift donation for The ACTING DEPUTY PRESIDENT the newly established Australia and New Zea- (Senator Reynolds)—Are you seeking leave land Studies Centre. You will recall that to incorporate the document? Senator Schacht attacked Mr Downer for anti- Senator HERRON—If that is the wish of Catholic remarks. It is very fortunate that, the opposition, I am happy to incorporate it. being a practising Catholic myself, I was here Senator Bolkus—Including the laughter? and I knew that that was a complete distortion of what actually occurred. I would like to Senator HERRON—It has ‘(Laughter)’, read the contribution that Mr Downer made yes. It was a joke. You wouldn’t understand at that time. He was at a Jesuit institution and that it was a joke. I seek leave to incorporate said: the speech in Hansard. Leave granted. Thanks very much, Jeff, and Father O’Donovan, Your Excellency, the Australian Ambassador and The document read as follows— Ladies and Gentlemen. Thank you very much for PRESENTATION BY THE AUSTRALIAN your introduction, Jeff. I am certainly delighted to MINISTER FOR FOREIGN AFFAIRS, MR be here in this world-famous and truly great Jesuit ALEXANDER DOWNER, OF A GIFT institution. I have to confess two things. One of DONATION TO GEORGETOWN LIBRARY them is that my press secretary who is back in Australia at the moment was himself a Jesuit priest FOR THE NEWLY-ESTABLISHED but is not anymore. I don’t know what one can say AUSTRALIAN AND NEW ZEALAND about that. STUDIES CENTRE 7 JUNE 1996 Senator Bolkus—Are you sure about this? WASHINGTON, DC Senator HERRON—I am sure. I have the (Introduction by Father Von Arx) context and if you want me to incorporate it MINISTER DOWNER: Thanks very much, Jeff, I am happy to do so. and Father O’Donovan, Your Excellency, the 1792 SENATE Wednesday, 19 June 1996

Australian Ambassador and Ladies and Gentleman. So, although Australia and United States have a Thank you very much for your introduction, Jeff. great deal in common there are some quite subtle I am certainly delighted to be here in this world- differences in the values of our societies—in their famous and truly great Jesuit institution. I have to value systems. And if you go back and look at the confess two things. One of them is that my press early history of the European settlers in those secretary who is back in Australia at the moment societies, the differences in those people in Austral- was himself a Jesuit priest but is not anymore. I ia and the United States helps to explain the don’t know what one can say about that (Laughter) differences in those values. So, I think this would He is happily married though. be very much something that could be explored in And another thing is, and this is another rather this Centre. It is a thesis that, as you can see, I am unfortunate coincidence, that if you take the 148 getting excited about (Laughter) A thesis that I am electoral districts of Australia, mine has the small- personally quite interested in and one that can be est proportion of people of the Roman Catholic extended to Latin American and to examine why denomination. That is, of course, a characteristic of Latin American societies are so different today South Australia which is very much dominated by from societies like the United States and Australia people from the Church of England and what used and New Zealand and Canada. So, it is quite an to be the Methodist Church and is now the Uniting interesting issue. Church. These sorts of issues are things we need to have a better understanding of. I also have to say that I But I am not here to talk about religion. I am here think the stereotypical view of Australia which to talk about the Australia and New Zealand exists in the United States as it does in parts of Studies Centre which, I think, is a truly excellent Europe, or probably most of Europe, is a view of initiative and we as Australians are delighted to see Australia that is, I suppose, reasonably flattering this centre of study established and to provide the but is an unsophisticated view of a society which support we do provide for it. And Georgetown is, in fact, a very interesting and sophisticated and University, as I mentioned already, is one of the successful society. really great universities of the world, not just of the United Stated. It has many distinguished alumni I like ministers who go out and sell their country including, of course, the President. For us to have and as far as I am concerned, I think Australia is this Studies Centre at Georgetown, I think, is one of the true success stories of human civilisa- something very advantageous to Australia. tion. As a society it has worked incredibly well. It is a multicultural society with people from 120 or Obviously, it is a centre that provides educational 130 countries settling Australia but they live in ties with Australia and helps Americans understand relative harmony and they live with a great deal of Australia better than might otherwise be the case. tolerance of different cultures, different religions, But more deeply than that, I think it is a great different denominations and even of rather different opportunity for us as Australians to help to get our values. It is a country which has developed, as has message across better in the United States and the United States, a high standard of living and develop an understanding—a better understand- generally speaking, I think, as a country which you ing—of Australia in this country. could describe as essentially a very decent country. It is often said that Australians and Americans have Australia is a country which has very decent values a great deal in common and we share common and I think internationally makes a contribution to values and so on. But one of the things we really the world which underlies the essential decency of do share is that as societies we have rather similar Australian society. but not identical origins. That is, we were countries So, we are absolutely delighted that apart from the which had a fairly small indigenous population but perspective of Australia that somehow is a place with very rich cultures. That Europeans came and with kangaroos, where people play a lot of sport settled those societies and totally changed those and beat Americans at the Olympic Games, particu- societies and those societies have subsequently larly at things like swimming, those truly important evolved from that point. And indeed, one of the exercises. And in tennis, we used to beat the United interesting things which is worth exploring is the States at tennis once. That takes you back. That way the society in the United States has differed takes you back a long time . . . (Laughter) . . . somewhat in its evolution from society in Australia. when we used to beat them in the Davis Cup. But Not, I suspect, as many would easily argue because that Australia is so much more than that and is of slightly different, in fact quite different, such a rich and exciting country. I suppose there is migration patterns but because of the different one other thing I should mention before I finish values that the early settlers of those two societies about Australia that I think is simply not under- had. And I often argue that it is the values of the stood in other parts of the world. And that is that early European settlers in a so-called "New World" of all the countries that I have ever visited—and I that very much entrenched for the long-term the am biased about this as the Australian Foreign fundamental values of those societies. Minister—of all the countries I have ever visited, Wednesday, 19 June 1996 SENATE 1793

I think Australia is one of the countries that has the TAXATION LAWS AMENDMENT strongest contribution and the strongest commit- BILL (No. 1) 1996 ment to the Arts. That is an aspect of Australian society which is little understood and little known. Second Reading But the performing arts and the creative arts Debate resumed from 28 May, on motion generally in Australia are very rich and very strongly supported by the Australian people. I by Senator Kemp: doubt, as a proportion of the population you would That this bill be now read a second time. get more support for the Arts in terms of consum- Senator KERNOT (Queensland—Leader ers in any country than you get in Australia. of the Australian Democrats) (12.39 p.m.)— So, there is much about Australia which I think is This is the first of the tax bills introduced by misunderstood. There is much about Australia this government. This bill seeks to do three which is not understood at all. And we as Austral- things. First, it seeks to reduce the provisional ians are very proud of what we have achieved over tax uplift factor from eight to six per cent for the last 200 or so years and we would like to go 1996-97. Second, it seeks to ensure that in out and tell our story and sell our story more off-market share buybacks the full buyback positively and aggressively than we have done in the past. I guess we are sort of shy and modest . . . process is treated as consideration for capital (Laughter) . . . people but I don’t think we have gains tax purposes—this measure was an- anything to be modest about. I don’t think we nounced in the 1995 budget. Third, it extends should be that. I think we should be quite outspok- tax deductibility for gifts to a wider range of en and positive about our really great country. organisations. The Democrats will be support- As I said, we are absolutely delighted with this ing this bill and we will be supporting the Studies Centre and I am very happy that the amendment that will be proposed by the Australian Government has decided to present some opposition later in the committee stage—an books to the Centre. I had a look on the way here amendment which applies to the provisional in the car at the books that we are actually present- tax uplift factor. ing, or at least a selection of them, and I know that I have symbolically to present you, Father with one This morning Senator Short made a clarify- of those books. I have decided to present a different ing statement about answers yesterday in one from the one that I was originally asked to question time. The issue related to legislation present cause I didn’t like that one. (Laughter) So, by press release and the particular component I thought that Geoffrey Serle biography of John that was in question here was the requirement Monash who is not only a great engineer but he is for Treasury to advertise the starting date of remembered particularly as a great general during the First World War would be a more appropriate this within seven days. There is another book to present you with than the one that I won’t matter which is relevant in this bill. I think name. But before I do that I also want to acknow- you can argue that the share buyback provi- ledge Henry Nowik who is here with us today if I sions are in technical breach of the Senate can see him out the back there. Henry has himself resolution of 8 November 1988. This resolu- presented—as I understand it—presented the centre tion, too, deals with legislation by press with some first editions of Patrick White’s novels. release and it requires that legislation by press And Patrick White is Australia’s Nobel Prize winning novelist and a wonderful and particularly release be introduced into the parliament interesting writer. So, I would like to acknowledge within six months to preserve the operative what Henry has done. We are very appreciative of date. that contribution as well. It is related. We are not going to say we are So Father, it is with those few words it is the not going to vote for the bill because techni- greatest of pleasure that I make the presentation to cally it is in breach. You can argue that this you and symbolically pass you this biography of provision was included in the bill introduced John Monash. by the previous government in November last year. It was just outside the six-month rule. (Applause) The bill lapsed. This bill brings it back again. Senator HERRON—I seek leave to con- We will not be opposing it, but we are very tinue my remarks later. conscious of the fact that legislation by press release, particularly on tax matters, was Leave granted; debate adjourned. abused very much in past years. 1794 SENATE Wednesday, 19 June 1996

The Senate sought to redress that, and we that that was not able to happen. Small want to give notice that we are going to insist business has been extremely disappointed at in future on the 1988 resolution. We want it the behaviour of the previous coalition in to be rigorously enforced. We do not want a opposition, too. But it was a coalition election return to the days of a Treasurer’s abuse of commitment. It was one of 23 proposals legislation by press release. which we put to this new government some On to the provisional tax uplift factor: this time ago. As a sign of good faith, we said, is the third time we have debated this in ‘Here are 23 issues with which we agree in recent years, mostly because the Democrats your policy commitments. We are prepared to have put it on the agenda. In 1984 we moved support them. You could have one piece of to reduce the uplift factor from eight per cent legislation passed through the Senate a day.’ to five per cent. Despite a number of very But, no. This is the only issue they have passionate speeches from coalition senators brought forward to this date. They have, as including, I recall, Senators Short and some commentators have referred to, stuck to Boswell—they condemned the eight per cent a self-imposed virility test by focusing on figure as too high—they went on to vote with Telstra and industrial relations—issues they the government at the time to keep it at eight knew the Senate was always going to take per cent. I remember the wonderful reasons issue with. I add that this government, even given. I will remember them till I leave this with this bill, has failed to live up to the com- place. mitment it gave to small business in the First of all, they said, ‘It costs too much to election campaign because this bill is only for the budget,’ even though it was revenue one year. At the end of 1996-97, the uplift neutral over two years. Then they said, ‘Well, factor will revert to 10 per cent. We will have if they don’t believe that, it really constitutes this debate all over again. blocking supply,’ which was nonsense as Debate interrupted. well. Then they came back with, ‘We have MATTERS OF PUBLIC INTEREST talked to small business and they don’t really want it yet. They can wait. They can wait till The ACTING DEPUTY PRESIDENT we come into government.’ Well, they have (Senator Reynolds)—Order! It being 12.45 waited. p.m., I now call on matters of public interest. The coalition is in government. The bill has Post-secondary Education been brought forward and the Democrats Senator TIERNEY (New South Wales) welcome the fact that the politics of the (12.45 p.m.)—I rise in this matter of public situation, not the merit, now means that the interest debate today to raise an issue of great issue will be addressed after three years of importance to post-secondary education in small business groups such as COSBOA Australia; that is, the development of learning describing this issue—the provisional tax pathways—allowing students access to post- uplift factor—as one of the biggest issues secondary education across all its various facing the small business sector. levels, from learning centres right through to The result of this bill will be the reduction universities. of taxes collected from small business next Despite the former Labor government’s financial year by $180 million. This is a tax rhetoric in this area, learning pathways in which the previous government continued to Australia have not yet evolved to very sophis- collect on income which small businesses had ticated levels. Many of the current structures not in fact earned. The impact of the $180 between the different types of education million impost on small business cash flows, providers do not mesh properly. Moving on employment, on tax compliance costs and between different levels of post-secondary so on, as the Senate committee found, has education is very difficult for many students been very significant. and many of the pathways that are supposed We believe that this impost should have to exist remain very poorly connected. This been removed years ago. We are disappointed lack of proper meshing is a major frustration Wednesday, 19 June 1996 SENATE 1795 because it wastes the time of students in excellent for an understandable system of repeating courses unnecessarily. It also wastes qualification registration. We only hope—I very scarce institutional resources. will certainly be urging for this to occur—the As a senator, I have had quite a number of new government will implement this frame- people come to me who have had such path- work as quickly as possible. way problems. One that stands out in my I mentioned that the framework is in the mind particularly is an accountancy student planning stage and not in force across the who had completed four years part time of a country. However, there are a number of diploma in accounting at TAFE. That is the bright spots that I want to mention briefly equivalent of two years full-time study. When where such articulation in the system, such he approached the nearby university to trans- credit transfer, such pathways, already exist fer to a degree course in accountancy, he was in a few isolated spots. They are in my own granted six months out of the two years area of northern New South Wales, so I equivalent. In other words, he was only given would like to mention two of them just a quarter and more or less had to go back briefly. almost to scratch. This is despite having spent The first is at the Ourimbah campus of the four years studying part time. Those sorts of University of Newcastle. Ourimbah, for those examples are rife through the system and who do not know their geography, is just bring on this need to create smoother path- outside of Gosford on the central coast of ways from one section to another and to New South Wales. The University of New- remove the many barriers to articulation that castle and the Hunter Institute of Technology, exist in this country. which run the TAFE program, have developed There have been in recent times some a joint development at the Ourimbah campus. welcome moves on this front. The ministerial They have a single management structure council for employment, education, training where the vice-chancellor of the University of and youth affairs set up the Australian qualifi- Newcastle and the director of the Hunter cation framework. I emphasise at this stage Institute of Technology have devolved respon- that what I am about to describe is not in sibility to develop integrated courses and place; it is a plan. It is an objective to get pathways between TAFE and university such pathways in place. They are aiming to courses at that site to the director of the make national qualifications much more central coast campus. They took in their first consistent and, particularly in the developing 50 students in 1989. international market for Australian educational I was a member of the committee that was services, to make them better understood involved in the establishment of that universi- internationally. They take into account key ty campus. Now, seven years later, what has competency, structure and content, and chan- developed on this site is absolutely amazing— ges in the vocational education and training in terms of facilities, in terms of the program- courses. ming and in terms of the staffing. Enrolments This framework was endorsed by all after 1989 doubled each year and currently ministers, state and federal, when it was put there are 3,000 tertiary students on that site, to the council. The Australian qualification two-thirds of them enrolled in higher educa- framework aims to link and mesh our educa- tion courses with the rest studying vocational tional sectors to emphasise key competency education and training. qualifications and to emphasise skill and The campus operates as a single integrated knowledge in terms of the levels people are unit. The original plan was to have TAFE up at, not the length of the course. Senior secon- one end and the university down the other dary qualifications link in to the vocational end and to have common sports fields, union education and training level under this scheme and library facilities, but they have gone and those courses in turn link in to higher much further than that. You can walk along education courses. The framework is a very a corridor and have a TAFE class in one good guide to course developers and it is room and a university class in the next one. 1796 SENATE Wednesday, 19 June 1996

Staff are all in the same area as well, and it the United States, which are much more operates as an integrated unit with a very generous in their credit transfer arrangements. strong emphasis on collaboration across the In the three sabbaticals I have done in the two sectors. This has assisted potential and United States I noted, in particular, how continuing students with course choices, generous they were in acknowledging proper- articulation of their program and credit trans- ly the work that people had done in some fer. other way before they came to an institution A federal government working party has and giving them due credit for it. now been established to inquire into the Australia reached its low point on this further development of this site as a central matter probably in the 1950s, when the coast university of technology. The minister University of New England broke off from has approved a working party to investigate the University of Sydney and the University the further development of this concept, of Sydney would not recognise the University which would use not only the Ourimbah site of New England undergraduate qualifications that I have been talking about but also the for post-graduate work. Fortunately, we have Gosford and Wyong sites of TAFE, to operate got past that. In the 1960s my sister-in-law a range of TAFE courses and university did eight-ninths of a degree at the University courses across all three sites. of New South Wales. When my brother, her There is a very definite need for this in the husband, went to New Guinea she enrolled central coast area. People might not realise it, externally through the University of Queens- but that central coast region, Wyong, now has land and they granted her four-ninths of a a quarter of a million people. Just to the north degree. She had eight-ninths and she had to is Greater Newcastle, with a third of a million go back to four-ninths. That is incredibly people, and just to the south is northern wasteful. Sydney, in very close proximity to this cam- How are things in the 1990s? They are not pus and with one million people. So it is at much better. One of my daughters is doing a the centre of a hub which is well connected Bachelor of Business at the University of by train lines and roads and which will, with Newcastle. Her husband moved to Sydney this very imaginative approach to post-secon- with his job. She went to Sydney and enrolled dary education, do extremely well. at UTS. She had 50 per cent of a Bachelor of A second example of this sort of articula- Business. They said: ‘We will give you 30 tion and excellent credit transfer in the system per cent.’ She managed to haggle that up to is further north at the University of the South- 40 per cent. Credit transfer in 1996 is still a ern Cross, which is located mainly in Lismore major problem. with a number of satellite campuses. They The credit transfer agency that I referred to have School of Business courses ranging from earlier hopefully will overcome some of these the certificate level through to PhD. A lot of problems, but unfortunately that agency, with these courses are tailor-made to industry such high and lofty aims, has two people on needs. They have worked, in particular, with staff. It is overworked and grossly under- leading companies such as Coles Myer and, staffed. It is a pity, because it is a false in the public arena, Telstra to develop courses economy. If you look at what happens across where people can plug in at these various the whole system, you will find that it is very levels and move up to further levels from wasteful for students to repeat work they have certificate through to PhD. The two examples already done. It takes up staffing time, it takes I have given are models which show how up library time, it takes up teaching time, it learning pathways can be properly connected. takes up institutional space. However, despite the value of credit trans- I will argue that the new government should fer, such bright spots as I have mentioned are give a much higher priority than the last fairly rare. We have a very poor history in government did to this whole credit transfer this country on this whole issue of credit business, not only because of the obvious transfer which contrasts with countries like economies to the government in such an Wednesday, 19 June 1996 SENATE 1797 arrangement, delivering programs much more ern Desert was by far the most important efficiently and effectively, but also because of thing that I have done. the much smoother pathway that it creates for In the Northern Territory you have a differ- training in our community for individuals, ent situation. Statute already allows for the many of whom have been disadvantaged, to views of the traditional owners to be taken achieve their full potential. into account. Through the Northern Land Council they are able to make their voice Aborigines: Traditional Land Owners heard, and they have an important voice in whether mining goes ahead at Jabiluka or Senator WHEELWRIGHT (New South Koongarra. But in the Western Desert the Wales) (12.58 p.m.)—The matter of public situation is far more confused. I would like interest that I wish to rise upon concerns a first to set the scene as far as the traditional trip which I made last week to the Western owners are concerned. The Martu people were Desert or, more correctly, to the Great Sandy part of the groups of Aboriginal people who Desert in Western Australia, and consultations during the 1950s and 1960s were rounded up which I had with the traditional owners of the when they were children and moved on to land out there in two communities in particu- missions. The missions had a sorry record lar—Parnngur and Punmu—in relation to their through the 1950s and 1960s and then, mov- views on the mining industry. ing into the 1980s and 1990s, they were disbanded. By way of explanation, because I am a What has happened with the Martu people member of the uranium committee which has is that they have gone back to the land—the been set up by the Senate and because my traditional land of their forefathers—and have time is very short, I decided that I wanted to sought to set up their communities again. visit the major potential sites for uranium They have a great desire to see their children mining within Australia. I had the good grow up on the land on which they were born fortune to go to Roxby Downs or Olympic and which they believe is rightfully theirs. Dam with the caucus committee last year. So I went up to Kakadu and took my environ- In the two communities that I went to—the ment adviser with me, at my expense, to talk first of which was the community of to the people there. Then last week, taking the Parnngur, which is 1,200 kilometres north-east opportunity of the break, I went out to the of Perth and about 400 kilometres inland from Great Sandy Desert to talk to the people Port Hedland—it is truly remarkable to see around Kintyre, again taking my environment what these people have been able to achieve. adviser with me at my expense. In this regard, when people are talking about ATSIC and whatever deficiencies they might The reason I want to raise this matter with see in ATSIC, it is truly amazing to see what the Senate now is that I believe we need to be can be achieved by traditional owners—given extraordinarily sensitive on the question of a reasonable amount of funding—to re-estab- relations between traditional owners of the lish themselves on their land. I think the job land and our white politics and their black that ATSIC has done in both of those two politics. I am grateful to Senator West and communities is truly remarkable. It is one of Senator Mackay, who have given up their those things that really makes you proud to be time today to allow me to speak on what I an Australian and to see that there is some believe is a very sensitive issue. I will ap- hope and some prospect of reconciliation in proach this whole matter with great trepida- this country. tion, very much aware of the fact that the In particular, I would like to thank Teddy mismatch between white politics and black Biljabu, who organised the meeting in politics can lead to a great deal of abuse and Parnngur. He is a man of remarkable intelli- unfairness in regard to the black population gence, remarkable experience and consider- when it comes to representing their views. able dignity. He is a man who has the clear Nevertheless, I found that going to the West- respect of the people whom he represents, and 1798 SENATE Wednesday, 19 June 1996 a man who is keenly aware of the cultural schools at Parnngur—three people who are identity of his people and has a very strong prepared to live in the middle of absolutely desire for that to continue. nowhere. There is very little there except a In the Punmu community—which I also salt lake and sand dunes. But they work there, visited, at Teddy’s suggestion—I met a lady teaching the children of the community in the called Patricia Fry, whom I desperately way that they wish to be taught. One of them wished worked as an organiser for the Labor happens to be a linguist who is teaching them Party. I think anyone would be proud to have to read and write in their own language. this woman as an organiser. Her ability to There is a third community, called Giga- round up people, get them off their behinds long. Senator Herron had been to visit that and get them to come to a meeting to express community about a week before I arrived. I their views was truly remarkable to see. I think that Gigalong should be put in context came back with an enormous respect for her with the other two communities. I do not intelligence and her commitment to her own know what point Senator Heron wants to people. The other person I would like to make about his visit. He did mention it in particularly mention is a man who was intro- question time yesterday. duced to me as ‘Longman’: I think that was It is important to see that Gigalong was one because he was the tallest person there. He of the original mission communities. There also was a person of considerable dignity and are three of these communities in a triangle— was treated with considerable respect by his Gigalong being one, and Parnngur and Punmu own people. being the other two. The latter two have been The first and most important thing that they established in recent times, as people have had to say to me had nothing at all to do with taken the opportunity to go back to the land uranium mining, but related to Mount Cotton, and re-establish communities on the land on which is a hill which exists immediately which they were born and which they all have behind the community of Parnngur. That is vivid memories of being taken away from as the most important thing to them, and anyone children. Gigalong is one which is in decline, who goes to that community should rightfully given its mission heritage. reflect that. It is not the other issues that we In all of this, there is a very complex and are concerned with; it is the issue of Mount difficult legal situation. I was greatly aided by Cotton, for two reasons. people who worked for the Western Desert First of all, Mount Cotton is a very sacred Corporation Legal Centre—which is known site for them, as far as the women are con- locally as ‘Woodpac’—including, in particu- cerned, and has all sorts of importance associ- lar, Grahame Powell and John Ford, who did ated with their cultural traditions. The second a great deal to assist me in getting to the reason is that immediately behind it—as they communities and organising the meetings. But took pains to show me—is their own burial at the present time, so far as I can establish, ground, which has been there for many there is no direct legal ownership between the thousands of years and in which they all hope people there and the mine which is proposed to be buried. by CRA at Kintyre. It is the subject of a mining lease by CRA. However, Woodpac is in the process of It has been drilled, in the past, for explor- putting in a land claim on behalf of those ation. I hope that CRA and everyone else people which will be registered within days. involved in that area leaves it alone from now The relationship between that land claim and on. There can be absolutely no doubt about the mining lease at Kintyre is going to be- the importance that the local people attach to come a very crucial one. But whatever else is that particular area. said about it, the views of the people are very I was mentioning before that ATSIC had clear indeed. done a great job in establishing these commu- As I said, I went there with a great deal of nities. I should also give credit to the teachers trepidation and I think, Madam Acting Deputy in the schools, particularly the teachers in the President, you, of all people, would recognise Wednesday, 19 June 1996 SENATE 1799 that there is this difficulty and sensitivity in views are very strong. As they said to dealing with black people and their politics me,‘How many times do we have to tell you and the mismatch, or potential mismatch, white fellas that we do not want this to go between their politics and white politics. ahead.’ They made it clear to me that they do But let me say that anyone who goes there not want the money. As I have said to you, is left with absolutely no doubt that the ATSIC is providing sufficient funding for people within those two communities do not them to establish their communities and they want uranium mining to go ahead. It is not a certainly see no need for the money and they question of me or anybody else not being able are not in the slightest bit interested in com- to understand their politics, their views of pensation. The land, as it exists at the present expression, or anything else. They make it time, is infinitely more valuable to them than abundantly clear that it is something that they any amount of money that could be offered to do not want. They do not want it because them. they do not understand it. They do not want the jobs either because I would not suggest to the Senate that these they do not see the jobs as meaningful. They people are as expert in the issues of uranium have had an experience with jobs and mining mining as I am, or others are, but they know before. As Teddy put it to me quite clearly: that it is dangerous. They know that it threat- all of the white fellas get the good jobs in ens the things which they hold most dear: the production where they can be trained and get water and the air. They do not believe that transferable skills, and all of the blackfellas they know enough about it to be able to make are put outside to dig holes, plant trees, water a decision on what they know is a crucial them, and so on. They do not see those jobs question and for that reason, they do not want as real and useful. it to go ahead. If you talk to the women, their views are It is important now because I know the even more strongly expressed. They ask why pressure that the uranium companies are under the men should go away for two weeks from at the moment. There is a narrow window of the community. The money would be paid to opportunity for new leases to be signed, given the men—whereas presently, the income for the cessation of supplies from the former the community is paid to the women—and the Soviet Union. But it is a very short-lived men would spend it on alcohol. They would opportunity, and the pressure will come upon bring the alcohol and all sorts of other social these people and on the government between problems back to their communities, and for now and the end of this year to have leases what reward? They are acutely sensitive to granted and deals signed. their own social organisation and to the I must impress upon the Senate that these impact that outside forces have on it. They people want much more time to understand have seen what happened after they were the issue and to have all of these things taken herded away from this land before, and what into consideration before they have any idea has happened to their communities on the of signing leases or giving their permission coast which is where they all ended up after for mining to go ahead. It requires all people the missions collapsed. involved in this, particular the media, to be So their views are very strong. They are not particularly sensitive to this situation. Nothing views that take any great understanding of could be worse than a bunch of people going voodoo magic or anything else. They are view out to these communities with TV cameras, of sensible, intelligent people who do not poking microphones into people’s faces and understand the issues involved in something saying, ‘Are you for or against this issue?’ which they can clearly see is a very important That would be the worst prostitution of the and threatening prospect for them. They want black political process. to be taken seriously. They want to be in- The only way to do it is to do as I did: to formed, and they want sufficient time allowed sit down in the red dirt with these people and for them to be informed before any questions listen to their views. I must say that their are raised about whether the uses for the land 1800 SENATE Wednesday, 19 June 1996 that they hold as desperately dearly as they to some parts of my electorate, this speech do, should be changed. contributed to dampening the efforts of the far I think all of us approach traditional Abo- right in the late 1980s. I have continued to riginal owners in this country with a great head them off whenever I have noticed them deal of humility. We recognise the sins that surfacing again. I ask you to believe, Madam have been committed by white people before Acting Deputy President, that I know what I us, and I think all of us are sensitive to the am talking about when it comes to the far needs and aspirations of Aboriginals. But, in right in Australia and that I am not afraid of this area, their views are clear. They are the taking them on. views of sensible and intelligent people and Of course, it would be more convenient for they deserve a right to be heard. I hope the all of us if the debate was being driven by the Senate and the government takes due regard far right. We could dismiss their concerns, as of their views. McGregor and others have done, but that is the easy path. In this case that would be to Gun Control walk away from the many ordinary, law Senator BOSWELL (Queensland—Leader abiding Australians who want nothing to do of the National Party of Australia in the with extremism. I say quite emphatically that Senate) (1.10 p.m.)—I want to place on the far right is not driving the gun debate in record some of my concerns about the current Australia. The attendance at the gun rallies gun debate following the resolutions agreed over the last couple of weeks attest to that. At to by the Australian police ministers at their the Melbourne rally there were 70,000 to conference on 10 May. In summary, those 100,000 people, definitely not Queensland concerns are: firstly, to correct the mistaken fringe dwellers, Sydney saw 35,000 people, impression that far right extremists are run- Brisbane saw 5,000 and so on. ning or driving the debate, they are not; If all of these people were aligned with the secondly, to state that gun owners have every extremists then Australia would be in big right to put their case and to have the new trouble, but they are not. It is most offensive laws clearly explained; and, thirdly, to state to have the label ‘right wing ratbags’ thrown that getting the first two wrong will have the at them. Writing them off like that is wrong. paradoxical effect of driving decent Austral- They are Australians like the rest of us. The ians unwittingly into the arms of extremists. overwhelming majority are not anti-Semitic, In relation to my first argument, I will racist, or believers in conspiracy theories quote from Malcolm McGregor’s column in about one-world governments. As every day the Australian Financial Review on 12 June. Australian workers, it is their right to take to He refers to those with concerns about the the streets. It is their right to have their voice gun control resolution as the ‘detritus of the heard and it is their right to be given a fair Bjelke-Petersen army’ and ‘Queensland’s go. political fringe dwellers’. He implies that they They are clerks, salespeople, panel beaters, have a single digit IQ, and that they form the doctors, professors, school teachers, computer lunatic wing of the National Party constituen- operators, small business owners, train drivers cy—the ‘ratbag fringe’. This is far from true and so on—responsible, law abiding citizens. and grossly offensive to the hundreds of Are we to dismiss them by diagnosing them thousands of gun owners throughout Austral- as suffering from ‘ignorance . . . with lashings ia, the National Party and, I might add, the of personal paranoia and religious funda- Bjelke-Petersens. mentalism’, as suggested by Geoffrey Barker As many in this parliament know, and as in the Financial Review on 11 June? the press gallery would know, I am no friend There will always be ratbags who align of the far right. In 1988, I gave a speech in themselves with a cause in order to pursue this chamber which exposed their groupings, their own agendas. This happens on all sides their modus operandi and their offensive of politics and on all issues. But let us not agendas. While not exactly endearing myself confuse the ratbags with the average Austral- Wednesday, 19 June 1996 SENATE 1801 ian. As always happens, the ratbag element is Pointing the finger at every gun owner in more colourful and sensational than anyone Australia and saying ‘You are a redneck’ will else so they capture a greater proportion of not help us learn from Port Arthur. the media and public attention. That is, after As I said in my speech in 1988, the groups all, what they set out to do. If we give them to the far right thrive in times of frustration a profile that they want, who is the bigger and dissension. Many times, that means that fool? They are parasites who live on the hard extremists flourish when parliament is not work and sweat of honest Australians. They doing its job properly. There are two ways to see an opportunity and they try to jump on put a stop to the influence of these groups. the bandwagon. One way is to have good government policy, The atmosphere of most of the gun rally clearly enunciated, with a good opposition to meetings has not contained the hysteria and ensure that the voices of all Australians are rantings of the far right renewal of the 1980s. heard in these chambers. The other way is to That movement was driven by extremists. know the extremists for what they are, so that They were the ones who organised and citizens can make an informed choice about advertised the meetings, booked the halls and whether to have anything to do with them. drove the debates. It was their extremist We have to be wary of isolating gun own- literature which was sold on trestles at the ers from reasoned debate, because they then back of halls, and it was their own speakers become prey to extremists. If we group them who addressed the crowds. all in the one net, not only are we being Most of the gun rally groups, on the other unjust and effectively censoring reasonable hand, have been at pains to distance them- debate but we are also running the risk of selves from the obvious extremist elements. giving the extremists a ready-made audience. They have not always succeeded, but they Who are the real extremists? Ian McNiven is have made great efforts that should be on the very small time, and all gun owners and public record. The far right groups are very industry representatives that I know will not wily in insinuating themselves at these meet- truck with him. Every time he opens his ings. It is difficult to keep them out, but I am mouth, he indicts himself. There is no fear satisfied that there have been many attempts from that quarter that he could drive any to restrict their presence at the major rallies. debate further than his own backyard. The Deputy Prime Minister and Leader of Tony Pitt is another long-time fringe hyster- the National Party (Mr Fischer) recently ic. Apart from putting together the Cap commented that there was not enough done to publication Fight, he has popped up in other sell the gun control agreement. That is true. extremist publications, such as Lock, Stock It is also a fact that, until the states legislate and Barrel and The Strategy. He now runs a on the agreed resolutions, it is difficult to splinter group called The Australians, and it know precisely what the detailed ramifications is a very small splinter at that. Ron Owen, will be. The translation of resolutions into gun shop owner and publisher of Lock, Stock legislation is not straightforward, as any and Barrel magazine is another loudmouthed draftsman will tell you. There will be bumps stirrer. His magazine is a menagerie of con- and bruises along the way, as is to be expect- spiracies, revisionism, racism and anti-Semit- ed. ism. In its pages, you can read interviews In light of these considerations, it behoves with all the far right luminaries of our time, all of us to keep the debate temperate and from tired old Eric Butler and Jeremy Lee of reasonable. Surely, the legacy of Port Arthur the League of Rights, to Perry Jewell of should be unity of purpose in working out former Cap fame, and Dennis Stevenson of how to reduce violence in our society. ‘Work- CEC and LaRouchian notoriety. ing out’ does not mean driving people into Ron Owen has distinguished himself by groups. Indeed, for the resolutions to work, inviting donations to the AWB, the white they will need the cooperation of the very Afrikaaner resistance group, which has terror- people who are being ostracised as extremists. ised black South Africans. You will even find 1802 SENATE Wednesday, 19 June 1996 that Scarlet Pimpernel of the lunatic fringe, His long-time political buddies, Australians Michael Darby, contributing his disturbed against further immigration, are bedfellows ramblings from time to time. In the August- with most of the extremists in Australia. September 1994 issue of Lock, Stock and One AAFI candidate in the Melbourne Barrel, Darby says families should practice Herald-Sun on 15 April 1994 said: drills in the event of Indonesian occupation. My policies on refugees and illegals is to reopen This involves learning rules such as: the second Yallah meatworks, creating up to 500 Never attack an individual unless you can be local jobs, and convert them to blood and bone. absolutely certain of killing him without witnesses; never attack a group or unit unless you are abso- In January of this year, before the last lutely certain of killing everyone in that group or federal election, Eric Butler and Jeremy Lee unit. of the League of Rights held a meeting on the Gold Coast to drum up support for Graeme He recommends stockpiling poisonous snakes Campbell’s political movement. They already and spiders and states: had their sights set on the 1999 elections. One An enemy soldier who offers to change sides rather fellow was to run a candidate training school than be killed, should be killed. for Campbell candidates. Eric Butler waxed Despite all these nasties, I would think that lyrical about Campbell, likening him to most of the revenue from Owen’s magazine Menzies. Butler said Campbell had similar sales comes from government and other policies to the League, for example immigra- people buying it to keep an eye on what he is tion and CIR. He said that there were women doing. People like Owen, MacNiven, Pitt and at recent Melbourne meetings who said, ‘Oh, Darby are two-dimensional cartoon characters if we could just touch him.’ Jeremy Lee sold who make for entertaining reading one day Campbell’s lecture booklets for $5 a touch. and sink back to political oblivion the next. There is a more disturbing link between If we give them leadership status in the gun Campbell’s friends and American extremists. debate, we only serve their agenda and boost Let me remind the Senate what Campbell has their appeal. said about the AAFI’s Denis McCormack. In The Graeme Campbell story is a bit differ- a letter to voters in April 1992, he wrote: ent. Here you have a member of the Com- I have no hesitation in recommending Denis monwealth parliament with the associated McCormack as an intelligent and courageous profile, resources and political acumen to buy Australian. more credibility than Owen and his ilk. Here On Australia Day this year, Campbell, in you have a man who was thrown out by the conjunction with the AAFI, made a policy socialists and who still kept his seat. He has launch speech, in which he said: been fawned upon by the Eric Butlers and In the state of Victoria, I intend to endorse the Denis McCormacks of this world until he AAFI candidates in places 1 and 2. I think Robin believes what they tell him—that he can and Denis are excellent candidates and Denis, as found a successful new political movement in Number 1, has an excellent chance of being Australia. So he develops a three-paragraph elected. I believe he deserves to win and, believe manifesto which generalises about manufac- me, Australia needs him to win. turing and immigration and that old nectar of The same AAFI were a significant presence the far right, CIR. He is not really setting the at the Melbourne seminar by Jack McLamb. world on fire, even if he is making a few Denis McCormack, amongst others, attended. bucks selling his book through extremist The Australia Israel Review’s Adam Indikt networks. reported in the December 1995 issue that Then along comes Port Arthur and the gun AAFI cassettes and Campbell’s book, Austral- control issue: a hell-sent opportunity. Most ia Betrayed, were on sale.(Extension of time Australians still think of Graeme Campbell as granted) being that maverick Labor guy from Western Adam Indikt says that ‘several of those Australia. They cheer him on because he got involved in the McLamb event had also stuck into Keating. But he is more than that. helped organise and been present at a public Wednesday, 19 June 1996 SENATE 1803 meeting held by AAFI at the Lilydale Motor those lunatics are driving the gun debate. Inn on October 27’. Jack McLamb’s visit was They hamper it. They do not drive it. allegedly organised by Ray Platt, the editor of My attitude to the gun control resolutions the extreme publication Strategy, which is a is, I hope, a reasonable one. Let’s communi- haven for various fringe elements, including cate with all the legitimate stakeholders so we the AAFI. can make the resolutions work. A positive Jack McLamb is an American militiaman. approach, not a punitive name-calling one, is He is a partner with Bo Gritz, a one-time needed. Attacking gun owners will meet with Vice-Presidential nominee on the ticket of nothing but resistance. It must be accepted former Ku Klux Klansmen David Duke. and known amongst the community that McLamb is a notorious figure amongst US people at these rallies give near unanimous citizen militia groups, ready for armed insur- support to the banning of semiautomatic gence against the global planners in their military assault style rifles. Like it or not, it government. After the Oklahoma bombing is apparent that gun ownership is widely incident, the American media profiled groups spread throughout our community, both rural with similar conspiracy leanings as the ac- and urban. cused bomber. McLamb and his associates all Accepting significant changes to a deeply featured prominently. embedded cultural icon was never going to be easy. Irresponsible comments which alienate The Pittsburgh Post Gazette of April 23 stakeholders from either side of the debate 1994 reported that McLamb ‘cites racial just make it more difficult. Port Arthur did intermarriage as religiously offensive and part not happen so that Australian society should of a one-world conspiracy’. The Denver Post go backwards and become more divided, and on 30 April 1995 described McLamb as ‘one provide a platform for extremists. If anyone of the nation’s most militant militia organ- is allowed to use the tragedy to further their isers’ and said that he had ‘purchased an 80- political career we have lost the plot. Port acre parcel adjoining Gritz’s white suprema- Arthur demands workable remedies, not cist land development project where, if you political opportunism. buy an allotment, you also get military train- ing thrown in’. Commonwealth-State Relations What this man can contribute to Australian Senator MACKAY (Tasmania) (1.30 society I do not know. But the real point is p.m.)—I congratulate Senator Boswell on that Campbell’s friends, whom he has repeat- much of his speech. edly and publicly endorsed, obviously believe For some time now, the Liberal and Nation- the Jack McLambs of the world should be al parties have asserted that the public sector encouraged. Mr Campbell has tried to dis- must be reduced and that the role of the tance himself from another American extrem- public sector should be revised. This ideologi- ist, Lyndon LaRouche, who went to gaol for cal drive for less government support for the robbing old ladies of their life savings. Much people of Australia remains a debatable issue. as he tries, however, Campbell can never get Immediately following the March election, himself away from the fact that he signed a the new government announced that two per petition calling for the exoneration of Lyndon cent would be cut from public expenditure. LaRouche. It is in black and white on the This was followed by the apparent discovery back of several CEC newspapers. of an underlying budget deficit which has This group is really weird. They blame been the dubious justification for the coalition Prince Philip for the genocide in Rwanda; in government’s cuts of $8 billion over two the United States they have associations with years. everyone from the Ku Klux Klanners to the What we did not know was that the states Teamsters Union and Manuel Noriega—a real would bear the brunt of the cuts and that the nice bunch. Do not insult the intelligence of negotiations with the states would turn to thousands of gun owners by telling them that farce. In a paper distributed by the University 1804 SENATE Wednesday, 19 June 1996 of New South Wales, John Quiggin examines The states had been promised increases in from where the apparent budget deficit has financial assistance grants. The states have appeared. The conclusion is that the figures forgone these so as not to lose full sales tax are derived from revised, lower estimates of exemption. What is the cost to Tasmania? It economic growth which are not convincing will be $16 million this year, $17 million next and the impact of which is exaggerated. year and $8 million the year after that. That Quiggin states that the deficit is amongst the is in addition to an already anticipated state lowest in the OECD and that the levels of budget deficit of about $30 million. debt are far from unsustainable. How is Tasmania going to cover this? So this conservative government has fabri- Several options have been suggested. One is cated a debt for its own purposes and is to increase taxes and charges. Another is the foisting that debt onto the states. To put it sale of the Hydro-Electric Commission. The bluntly, the states are getting done. The third is a possible Costello-style levy. To put outcome of the Premiers Conference last week it in perspective, the proposed cuts are equal can be put simply: the states have been done to 40 per cent of the running cost of the for $2 billion over two years. Tasmanian police force. We are talking about By forgoing indexation of the financial potential job losses of 1,500. assistance grants, the states will lose $644 million in the first year. The three per cent Why did the premiers not challenge the cut to special purpose programs—excluding whole concept of the mythical debt? Why did universities, that is—amounts to about $400 the premiers not see that the federal govern- million in the first year. Combined, that is $1 ment was using unsubstantiated financial billion each year for two years. Therefore, the claims to rake moneys from the states? Why states have accepted cuts of $2 billion which, did Tasmania’s Premier Tony Rundle not put for the government, is supposed to represent Tasmania’s case? Why did Premier Rundle a quarter of the mythical debt. That means the not point out that, because Tasmania’s econ- states will have been asked to contribute one- omy is running at one-sixth the growth rate of quarter of this mythical debt. the other states, Tasmania simply cannot One billion dollars per year translates into afford to wear cuts at the same rate? The 50,000 jobs, which includes the multiplier states did not expect that the government effect. Tasmania’s proportion of that is 1,500 would act in such an incompetent manner on jobs in one year and 3,000 over two years. these issues—or did we understand all along Why would the states accept this? One reason that the Liberal and National parties are is that they were given no choice. Another incapable of offering effective and responsible possible reason is that there is an as yet government? unannounced sweetener in the untying of the Let me just remind you of what is being tied grants, giving the states greater discre- done to Tasmania. I have already mentioned tionary powers over the moneys required for the loss of sales tax exemption and the cuts matched funding. in both specific purpose and financial assist- It is important to ask what these cuts will ance grants. There is also the slashing of our do to Tasmania. Full sales tax will be im- vital labour market programs, the threats to posed on executive vehicles, with a cost to our only university, and whatever will come the state of $3 million. There will be a three from the devolution of responsibility for aged per cent cut in specific purpose payments, care and other services. What is being done being about $11 million. Where specific to our vital public sector is appalling. As of purpose payments are paid through the state 5 June, we know that 9,588 public sector jobs to others—for example, for higher education, will go in the pre-budget round. Two thou- non-government schools and local govern- sand of those jobs are going from the Depart- ment—the three per cent maximum does not ment of Employment, Education, Training and apply, so cuts probably will be greater than Youth Affairs. Of these two thousand, 800 three per cent. people are losing their jobs to pay for the Wednesday, 19 June 1996 SENATE 1805 department’s aggregate redundancies. That is mid-August, with the second semester begin- 40 per cent. ning in August and ending in December. This department is responsible for, amongst The university was set up by an act of other things, the delivery of Working Nation parliament in Western Australia in 1989 and programs. One of the principles of Working is owned, controlled and operated by a board Nation was to provide greater resources for of trustees and a board of governors. The uni- training for the long-term unemployed in versity has a close relationship with the those regions with the highest levels of University of Notre Dame in Indiana in the unemployment. Tasmania is one such region. United States, and it has drawn much of its Madam Acting Deputy President, over the last founding inspiration and philosophy from that two years more than two-thirds of the drop in university. It is worth while to note, whilst we unemployment in Tasmania has been in the are looking at the question of funding for long-term unemployed category, which is higher education institutions, that Notre Dame directly attributable to Working Nation pro- is not funded by the Commonwealth. In fact, grams. Also, by extrapolating the figures that university is a living example of what known from cuts to the Department of Em- can be done by the private sector in eduction. ployment, Education, Training and Youth The fee in relation to Notre Dame is $690 per Affairs, it is disturbing to calculate that, of the unit for full-time Australian students and 310 redundancies from the Commonwealth $1,220 per unit for full-time overseas stu- departments in Tasmania, 124 of these job dents. Needless to say, the service of overseas losses will be instituted simply to fund the students is a growing area, and the export of redundancy program. In other words, over education generally is a growing area for one-third of the cuts in Tasmania have not Australia. been carried out for any functional reasons, At present there are 1,000 students enrolled, but simply to fund the aggregate redundan- and law enrolments will not be opened until cies. This is, bluntly, incompetent fiscal next year. As I understand it, the university, policy. This demonstrates the inept and in contrast to Bond University, is more callous nature of this government, where economical in its costs and overheads in individuals have become expendable and relation to the cost per student per annum. where valuable people are being used to meet Having visited the Notre Dame campus, I can the government’s ill-constructed financial say that much has been done to economise on bottom line. expenditure without any sacrifice in quality. This is perhaps something that public univer- Notre Dame University sities could well take heed of. Senator ELLISON (Western Australia) In closing, the university aims to be faithful (1.38 p.m.)—Madam Acting Deputy Presi- to the intellectual and spiritual ideals which dent, on 13 June this year I attended the have been the foundation of the great Catholic opening of the Law School at the University universities of the world. Like them, Notre of Notre Dame in Fremantle, Western Austral- Dame Australia seeks to be a leader in schol- ia. Notre Dame is Australia’s first Catholic arship and education. Basically, there are four university. It commenced teaching in January main objectives of the university: first, to 1992. Notre Dame has two campuses, one in provide, through teaching, pastoral care and Fremantle and the other in Broome, Western personal development, for the total education Australia. One of the features of the univer- of its students; second, to support an academ- sity is that its academic year differs from that ic community noted for its excellence; third, of other Australian universities because of its to support the role and work of the church in relationship with the University of Notre Australia; and, fourth, to make a special Dame in the United States. The academic year contribution to the economic and social commences in early February, with its first development of Australia. semester lasting until May. This is followed At present, the university has four col- by a winter term, which runs from June until leges—namely, arts and sciences, business, 1806 SENATE Wednesday, 19 June 1996 education, and theology. The two campuses number. I can evidence the fact that this contribute greatly to the local communities in would not necessarily be identified as a tax Fremantle and Broome. I believe Notre Dame, file number by referring to evidence given by as a university, will contribute greatly to the a tax officer to a Senate estimates committee. future of young Australians. I look forward to I asked the tax officer: the intake of law students at the law school in Will you explain to me what the words ‘our 1997 and I congratulate all the staff associat- reference’ mean on an Australian Taxation Office ed with its development, especially Geraldine letter? Byrne, the law school secretary, and Mary This was the particular letter that I had tabled. Eileen Gaunt, the registrar. I believe that the For example, the letter states ‘our reference’ then opening of this law school at Notre Dame will ‘13/BA51’ followed by a series of numbers. What be one of the steps along the way in the do the words ‘our reference’ mean? success story that will be Notre Dame Aus- The tax officer responded: tralia. That would be an in-house identification of the Tax File Numbers source of that document. I do not know precisely what the ‘13’ or the ‘BA’ stands for. The ‘BA’ Senator MICHAEL BAUME (New South may be the initials of the writer. The ‘13’ may Wales)(1.42 p.m.)—The government is exam- indicate the branch office from which the letter ining a re-writing of the tax act. As I under- came. I would imagine the numbers to which you stand it, the first instalment of that will be did not refer possibly were the equivalent of a tax introduced into this chamber shortly. What I file number. raise today relates to the need to redefine and His words were ‘possibly were the equivalent to correct some of the problems that have of a tax file number.’ I went on to say: emerged from some elements of tax law, So that may include some numbers which could particularly those that were used improperly possibly be a tax file number? I am just summaris- in the House of Representatives in respect of ing; is that basically what you said? criticism of me. I wanted to get it absolutely clear from the The Senate may recall that last year the tax office that that was the situation. His House of Representatives passed a resolution response was: condemning me for, allegedly, revealing a tax It could, yes. file number in a document presented to this chamber. Apart from the political stunt in- I then went on to ask: volved in that activity by the previous govern- So is revealing our reference number, which may ment—it was in fact the then Treasurer, Mr possibly include a tax file number but which is, in Willis, who moved the resolution—the reality fact, your internal reference number, an offence? is that at no stage was the number ever The tax officer responded: identified as a tax file number. It was claimed I would have to take advice on that particular issue. in the House of Representatives at that time I would imagine that if the item of information was that I was protected from the consequences not described as a tax file number it may well be and the penalties of such an offence by hard to prove that it was an offence. parliamentary privilege. Of course, that is That was the tax office advice. If it was not totally false, but it was among a whole range identified as a tax file number, as it was not of false accusations made at the time. in this case, then it might well be hard to If there are to be offences for revealing a prove that it was an offence and, in fact, you tax file number, it is absolutely vital that the might well not know by looking at it that it tax file number be identified as such. In the was a tax file number. law, as it stands at present, there is no re- It is the concern of the tax office that in quirement for a tax file number to be identi- fact revealing a tax file number when it is not fied on a document as a tax file number. The evidently a tax file number may make it very document that I presented to this chamber had difficult for the tax office to proceed against a whole series of other reference numbers in someone who makes such a revelation. Clear- front of what turned out to be a tax file ly, it is both in the tax office’s interest and in Wednesday, 19 June 1996 SENATE 1807 the interests of people, such as I, who inno- then Prime Minister, Mr Keating, by revealing cently gave a reference number which includ- information he did not want revealed about ed a tax file number, that on both accounts his extraordinary misuse while Prime Minister we be protected by a better law. of his office to enrich himself as a result of The tax office will clearly have great personal activity and personal investments. It difficulty pursuing people for breaking the has been a tradition in this place that this sort law in relation to tax file numbers unless the of thing should not take place, and in the past tax file number is identified as a tax file it has not. But because of this personal ven- number. How curious it is that the tax office detta against me, we had the House of Repre- is saying, ‘Yes, it is a bad situation and it sentatives being grossly misused and, as I makes things difficult for us. Yes, it may said, Mr Willis was prepared to say things possibly not be recognisable as a tax file like this about me: number.’ How different that is from the His actions engaged in by anyone outside this place resolution, passed by the House of Represen- would amount to criminal behaviour— tatives, which condemned me. In part, it not ‘may’, not ‘might’, but— reads: would amount to criminal behaviour and may even (d) Senator Baume, in seeking the leave of the duty amount to criminal behaviour by him. Minister and the Senate to table the documents in And yet we know perfectly well that the tax question, did not draw attention to the tax file number identified therein... officer said, ‘It may have been a tax file number but it was not identified as such.’ At That is a simple, uncomplicated lie. There no stage was it identified as a tax file number. was no tax file number identified therein. Mr Willis, the minister, knew that perfectly well Of course, it may well be that Mr Willis at the time, and it was a fact reinforced by the was simply relying on the extraordinary and opinion given to the Senate estimates commit- politically very convenient advice he received tee by the tax officer who appeared before from another officer in the Taxation Office. that committee. There was no identified tax I have already expressed my concerns about file number. The basis on which I was con- the way that particular officer, Mr P.E. Simp- demned by the House of Representatives— son, the second commissioner, was prepared and, I might say, also criticised in this cham- to go on the record as saying in a confidential ber—was totally and absolutely false. memorandum which, in my view, was grossly and improperly tabled by Mr Willis: It seems to me that it may be appropriate the tabling of the information, which I understand for that chamber, now that it is no longer included a TFN— dominated by people who seek to make political capital out of a stunt like this, to ‘I understand’, he said, ‘included a TFN’— withdraw that quite improper condemnation by Senator Baume is prima facie an offence under of me for doing what was right and what was section 8WB and possibly of section 8XB. clearly legal at the time. It is incredible that No, the second commissioner did not under- the minister, Mr Willis, accused me of indul- stand too damn well because when he said ging in what from any other person would be that he understood that it included a TFN, it a criminal action; yet we have just heard that was not a TFN identified as such. It was part the tax officer involved said that it would be of ‘our reference number’, and it included a very difficult to establish that, and that it was whole lot of other figures, as I have already only ‘possible’ that the figures revealed were outlined to this chamber. the equivalent of a tax file number, maybe. In The fact remains that the use of this device other words, the present law is absurd. as a way of beating me around the head But even worse, it seems to me, than the because of the way I have been effectively absurdity of the present law, is the way that pointing out the improper behaviour of Mr the previous Labor government misused it in Keating and, in particular, his partner—to a personal vendetta against me simply on the whom Mr Keating had given his power of grounds, of course, that I had offended the attorney several years before that—is clear 1808 SENATE Wednesday, 19 June 1996 evidence, I believe, of a misuse of that cham- improperly accused of criminal behaviour and ber. of being saved from criminal prosecution The tax officer then followed up his quite because of parliamentary privilege. The facts improper recommendation to the minister, by are that the tax office said: saying: I would imagine that if the item of information was not described as a tax file number it may well be There has, however, clearly been a breach of hard to prove that it was an offence. section 8WB and that breach has a number of dimensions The tax department itself said: and one of the dimensions that relates to me . . . it may well be hard to prove it was an offence. is There is clearly a need to ensure that that sort . . . the disclosure of that information by the of nonsense is not allowed to continue. An Senator. inadequate law has to be corrected. As I said, it is simply ludicrous that the law Australian Geological Survey should be so badly worded that it is an Organisation offence to reveal a tax file number without the tax file number being identified as a tax Senator WEST (New South Wales) (1.57 file number. p.m.)—I rise today to bring to people’s attention what is happening within some Senator Abetz—Ludicrous. specialist sections of the Public Service. In Senator MICHAEL BAUME—Absolutely particular, I refer to the provision of services ludicrous, as Senator Abetz has just interject- to mining companies in this community, to ed. He was at the Senate estimates committee the regional areas that they service and to the at the time and he heard the responses from effects of this on the Australian Geological the tax officer indicating that it may possibly Survey Organisation, otherwise known as be identifiable, but not necessarily identifi- AGSO. able, as a tax file number. Senator Sherry—A very important body. On the basis of this nonsense, Mr Willis, Senator WEST—You are right, Senator whom, I must say, I have always found to be Sherry; it is very important. An article from a decent chap, went on to say: the New Scientist dated 1 June says: Senator Baume’s action is obviously exceedingly It is the latest casualty of the government’s aim to serious. It undoubtedly amounts to disgraceful slash expenditure on public sector science. behaviour and, indeed, criminal behaviour... A paper distributed to staff at a meeting on 13 That is simply false and it is recognised to be May said the AGSO budget is likely to be reduced false except, of course, by all those sitting from this year’s $55.5 million to $37.8 million in opposite, who have a particularly one-eyed 1997-98. That is a budget cut of more than 30 per view of how to take smart alec political points cent over the next two years. without regard for decency and integrity and This means that somewhere between 102 and for the duty of people in this place to reveal 132 staff will be losing their jobs, and these what should be revealed for particular pur- are the scientists that are involved in the poses. He went on to say: geological mapping of this country. His action amounts to criminal behaviour... An article from a newspaper last Sunday in I am continually being accused by the Labor New South Wales outlined the benefits that Party of criminal behaviour with no evidence are going to accrue to this country from a whatsoever to support it. On the contrary, Newcrest mine at Cadia near Orange. I under- evidence in Senate estimates committees has stand that Newcrest were encouraged to look clearly shown that it is baseless because, in further in this area at Cadia because of the fact, the tax file number was never identified geological mapping. They have found one of as a tax file number. There is an obvious need the richest gold deposits in this country. This not only to clear up the disgraceful attack on will do not only wonderful things for the me but also to clean up this legislation so that Australian balances of payment and trade but no-one else ends up in a situation of being also wonderful things in the local area in Wednesday, 19 June 1996 SENATE 1809 terms of employment and infrastructure, and Did you fail to read the Treasurer’s press in general boosting morale in country areas. release, or was it just too difficult for you to Of course, that is not the only mine that has understand? (Time expired) been discovered as a result of this geological Senator SHORT—I do not think anyone in mapping survey by AGSO, in cooperation Australia believes that I misled the Senate on with the states. It is very important and I the basis of the Treasurer’s statement of 11 think it is a thing that we can ill-afford to June. I tabled documents in this place this lose. I draw attention to an article that ap- morning, including a letter from the Commis- peared in the Australian on Monday, 3 June, sioner of Taxation, who admits that the advice which said: conveyed to me yesterday in good faith by a Strong protests over the cuts have been lodged by senior officer of the Australian Taxation mineral firms including Mount Isa Mines, Office—which I, in good faith, presented to Normandy Exploration, Equinox Resources, Cable you, Senator Faulkner, at the conclusion of Sands, Orion Resources and Paladin Resources. question time—was an opinion on which the They warned Australia was still extensively un- taxation commissioner, Mr Carmody, who mapped and unexplored in geological terms, and became aware of it after the event, took a cuts of the order envisaged would deter future different view. mineral exploration and send many companies offshore. In a situation like that, when there is a very legitimate difference of opinion within the This is what this government is doing to the Taxation Office between the senior officers minerals and mining industry in this country. who provided the advice which I provided to It is encouraging the industry to go offshore the Senate and the tax commissioner— because it is not doing anything to enhance Senator Faulkner—What about your com- this country’s base knowledge, which is ment about an offer? necessary for mineral and mining companies to undertake research and further exploration. Senator SHORT—Do you want to hear the The government is to be condemned for this. answer or not? In a case like that, the I will continue to pursue this issue because it commissioner’s advice obviously prevails. He is vitally important. has apologised to me, and I have apologised to the Senate that, as a result of the incorrect QUESTIONS WITHOUT NOTICE advice that his officers provided to me, I inadvertently misled the Senate yesterday. I Wholesale Sales Tax on Motor Vehicles have apologised for that. The commissioner Senator FAULKNER—My question is has apologised for that. Indeed, the commis- addressed to Senator Short, the Assistant sioner himself recognises that he has not met Treasurer. Minister, you have already acknow- the provisions of section 130B of the sales tax ledged that you misled the Senate yesterday act. We have come clean on that. in relation to the statutory seven-day period At the first available opportunity this for providing public notice of sales tax chan- morning I advised the Senate of the incorrect ges. Why did you also mislead the Senate advice that had been given. I could not do when you stated, ‘The Treasurer’s first an- any better than that. No reasonable person nouncement was an offer made to the states.’ would expect me to do better than that. Your The press release issued by the Treasurer on hypocrisy in throwing this up when, in 11 June commences: government, time and time again you and The Government has decided to remove the exemp- your colleagues misled the Senate—I would tion from sales tax currently enjoyed by Common- have to say not inadvertently, more often than wealth, State and Territory and Local Governments. not—gives you little basis to make such It continues later: shoddy allegations. As I say, and I repeat The removal of the wholesale sales tax exemption again: I have acknowledged the mistake I for general purpose road vehicles purchased or made yesterday. The commissioner has ack- leased by Commonwealth, State and local govern- nowledged the mistake he made yesterday. He ments is to have immediate effect. has apologised, through me, to the Senate. 1810 SENATE Wednesday, 19 June 1996

There is nothing more that I can reasonably the claims made by the New South Wales add or be expected to add on that point. Treasurer? Senator FAULKNER—I indicated to Senator HILL—It should be clearly attrib- Senator Short in my question that you, Sena- uted to the previous Commonwealth govern- tor Short, stated yesterday that ‘The Trea- ment because this is part of the states’ effort surer’s first announcement was an offer made to meet a share of the burden we all face to the states.’ I repeat: the press release issued arising out of the Beazley black hole. by the Treasurer on 11 June says: Opposition senators interjecting— The Government has decided to remove the exemp- Senator HILL—Labor scoffs, but it was tion from sales tax currently enjoyed by Common- wealth, State and Territory and Local Governments. Labor’s inheritance. That is what you gave us. Labor gave us a forecast budget deficit of It continued: $8,000 million. This is after Labor assured us The removal of the wholesale sales tax exemption time and again that there would be no forecast for general purpose road vehicles purchased or deficit at all. Senator Cook in the Senate said, leased by the Commonwealth, State and local ‘Don’t worry about it; it will be in surplus.’ governments is to have immediate effect. During the election, Mr Beazley said that it Why did you mislead the Senate on that will be in surplus. Mr Keating said that it will matter? be in surplus. When we said, ‘Open the books’, they said no. Furthermore, they said Senator SHORT—The point I want to that if you open the books, you would not see make clear to the Senate at the very outset is in any event; the results would not be there. that the whole reason that this matter has But the day after the election, there they were. arisen in the first place is because the fiscal Labor hid it from the Australian people— irresponsibility and incompetence of Labor in $8,000 million of forecast deficit. That is government in Canberra for 13 years led to what we inherited and now we have a respon- the development of a massive hole in the sibility to do something about it. We expected government’s books—an $8 billion black hole the states to take a part of that burden. that is wholly and solely attributable to the Labor government. Everyone knows that. That It was interesting that at the end of the day was the basis for the discussions at the Premi- at the Premiers Conference the premiers ers Conference. basically said that they recognised their responsibility also. We all saw them on the I am pleased, and the government is television at the end of the day. They said pleased, that the Commonwealth, the states that they recognised the problem that the new and the territories all took a mutually respon- coalition government had inherited—the sible attitude to this matter. The one group in Beazley problem, the $8,000 million deficit— the whole Australian community that is not and that they would each have to play their prepared to be responsible in this matter in part in filling that black hole. trying to recognise and heal the wounds the former Labor government made to the finan- What does the New South Wales Labor ces of this country is the now Labor opposi- government do? It immediately reverts to tion of this country. type. When it has to find extra revenue, what does it do? Does it look at whether it can cut Taxation: New South Wales its expenditure? Of course not. It inflicts Senator REID—My question is addressed further taxation pain on the people of New to the Leader of the Government in the South Wales. Senate. I draw the minister’s attention to the Who should New South Wales voters hold tax increases in New South Wales announced responsible for this extra burden? It is Mr yesterday by Mr Michael Egan, the Treasurer, Beazley, the Minister for Finance at the time, and attributed to the policies of the Common- the person with his finger on the financial wealth government. Can the minister inform pulse, the person responsible for the assuran- the Senate of the government’s response to ces that were given during the election that Wednesday, 19 June 1996 SENATE 1811 this deficit did not exist at all. That is who position, how can those in the motor trade the New South Wales voters ought to be possibly understand what is proposed? angry about in this instance. Senator SHORT—The basic principle It is just part of this ongoing legacy of which the Treasurer has espoused, which I financial incompetence that Labor continually have espoused and which I think everyone demonstrates. We saw it with the last federal other than the opposition seems to understand, government. What did you do? Whenever you is that the new sales tax measures will apply were in trouble, you either put up taxes or to motor vehicles that are provided wholly or borrowed more. partly for private use as part of the remunera- Senator Faulkner interjecting— tion of the employee. It is as clear and simple Senator HILL—Senator Faulkner, your as that. It is no more complicated. I do not government succeeded in doing both at once. understand your continual lack of understand- You remember Mr Keating saying in the 1993 ing of that. It has been made clear by all election that he would not put up taxes. In the spokesmen for the government, it has been subsequent period of government the increase made clear by the Treasurer, it has been made in Commonwealth taxation rose by 30 per clear by the Prime Minister and it has been cent. What a big broken promise! made clear by me. You only have to read the clear print, and there you go. On the other hand, you also ran budget deficits for the same period of $40 billion. Senator SHERRY—I wish to ask a supple- You put taxes up 30 per cent and still ran mentary question, Mr President. On Friday the budget deficits of $40 billion. It is not surpris- Treasurer announced his changes to the tax ing that many were sceptical about your structure, with the unprecedented qualification assurance that there would not be further that further details will be announced as soon budget deficits. The reality was that there as possible. You claimed on Monday, in were—$8,000 million. We have to meet the answer to Senator Wheelwright again, that the responsibility of filling that Beazley black application of the tax is quite clear. You have hole. We expect the states to do it and we claimed it again today. If it is quite clear, why regret the fact that the New South Wales is the government to announce further details? Labor government is behaving exactly the Why have the further details not been an- way that the former Commonwealth Labor nounced five days after the Treasurer’s state- government behaved by putting up taxes and ment, unless they are very complex? expecting the people to bear further pain. Senator SHORT—You could not have got Wholesale Sales Tax on Motor Vehicles a clearer statement than that which the Treas- Senator SHERRY—I direct my question urer made on Friday in his statement follow- to the Assistant Treasurer. In your answer to ing the Premiers Conference. He said: Senator Wheelwright on Monday you stated: Wholesale sales tax will apply to general purpose The sales tax will apply to privately plated vehicles road vehicles provided wholly or partly for private of employees of Commonwealth, state and local use as part of remuneration by Commonwealth, governments. state, territory and local governments to take effect By way of contrast, the Treasurer’s statement from 11th June. of 14 June said: Then he said, as you correctly say: Wholesale sales tax will apply to general purpose road vehicles provided wholly or partly for private Further details will be announced as soon as use as part of remuneration... possible. Why did you mention the registration status On that point of 11 June, Senator Sherry, you of the motor vehicles, given that neither the will see from the taxation commissioner’s Treasurer’s press releases nor the Commis- press statement of yesterday, that I tabled here sioner of Taxation’s media releases mentioned today, that he confirmed that 11 June is the these matters? What is the correct position? operative date, as it has always been and been If you as a minister cannot understand the intended to be. 1812 SENATE Wednesday, 19 June 1996

Telecommunications Equipment Industry The fact is that New Zealand at the present Senator SANDY MACDONALD—My time is going ahead in leaps and bounds. In question to the Minister for Communications 1990, its export of telecommunications equip- and the Arts concerns Telstra. Is the Minister ment totalled $43 million. In the year to June aware of recent comments by the Leader of 1996, its exports are expected to exceed $200 the Opposition regarding the impact of tele- million and by the turn of the century $400 communications privatisation on the local million. So to suggest that somehow the telecommunications equipment industry? privatisation of Telstra New Zealand has led Secondly, in particular, what light does the to the demise of the electronics industry is New Zealand experience throw on the matter? absolutely contrary to any possible under- How has the New Zealand telecommunica- standing of the facts. tions equipment industry fared since 1984? Mr Beazley trotted this sort of nonsense out Senator ALSTON—I did read an interview at the ALP state conference in Victoria a few in the Weekend Australian, which resulted weeks back. I can perhaps understand him from what was described as an Australian- telling a few porkies to the party faithful. American leadership dialogue involving That is one thing, but to go onto the interna- participants from both nations. One of those tional stage and make a complete fool of participating was Kim Beazley. One would himself, in the way that he did on this occa- have thought that with all his experience as a sion, is very damaging to our international previous minister for communications, and as reputation. someone who professes to strut the world These people are entitled to think that if stage, he would have at least a basic under- you are attending a leadership forum you standing. I was absolutely appalled—and I am would at least show a bit of leadership. They sure other senators will be as well—at what did not expect some bloke to go over there, Mr Beazley had to say in this interview with dragged by the ear by the trade union move- Paul Kelly. He started off by saying: ment, pandering to fear and ignorance in I’ve got a view on Telstra which is distinct. Australia and somehow pretending that he has I can assure you that that is a masterful an understanding of what is going on in the understatement. He said: country. He went on in that interview to say: My view is that Telstra performs a function in If you try to simultaneously privatise and introduce Australia that there is no equivalent of in the competition, you’ll compromise one or the other. United States. The fact is that we introduced competition in I thought Telstra delivered telecommunica- this country five years ago. Do you know tions services and telephone calls. I would who the minister was at that time? Kim like to know what Mr Beazley was doing Beazley. I do not know what his defence is. when he was in the US. Was he living in a Is he saying that he read the bill but did not tent? Was he communicating with his Ameri- look at the contents? Is he somehow not even can colleagues by smoke signals or carrier aware of what has been going on in Australia pigeons? Was he simply not even aware that in the last five years? Is he not aware that our they have telephones in the United States? It electronics industry depends entirely on is a pretty extraordinary start to an interview, Telstra complying with licence requirements I would have thought. Then he goes on to which obligate it to use best endeavours. That say: is precisely what will happen after Telstra is Without Telstra . . . we have no investment in privatised. R&D. This is a major international embarrassment There is no electronics industry in Australia for Australia. You blokes have some hard without a publicly owned Telstra— thinking to do if you think you can get away Telstra constitutes about 38 per cent of the with a leader like this, who should never be electronics industry in Australia— allowed out of the country again until he has just as there is no electronics industry in New undergone a re-education program. It is Zealand. simply not good enough to go to the sub- Wednesday, 19 June 1996 SENATE 1813 branch of the Lenin institute for public owner- matter for the state governments themselves. ship of everything that moves. It has nothing whatsoever to do with the What he needs to do is talk to some people Commonwealth. It is up to the states to who have a real understanding. There is no determine their priorities. They know that. All point in him going to the Australian Demo- state governments know that. They have all crats, but next time he goes overseas can I been acting on their own priorities for many suggest that perhaps he might like to go via years now. Romania. The deputy leader of the Romanian New South Wales has chosen, for whatever Democrats is in the Senate today. He was a reason, to go down the route of increasing former adviser on privatisation to the former taxes and charges, just as Labor did after it Prime Minister of Romania. They commenced won the last state election. It really lied its privatisation of the Romanian Telecom system way to victory by one seat at the last state some years ago. Perhaps Mr Beazley might election by saying, ‘No, there aren’t going to learn a bit. (Time expired) be tolls on roads—nothing like that.’ What happened to the toll free project? The New Taxation South Wales Premier broke that promise Senator SCHACHT—My question is to immediately after the election. The actions the Assistant Treasurer. I refer the Minister to that he has taken in that regard are in absolute statements by premiers and state treasurers full mode with what he has been doing since indicating sharp increases in state taxes and he won government. As far as any taxes charges as a consequence of the $2 billion imposed by the New South Wales government shortfall in federal funding. In particular, I are concerned, those taxes should very cor- draw the minister’s attention to New South rectly be labelled the ‘Beazley black hole Wales’s proposals to increase payroll tax, car taxes’. stamp duty and land tax; Victoria’s proposal Senator SCHACHT—Mr President, I ask of a household levy and increased taxes on a supplementary question. It is very simple. business; and Queensland’s consideration of At the end of my question I asked whether a rise in tobacco and alcohol tax. Does the you have made an estimate of the inflationary minister concede that such increases will impact of any of these new state charges that inevitably lead to an increase in inflation? are being announced by the states. What estimates, if any, have been prepared by or for the government on the inflationary Senator SHORT—Senator Schacht’s supp- impact of such measures? lementary question shows a further abysmal lack of any understanding of how the econ- Senator SHORT—I do not think Senator omy works. The problem with Labor is that Schacht could have heard the earlier answer they do not appreciate that an $8 billion that was provided by Senator Hill to a similar deficit in the federal government’s budget question. The fact is that last Friday, 14 June, leads to increased pressure on interest rates, state and territory leaders reached a very fewer jobs, lower economic growth and lower cooperative agreement with the federal living standards for all Australians. In the end, government on how to make their contri- measures have to be taken to correct that bution to fill the huge hole that was left by situation. If you are not going to exercise your government when you left office in fiscal responsibility in your budget, you going March—the $8 billion black hole for which to compound the problems that we inherited your Leader of the Opposition was primarily from Labor opposite. We are not prepared to responsible through his role as the Minister continue to sell future generations down the for Finance. drain at great cost to all Australians, in the The fact is that that was a very welcome way that Labor did for 13 years. and worthwhile contribution made by the states. Any further action that is taken by the Environment Funding states in relation to their own finances, as Senator LEES—My question is directed to Senator Hill has so rightly said, is entirely a the Minister for the Environment. I refer you 1814 SENATE Wednesday, 19 June 1996 to the summary paper that you released Apart from that, yes, we said that we would yesterday on the key provisions in the nation- obviously wish to continue recurrent pro- al heritage trust fund legislation. I refer in grams. But those programs are struggling. particular to the mention made of gifts and Senator Faulkner will tell you that he had bequests being sought for the trust. Point 5 forecast for significantly lower expenditure in states that all interest earned from the trust, this coming year. and, indeed, all the public donations to it, will You will be aware—if you are not, the be able to be spent on other environment and Greens are—that there are a whole series of natural resource management projects, such as programs under Labor’s plans that were river care and endangered species. Firstly, coming to an end at the end of this financial given that conservation organisations depend year. They are not easy to pay for. They very largely on gifts and bequests, are you require further funding. You are aware that now going into direct competition with we are also seeking to fill the Beazley black organisations such as the ACF? Secondly, in hole of $8,000 million. your summary it appears that there will be no other source of funding, or little other sources There is continual pressure upon recurrent of funding, for many of these projects, includ- expenditure. We need a further major capital ing endangered species. Is that the case? Will contribution to the environment to better they now have to rely, either partly or totally, achieve the conservation and environment on charity to have a chance for survival? Are outcomes that we would like to see, and we moving to the days of lamington drives which I would have thought you would like for the Leadbeater’s possum and bingo nights to see. So, instead of coming in here and for the bilby? moaning about recurrent expenditure difficul- ties, why not come in here and support our Senator HILL—I do find it amazing that, fund? Come on board and let us do some of when the government puts before the parlia- these things that are necessary and in the best ment the potential for a $1 billion investment interests of our natural capital. in the natural capital of Australia, the Demo- Senator LEES—Mr President, I ask a crats come in here and vote it down and then supplementary question. I note with interest say that we are not seeking to appropriate the minister’s comments about there never enough money to the environment. Here they being enough. Even if this fund is set up, have the opportunity to support the largest Minister, it will not have as much money as reinvestment in Australia’s natural capital in is available this year, from both the fund and the history of this country, and they say no. your planned budget expenditure. You will be tens, if not, hundreds of millions of dollars The reason that we want to do it is that worse off. So, presuming we set up the fund funding from recurrent expenditure is never and, of course, fund it from the budget, what enough. That is the point, Senator Lees. I do is going to happen to the administration of not think you appreciate that. We do not think that fund? Is it correct that your department we can get enough money out of recurrent is going to have administrative control over expenditure. Labor could not get enough only about 20 per cent of it? Is it the case that money out of it. What it needs is a major about 80 per cent of the money invested in reinvestment of capital. That is why we chose that fund is going to be under the control of to sell part of one asset, a telecommunications the Department of Primary Industries and company, and reinvest part of the capital of Energy? that into another project, our natural capital. Senator HILL—That is not so, but you It is a sensible, rational policy to achieve will get full details of that in due course. You the sorts of objectives that you seem to say know as well as I do that, for example, you want to achieve but then vote down. It is money under the current Murray-Darling fund extraordinary. If there is any logic in that, it is administered through primary industry. You might be apparent to you but it is not appar- know that landcare money is contributed ent to anybody else. through primary industry. If you have read the Wednesday, 19 June 1996 SENATE 1815 structure for this fund, you will realise that cent in 1990 as part of its quite deliberate there will be further money in both areas. policy to engineer a massive recession—the What are you shaking your head for? There greatest recession we have had since the will be very substantial contribution to the 1960s. Murray-Darling. One of the major needs of That caused a whole range of problems Australia’s environment is to restore that river through the economy, including pushing system. unemployment to rates that would never have Let me make it a even clearer if it is a been believed in this country—that is, above trouble for the Democrats to understand. The 11 per cent, above a million people unem- promise was for approximately $1.15 billion ployed. In terms of the movement in interest to be expended over a period of five years to rates, they are unequivocally down, which is come through the fund. That would be made welcome news. So the premise on which your up of the major capital contribution of $1 question is based has no substance. billion, plus recurrent expenditure, plus Senator COOK—Mr President, I have a interest earned. (Time expired) supplementary question. I am entitled to ask, Housing Interest Rates ‘Which bank,’ but which government was it Senator COOK—My question is directed that actually introduced the competition that to the Assistant Treasurer. I refer to a state- has created the reduction in home mortgage ment made by the Prime Minister, and report- rates—yours or ours? More importantly, ed in yesterday’s Australian, where he would you answer this question: if you slug claimed that wage restraint would be justified battlers with tax, are they not able to claim it because interest rates on home mortgages are in wages; if you slug battlers with high coming down. Does this mean that the interest rates, are they not able to claim it in government will encourage wage claims if wages? It has been claimed that if interest home mortgage rates go up? rates go down, they ought not make wage claims. So what do battlers do to protect their Senator SHORT—I do not think Senator standard of living? Cook is aware of what has been happening to home mortgage rates in this country. I am Senator SHORT—There were a couple of pleased to have this opportunity to inform good questions there. So far as his first one is him and the Senate of the fall in interest rates concerned—which government?—the origin for housing that has occurred over recent of the increased competition in the banking weeks as a result of increased competition in industry, I remind Senator Cook, came from the banking industry. the Fraser government through the establish- On 31 May, the Commonwealth Bank cut ment of the Campbell committee which led to its variable home mortgage rate from 10.5 per everything that was formed in the 1980s. cent to 9.9 per cent. ANZ followed suit Opposition senators interjecting— shortly thereafter. The National Australia Senator SHORT—I know they do not like Bank did it also, as did the Commonwealth to hear it but the Treasurer at the time who and Westpac by varying degrees. Almost 70 established the Campbell committee of in- per cent of all home lending comes from quiry, which led to the deregulation of the those four banks. That means that the cuts in financial industry in Australia, was the now rates from 10½ per cent to 9¾per cent has led Prime Minister, John Howard. So that is to a benefit of $53 per month for a household pretty good news. For Senator Cook and those with a 25-year $100,000 home loan. That is opposite to talk about tax increases when of major benefit to most Australian families. under their regime and their incompetence It ought to be welcomed by the opposition. over the years before they went out of It is certainly very warmly welcomed by the government they racked up tax increase after government because it is in stark contrast with tax increase, and broke every tax promise the interest rate record of the previous govern- they ever gave to maintain or reduce taxes, is ment over more recent years. The Labor gov- the height of hypocrisy and deserves the ernment had home mortgage rates at 17 per answer it received. 1816 SENATE Wednesday, 19 June 1996

DISTINGUISHED VISITORS reports to date from the organisation and has The PRESIDENT—Order! I draw the not received a submission for funding in attention of honourable senators to the pres- 1996-97. ence in the senators’ guest gallery of the The Department of Health and Family Deputy Leader of the Democratic Party of Services has asked the NHMRC to send a Romania, Mr Adrian Severin. On behalf of all copy of the final summary report and any honourable senators, I welcome you to the other reports from the organisation to assist in Senate and hope that your visit to Australia is assessment and negotiation of future funding productive and enjoyable. needs of the service. The organisation also Honourable senators—Hear, hear! receives funding under the department’s healthy women, strong families initiative, QUESTIONS WITHOUT NOTICE which commenced in the last financial year Aboriginal Health and which will be supported as a recurrent program from 1996-97 with funds provided Senator CHAMARETTE—My question is by the Office for Aboriginal and Torres Strait directed to the Minister representing the Islander Health Services. Minister for Health and Family Services, Senator Newman. I refer the minister to Finally, I am advised that the Department answers her colleague, the Minister for Abo- of Health and Family Services and the West- riginal and Torres Strait Islander Affairs, ern Australian Health Department have com- made on 27 May 1996 concerning Aboriginal menced discussions about outcomes of the infant mortality rates. He said: project and arrangements for a joint review in The crude birthrate and the neonatal death rate July this year to determine ongoing funding are higher. The stillbirth rate is almost three times and service delivery arrangements for the and the infant mortality rate about four times that service. If I can just add on a personal note, of non-Aboriginals. Nutritional deficiencies in having seen a number of these isolated com- infants under five years of age are also up. munities myself and well understanding the Has the minister’s attention been drawn to the need, I know that Minister Wooldridge has a announcement that funding for the Ngunytju personal commitment from the time that he Tjitji Pirni health project in Kalgoorlie ceases spent as a doctor in an isolated Aboriginal at the end of 1996? Why has the federal community. government withdrawn funding from the project without reviewing its progress? What Auditor-General steps has the minister taken to review the Senator COATES—I ask the Minister report of the Western Australian parliamentary representing the Minister for Finance a ques- committee’s inquiry into the project? tion about the Auditor-General. When in Senator NEWMAN—I thank Senator opposition, the coalition constantly argued for Chamarette for her question. The federal the Auditor-General to be made a so-called government is committed to supporting officer of the parliament. Now that the coali- effective primary health care initiatives in tion is in government, does it intend to imple- maternal and child health managed by com- ment its longstanding policy? If so, when will munity controlled health services. I myself the government take action to make this have visited them and have a personal com- happen? What difference will it make to the mitment. audit office? Can the minister say exactly how The Ngunytju Tjitji Pirni project was this change would be made? established primarily as a research project Senator SHORT—Senator Coates raises securing the vast majority of its funds from an what has been regarded here in the Senate and NHMRC research grant, although there were in the parliament generally as a very import- other sources of funding, I understand, avail- ant issue for a long time. A lot of work has able to them. I am advised that the federal been done on it, particularly through the government has not withdrawn funding. The Public Accounts Committee. I know that office of the NHMRC has not received any Senator Coates and others—my colleague Wednesday, 19 June 1996 SENATE 1817

Senator Gibson in particular—have been would like to make it very clear that I am following this matter very closely for many disappointed with Ms Hanson’s statements years. regarding financial assistance to Aboriginal The question of future arrangements in Australians. She made the comment: relation to the Auditor-General, the potential Why the financial burdens and hardships of fami- legislative implementation of the recommen- lies of comparable income differ due to Aborigi- dations from the Public Accounts Committee nality is a mystery. on the status of the Auditor-General and a I would like to point out to Ms Hanson that, range of other issues associated with the audit if she cares to look at the research available, office are under active consideration. I expect Aboriginal Australians are far more disadvan- that decisions on those matters will be an- taged than non-Aboriginal Australians and nounced in the near future. therefore require greater assistance. Most Senator COATES—Mr President, I ask a disadvantaged groups in a democratic society supplementary question. I get the impression are given some government assistance. That from Senator Short that he does not actually is not to say that we want to encourage know the answer to the question, but could he welfare dependence. Most fair-minded people at least say whether it is still the policy of the in this country would acknowledge that coalition. Is the minister admitting that his indigenous Australians are living in appalling party’s policy is really a lot of rhetoric and conditions and do require assistance. that the government is just accepting the Over the last three months I have visited status quo and rejecting the idea altogether? many Aboriginal communities that have taken Does the minister have any idea of what he the initiative to try to improve their situation. and his colleagues meant by the term ‘officer Many participate in CDEP, a work for the of the parliament’? dole scheme, when they would be better off Senator SHORT—As I said to Senator financially by being on welfare. In the North- Coates, decisions on this will be announced ern Territory I was impressed by a strong in the near future. I must say that the question women program started by local volunteers to comes pretty oddly from a party that had combat domestic violence and reduce health years to do something about it. You looked at problems. These are two examples of Aborigi- this matter for years and you had neither the nal Australians helping themselves to improve ability nor the wit to take the action that you their living conditions, but there are many are now asking us to take and on which, as I more. say, we will announce our decision. You were I would like to cite some research taken here for 13 years. You looked at all these from the 1994-95 ATSIC annual report which things. You did not do a cracker to change illustrates just how big the gulf is between the situation. I have to say that a question like Aboriginal and non-Aboriginal Australians. that comes very oddly from your side of the For example, in education, while indigenous Senate. participation levels are improving, the gap with non-Aboriginal rates remains wide. I Aborigines quote from the report that between 1985 and Senator ELLISON—My question is 1992 the retention rate to year 12 of Aborigi- addressed to the Minister for Aboriginal and nal students rose from 14 per cent to 25 per Torres Strait Islander Affairs. Minister, what cent. Rates for other students in the same is your response to a media release issued this period, however, rose from 58 per cent to 78 week by the Independent member for Oxley, per cent. Pauline Hanson? What is your response to In the 1991 census, one in two Aboriginal research by Ms Hanson of the benefits avail- and Torres Strait Islander 15- to 19-year-olds able to indigenous and non-indigenous Aus- stated they had left school at age 16 or tralians? younger, compared with one in four non- Senator HERRON—I thank Senator Aboriginal Australians in this age group. The Ellison for his question. Most importantly, I 1991 census also showed that among 20- to 1818 SENATE Wednesday, 19 June 1996

24-year-olds the proportion of Aboriginal Senator Faulkner—Thank you very much. Australians attending educational institutions Senator SHORT—It is a pleasant change, was about one-third of the non-Aboriginal I would have to say. It is an important point. rate. It is a relevant question. It is one of those As Senator Chamarette mentioned earlier, details that will be the subject of announce- maternal and infant mortality rates are higher ment in the very near future. for Aboriginal Australians, with Aboriginal Senator FAULKNER—I ask Senator mothers 10 times more likely to die than non- Short: do you at least acknowledge that there Aboriginal mothers. At any age, Aboriginal is a lot of uncertainty out there amongst not and Torres Strait Islander people are twice as only motor traders but also professional tax likely to die prematurely as non-Aboriginal advisers? It is not true, as you claimed earlier Australians. For Aboriginal people aged 25 to in question time today, that everyone under- 44, the risk is five times greater. The list goes stands the changes. The Financial Review, for on and on in that regard. example, has carried a report about a partner In summary, I want to express again my in Arthur Andersen who has been deluged disappointment over Ms Hanson’s comments. with calls from people who are confused She should stop and consider the hardship and about the changes. Do you at least accept that disadvantage that many Aboriginal people there is uncertainty and that that uncertainty face on a daily basis, often through no fault is as a direct consequence of your govern- of their own. ment’s bungled attempt at handling the Premiers Conference and your government’s Wholesale Sales Tax on Motor Vehicles failure to provide details of these changes? Senator FAULKNER—My question is Senator SHORT—I do not accept the addressed to the Assistant Treasurer. Minister, assumption in the supplementary question that I refer you to your answer on Monday to a there is a lot of uncertainty out there. But question from Senator Conroy about the what I do accept, and what the government application of sales tax to red-plated vehicles. and the Treasurer accept, is that there is a Can you explain to the Senate how a motor need for the final details to be announced, trader can possibly know before it is sold released and implemented as soon as possible, whether a motor vehicle will be used partly and that is precisely what the Treasurer or wholly for private purposes. Will you announced last Friday. That is not long ago. guarantee that no small business will have to It is five days ago. The final details will be pay sales tax or penalties because of the announced very shortly, which, I agree with uncertainty which continues to prevail due to you, is necessary. your government’s incompetence on this Senator Faulkner—You agree with me. matter? You didn’t agree with me a minute ago. Senator SHORT—I answered this question Senator SHORT—I agreed with you. For earlier today. I said, and I repeat—if the once in my life I did agree with you because opposition needs it repeated yet again—that you asked a sensible question. I am telling this wholesale sales tax will apply to general you that the necessary details will be an- purpose road vehicles provided wholly or nounced very shortly. partly for private use as part of remuneration by Commonwealth, state, territory and local Australian Customs Service governments to take effect from 11 June. I Senator SPINDLER—My question is also refer him to the sentence in the Trea- directed to the minister representing the surer’s statement last Friday, to which he minister responsible for customs. I refer to a seemed to take exception earlier today, name- report that shift work is to be cut back in the ly that further details will be announced as Australian Customs Service. I ask the minis- soon as possible. The point that he has now ter: does he agree that these proposals ignore raised in his question is an important point. I the fact that drug smugglers do not work nine fully accept that. to five? Is this measure directly related to the Wednesday, 19 June 1996 SENATE 1819

295 positions the service is to lose as a result Senate Committees of cutbacks in the federal public service? Is Senator ROBERT RAY—I direct my this an example of the government’s blind question to the Assistant Treasurer. Minister, cost cutting across the public sector? Can the why has the agreement between the Depart- minister inform the Senate what assessments ment of Finance and the Senate, regarding the the government is making to ensure that funding of Senate committees, been rescinded essential services will continue to be delivered by an officer of the Department of Finance to the Australian community? And is the rather than by the minister? Why has the government prepared to table the results of Minister for Finance requested a joint submis- these assessments in parliament? sion from the five parliamentary departments Senator PARER—Senator Spindler will be when the coalition vigorously opposed the surprised to know that the minister does not amalgamation of parliamentary departments agree with the proposition—a rather absurd on the principle of immutable division of proposition—that any changes to shifts in responsibilities? Finally, do the recommenda- customs ignores the fact that drug smugglers tions of the Department of Finance mean that do not work from nine to five. Frankly, there is no funding at all in the next financial Senator Spindler, your question ignores the year for the two latest select committees: one very fact that customs work involves a whole on the uranium mining industry and the lot of risk assessment of the likelihood of the second on the Victorian casino inquiry? importation of prohibited substances and the Senator SHORT—I am not aware that an like. officer of the Department of Finance has issued that notification to the Senate. I will In fact, your question ignores the fact that, take that on notice. I will seek the advice of when planes land at Sydney before 8 a.m. and the Minister for Finance. So far as the finan- after 5 p.m., there are customs officers on cing of the Senate and parliamentary depart- duty to perform their very important role. I ments, including committees, for the year might say that Mr Toohey and others are ahead is concerned, that will be announced in ignoring the fine work done by the Customs the budget. Service and are seeking to take cheap shots Senator ROBERT RAY—I ask a supple- without fully acquainting themselves with or mentary question, Mr President. Whilst not acknowledging the way in which customs alleging that the crackdown on Senate funding actually operates. There were four questions is for political censorship for you to look after asked. That is the response to the first ques- your mates, isn’t it now a great coincidence tion. The answers to questions two, three and that you are taking a million dollars out of the four are no, no and no. Senate committee system and it is going to Senator SPINDLER—I wonder how the impact on the two inquiries that you never minister can reconcile government accounta- really ever wanted to go ahead? bility to provide essential services with the Senator SHORT—I have nothing to add to three noes that he has provided, particularly what I already said to Senator Ray other than to the last two, which ask: is the government to say that, if you ever wanted to see an going to make any assessments as to the attempt at sheer blatant political manipulation effect of the cuts in the Public Service and is of the Senate for narrow party political ends, it prepared to table the assessments in parlia- you would only have to look as far as the two ment? Or is the government simply shirking inquiries to which Senator Ray referred. all responsibility? Senator Crichton-Browne Senator PARER—Mr President, I have Senator CRICHTON-BROWNE—My already answered the question. I will take the question is directed to the Minister for Abo- supplementary question on notice and refer it riginal and Torres Strait Islander Affairs. I to the minister. If he has any more to add, I apologise that I have not given him prior will come back to Senator Spindler. notice, so I will understand if he is not equip- 1820 SENATE Wednesday, 19 June 1996 ped to answer the question immediately. I raised by charging this interest will be? Can refer the minister to the admission by Mr Ian you also explain what action will be deemed Viner QC that he sought and improperly obt- to be an honest mistake and who will make ained an unprocessed court document from that judgment? the Ministry of Justice in WA and that he Senator SHORT—As I would expect provided that and other equally unlawfully Senator Bolkus would know, the administra- obtained documents to Mr Eoin Cameron MP, tion of the tax laws are by statute the respon- who then had them photocopied and widely sibility of the Australian Taxation Commis- distributed immediately prior to my preselec- sioner. Mr Carmody has the statutory respon- tion. sibility for administering the laws, and that I remind the minister that the clerk who includes the points that have been raised by provided the documents has been convicted, Senator Bolkus in his question to me. I will demoted and transferred from the Department refer his question— of Justice. I further remind the minister that Senator Bolkus—This has got widespread the improperly obtained documents related to publicity. Why don’t you know? the private affairs of my wife. I further re- Senator SHORT—You have asked me a mind the minister that Mr Ian Viner QC specific question. I will refer Senator Bolkus’s obtained knowledge of the document through question to the commissioner, who has the his client-lawyer relationship with my wife. responsibility in these areas, and provide you Given that Mr Viner has demonstrated a with his response. reckless disregard for ethics, confidentiality and common decency, I ask the minister: if Public Housing Mr Viner cannot keep white women’s secrets, Senator CALVERT—My question is to how can he possibly be expected, as a mem- the Minister for Social Security. Is public ber of the National Native Title Tribunal, to housing threatened, as claimed in a letter to keep black women’s secrets? (Time expired) the editor in the Australian today by Stephen The PRESIDENT—Order! I am not sure Nash from the Inner Urban Regional Housing that this is in the minister’s area of responsi- Council of Victoria? Will the government’s bility, but I will leave it to the minister as to plans for housing reform devastate our com- whether he wants to answer it. munity, and will the changes mean a decrease Senator HERRON—I am happy to reply in public housing funding in real terms? Does to that, Mr President. I think that properly is the minister agree with Mr Nash that if low a question that should be addressed to the income households are banished from inner Minister for Justice, and I will refer it to the urban public housing, they will remain in a Attorney-General. poverty trap? Senator NEWMAN—Yes, my attention Taxation Returns was drawn to the article. I find it quite Senator BOLKUS—My question is to the strange how close some members in this Assistant Treasurer. I refer the minister to the chamber are to the views that Mr Nash was Australian Taxation Office’s announcement propounding. But it is really rather sad, recently that taxpayers would not be penalised because Mr Nash’s group has not been one of for honest mistakes that they make in prepar- the many groups with whom I have consulted ing their tax returns using the Tax Pack.In over the government’s proposed changes to view of this commitment by an arm of the housing. Treasury department for which you have As you would remember, Mr President, responsibility, Minister, can you explain why there were not too many members of the the tax office does, in fact, intend to charge opposition who wanted to listen to the long interest in circumstances of honest taxpayer list of women’s organisations with whom I error in using the Tax Pack? Can you also had consulted on women’s issues. Perhaps explain what the rate of interest will be and they might be interested to know that I have what the anticipated level of revenue being met with ACOSS, the National Shelter, the Wednesday, 19 June 1996 SENATE 1821

Community Housing Federation of Australia, level of rent assistance if they choose to rent the National Community Housing Forum, the privately. Housing Industry Association, and the list Mr Nash also claims that rental subsidies goes on. Unfortunately, perhaps due to my are the most expensive form of housing newness in the portfolio, I was not aware of assistance. I say to him that maintenance of Mr Nash, but I would be very happy to see ageing housing stock is the most expensive him if he would like to make an appointment. form of housing assistance you can give. For the state housing authorities, which have been The interesting thing is that housing and slipping further and further behind in many community groups did not express concerns states in the maintenance of their housing about these proposals when they were an- stock, housing assistance will give them an nounced last year by the previous govern- opportunity to get better rents for their hous- ment. Their response to our proposals this ing. That will mean they are going to be able year has been positive as well, because they to keep those houses in a better state of are very positive for tenants whether they are repair. Also, the private rental market will get in the private sector or the public sector. It is a boost and so will the construction industry. going to mean flexibility for people as to It seems to me, whether you are in the private where they live. It is going to mean a reduc- or the public sector, whether you are a state tion in the waiting lists of people in public or in private enterprise in the building indus- housing, because the 200,000 people who are try, there is a win-win for all. (Time expired) currently waiting for a home will be given a higher level of financial subsidy. If they want Senator Hill—Mr President, I ask that to rent in the private sector, then they are able further questions be placed on the Notice to at the moment. They have an opportunity Paper. to live near where they can find work or Australian Federal Police where they have family support, et cetera. Senator VANSTONE—Mr President, on There is a huge discrepancy at the present 23 May Senator Bolkus asked me a question time in the assistance that goes to renters in in relation to the Australian Federal Police the private sector and the renters in the public special reference branch and Senator Ray sector. For example, at the moment the subsequently asked a question with respect to average Commonwealth rent assistance for the practice that any investigation into a those in private accommodation is around federal politician is notified to the Attorney- $1,500 a year. But, if you live in public General. I seek leave to incorporate the housing, you receive an average annual answers from both ministers in Hansard. subsidy of $4,000 a year from the state Leave granted. housing authorities. The answers read as follows— People renting from the private sector are ANSWER TO QUESTION WITHOUT NOTICE the people who are paying high rents. They Senator Bolkus asked me the following question are the most disadvantaged members in our without notice on 23 May 1996: community. It is important and imperative 1. I ask the Minister whether she can confirm that we give them more equity and justice. that the Australian Federal Police Special Far from being caught in poverty traps, as Reference Branch is investigating possible they are now, these people are going to be fraudulent activities by a South Australian Senator? Further, can the Minister guarantee, able to exercise real choice because the given Senator Chapman’s views as expressed money will be in their hands for them to be in this Chamber over the past few years, that make a choice between public and private. this investigation will be free of political They are not going to be banished to the interference? outer rim of the city. They are going to be Further, on 23 May 1996 Senator Ray asked me the able to make a choice to live where their following supplementary question: support network or their job opportunities are. 2. Would the Minister confirm the longstanding They will do that because they have a higher practice that any investigation into a Federal 1822 SENATE Wednesday, 19 June 1996

politician by the Australian Federal Police Responses: would be notified to the Attorney-General and Of the 50,000 or so vehicles in the Commonwealth Minister for Justice, Mr Williams? sector, about half have already been purchased with ANSWER TO ABOVE QUESTIONS sales tax paid. The exemption from sales tax on The Attorney-General has provided me with the purchases by Commonwealth trading enterprises following answers: such as Telstra and Australia Post was removed in May 1987. This included their exemption on cars. . The Australian Federal Police, as part of its responsibility to investigate offences against the DASFLEET manages a fleet of about eighteen Commonwealth, at times receive allegations that thousand vehicles. Of these, only about two and a prominent persons, including Members of Parlia- half thousand are provided for private use as part ment, are or have been involved in criminal of remuneration and therefore will be affected by activities. the Government’s announcement. Based on this estimate, and assuming that some 60% of these . In accordance with longstanding practice the vehicles are replaced annually, about $10 million AFP advises its Minister of the allegations. is expected to be raised from this measure. . Once an investigation has commenced it is the Based on the best information currently available, practice not to comment publicly or indeed the preliminary estimate of the impact of the confirm or deny an investigation is under way. measure across the whole of the Commonwealth, There are sound and proper operational and State, Territory and local government sector is in privacy considerations which make this approach the order of $50 million to $100 million. This essential. compares with the revenue estimates reported in the . It is a fact of public life that prominent persons press, which are in the order of $80 million to $100 at times are the subject of allegations that they million. have been involved in what could be termed The extent to which Commonwealth Departments criminal activities. The AFP where these matters and agencies will be supplemented for this addi- relate to offences against the Commonwealth or tional cost is a matter for consideration in the are against Commonwealth interests investigates context of the forthcoming Budget. the allegations fully. The administrative cost of removing the measure . Frequently such allegations are found to lack is not considered to be significant. There will be substantiation and are sometimes malicious in some reduction in the administrative costs of motor their intent. vehicle dealers as fewer exemptions will be claimed and there will be a corresponding reduction Wholesale Sales Tax on Motor Vehicles in the paper work they need to process. For Senator SHORT—On 17 June Senator Government bodies there will be some increase in Lundy asked me a question which contained administrative costs as particular bodies assess which vehicles they are entitled to purchase free of several parts and I undertook to get some tax. In many cases this assessment will be straight- additional information for her. I have that forward. In others, it may be necessary to consider information now seek leave to have it in- the purpose for which the vehicle is being pur- corporated. chased whereas previously all vehicles were Leave granted. purchased free of tax. 2. Further on the issue of the exemptions: The answer read as follows— Response: Sales Tax on Motor Vehicles . Minister, can you guarantee that the exemptions Questions directed to the Assistant Treasurer, administered by your department will continue Senator Short by Senator Lundy (Senate, Monday, to apply to TPI pensioners? 17 June 1996) TPI pensioners will retain their existing entitlement 1. Given that sales tax will apply to privately plated to sales tax exemptions on the purchase of motor vehicles controlled by the federal government, can vehicles. the minister inform the Senate: That is, those pensioners (for example veterans in . How many such vehicles will be affected?; receipt of a special rate of pension as a result of . What revenue will be raised?; being totally and permanently incapacitated from war-caused injury or disease) will continue to be . Will departments be supplemented as they were eligible to apply for motor vehicle sales tax exemp- for fringe benefits tax?; and tion under sub-item 96(1) in Schedule 1 to the . What will be the administrative cost of removing Sales Tax (Exemptions and Classifications) Act this exemption? 1992 as before. Wednesday, 19 June 1996 SENATE 1823

Taxation talking here about tax law. That is not a soft Senator COOK (Western Australia) (3.03 issue; that is a heavy issue. We are talking p.m.)—I move: about utterances by the Assistant Treasurer, who is in a position of authority in respect of That the Senate take note of the answers given by the Assistant Treasurer (Senator Short), to this act and is supposed to know and whose questions without notice asked by Senator Schacht words are bullets in a debate like this. There today, relating to sales tax legislation. is a whole industry out there depending on what interpretation the government is putting There is a black hole in the Australian econ- on these words. There is a whole industry out omy. That black hole is called Senator Short. there that litigates profusely about any differ- In this chamber we have become used to the ences or variations in these words and it is stumbling, bumbling, incompetent, inept incumbent upon an Assistant Treasurer, as it performances of Senator Short, but to that is incumbent upon a Treasurer, to use these litany of sad truths about his application as a words with sage deliberation as to their true minister, one now has to add the word meaning. ‘misleading’ to the performances by Senator Short. Today, again, he continued to mislead Senator Short did not do that. The only this chamber. conclusion one can come to is that he did not I refer the Senate to the answers that he do that deliberately because he knew he had gave to Senator Faulkner today and yesterday. a political hot potato on his plate. The foray When he answered Senator Faulkner yester- by the federal government in order to shift day he said, ‘You don’t know that you’ve got sales tax responsibilities onto the states blew it wrong again and what you’re saying is not up, became a debacle and the federal govern- in conformity with the act.’ Facts have re- ment backed down under pressure from the vealed that what Senator Faulkner said was states and saved out of that mess and political right and was in conformity with the act. embarrassment a couple of elements of their original proposal. That does not in any way We now have a pallid imitation of an deviate from the fact that they made an apology from Senator Short to set the record announcement on the 11th and not on the right, but no apology for his shameful re- 14th of this month which triggered certain marks about Senator Faulkner. Nonetheless, consequential steps in the federal act. let us avoid that because we have become used to Senator Short’s arrogance, bombast The only defence Senator Short can give to and ignorance, not to mention name calling in this blatant and obvious misleading is that he this chamber. Let us go to the facts. Senator did not know—in which case he pleads guilty Faulkner did not get it wrong. The important to the lesser charge of incompetence. But thing here is the misleading that Senator Short whichever way you go, he is guilty of either himself has engaged in. The question put to misleading or incompetence. That is a per- Senator Short today, in part, was: formance that we have become very well versed in over recent days and weeks as he ‘The Treasurer’s first announcement was an offer made to the states.’ has tried to conduct himself as Assistant Treasurer. The question continued: . . . the press release issued by the Treasurer on I will just leave that point for the moment June 11 says: and go to the point of the question that I asked Senator Short. It is true that the Prime The Government has decided to remove the exemp- tion from sales tax currently enjoyed by the Minister said that, because of interest rate Commonwealth, State and Territory and Local falls—which, by the way, are because of the Governments. extra competition between the banks which The question concluded: was introduced by the Labor government, not by this government—wage claims should Why did you mislead the Senate on that matter? somehow be reduced. The obvious corollary To students of the English language, that may of that is that if interest rates go up or state appear to be a pedantic point, but we are taxes and charges rise and battlers’ wages are 1824 SENATE Wednesday, 19 June 1996 eroded accordingly, there is justification for The Labor government had increased a wage claim. income and horrendous borrowings. It sold off the silver and stopped investing. No wonder Senator Short never answered any of those the Commonwealth’s finances are in a mess. questions because, again, he is embarrassed. No wonder we have to look at cutting expens- What we have here is an example of the es everywhere we possibly can. No wonder Prime Minister saying that in fact the claims the sales tax exemption had to be looked at. that apparently the ACTU will lodge are It was your fault—the blame is on Labor’s justified, but one should regard all indicators, side. not just the tax indicators. That is what the Prime Minister has said. The avoidance of Senator FAULKNER (New South Wales— that question here today again shows how Leader of the Opposition in the Senate) (3.10 quickly this government has become out of p.m.)—We have already an abject admission touch. (Time expired) from Senator Short this morning, who came into this chamber with his tail between his Senator GIBSON (Tasmania—Parlia- legs— mentary Secretary to the Treasurer) (3.08 p.m.)—I also rise to talk on Senator Senator Campbell—Madam Deputy Presi- Faulkner’s question to Minister Short. I note dent, I rise on a point of order. The Senate Senator Cook’s comment about a black hole. should know what motion is before the chair The black hole is in fact the big hole that the at the moment. Labor government left behind because of its Senator West—If you don’t know, you poor management of its own resources. It is shouldn’t be here. important for the Senate and the Australian Senator Campbell—Perhaps Senator West community to realise that over the last four could inform the Senate what motion she years the Labor government increased income thinks is before the chair. Senator Cook from taxpayers by over 30 per cent. moved to take note of answers given by Senator Sherry—Because the economy Senator Short. Perhaps you would like to rule grew. on whether it is within the standing orders to take note— Senator GIBSON—Hardly any businesses Senator West—We have already been increased by 30 per cent, senator. Income through that ruling. from taxpayers increased 30 per cent over four years, from $95 billion to $124 billion. Senator Campbell—No, we haven’t. The Labor government spent it all. At the Senator Cook took note of at least two an- same time they went out and borrowed heavi- swers, possibly three. Perhaps we should find ly in the marketplace and lifted debt from the out from Senator Faulkner whether he is middle of 1991 to this year from $32 billion speaking to the same motion and, if he is to $100 billion, and spent all that. speaking to the same motion, which answer he is referring to, so that we can have a Senator Sherry—Are you defending debate on one particular answer and not three Senator Short? different answers or anything that you happen Senator GIBSON—Yes, I am. The Labor to want to talk about at the time. government also went out and spent the Senator FAULKNER—On the point of money from the sale of assets—$8.7 billion order: we have a situation where previous worth of assets were sold off, the silver. They President’s have ruled that it is in order for a spent all that and, worse still, they stopped senator to move that note be taken of more investing in infrastructure. Ten years ago than one answer given by an individual infrastructure was eight per cent of Common- minister during question time in this chamber. wealth outlays. Five years ago it was about The most recent example of that is a motion five per cent of Commonwealth outlays. This I moved in relation to taking note of a num- current financial year, on Labor’s budget, it ber of answers to questions directed to Sena- was minus 2.3 per cent. tor Vanstone just a few sitting weeks ago. Wednesday, 19 June 1996 SENATE 1825

The DEPUTY PRESIDENT—I understand point of order on a matter on which you have it is the practice that senators may move to already ruled. take note of multiple answers. If they do that, Senator Abetz—Madam Deputy President, they may speak to those questions and an- on the point of order: the submission made to swers. If they only move to take note of one you by Senator Faulkner is in direct conflict answer, then they should be restricted to that. with the motion moved by Senator Cook. I am advised that Senator Cook did move to Senator Cook moved that the Senate take note take note of answers given by Senator Short, of answers. As a result, it must be all the in which case it would be in order to speak to answers delivered by Senator Short today, the matters that were raised in those answers. including questions from our side of the Senator FAULKNER—We have had this chamber, from the Democrats, et cetera. If morning an admission from Senator Short that that is the case, it could hardly be asserted, he misled the Senate during question time Madam Acting Deputy President, as Senator yesterday in relation to questions that I Faulkner has just said— directed to Senator Short in relation to section 130B of the Sales Tax Assessment Act. It was Senator Murphy—Madam Deputy Presi- a humiliating backdown, indeed, from Senator dent. Short this morning. I want to place very Senator Abetz—She is Madam Deputy clearly on the record that that is not the only President. Thank you for that correction. If occasion— you want to keep on like that, you will be Senator Campbell—Madam Deputy Presi- denied even more time. dent, l rise on a point of order. I think it The DEPUTY PRESIDENT—Senator would help all senators—and there are a Abetz, please keep to the point. number here who want to take note of an- swers—to know which answers we are taking Senator Abetz—The point is that Senator note of. Senator Short was asked questions on Faulkner was asserting that the Labor Party a range of issues today. Some of them were had moved this motion in relation to ‘non- in relation to the sales tax decisions. Some of answers’. The simple fact is that the motion them were in relation to the New South Wales they moved allows the Senate to take note of government’s decision to put taxes up. all answers given by Senator Short, including those from our side of the chamber. If that is I think it is very appropriate for senators in the case, the submission made by Senator this chamber to know what Senator Faulkner Faulkner simply does not stand. is taking note of and what this debate is about. Is it two answers, three answers, four The DEPUTY PRESIDENT—I think it is answers or five answers? There needs to be clear that the debate is taking note of all clarification on this. Is it all of Senator answers that have been given by Senator Short’s answers or is it restricted to two or Short. Senator Faulkner did appear to be three? Does it relate to inflation? Does it addressing an answer that was given yester- relate to sales tax? Does it relate to the New day, but I expect that he is coming to the South Wales government’s decision to in- point of those that were given today. crease taxes? Senator FAULKNER—I did, of course, Senator FAULKNER—On the point of address the issue that I commenced my order: what we have here is a transparent contribution on in a question to Senator Short attempt by Senator Campbell to protect today. Let me make it absolutely clear: not Senator Short from senators who want to only did Senator Short mislead the Senate— address issues and answers, or non-answers, he has admitted to misleading the Senate this to questions raised by Senator Short during morning—he has also been exposed during question time. Senator Campbell is deliberate- question time today as having misled the ly—deliberately—flouting the ruling you gave Senate when he said: just a minute ago. I ask you to rule him out . . . the Treasurer’s first announcement was an offer of order and discipline him if he takes another to the states... 1826 SENATE Wednesday, 19 June 1996

He used these words in an attempt to weasel ment—I am getting the details out for tomor- and wimp his way out of a difficult situa- row—there were four ministers caught in the tion—the debacle of the Premiers Conference. same trap. Senator Schacht was caught, I He used those words ‘the Treasurer’s first think at estimates, on customs. Whether it was announcement was an offer to the states’. Of in estimates or over here, you were caught in course, the press release from the Treasurer is the same way. You were given misleading absolutely clear. That press release, dated 11 information. You came in here and defended June, says: yourself. Your colleagues defended you to the The Government has decided to remove the exemp- hilt. You were defended on that when you tion from sales tax currently enjoyed by Common- were in the same position. I will not name the wealth, State, Territory and Local Governments. other three because I am not sure, but— It continued: Opposition senators interjecting— The removal of the wholesale sales tax exemption Senator PANIZZA—All right, I will. for general purpose road vehicles purchased or Senator Cook was one, from my knowledge. leased by Commonwealth, State and local govern- ments is to have immediate effect. Senator Michael Tate was another one. And there was one other. In my belief, there were It is absolutely clear—a black and white case four that fell into the same trap, by someone of Senator Short having misled this Senate else’s ineptitude. You have to remember that. again on a very important matter. The record No-one over there offered any resignation. of Senator Short in terms of his capacity to You fought it and fought it, all the way along. answer any question directed to him by the opposition is abysmal. Question after ques- I come to another point. Senator Schacht tion, we see Senator Short try to waffle and misled the parliament in a question today. He windbag his way through because he does not stood up there—anyone can tell me if he did have a clue. not—and said that all states are raising taxes because of the outcome of the Premiers He talked today about his responsibility Conference. Is that right, Senator Schacht? versus the responsibilities of the Tax Commis- sioner. Senator Short is the Assistant Treasur- Senator Schacht said that all states are er of this country. The portfolio allocation of going to raise taxes. Did you hear Richard ministerial function says that he is responsible Court’s statement on Friday night when he for the administration of taxation laws and got back to Perth and completely ruled out administrative matters relating to the Austral- any state tax rise? Do you remember that? ian Taxation Office. It is reasonable to expect No. He chose to mislead the Senate with that that he would be able to answer at least some statement. If the state of New South Wales, of the questions asked by the opposition in under a Labor government, has done that, this chamber. Your performance is pathetic. then Senator Schacht should mention them You are an abject failure. You are inept. You and leave anyone else out. But the state of are incompetent. You are a disgrace. (Time Western Australia has ruled that out. expired) Senator Faulkner asked a question and Senator PANIZZA (Western Australia) pointed out that there is doubt amongst motor (3.19 p.m.)—Those on the other side have retailers as to sales tax exemptions. Obvious- continually tried to hang Senator Short for the ly, Senator Faulkner and most of you over mistaken information that was supplied by a there have never been in business, otherwise senior officer of the tax department. That you would know the answer. senior officer has admitted his mistake and Senator West—Oh! apologised. The commissioner has admitted Senator PANIZZA—Listen, Senator West. that mistake and apologised. Let us get to the The retailer does not have to worry about the point. sales tax exemption. It is exempt if the pur- During the 13 years you people were in chaser gives the retailer a declaration that it government and during the eight years that I is eligible for exemption. On that certificate was here while you people were in govern- he will exempt it or he will not exempt it. So Wednesday, 19 June 1996 SENATE 1827 it is not up to the motor retailer to work it Immediately on the conclusion of question time, I out. In this case we are talking about the provided the Senate with some additional advice federal government, about state governments that my office had received in the interim from a senior officer of the Taxation Office. and about local government. They have enough financial, legal and commercial It does not actually say who it was. We got advisers who can tell them precisely whether a letter tabled today from the taxation com- or not something is exempt. If they sign a missioner apologising for that advice. But certificate, it is exempt. If they do not sign a yesterday in the debate Senator Short on three certificate, it is not exempt. The retailer does occasions referred to his advice as coming not have to worry about running off to his from the taxation commissioner. On page accountant or solicitor or anyone like that. 1689 of yesterday’s Senate Hansard he says: Those four ex-ministers, before they start The commissioner and the tax office are of course casting stones, should think of their own aware of this. ineptitude, and think of the stupid question Then, on page 1691 he says: that was asked about the exemption. They That is certainly what the taxation commissioner should look at their own failings rather than believes and it is certainly the date from which the attempt to ascribe failings to the minister over taxation commissioner is working. If I have to put here. (Time expired) my money on whether it is Senator Faulkner or the taxation commissioner who is right in the interpre- Senator SCHACHT (South Australia) tation of the tax act, it is no contest. (3.25 p.m.)—The issue today, covered in a Finally, on page 1996 Senator Short says as number of questions, is in two different parts. an interjection to Senator Sherry: Senator Short said, ‘This was a matter for the taxation commissioner and it is not for me’, Are you saying that the taxation commissioner is even though he is the minister, under the wrong? executive arrangements, responsible for the Even in Senator Campbell’s remarks he again Taxation Office. He is trying to say that the confirms that it is the taxation commissioner, minister in this parliament is not responsible but I will not hold Senator Campbell respon- for answering questions about any statutory sible for the problems of Senator Short, which authority under Commonwealth legislation, if are all totally self-inflicted. you take Senator Short’s response today to its Yesterday in the debate the taxation com- logical conclusion. That is absurd. missioner was quoted by Senator Short as his authority. Today it is some unnamed lower We all knew when we were ministers that officer who was at fault. That is the reason whether it was a statutory authority under that Senator Short says, ‘I got it wrong.’ He whatever form, we had to answer the ques- has again misled. He says that we have got it tions in the parliament people asked you wrong. What we want to know is why he was about what they were doing, even though quoting yesterday the taxation commissioner there might be an independent board, a chief as the source of his authority and his advice executive, a statutory office holder. No-one and then had to apologise this morning in his accepted that you could stand up and say, statement—it is no longer the taxation com- ‘That is not for me. That is for the taxation missioner who gave him the advice, it is a commissioner. Go and ask him.’ That is what senior officer of the Australian Taxation Senator Short has tried to say today on these Office. matters about the timing of the statement, the press releases, the newspaper advertising and It is clear that there is a significant differ- so on. ence in the bumbling mistake this minister has made. He ought to come clean today and Senator Short has also said that the reason point out who he got the advice from. Was it he made a mistake in misleading the Senate from the commissioner? Was it the commis- yesterday is that he was advised by an ‘officer sioner in the days leading up to when you of the Taxation Office’. It is in his statement were speaking yesterday? Who was the officer this morning: who suddenly has been put in the gun? 1828 SENATE Wednesday, 19 June 1996

I would also ask: if the officer has made knows, when one receives advice from a such a serious mistake, what penalty or senior level in the department, it is reasonable disciplinary action has the taxation commis- to expect that that advice reflects the view of sioner taken against such officer for giving the department. you advice which you now say was wrong? As I understand it, in this instance what This officer, you are saying, is responsible for happened yesterday within the tax office—as giving advice to you which you gave to the the commissioner has now explained it and it Senate which was misleading and not the is essentially contained in the letter—is that truth. This will be a real test for the taxation there was a legitimate difference of view commissioner and the department you are within the Taxation Office as to the interpre- responsible for. This is a serious breach. Will tation— the officer pay a penalty for it, or will it all be glossed over because they know that what Senator Schacht—Did you talk to the they are doing in the letters that the taxation taxation commissioner before yesterday, commissioner tabled today is protecting your personally? The actual taxation commission- miserable reputation, which you cannot er? perform in this place. You cannot answer Senator SHORT—No, I did not speak to questions. Above all else, you do not even the taxation commissioner. accept that you are responsible for the Aus- Senator Schacht—The Hansard is at least tralian Taxation Office—(Time expired) misleading on that. Yesterday it implies very strongly that you did talk to the taxation Senator SHORT (Victoria—Assistant commissioner. Treasurer) (3.30 p.m.)—I wish to say a few things in this debate in response to the abso- Senator SHORT—Generically, when one lutely wild assertions made on the other side talks to the Taxation Office and gets a view about the matters occurring in the last few from the Taxation Office from a senior level, days, including the lack of understanding by it is the normal practice to say that one has the opposition in relation to ministers’ relative had advice from the commissioner. I think I responsibilities and the Commissioner of used both terms, the commissioner and the Taxation’s responsibilities. The Commissioner ATO. Senator Schacht is really trying to split of Taxation has statutorial responsibility for hairs in a very petty and silly way. the administration of the taxation laws of this I accept the advice of Mr Carmody, the country. It is the responsibility of government taxation commissioner, to me that there was to set the laws in the parliament and it is the a legitimate difference of opinion within the responsibility of the commissioner to adminis- Taxation Office as to the interpretation of ter those laws. That is a statutory requirement section 130B of the Sales Tax Assessment placed on him. That is why section 130B of Act. The commissioner, Mr Carmody, was not the Sales Tax Assessment Act—which has aware until after question time yesterday—as been the subject of the debate over the last I am now advised—of the fact that there may couple of days—places the responsibility on be a difference of view within the Taxation the commissioner to publish in the news- Office. As soon as he was made aware of papers within seven days details of proposed that—being aware of the advice that his sales tax changes. senior officer had conveyed to me and which I then conveyed to the Senate immediately Senator Faulkner talked about it being after question time—he very properly dis- pretty humiliating to have to say in here, ‘I cussed the matter with us. Of course, if the was wrong.’ Of course it is humiliating and commissioner himself has a view of an I very much regret having to come in and say interpretation of the act under his responsibili- that. However, as I and the commissioner ty— have pointed out, I acted in good faith on advice provided to me. The advice I received Senator Carr—He agreed with us. came from a senior officer in the Australian Senator SHORT—Yes, he agreed with Taxation Office. As Senator Schacht well you, but there was a legitimate difference of Wednesday, 19 June 1996 SENATE 1829 view between him and his senior officers. As Deputy President. Senator Wheelwright was a result of that, the commissioner’s view making debating points about a number of prevails. He is the head of the office and it is questions answered by Senator Short. It was for that reason that I have accepted—as he nothing more than that, a debating point. It accepted—responsibility for the incorrect was a spurious point of order. advice with which I was provided and which The DEPUTY PRESIDENT—It is very caused me inadvertently to mislead the Senate early in Senator Wheelwright’s contribution. yesterday. I have apologised for that today in He certainly appeared to be referring to my statement. I have tabled all the relevant answers given previously. I remind Senator material, namely the commissioner’s press Wheelwright that the motion before the statement of yesterday and his letter to me of chamber is to take note of answers given by today. There are many occasions on which Senator Short today. I am sure Senator this happened to ministers on both sides. I am Wheelwright is getting to that point, but that sorry for it, but these things happen. (Time is the motion we are discussing. expired) Senator WHEELWRIGHT—As I ex- Senator WHEELWRIGHT (New South plained, one cannot look at this answer only Wales) (3.35 p.m.)—In order to understand in the context of today. As I said, it comes the importance of the questions by Senator after 74 questions and several of them are Faulkner to Senator Short today, one has to important in the context of this question. It understand that on my count it comes after 74 happened in the same way with other an- questions by the opposition to the government swers. In answer to a question about DIFF, he and to him. made absolutely no mention of DIFF. There Senator Carr—Seventy-four! was a question as to the state of the economy Senator WHEELWRIGHT—I had count- where there is a clear contradiction with his ed 74, but it may be more than that. He said leader. that he thought inflation was a five year high. Senator Campbell—Yesterday again; get He was completely wrong about that. He was on to today. asked about the DIFF scheme in two separate Senator WHEELWRIGHT—May I finish questions and he did not mention one word my answer? As to the question of sales tax, about DIFF. He did not mention DIFF once there is a clear lack of understanding as to in his entire answer. what the statutory requirements are for in- Senator Campbell—On a point of order: forming the public. Why does all of this I totally respect your ruling, Madam Deputy happen? The answer is pretty simple: because President, and agree with your ruling in the minister’s understanding, as he has dem- relation to taking note of answers on the same onstrated in the Senate, stopped in 1975 when day. To try to take note of 74 answers over he left the Treasury. He basically went out to the last 10 days is clearly outside your ruling. lunch then and stayed there. If you go back Could you please direct Senator Wheelwright and look at all of the speeches that he has to restrict his comments to answers given by given, there is absolutely no understanding. It the minister this day? is one speech and one speech only. Senator Sherry—On the same matter, To this question he has given the same clearly there is no point of order. answer he has given to every other question. It is the same one he used in opposition and Senator Panizza—That is for the Deputy it is the same one he is using in government President. now. There is absolutely no variation to it. Senator Sherry—Yes, I will let the chair This bluster and this abusing people, which is decide, but I am making a comment about the a tactic which he has used, makes absolutely point of order. That is the third occasion on no contribution to government policy at all. which Senator Campbell has interrupted He has made no contribution at all to wages debate and clearly it is not a point of order. policy, inflation policy, current account policy You have made a very clear ruling, Madam or savings policy. All we get, as we got to 1830 SENATE Wednesday, 19 June 1996 this question, is the same answer he practised Senator CRICHTON-BROWNE—Thank in opposition and which he trots out every you, Senator Kemp. In fact, it was my prece- time now he is in government. The problem dent that you referred to. I move: for him is that he does not know the answer. That the Senate take note of the answer given by He has clearly shown that he does not know the Minister for Aboriginal and Torres Strait the answer in these areas. Of course, the other Islander Affairs (Senator Herron), to a question corollary problem is that he is not in the loop. without notice asked by Senator Crichton-Browne He is not consulted by the Treasurer or by the today, relating to Mr Ian Viner QC’s position as a Prime Minister or by all the other people member of the Native Title Tribunal. making the decisions. When he does not I believe this to be one of the grubbiest know, it is because nobody has bothered to episodes that will go down in the annuls of consult him. the Senate. It shows the level of degradation, This will hit the government with a big dull corruption, lack of integrity and decency that thud when it comes to the budget. In the is able to be portrayed by certain people for budget if you don’t know the work, how can their own selfish ambitions. you negotiate with other people? If you don’t know the work, how can you go to the oppo- Mr Viner was not the first person to go into sition and the minor parties and discuss what the Justice Office and seek this unprocessed the government wants to get through the and withdrawn application. Previously, Mr Senate? This is where this question is import- Eoin Cameron’s employee, Mr Gaspar, had ant and this is where this constant answer he made four applications. In fact, he got so gives which has no content is important. He frustrated when he was refused because he will be completely unable to get the budget was not a party to the matter, that he demand- through the Senate because he simply does ed to see a higher person and when that was not understand the work. His laziness in refused, he then refused the application. The opposition has been translated to his laziness very day that Mr Titelius, a known political in government and he will fail on those opponent of mine, the clerk in question, grounds. (Time expired) ejected Mr Gaspar from Mr Cameron’s office, as he had Mr Nick Nolan, a close personal Question resolved in the affirmative. friend of Mr Cameron’s also—that very same The DEPUTY PRESIDENT—Order! The day—he provided the order to Mr Viner. time for this debate has concluded. And that very morning, because my wife Senator Crichton-Browne had learnt of Mr Viner disclosing private Senator CRICHTON-BROWNE (Western conversations, she rang him, and, on my Australia) (3.40 p.m.)—Madam Deputy advice, she wrote down verbatim down what President, I seek the indulgence of the Senate he said, and what she said. And she said, ‘Ian, for an extension of this debate for five have you betrayed my trust in you as a minutes because, as you understand, inde- lawyer’? And he procrastinated and she asked pendents rarely get to ask a question. When him the question again, and he said, ‘No, I they do, if they are not given a right of reply, have not’. Within one hour of that conversa- it simply means that they do not get a right to tion, Mr Viner QC, on the National Native reply for a month at a time. Title Committee—that’s why I raise the ques- The DEPUTY PRESIDENT—Is leave tion—went down to the court and convinced granted? this clerk—I must say it wasn’t too much to Senator Kemp—I wish to make a brief convice him—to give him the document. comment. I have checked with the clerks and The legal practitioners complaints commit- have received some preliminary advice that tee thus far has sought to draw a distinction there is some precedence for this, but we between the fact that Mr Viner, when con- would expect it to be kept to the five-minute sulted by my wife, referred her to somebody limit. else. To me that is analogous to a woman Leave granted. going to a GP, being referred to a gynaecolo- Wednesday, 19 June 1996 SENATE 1831 gist and then the GP going around and dis- mation because my preselection was coming cussing the private and intimate details of the up. This is something that happened six years health of the patient who went to see him. In previously, which he knew of from my wife. some quaint, curious way the legal practition- He said, ‘I just want it in case it comes up at ers board thus far—they will find themselves his preselection.’ Why would it come up in in court as a result of it if they do not review my preselection if it was not for the fact that their position—drew that distinction. Can you a dirty, filthy, grubby sheet was distributed honestly believe that that is the distinction using a database provided by at least one that they drew? senator in this chamber and then produced by Let me read very quickly from the tran- Mr Viner and Mr Cameron like confetti script of the appeal that poor old Mr Titelius around the place? put in. Talking about Mr Viner, he said he That is not the sort of standard I would did not have an emotional interest in it be- expect of the Labor Party and the Liberal cause as he was requesting the order, he told Party. The Prime Minister at the time, Mr me details about the incident, not the whole Keating, said on 6PR radio that he was incident, but he was familiar with what had disgusted. He thought it was filthy and it is gone on. He said: not the sort of thing he would condone, but I wasn’t telling him something that he didn’t know he would rather condemn. (Time expired) already. Question resolved in the affirmative. In other words, he was going down there using his prior knowledge. He said: NOTICES OF MOTION I gave him the order and he went off, and that was Industrial Relations System the last I—I also said, because Ian Viner was sort of like a third party— Senator JACINTA COLLINS (Victoria)— by leave—I give notice that, on the next day that means, by definition under the act, an of sitting, I shall move: interested party— That the Senate: to take into account the needs of Esther Crichton- Browne—because although it was a public record— (a) notes the overwhelming Australian and overseas evidence that the majority of which, of course, he knew it was not— Australian workers will be disadvantaged by just to be sensitive to her needs and be very careful the Government’s proposals to reform with how you use the document. Then Ian Viner Australia’s industrial relations system; and said, "I will use this document with the utmost (b) condemns the Government for continually discretion". failing to acknowledge women’s concerns in He then gave it to Mr Cameron’s son, who particular, whilst defending the ‘rock solid’ then took it back to Mr Cameron’s office guarantee of the Prime Minister (Mr How- which then photocopied it in hundreds in col- ard) that no worker will be worse off. oured paper and distributed it like confetti DOCUMENTS around the place, including to members of this chamber. It was distributed widely, Auditor-General’s Reports together with a filthy, disgusting, diabolical, Report No. 29 of 1995-96 criminally defamatory dirt sheet as well. The DEPUTY PRESIDENT—In accord- There are two copies that I know of. One was ance with the provisions of the Audit Act sent to Senator Bob Collins, which he had the 1901, I present the following report of the decency to return to me, without even reading Auditor-General: it, I believe. The President of the Senate showed the integrity for which I respect him Report No. 29 of 1995-96—Performance by also sending his copy back to me as well. Audit—Management of the Commercial Mr Viner said: Estate—Australian Estate Management. I will use this document with the utmost discretion. Senator MICHAEL BAUME (New South That tells you where we are. Except Mr Viner Wales) (3.47 p.m.)—by leave—I move: did say, curiously, that he wanted this infor- That the Senate take note of the document. 1832 SENATE Wednesday, 19 June 1996

This report contains some quite significant Place in Melbourne, which has been the implications for the government and for subject of some controversy in recent times, potential expenditure on government build- is down from a valuation of $123.8 million to ings. It raises some serious problems that $103.9 million—down about $20 million. have been left over from the previous govern- ment—multimillion dollar problems. Section Substantial write-downs, not of the same 9 of this report, dealing with valuations of dollar amount but certainly very large per- office estates, shows the consequences of the centage amounts, have occurred in other changed arrangements—and I might say buildings. For example, the George Knowles sensibly changed arrangements—under which building in Barton is down from a valuation Commonwealth departments will no longer of $3.35 million in 1994 to only $700,000 as necessarily be tied to occupancy of what at 30 June 1995—almost an 80 per cent might well be inappropriate government reduction in value. These reductions in values owned offices. They will have the opportuni- are obviously of some significance. I com- ty, basically, to get the best, and in many mend the Auditor-General for revealing them. instances the cheapest, option, which may The technique in valuation also incorporates well not be the occupancy of a government a forecast of capital requirements associated owned building. with the asset as part of the valuation process. There are very substantial capital expenditures During the course of the audit by the to come, as revealed in this audit report. As Auditor-General into the management of the the audit report states: commercial estate, it was observed by the Auditor-General that the Australian Valuation The 1995 review of the annual valuation of the Office, acting under instructions from Austral- properties highlighted a significantly lower valu- ian Estate Management, had revised the 1994 ation, which reflected the lack of executed tenancy valuations for the government’s 20 most agreements, and also the significant capital needs in the ACT property portfolio. The ACT values valuable properties. The 1995 change to the reflect a building portfolio that features many old 1994 valuation basis required that valuers not buildings needing extensive refurbishment. In assume indefinite Commonwealth tenancy as addition, valuations in a number of regions were they had done in 1994 but value the proper- recalculated on the basis of month by month ties on the basis of specific tenancy commit- tenancies being in place rather than a long-term ments. On this basis an open market value tenancy agreement. This depresses property values which reflects net realisable value is deter- until fixed-term tenancy agreements are in place. mined. The Auditor-General says that the completion of core occupancy agreements and further As a result of this, there has been a massive occupancy agreements is essential—and I write-down in the value of Commonwealth underline that word—to ensure the improved properties, particularly in Canberra. Some of certainty in the valuation process. these involve write-downs of well over $20 million per building. For example, the admin- So the present government has certainly istrative building in Parkes was valued in inherited some serious problems. In terms of 1994 at $53 million. Its current valuation is the capital expenditure required on these down by $25 million to only $28 million. We buildings over the next five years, the audit have the Campbell Park offices at Pialligo report reveals that forecasted capital require- down from $67 million to $42.6 million—a ments over the next five years are ‘sub- $24 million cut. The Edmund Barton building stantial’. There had been an existing capital in Barton is down by $11 million. The Benja- funding requirement over this period totalling min Offices in Belconnen are down by $15 $308 million and a forecast need for addition- million. The Cameron Offices in Belconnen al capital amounting to $540 million after are down from a value of $65 million to only taking into account offsets and property sales $39 million—a $26 million cut. The Jessie proceeds. That makes a total for capital Street Centre in the CBD of Sydney is down requirements of $848 million on government by $13 million to $112 million. Casselden owned properties over the next five years. Wednesday, 19 June 1996 SENATE 1833

This government has to find the money Baume has said that the report shows that that from somewhere. It has inherited another write-down of the valuation has gone up by problem. The additional capital funding of up $10 million. to $194 million will also be required to meet What did then Minister Frank Walker, and the forecasted shortfall in funds required to therefore the former Labor government, say meet the Commonwealth’s liability at the end about that loss? He said, ‘Oh, but it is only a of 2008 in concluding a major finance lease, paper loss.’ which is a very complicated one that is outlined later on in this audit report. Senator Michael Baume—Ha, ha! Senator CAMPBELL—He is probably There is no doubt that these very expensive right, Senator Baume. There was a lot of property commitments do raise interesting paper collected from a lot of taxpayers, questions about how best the government’s folding stuff ripped out of their back pockets property should be handled. In fact, it raises and spent by the Labor government on this a significant question as to whether the building. If the government sold Casseldon government really has no requirement to hold Place now, we would get paper for it, we properties of this kind, whether it in fact would get a lot of folding stuff back. The might not be better off disposing of them so difference between the paper stuff that was that it does not end up with the sorts of ripped out of the taxpayers’ back pockets and massive writing-down of property values and the paper stuff that we would get if we put it massive capital commitments that are revealed on the market today is about $110 million in this audit report. I commend the audit worth of paper, to use Frank Walker’s words. report to the Senate. We welcome this report because this Senator CAMPBELL (Western Australia— government will finally bring some sense to Parliamentary Secretary to the Minister for the the Australian government’s property hold- Environment and Parliamentary Secretary to ings. They will, through the task force estab- the Minister for Sport, Territories and Local lished by the Minister for Administrative Government) (3.54 p.m.)—I will not delay the Services (Mr Jull), finally start tearing off the Senate for too long because I know that the layers and layers of cover-up that were ap- Manager of Government Business in the plied to this portfolio, firstly by Minister Senate (Senator Kemp) will seek to do per- Bolkus when he was in charge of it and then sonal injury to me if I do so. This report by by former Senator McMullan. God help the Auditor-General is one that I think the Australia if he ever became Treasurer; he is Senate should welcome. Senator Baume now the shadow Treasurer. briefly alluded to the fact that it did come out of some actions taken by this Senate which Senator Sherry—He is not; Gareth Evans were opposed, of course, by the then Labor is. government, which was most embarrassed by Senator CAMPBELL—He was a disaster the performance of a number of its property as admin services minister, an absolute disas- operations, particularly involving Centenary ter. Sorry, he is shadow industrial relations House, but more lately Casseldon Place. minister. But God help Australia if he even gets any job in a future government. Let us This Senate demanded that the former hope that he never does, because he was a Minister for Administrative Services, Frank disaster in this area and sought to cover up Walker, table a range of documents in relation this $110 million disaster. Then there is Frank to the Casseldon Place building. It showed at Walker. that time that the Labor government’s failed attempt to construct a building in the Mel- Senator Michael Baume—Walker was a bourne business district and to fill it with disgrace. Commonwealth tenants had actually lost the Senator CAMPBELL—Thank God for the Australian taxpayers in excess of $100 new member for Robertson (Mr Lloyd), million. This report confirms that that loss is because Walker was a joke. He tried to cover actually more like $110 million. Senator up the Casseldon Place black hole. I am very 1834 SENATE Wednesday, 19 June 1996 glad that the audit office has done this de- Hicks, Mr Sercombe, Mr Somlyay and Mr tailed work on looking at the previous Zammit. government’s handling of property matters. Parliamentary Joint Committee on the National The Senate Standing Committee on Finance Crime Authority—Mr Bradford, Mr Filing, Mr and Public Administration also did a detailed Sercombe, Mr Truss and Mrs West. report. Parliamentary Joint Committee on Native Title and the Aboriginal and Torres Strait Islander This report contains a lot of very useful Land Fund—Mr Causley, Mr Dondas, Mr information for all senators to look at to see Entsch, Mr Melham and Mr Quick. what happens with this multi-billion dollar Joint Standing Committee on Electoral Mat- property portfolio. It was handled in such a ters—Mr Cobb, MrLDTFerguson, Mr way that if it was a private property trust that Griffin, Mr McDougall and Mr Nairn. had dealt with it this way they would have Joint Standing Committee on Foreign Affairs, been de-listed years ago. They would have Defence and Trade—Mr R C Baldwin, Mr been run out of Australia, run out of town. Bevis, Mr Bradford, Mr Brereton, Mr Brough, Mr Dondas, Mrs Gallus, Mr Georgiou, Mr E People talk about Christopher Skase sitting L Grace, Mr Hicks, Mr Hollis, Mr Jones, Mr in Majorca. Quite frankly, the ministers who Lieberman, Mr Nugent, Mr Price, Mr Sinclair, were responsible for the cover-up of this Mr Slipper, Mr S F Smith, Mr Taylor and Ms disastrous management of billions of dollars Worth. worth of taxpayers’ offices are really no better Joint Standing Committee on Migration—Mrs and no worse than Christopher Skase in Gallus, Ms Gambaro, Mr Holding, Mr Kerr, Majorca. I commend the report to the Senate. Mr Sinclair and Dr Theophanous. I commend the new government’s very Joint Standing Committee on Treaties—Mr positive action in appointing a property task Adams, Mr Bartlett, MrLDTFerguson, Mr force to start implementing the sorts of rec- Hardgrave, Mr McClelland, Mr A C Smith, ommendations made in this report. Mr Taylor, Mr Truss and Mr Tuckey. Question resolved in the affirmative. CUSTOMS AMENDMENT BILL 1996 COMMITTEES CUSTOMS TARIFF AMENDMENT BILL (No. 1) 1996 Scrutiny of Bills Committee First Reading Report Bills received from the House of Represen- Senator COONEY (Victoria)—I present tatives. the third report of 1996 of the Senate Stand- ing Committee for the Scrutiny of Bills. I also Motion (by Senator Kemp) agreed to: lay on the table Scrutiny of Bills Alert Digest That these bills may proceed without formalities, No. 3 of 19 June 1996. may be taken together and be now read a first time. Ordered that the report be printed. Bills read a first time. Membership Second Reading The DEPUTY PRESIDENT—A message Senator KEMP (Parliamentary Secretary to has been received from the House of Repre- the Minister for Social Security) (4.00 p.m.)— sentatives notifying members of various joint I move: committees. That these bills be now read a second time. The message read as follows— I seek leave to have the second reading Message no. 45, dated 19 June 1996— speeches incorporated in Hansard Parliamentary Joint Committee on Corpora- Leave granted. tions and Securities—Mrs Johnston, Mrs D M The speeches read as follows— Kelly, Mr Latham, Mr McLeay and Mr Sinclair. CUSTOMS AMENDMENT BILL 1996 Parliamentary Joint Committee on the Austral- The Customs Amendment Bill 1996 introduces ian Security Intelligence Organization—Mr changes to Part XVA of the Customs Act 1901 in Wednesday, 19 June 1996 SENATE 1835 relation to the Tariff Concession System and to by- they produce substitutable goods and that the laws and determinations relating to certain Policy importation of goods under the Tariff Concession By-laws under sections 271 and 273 of the act. Order would cause significant adverse effect to THE TARIFF CONCESSION SYSTEM them. In future, the onus for demonstrating that there are no substitutable goods produced in The changes to the Tariff Concession System stem Australia will rest, in the first instance, with the from an evaluation conducted in 1995 which found applicant for the Tariff Concession Order. that while the System was making concessions readily available to importers, Australian manufac- It will be the responsibility of the tariff concession turers were being adversely affected by its oper- order applicant to research the existence or other- ation. It concluded that Tariff Concession Orders wise of Australian manufacturers of substitutable should only be made where there is no Australian goods prior to lodgement of the application with manufacturer of goods substitutable for those Customs. If the application does not adequately imported. establish that the research has been done, Customs will reject it as not meeting the requirements of the This position was accepted by the former govern- legislation. This appears in items 7 and 8 on page ment, and the Tariff Concession System changes in 5 of the bill. this bill are essentially as they were announced last year. The application will also have to provide the name of the importer seeking the concession. The The purpose of these changes is to more closely importer’s broker or agent’s name only will not align the operation of the System with its aim to suffice. These details will also be Gazetted, consis- make concessional entry readily available without tent with the requirement already in existence to adversely affecting the tariff assistance given to notify applicants of the names of Australian Australian manufacturers. manufacturers claiming they produce substitutable I will now outline the amendments contained in this goods. Item 9 on pages 5 and 6 of the bill refers. bill in more detail. It is important that in processing applications, The most important change is the removal of the Customs be able to utilise the considerable know- significant adverse effect clause, the so-called ledge of bodies such as industry associations and market test, from the core criteria. This occurs in other prescribed organisations in determining item 4 on page 4 of the bill. In practice, the exist- whether substitutable goods are produced in ence of the market test has meant that Tariff Australia. The information contained on the appli- Concession Orders have been granted to the cation form will therefore be made available to detriment of Australian manufacturers, contrary to such organisations for this purpose. Item 12 on the stated intention of the System. It is, in any case, page 7 of the bill refers. very difficult for an Australian manufacturer to prove prospectively that the market for its good The time allowed for applicants to propose amend- will be adversely affected by the duty free importa- ments to their application will be extended from 14 tion of a substitutable good. days to 28 days in item 10 on page 6 of the bill. Such amendments will, however, be limited to In 1991, when the Industry Commission reviewed narrowing the description of the goods within the the predecessor of the current System, the Commer- tariff classification cited in the application. The cial Tariff Concession System, it recommended amended wording will be Gazetted, with objections against the inclusion of a market test. allowed for up to 14 days after gazettal. If, how- Once the market test has been removed, the ever, Customs is not satisfied that the amended remaining core criterion will be the substitutability wording meets the requirements, the proposal will test. The Australian Customs Service will not grant not be accepted and the application will be pro- a Tariff Concession Order where it is satisfied that cessed with its original wording as if no amend- substitutable goods are produced in Australia. A ment had been suggested. concession will therefore only be made where there The present legislation requires the Attorney- is no Australian manufacture of goods substitutable General’s Department to provide advice on the for those which are the subject of the tariff conces- correct tariff classification in case of error. How- sion application. ever, in recognition that Customs is the expert The definition of "substitutable goods" is also agency in the area of tariff classification, Customs, qualified in item 3 on pages 3 and 4 of the bill to rather than the Attorney-General’s Department, will ensure that a de facto market test cannot be implied in future determine the correct tariff classification. into this remaining provision. Without this change, This is accommodated in items 13 and 26 on pages the benefits of removing the market test are unlike- 7 and 9 of the bill. ly to be achieved. I turn now to the date on which a Tariff Conces- The system to date has placed a considerable sion Order becomes effective. The present legisla- burden on Australian manufacturers to prove that tion allows the commencement date of a tariff 1836 SENATE Wednesday, 19 June 1996 concession to be backdated to 28 days before the or part number, that application will now be lodgement of the application. This is a carryover of rejected. a provision in the Commercial Tariff Concession I turn now to transitional arrangements for the System which was terminated in 1992. There is Tariff Concession System which are covered in now no rationale for backdating Tariff Concession detail in Part 2 of Schedule 1 of the bill. Orders, and items 16 to 23 on page 8 effectively remove this. Making orders operative from the date All applications lodged with Customs but which of lodgement of applications should encourage have not been decided on the day these changes importers to lodge applications earlier. come into effect will be decided under the present legislation, that is, the legislation in force before This bill will also enable Customs to commence these amendments come into effect. revocation action for Tariff Concession Orders where there are Australian manufacturers of However, if the application is for goods which are substitutable goods, and where the orders have not substitutable for goods manufactured in Australia been used for at least two years; that is, they are and the application is successful because of the obsolete. Revocation of Commercial Tariff Conces- operation of the market test, the Tariff Concession sion Orders will also be considered under the new Order will be valid only up to the day that these Tariff Concession System criteria. Items 24 and 25 amendments come into force. This appears in item on pages 8 and 9 give effect to this change. 37 of page 13 of the bill. Decisions referred to Customs for Internal Review The definition of "made to order capital equipment" or to the AAT or which are on appeal to the will be amended to allow concessions only for Federal or High Court in relation to applications for equipment made on a one-off basis to meet a orders lodged before the commencement of these specific order rather than being the subject of amendments, are to again be decided under the regular or intermittent production, and to exclude present legislation. Any orders made, however, goods made as a result of production runs. where the market test results in a tariff concession Customs decisions with respect to the Tariff order being granted will be taken to have been Concession System will remain subject to review revoked from the date the changes come into effect. by the Administrative Appeals Tribunal. However, I turn now to changes to the Policy By-law System. amendments in item 31 on page 10 of the bill will limit persons who have standing to appeal to the THE POLICY BY-LAW SYSTEM AAT to those directly involved in the decision (that The Policy By-law System are those concessions is, the applicant and those who have lodged which apply to items 43, 45, 46, 47, 52, 55, 56, 57, submissions with Customs). Customs will be and 60 of Schedule 4 of the Customs Tariff Act required to Gazette any application to the AAT. A 1995. person wishing to be joined as a party to the AAT The government announced its reforms to the proceedings must apply to the AAT within 60 days Policy By-law System in a press release on 8 May of the Gazettal notice or satisfy the AAT that they 1996. The changes will revamp and streamline the were not reasonably able to apply within the 60 day administration of the Policy By-law System. period. Concessions under items 43 and 52 will be restrict- Any document on which a party intends to rely at ed to concessional entry for the split consignment the AAT hearing must be filed with the AAT and of whole goods unable to be transported on a single served on the other parties not less than 28 days vessel or aircraft because of the size of the good or before the date set for hearing unless the AAT because of an inadvertent delay in shipment. otherwise orders. In considering whether to make Consistent with past practice, the Chief Executive such an order, the AAT will consider whether there Officer of Customs will publish guidelines in the was a reasonable cause for the material not being form of an Australian Customs Notice, setting out available 28 days before the hearing. new guidelines for persons wishing to seek conces- sions under these by-laws. These changes should ensure that the external review process is not subject to unreasonable delay The guidelines will implement the reforms an- and excessive costs. nounced by the government on 8 May 1996, including the provision of concessions under items The proposed changes will also ensure in items 32 45, 46 and 56 for projects with a capital equipment and 33 on pages 11 and 12 of the bill that tariff value of more than $10 million. concession orders remain generally available by Accordingly, concessions under items 43, 45, 46, requiring the description of the goods for which the 52 and 56 of Schedule 4 of the Customs Tariff Act Tariff Concession Order is to apply to be generic. 1995 will be revoked on the day this bill comes Where either directly or by implication an applica- into force. This appears in item 42 on pages 19 and tion is for goods of a particular brand name, model, 20 of the bill. Wednesday, 19 June 1996 SENATE 1837

Any request for a concession under these items Concession Orders under Part XVA of the Customs which has not been finalised on the day this bill Act 1901 (item 19 and item 50 of Schedule 4 to the comes into effect will be considered under the new Act) and to Policy By-law items 47, 55, 57 and 60 guidelines. of Schedule 4 of the act. Transition provisions in item 43 on pages 20 and FINANCIAL IMPACT STATEMENT 21 of this bill will preserve access to a revoked The amendments proposed in this bill will result in policy by-law concession for these 5 items provid- the following savings to revenue: ed: 1) Goods which have been imported on or A) Tariff Concession System changes before the date of revocation, are entered within The proposed rate changes for items 19 and 50 28 days of the date of the revocation of the will result in revenue savings of: Policy By-law; or 1996-97 1997-98 1998-99 1999-00 2) Goods on direct shipment to australia before $338M $358M $393M $413M the date of revocation of the Policy By-law provided they are entered within 28 days of B) Policy By-law changes importation; or The proposed rate changes for items 47, 55, 57 3) In relation to goods which are made to order and 60 will result in revenue savings of: capital equipment (as defined for the Tariff 1996-97 1997-98 1998-99 1999-00 Concession System and amended by this legisla- tion), provided such goods are imported and $18M $20M $21M $23M entered under one of these Policy By-law items Debate (on motion by Senator Chris until 15 February 1997. Evans) adjourned. FINANCIAL IMPACT STATEMENT The amendments proposed in this bill will result in CUSTOMS AND EXCISE the following savings to revenue: LEGISLATION AMENDMENT BILL A) Tariff Concession System changes (No. 1) 1996 The proposed changes to the Tariff Concession Consideration of House of System in Part XVA of the Customs Act, and in Representatives Message particular the removal of the market test from the core criteria and the new revocation facility for Message received from the House of Repre- existing Tariff Concession Orders and Commer- sentatives returning the Customs and Excise cial Tariff Concession Orders, will result in Legislation Amendment Bill (No. 1) 1996 revenue savings of: with amendments. 1996-97 1997-98 1998-99 1999-00 Ordered that consideration of the message $92M $105M $119M $131M in committee of the whole be made an order B) POLICY BY-LAW SYSTEM CHANGES of the day for the next day of sitting. The proposed revocation of the 5 Policy By- law items and the introduction of the revised EXPORT MARKET DEVELOPMENT criteria against which requests for concessions GRANTS AMENDMENT BILL (No. 1) under these items will be considered will result 1996 in revenue savings of: 1996-97 1997-98 1998-99 1999-00 Second Reading $29M $32M $34M $37M Debate resumed. CUSTOMS TARIFF AMENDMENT BILL Senator BROWNHILL (New South (No. 1) 1996 Wales—Parliamentary Secretary to the Minis- The Customs Tariff Amendment Bill (No. 1), ter for Trade and Parliamentary Secretary to 1996 proposes tariff rate changes consequential on the Minister for Primary Industries and Ener- the substantial administrative and legislative gy) (4.01 p.m.)—Could I thank all those who reforms to both the Tariff Concession System and participated in the debate—Senator Cook, the Policy By-law system contained in the previ- ously referred to bill, the Customs Amendment Bill Senator Spindler, Senator Evans, Senator 1996. Cooney, Senator Margetts and Senator This tariff bill introduces changes to the Customs Schacht. I would like to respond by making Tariff Act 1995 to amend from free to 3 per cent some remarks about issues raised by senators the concessional duty rate applying to Tariff in that second reading debate. 1838 SENATE Wednesday, 19 June 1996

Firstly, Senator Cook raised concerns with industry. As senators noted, discretion expressed by industry to the Senate committee will be required to ensure that companies, on the potential for the bill to lead to in- particularly the SMEs, are not disadvantaged creased red tape. The government certainly by rules which cannot take account of indi- does not intend this to be the case. The vidual industry needs. The government does Senate noted Austrade, the agency responsible not agree to the opposition’s amendment. for the administration of the EMDG, is Amendment agreed to. working with industry to ensure that this will not be the case. For example, the draft 10- Original question, as amended, resolved in page document, which the senator referred to, the affirmative. would replace similar existing paperwork, Bill read a second time. which was actually nine pages, rather than be a big piece of additional paperwork. Senator CHRIS EVANS (Western Austral- ia)—by leave—Madam Acting Deputy Presi- Secondly, both Senator Spindler and Sena- dent, I rise on a point of order, and you might tor Margetts made comments on the grants be able to help me here. I think the opposition entry test. I would like to make the following and the Democrats had the understanding, points with regard to that. Regarding some of certainly I did, that we were proceeding with Senator Spindler’s concerns, Austrade oper- the taxation bill straight after question time. ates an efficient counselling and referral So Senator Brownhill’s contribution came system for exporters. The grants entry test and somewhat as a surprise to me as I was expect- the registration will enhance Austrade’s ing Senator Kernot, as she was, to continue ability to provide these services and give on the taxation bill. I was going to suggest Austrade a greater opportunity to support the that we might delay the committee stage of export development of Australian companies. the bill at least for some time to allow me to All grants applicants have access to those get Senator Cook and others who want to services. participate in the debate into the chamber, if Thirdly, this test does not alter the funda- the government intends pursuing that matter mental open access nature of the scheme. The immediately. general principles that anyone can apply, that Senator BROWNHILL (New South the number of grants are not limited and that Wales—Parliamentary Secretary to the every claimant who meets the eligibility Minister for Trade and Parliamentary Secre- criteria receives a grant still apply. The bill tary to the Minister for Primary Industries and will not enable Austrade as administrators to Energy)—by leave—I understood that we specify or limit the number of grants to be were going to have this debate now on the made. Decisions about whether claimants pass Export Market Development Grants Amend- the test may be subject to review by the ment Bill (No. 1), and that is why I have Administrative Appeals Tribunal. Austrade is come in here. The advisers have come into actually projecting an increase in the number the box here to go through the committee of first time claimants who will receive a stage. I will deliberate on it for the good grant next year. Also, Senator Cook suggested running of the Senate, but I believe that we that this government has not consulted with should proceed. I do not know what the industry. I bring it to the attention of the Deputy Leader of the Opposition (Senator chamber that both the previous government Sherry) has to say about it. I believe there are and Austrade consulted extensively on this a lot of non-contentious issues regarding this bill, which has been in circulation for over 12 bill. In fact, I do not think there are any months. contentious issues in the bill except some Finally, as noted by senators, the test itself points that might be made by Senator Cook may be disallowed by the parliament if it or Senator Margetts. I know Senator Spindler considers it to be inappropriate. Austrade will is here. He most probably has some words to be developing clear and appealable rules for say on this particular bill. I cannot see why it the tests, and this will be done in consultation should not proceed forthwith. Wednesday, 19 June 1996 SENATE 1839

Senator SHERRY (Tasmania—Deputy The source of my inquiry was the written Leader of the Opposition in the Senate)—by submission lodged with the Senate committee leave—We were just not aware this matter by the Tourism Commission. I do not have to was coming on. I am not going to attribute hand the document that the Tourism Commis- blame. As we were not aware that it was sion provided me—I cannot find it among my coming on at this point in time, we would papers at the moment—but the question, as I seek this matter to be adjourned. recall, cited this passage from the Tourism Senator CHRIS EVANS (Western Austral- Council of Australia’s submission: ia)—by leave—If Senator Spindler were to In relation to the administrative costs, the Tourism indicate that he was prepared to proceed with Commission finds it alarming that these have the committee stage, that might give us time increased significantly—that is, around 130 per cent to get organised. If Senator Spindler is not over the last three years from $3.3 million in 1993- ready or has nothing to contribute, I am at a 94 to $7.6 million in 1995-96. loss. As I understand Mr Oliver’s reply to my Senator PANIZZA (Western Australia)— question seeking verification of the increase by leave—I understand that there is some in administrative costs, he was not able to confusion about coming back to the Export confirm the figures that the Tourism Council Market Development Grant Amendment Bill gave. I have gone back and checked with the (No. 1) 1996. It was agreed last night—the Tourism Council and I am advised that those opposition whip will confirm this—that the figures were given to a Senate estimates bill would come back on— committee in August last year when the Department of Trade’s estimates were before Senator Chris Evans—At a later hour. it. Senator PANIZZA—Yes, it was agreed My question now is: can the parliamentary last night that we would have second reading secretary confirm that increase in administra- debate this morning which would be post- tive costs? If that is not the figure, can he tell poned to a later hour of the day. us what the figure is? Given the extra respon- Senator Chris Evans—We didn’t know sibility placed on Austrade by the requirement when that was going to be. of the export ready test that this legislation Senator PANIZZA—I said it would be confers, has the government undertaken any after question time. I asked if there were any estimate of what additional cost there will be questions about that. There were none, so I in administering these claims? presumed that the arrangement would go ahead. If there is a problem now, I would like Senator BROWNHILL (New South to know about it. Wales—Parliamentary Secretary to the Minister for Trade and Parliamentary Secre- (Quorum formed) tary to the Minister for Primary Industries and In Committee Energy) (4.14 p.m.)—To the best of my knowledge, the figures given at the hearing The bill. are correct. I cannot see any reason for them Senator COOK (Western Australia) (4.11 not being so. With regard to the administering p.m.)—I have a couple of questions for the of the grants entry test for first time claim- Parliamentary Secretary to the Minister for ants—I have already made the point in my Trade, Senator Brownhill. My first question reply to the debate—there has not been a relates to the fact that at the Foreign Affairs, great increase in the number of pages as far Defence and Trade Legislation Committee’s as the grants entry test requirements are first hearing I asked Senator Brownhill a concerned. I would not envisage that there question which he may have passed on to Mr would be any increase in costs, to the best of Oliver, representing Austrade, and answered my belief and knowledge. I will definitely get by Mr Oliver at the time. That question a comment from my advisers on that. That is related to the cost of administering the claims the way it is. There would be no increase at for EMDG. all for claimants, and Austrade would get 1840 SENATE Wednesday, 19 June 1996 approximately $2 million per year to adminis- evidence adduced at a Senate estimates ter the scheme. hearing on the EMDG scheme last August. Senator COOK (Western Australia) (4.15 There is nothing tricky in this, but can you p.m.)—In view of that answer—I want to be advise me, from the best knowledge that you clear about this; I am not being difficult—I have, that those figures are verified? As I say, just want to get what you are confirming clear I just want some indication. If they are not for me. verified by you because you do not have the information in front of you now, will you Senator Brownhill—I will help you, too, undertake to the Senate to provide that infor- Senator. mation to us? Senator COOK—We are talking about big Senator BROWNHILL (New South figures here. Are you saying that what the Wales—Parliamentary Secretary to the Tourism Council said is true—that is, that Minister for Trade and Parliamentary Secre- there has been around a 130 per cent increase tary to the Minister for Primary Industries and in costs from $3.3 million in 1993-94 to $7.6 Energy) (4.18 p.m.)—I might be able to help million in 1995-96? Is that, in fact, true? Is a bit, and I am sorry if I have not been as that what you are saying? succinct in answering as I could have been. Senator Brownhill—I do not know wheth- I hope I have been, but to get it a little bit er I could add a lot more to what I have clearer for you, the projected cost for 1995-96 already said, Senator. I think I have answered is below $7.6 million, and 1995-96 is not as best I can. I do not think I can add any- concluded yet because we have got a few thing further to what I have already said. weeks to go until the end of the financial Senator COOK—Well then, what did you year. say? When you said yes, you think those Senator COOK (Western Australia) (4.19 figures are right, is that what you meant? p.m.)—I assume, therefore, that three years previous to the 1995-96 figure of almost $7.6, Senator BROWNHILL (New South which you have just acknowledged, the tourist Wales—Parliamentary Secretary to the authority was right in saying that it was $3.3 Minister for Trade and Parliamentary Secre- million. Over the three-year time span it has tary to the Minister for Primary Industries and gone up by that amount. The question that I Energy)—(4.16 p.m.)—If you look at the want to ask now is— previous figures, there was an increase in staffing levels, so that would account for Senator Brownhill—That is what you those figures that the tourism association were assume. talking about. There was a growth in claim Senator COOK—You might deal with my numbers. There was the introduction of new assumption in your answer. It is a matter of markets and the six-monthly claim provisions. fact, and we will find it out one way or the In the previous scheme there was an increased other; I can go back to the records and we complexity of claims related to the companies can find it out, but it would save time if you test and also the introduction of tourism. could just confirm it. The real question I am There were 21 staff involved in the imple- coming to, and the question I want to again mentation in 1994 of the ANAO review ask, is: given that this bill imposes extra recommendations, and $1.58 million was complexity which will require further admin- provided in 1995-96. There was also a growth istrative responsibility by Austrade, has there in the AAT cases. Does that help you with been any estimate of whether there would be those figures that you asked for? Does that an extra cost of administration that would be explain it a bit better? incurred by Austrade if that were the case? If Senator COOK (Western Australia) (4.18 so, what is it? p.m.)—What it explains is why there would Senator BROWNHILL (New South be a cost blow-out. The Tourism Council Wales—Parliamentary Secretary to the Minis- have said to me that they got the figures they ter for Trade and Parliamentary Secretary to included in their written submission from the Minister for Primary Industries and Ener- Wednesday, 19 June 1996 SENATE 1841 gy) (4.20 p.m.)—First of all, Senator, I do not tion of Austrade because they certainly are agree with your assumption that there is extra competent administrators. complexity. Therefore, I do not believe that I also point out, as I have said in my there will be an increase in costs because of remarks in principle, that advice to me is that extra complexity. I cannot see where there is the Expenditure Review Committee of your a raising of extra complexity within the bill. government has demanded a 24.3 per cent cut There is an extra administrative cost of to Austrade’s running costs budget, which about $2 million, but there are efficiency would diminish its running costs by a quarter. offsets against that, and I would imagine that The extra efficiencies they have found will those efficiency offsets will actually reduce have to go to covering that gaping hole as that quite dramatically. I do not believe, well as meeting the demands of extra com- Senator, that this bill has got in it the extra plexity imposed on them by this bill. In those complexities you have alluded to. circumstances, a prudent organisation should be able to at least give this parliament an Senator COOK (Western Australia) (4.21 answer on what the extra costs and what the p.m.)—I cannot quibble with a belief. If you extra changes in Austrade will be, and it believe that, that is what you believe. What should be able to do it for the reason that it the facts are, and whether they correspond to needs to assure the Australian business com- the belief, is another matter, and we can munity that those costs are not going to debate that. However, I just point out that the unduly delay the payment of reimbursements Australian Business Chamber, the Australian under this scheme. Chamber of Commerce and Industry, the As we heard in evidence in the committee, Australian Chamber of Manufactures, the many companies have taken loans to cover Australian Book Publishers Association, the the time gap between incurring the cost and Australian Institution of Export (New South receiving the reimbursement. If, by virtue of Wales) Ltd, the Australian Information Indus- so-called savings in Austrade, the time be- tries Association, Blades Mi-Sporting Pro- tween cost being incurred, reimbursement ducts Pty Ltd, the Council of Small Business being sought and reimbursement being paid Organisations, the Metal Trades Industry is blown out, it could well be that some Association—Australia’s manufacturing, companies will be adversely affected in their engineering and construction industry associa- financial affairs. It could be that the export tion—Sunlover Cruises, the Tasmanian apple effort is diminished considerably as a conse- and pear growers association and the Tourism quence as companies act conservatively to Council of Australia all believe—this is their avoid being trapped. It could also be, and belief—that there is extra complexity, and that very probably will be, that some companies was the evidence that was adduced in the will be financially embarrassed. Some may hearing. even go to the wall. That is the basis of my So that might be your perception, Senator, concern and the reason for my questions. but their perception is different and their The other point I want to ask though is, perception is unanimous. We will see what given this government’s election commitment the truth of the matter is if these provisions to reducing red tape and compliance costs on are passed—and we have given an indication Australian small business by 50 per cent, can that we will support them as a government you give me any sort of guarantee that the 10- measure—as to whether extra complexity page document that Austrade is circulating for arises. I would find it prudent for any organi- business commentary on how to meet the sation faced with these measures to have export ready test will, in fact, be simplified undertaken some sort of estimate of what the and made easy for business? By your courte- extra costs to their organisation might be. I sy—and I acknowledge that—Austrade made would have thought Austrade had done that. available to me, as I believe they have made If Austrade have found other savings, that is available to the minor parties, a document again a reflection on the superior administra- which I think is still in draft form but which 1842 SENATE Wednesday, 19 June 1996 consists of 10 pages. Unfortunately, I do not The test will be designed to ensure that have it with me at the moment, but I could claimants meet accepted standards for entry show it to you again. Several questions in that to government facilitation programs. In the document go right to the heart of a company’s case of this test, it is the intention to ensure financial security: its products and services, that the claimants have suitable levels of its administration, its marketing capability, its planning and forward thinking to avoid grants evaluation of its competitors and its appreci- being paid to businesses that will subsequent- ation of market conditions in foreign count- ly go out of business. The grants entry test ries. will be a disallowable instrument under section 46A of the Acts Interpretation Act Companies are expected to fill this out in 1901. order to demonstrate compliance with export readiness, as required under this act. That I have read through the draft grants entry stands as an extra imposition on business. For test, which was circulated to you and also to small business, with little discretionary time Senator Spindler for help within this debate. available to meet the demands of red tape I think that is a courtesy sometimes extended requirements such as this, this is a further by people to make the debate on the bill imposition. My question is from the small better, especially when the bill obviously was business perspective and on how Austrade introduced by a previous government. Now will administer this. Can you give me a we are going through the clauses. We did not guarantee that this quite extensive requirement have the opportunity to go through them will be reduced and made more simple? because we had an election that interfered with the movement of this bill. Senator BROWNHILL (New South I believe that, if you go through the entry Wales—Parliamentary Secretary to the Minis- test in a fair mannered way, you will see that ter for Trade and Parliamentary Secretary to it is not an onerous one to fill out and it only the Minister for Primary Industries and Ener- adds, as I said, one more page and a couple gy) (4.27 p.m.)—Senator, I think your last of questions that were not in the previous act. question was already required by the previous export plan, but I will just go through a Senator SPINDLER (Victoria) (4.31 couple of the points that you have made in p.m.)—The issue, I believe, in this particular speaking to this bill in the committee stage. question on the entry test is not so much the I think the bill actually clarifies a number of general information that needs to be provided issues. The bill will be longer, but it will be but the test that is to be used by the govern- clearer. I think there will be a minimal cost to ment that, as the minister says, will be subject claimants. Basically, I presume we will go to a disallowable instrument. I would like to through the grants entry test when we get to ask the minister: when will that instrument be that stage of the bill, Senator. available? Senator Brownhill—Within the next two Senator Cook—I think we are taking it as weeks, as I understand from the advice that I a whole. have here, Senator. Senator BROWNHILL—We can discuss Senator SPINDLER—I trust the govern- the grants entry test now, if you like, and that ment will take on board the comments made might clarify some of the issues. It is envis- in the chamber which require a clear, detailed aged that the test will cover five fundamental and objective test, because it was on the basis areas of business planning—I think Senator of that understanding that the Democrats Spindler would also have an interest in this— decided not to proceed with the amendment and that will be based on the financial re- to knock out that particular section in the bill sources to survive, human resources to do the and we advised both the government and the job, marketing and distribution arrangements, opposition that we would not be proceeding supply and production arrangements and res- with it on that basis. The Australian Demo- earch development innovation to provide crats—and really every other speaker—have sustainable competitive advantage. pointed to the value of the export market Wednesday, 19 June 1996 SENATE 1843 development grants scheme. Can the minister gy) (4.35 p.m.)—I am advised that the consul- confirm that the government is taking cognis- tation process that has been in place in the ance of what was said? Does the government past will continue. I believe Austrade has now appreciate a little better the value of that been a good organisation, is a good organisa- scheme and can the government give the tion and will remain a good organisation as Senate some assurance that it will not proceed far as our trade is concerned. Just this morn- to abolish the scheme? ing I was in Melbourne helping launch the Senator BROWNHILL (New South Wales CeBIT event that is going to take place in —Parliamentary Secretary to the Minister for Hanover next year. I believe that Austrade has Trade and Parliamentary Secretary to the always been a hands-on organisation and that Minister for Primary Industries and Energy) it will continue to consult with people as it (4.33 p.m.)—As I said before the Scrutiny of has in the past and, I am sure, will in the Bills Committee, we are dealing with a bill future. that has been in place for over 12 months. I Senator COOK (Western Australia) (4.36 cannot conjecture what will happen in the p.m.)—I say amen to your sentiments about future. All I can say is that, yes, the govern- Austrade. That is certainly my experience but ment does understand the value of the export I note for the record that their chief executive, market development grants scheme and it has Mr Ralph Evans, is not renewing his contract been well documented. But you will have to and is leaving and I note the disquiet that has wait until the budget in August to see the been leaked to the media about possible cuts results of that. I know that deliberations I to government programs, in particular the have had with you are on the basis of the bill. running costs cut that I have referred to. I As far as this bill is concerned, there are no take your answer to be that Austrade will implications to it whatsoever to my know- continue to consult with the organisations that ledge. they would normally consult with. My ques- tion is: will they consult with the organisa- Senator COOK (Western Australia) (4.34 tions that gave evidence to the Senate com- p.m.)—In view of the answer that Senator mittee that raised questions about the diffi- Brownhill has given to Senator Spindler on culty and complexity that I have referred to? when the disallowable instrument will be tab- led in the Senate, I understand that Austrade Senator BROWNHILL (New South consulted on the draft—which is the docu- Wales—Parliamentary Secretary to the Minis- ment I have referred to—with industry. I ter for Trade and Parliamentary Secretary to think all of the organisations that made sub- the Minister for Primary Industries and Ener- missions to the Senate committee of inquiry gy) (4.37 p.m.)—I give you an assurance that into this bill raised concerns about its admin- they will, because that is a normal fact. The istrative complexity. Will the consultations test has been formulated in consultation with that Austrade is undertaking be with those industry, so the consultation has been there. companies as well as more broadly with in- The Australian Chamber of Commerce and dustry associations, or will they be confined Industry is one group that was consulted, as to a consultative process that is already in were the Metal Trades Industry Association, place? My question really is: given that these the Australian Chamber of Manufactures, people have raised the issue, will they be Australian Business Ltd, the Inbound Tourism talked to about how it will be dealt with? I Organisation of Australia Ltd and the Council ask that question because some of them have of Small Business Organisations of Australia. said they do not believe that Austrade has So I believe that there has been consultation consulted them, although they do have some and I believe that there will continue to be. views about it. Senator COOK (Western Australia) (4.38 Senator BROWNHILL (New South p.m.)—I am not saying that there has not Wales—Parliamentary Secretary to the Minis- been consultation, but I just want to be sure ter for Trade and Parliamentary Secretary to that those who raise the question of complexi- the Minister for Primary Industries and Ener- ty—for example, the Tourism Council of 1844 SENATE Wednesday, 19 June 1996

Australia was not referred to in that list you I believe it is to be a permanent reduction. read—will be consulted. Can you give me an Mr Howard announced this. He said, ‘We are assurance that those who have taken the time the real friends of small business.’ He made to write a submission and appear before the good political capital out of it. He said, ‘This Senate committee to raise the question of is going to assist small business to employ complexity will be consulted about the regula- more people. We are going to solve employ- tions that are to be imposed on them before ment problems. Small business is going to do it is put up as a disallowable instrument? it all.’ Senator BROWNHILL (New South The point I make is that small business Wales—Parliamentary Secretary to the cannot do it all if the uplift factor is only Minister for Trade and Parliamentary Secre- going to be reduced for one year. That is the tary to the Minister for Primary Industries and issue. That is why in committee we will be Energy) (4.39 p.m.)—I would imagine that to supporting the opposition amendment to make be the case, yes. this a permanent commitment, to make the Senator Cook—Is that a yes? coalition government honour its election Senator BROWNHILL—Yes. commitment in a permanent way. Bill agreed to. Senator SHERRY (Tasmania—Deputy Leader of the Opposition in the Senate) (4.44 Bill reported without amendment; report p.m.)—We are speaking on the Taxation adopted. Laws Amendment Bill (No. 1) and the provi- Third Reading sional tax uplift factor. In speaking for the Bill (on motion by Senator Brownhill) Labor opposition on this matter, firstly, the read a third time. bill proposes to decrease the current provi- sional tax uplift factor from its current eight TAXATION LAWS AMENDMENT per cent to six per cent for 1996-97 only. For BILL (No. 1) 1996 subsequent years, the uplift factor will revert to 10 per cent unless parliament otherwise Second Reading prescribes. Debate resumed. Provisional tax is levied on individual (Quorum formed) taxpayers who earn $1,000 or more in invest- Senator KERNOT (Queensland—Leader ment income—interest, dividends, rental of the Australian Democrats) (4.42 p.m.)— income. It does not apply to salary and wage When we suspended this debate earlier today earners, who fall under the scope of the I was saying that this bill is welcome, even PAYE scheme. Provisional tax is levied in though it is three years late. It is more than order to bring forward future estimated tax- three years late, but it has been on the agenda ation revenue from future income earnings. for three years. I was pointing out that it only Quite often, certainly when we were in goes part way to honouring the coalition government—and I am sure while we have government’s election commitment because at been in opposition—small business made the end of 1996-97, under this bill, the uplift significant representations about the drain on factor reverts to 10 per cent. So all we get is their cash flow that can occur as a conse- one year’s reduction. quence of the provisional tax uplift factor. This contrasts with the coalition’s small They argue that it can affect their cash flow business policy, which says, ‘The provisional as they have to pay tax on current year tax uplift factor will be reduced by two per earnings and then pay provisional tax on next cent to six per cent which is more in line with year’s estimated earnings. The provisional tax nominal growth in the economy.’ This does payable is based on the previous year’s not say, ‘We are going to reduce it for one income being increased by the provisional tax year only.’ It sets down the principle of being uplift factor and then calculated at the prevail- in line with nominal growth in the economy. ing income tax rates. Wednesday, 19 June 1996 SENATE 1845

Prior to the election, the then opposition, quote just a few of them because I think it is now the government, stated that the reduced worth while reminding the government what rate would be of benefit to small business. I their position was in opposition. Senator can recall on a number of occasions the now Short, the Assistant Treasurer, struggling Prime Minister, John Howard, personally with a range of issues in his portfolio at the extolling the virtues of the now government’s moment, said on 10 October 1994: policy in his appeal to small business. I have The other major item in this bill—it is a controver- here a copy of the Liberal-National coalition’s sial one—is the reduction in the uplift factor for small business policy entitled A new deal for provisional tax from 10 per cent to only eight per small business. It states: cent—a relatively small reduction. That is being done at a time when inflation is being forecast by It is inexcusable that the Labor Government the government to be something like 2¼ per cent continues to apply to provisional tax assessments and there is an average earnings growth of about a provisional tax uplift factor of 8 per cent which 3.5 per cent. So there is certainly a major discre- is in excess of growth in the economy and incomes. pancy between the uplift factor and inflation. We will return these funds to their rightful own- ers—small business. I will return to that fact a little later. He went It goes on: on: Under a Liberal/National Coalition government: By reducing the uplift factor further below the limited reduction to eight per cent, the government . the Provisional Tax Uplift Factor will be reduced would not lose revenue in the longer run but would by 2% to 6% which is more in line with nominal delay and reduce its collection this year and growth in the economy. This measure will have therefore put more money in the hands of business a one-off cost of $180 million. and less in the hands of government. At a time That is their policy. But what do we have when capital expenditure is important for small here in the legislation today? Any reasonable business, this tax slug, which takes cash out of firms’ hands and puts it into the government’s reading of the Liberal-National parties’ policy pocket for 12 months, will only hinder the oppor- would lead a person and, I am sure, the tunities for small business to expand. hundreds of thousands of small business He goes on and on, complaining about the tax persons around Australia to believe that the uplift factor. Senator Panizza stated: tax uplift factor was being reduced to six per cent—full stop. But what does this legislation I would now like to address the provisional tax uplift factor. I have said time and again in this do? It does not just drop it from eight per place that the provisional tax uplift factor should cent to six per cent. It returns it to 10 per cent reflect Australia’s economy, our inflation rate and after one year. those allied things that affect the sort of profit This is a massive breach of faith in the businesses will make. commitment given at the last election by the He went on in his speech complaining, very new government—a massive breach of faith. bitterly in fact, about the provisional tax uplift It will affect 800,000 small businesses and factor. Senator Ferguson, who I think was on investors around the country, who will have the Senate Economics References Commit- to pay not just a reduced uplift factor for one tee— year. To really rub salt into the wound, it will Senator Calvert—He was the chairman. not be lifted back up to the eight per cent, which is what it is at the present time, but to Senator SHERRY—I am glad you in- 10 per cent, which is above where we had it. formed me of that, Senator Calvert. He was It is an outrageous breach of faith. I can in fact chair of the committee that prepared a assure the government that there are thou- report on the tax treatment of small business, sands of disillusioned small business people entitled A question of balance, which refers around Australia who are appalled at the to this issue as one of the major concerns of breaking of the election commitment given by small business. In his contribution to that the government. debate Senator Ferguson said: On 20 October 1994, the Senate referred to the It is interesting to look through some of the Senate Economics References Committee for speeches given by now members of the inquiry and report the matter of the tax treatment government on this matter. I am going to of small business. This matter arose following 1846 SENATE Wednesday, 19 June 1996 concerns about the appropriateness of the level of the now government in this area. We will the provisional tax uplift factor that the government certainly be reminding them of that massive was proposing to apply to the provisional taxpayers breach of faith. for the 1994-95 financial year. He goes on and says: If our amendment is carried it will mean an additional $540 million going back into the The most complex issue that the committee had hands of small business as a consequence of to deal with was the provisional tax uplift factor. Of all the issues raised by small business in the what the Labor Party has done in opposition inquiry, it is fair to say that the uplift factor was in this Senate. We are going to hold you to almost universally considered unfair, not the least your commitment and your promise on this because most small businesses do not experience matter. It is outrageous. The speeches I a growth in income as great as the uplift factor referred to continually refer to the need for expects them to. This is why the committee majori- the uplift factor to be reduced to the econom- ty recommends that the uplift factor be set at a level no higher than the current or expected annual ic growth rate, the inflation rate. All of those movement in the consumer price index. sorts of basic economic fundamentals have been referred to by now members of the gov- Again, he went on with a very significant ernment about where the uplift factor should range of complaints about the tax uplift be reduced to. It is not as though inflation is factor. If we look at the membership of that high. When this matter was debated two years committee we see that Senator Ferguson was ago, projected inflation was 2¼, 2½ per cent. the chair and there were other members of the Look where inflation is now. If anything, the now government—Senator Chapman, Senator government should be reducing the uplift Crane and Senator Panizza—altogether four factor even further below six or seven per members from the government. It will be very cent on its own arguments, on its own contri- interesting to see how they vote in this Senate butions, on the record, in the Hansard in this on the amendment that will be moved in place, in the report prepared by the Senate committee by the Labor opposition on this Economics References Committee. On its own matter. It is outrageous that a promise was argument it should be reducing the factor given by the now government before the down below six per cent, but what are they election—I have read out its promise on this going to do? This is a massive breach of an issue—to reduce the uplift factor from eight election promise made here in writing. I have to six per cent and then one year later the read it into the Hansard. government takes it, not back up to eight per cent, which would be a breach of promise in Senator Watson has just come into the itself, but to 10 per cent. It is no wonder chamber. The provisional uplift factor is being small business is absolutely outraged by what debated today. You should be ashamed of the government is proposing. yourself, Senator Watson, for being in a In pursuing our opposition in committee we government that promised to reduce it to six will be moving that the provisional uplift per cent. Where does it say that you are going factor remain at six per cent, as the coalition to up it to 10 per cent after the first year? promised when it went to the election. By Any reasonable person reading your policy moving that amendment—I hope it is accept- believed it was going to stay at six per cent. ed by the Senate and I certainly hope to see That is what the many small business people a number of now government senators cross who have been ringing my office and ringing over this side of the chamber and vote in Gareth Evans’s office, the office of the favour of our amendment—we will be saving, shadow Treasurer, have been saying. They are if it is carried, small business $360 million, deeply disillusioned about what you have on the government’s own costings, in the done on this proposal. 1997-98 financial year and a further $360 Senator Watson, one of the more respon- million in 1998-99, by the time of the next sible members of the government, should be scheduled election. I hope small business, in sitting where Senator Short is. He could three years time, if that is when the election probably answer some of the questions on is, remembers the massive breach of faith by sales tax and the other issues we have been Wednesday, 19 June 1996 SENATE 1847 raising with him. As one of the more respon- By contrast, the Labor Party went to the sible members of the government, I am sure election of 1993 and said that they would not you have been contacted by outraged small increase taxation. They were not committed business people who are going to be ripped to reducing it; they just promised that there off to the tune of $540 million when this would be no increase in taxes. But, as we all uplift factor returns to 10 per cent. know, they did not even hold themselves to that. Not only did they not reduce it; they We are going to defend small business in actually put up taxes. the Senate. We are going to return $540 million. I look forward to you, Senator Wat- The coalition gave the electorate a commit- son, living up to your comments on this ment, not simply to keep taxes at the same matter when you were in opposition and level. It gave a commitment to reduce the tax crossing the floor, along with the other sena- burden in relation to provisional tax, and now tors who have spoken on this matter in the we are keeping that commitment. It believes last five or six years, and supporting our in honouring promises. It is reducing the amendment on this proposal. provisional tax from eight per cent set in previous years under the previous government Senator WATSON (Tasmania) (4.58 to six per cent in the 1996-97 financial year. p.m.)—Senator Sherry has a very short mem- If no legislation was being introduced, provi- ory because in terms of the legislation the 10 sional taxpayers would be paying 10 per cent per cent fallback figure has been there. I think under the legislation designed by the Labor the Labor Party introduced that concept. We Party—the default level if parliament does not are honest. We want to review it each year provide otherwise. The coalition will not and, given the prevailing circumstances, if it allow that default 10 per cent to operate in can be lowered from the current six per cent the 1996-97 financial year. It is delivering on we will certainly lower it next year with the its promise. It will not allow the default to full support of business. operate next year either, unless the Senate The hypocrisy of the people opposite is intervenes. somewhat astounding. The legislation con- Small businesses are the backbone of our cerns three amendments that I want to ad- economy. The potential for job growth is dress. There is reducing the provisional uplift greatest in the small business sector, but they factor, which has been very well received, need encouragement. In 1995, the number of contrary to the earlier remarks. There are the bankruptcies in Australia increased at an off-market share buybacks and the deduction alarming rate under the previous government, for gifts. I want to confine my remarks from 3,305 in December 1994 to 4,050 in essentially to the first two aspects, the provi- December 1995—a 22.5 per cent increase. sional uplift factor and the off-market share Businesses desperately needed to be relieved buybacks. The reduction of the uplift factor of the onerous and unfair taxation measures. on calculated provisional tax is the fulfilment The application of this bill will go some way of an election promise that this government to alleviating their plight. gave to small business. It has been well received, contrary to earlier remarks. Labor’s record in this field has been appal- ling. The uplift factor they set was quite out We went to the election on 2 March on a of proportion to any realistic measures of promise that we would reduce the uplift factor ability to pay or prediction of economic for small business. The coalition’s policy growth. Senate committee reports have exam- document, A new deal for small business, ined this from time to time. It was just an- released on 18 February 1996, announced that other way in which the Labor Party grabbed there would be a reduction in the uplift factor revenue from those making an honest living from eight to six per cent for the purpose of to fund the Labor Party’s ill-managed govern- calculating the 1996-97 provisional tax, and ment expenditure. Under Labor, the provision- that is exactly what the government is doing al uplift factor exceeded the actual rate of in this bill. That is 100 per cent commitment. growth in income subject to provisional tax in 1848 SENATE Wednesday, 19 June 1996 every year between 1991 and 1994-95. The cent, unless the taxpayer can justify why his provisional uplift factor was set by the previ- or her income was underestimated. ous Labor government at eight per cent for Three submissions were received by the each of the last four years, including 1994-95. committee in relation to this question of the The level of aggregate income that should uplift factor—all of which applauded the be subject to provisional tax can be difficult reduction to six per cent. Concerns that it will to predict. We all acknowledge that. There- revert to 10 per cent in the absence of parlia- fore, in regard to the uplift factor for subse- mentary provisions otherwise naturally were quent years after the 1996-97 financial year, expressed. What needs to be more clearly the new coalition government will set it when understood is that it is the government’s the most accurate information is available, intention to review the circumstances each and that is the right time to set it. It will be year, according to the economic prevailing set at what is a realistic figure for the time circumstances. The default 10 per cent may and the circumstances so that small business never be imposed. The intention is to review people, self- funded retirees and other provi- the factor in the appropriate economic cli- sional taxpayers will be treated fairly. mate, as was the practice of past Labor We will not lock those people into situa- governments—it is not surprising that Senator tions where they may be penalised because of Sherry has now left the chamber—although changing economic circumstances merely to they seldom moved that rate, and this was the get revenue for government but, rather, we interesting factor, as reflected in the various will set a rate which is a reasonable reflection determinants of unearned income. of the growth in income of provisional tax- The minority report from the Labor mem- payers. This is actually what is being done for bers of the committee condemns the 10 per the 1996-97 financial year. For subsequent cent after 1997. What they chose to ignore for years, an assessment of the economic circum- their own political purposes is that the stances will be made at the appropriate time. government has quite appropriately left open The report on the consideration of provi- the option to review the factor. My Labor sions of Taxation Laws Amendment Bill (No. colleagues would have us locked in without 1) by the Economics Legislation Committee any possibility of adjustment in the light of recommends that the bill be agreed to. Unfor- changing economic factors. There must be tunately, I think the terms of reference for provision for more flexibility. For that reason, that particular inquiry were a little bit limited. we will not be supporting the Labor Party However, all members of the committee amendment. wholeheartedly endorsed the reduction of the A submission from the Australian Society uplift factor from eight per cent to six per of Certified Practising Accountants drew the cent. The report draws attention to the fact committee’s attention to the fact that provi- that the amount of tax for which provisional sional taxpayers are often reluctant to submit taxpayers are finally liable will not be affect- a provisional tax variation as the cost of ed in dollar terms by the uplift factor, regard- doing so—doing the appropriate estimates— less of the amount or the form. What is at coupled with the 15 per cent variation toler- issue is the timing of the payment to the tax ance allowed is a real deterrent. A submission office. It is this aspect which can be a deter- from the Association of Independent Retirees rent or an incentive for small business. expressed a similar psychological factor which If provisional taxpayers think their income may cause anxiety, especially amongst the will not increase by the predicted uplift factor elderly. It must be remembered—I think it or that their taxable income will decline was during the Labor Party administration— during the remainder of the forthcoming year, that the factor was previously 20 per cent in taxpayers of course can lodge an application terms of the estimates and was reduced some to vary their provisional tax. A penalty, time ago to 15 per cent. however, is incurred if that variation under- The Australian Society of Certified Practis- states actual income by more than 15 per ing Accountants actually suggests that the Wednesday, 19 June 1996 SENATE 1849 uplift factor be linked with the economic share’s market value at the time of the buy- growth factor put forward by the Treasury in back is the amount which would have been its budget consideration each year. An alterna- the market value of the share at the time if tive suggestion put forward by the Taxation the buyback never occurred and was never Institute was that the factor should be auto- intended. matically linked with the rate of inflation. If the purchase price of the share is less Both of these suggestions are worthy of more than the market value of the share, the differ- serious consideration in the future deliber- ence between that price and the market value ations on the uplift factor. The important will be treated as consideration for ordinary thing is that the coalition seeks to provide income and capital gains purposes. It will not flexibility and a determinant at the most be treated as a dividend. This means that the appropriate time when all the circumstances taxable gain will not be artificially reduced are best known. and a tax loss will therefore not be created. If The second aspect of the bill that I want to the purchase price is more than the market address is in relation to the off-market share value of the share, the amount of the purchase buybacks. These will apply to off-market price that is treated as a dividend is the share buyers. The amendments are intended amount that exceeds the sum of the paid-up to deter companies from avoiding tax by capital of the share and the amount debited to arranging off-market share buybacks. The a share premium account. The dividend amendment will ensure that the full buyback component of the purchase price which is price of off-market shares is treated as con- attributable to the excess over the market sideration for ordinary income tax purposes value of the share, however, will not be and for calculating any gain or loss on the frankable, no matter from where the funds disposal of the shares. Relief from double used to buy back the shares are sourced. taxation is provided by reducing the amount This proposal was announced by the former of the buyback price that is a dividend includ- Labor government on 9 May 1995 as part of ed in assessable income or paid out of profits, its 1995-96 budget. In this bill it is proposed not including revaluation reserves. that the closing of this loophole take effect Under the previous law tax could be re- quickly and will apply to all share buybacks duced by the amount of the buyback that was that took place after 7.30 p.m. on 9 May treated as a dividend, even if the dividend 1995. Arrangements which were announced was exempt or paid from an untaxed source. and which were acted on well before this date Companies could gain a tax advantage by will be exempt. buying back off-market at a higher or lower It is important that a taxation scheme does price than the market value of the share. They not encourage Australian investors to send could also create artificial capital losses and their money outside Australia. This measure, allowable deductions or these could be in- amongst other things, will deter resident creased by rebatable dividends in certain shareholders receiving tax exempt dividends circumstances. from the off-market buyback of shares held in The proposed amendments that our govern- a foreign company where the dividend is not ment is putting forward will not change the paid out of profits. calculation of that part of the purchase price Those on the other side have made much of of a share in an off-market buyback that is a a hyped-up speculation of possible cuts to this dividend. What will change, however, is the or that government expenditure over the past amount that is to be treated as disposable few weeks. They have carefully skirted the consideration for the purposes of calculating reasons for which savings in government ordinary income or capital gain or loss. If expenditure will have to be made. They there is a difference between the purchase ignore the fact that the coalition government price in respect of an off-market buyback and inherited this $8 billion deficit which must be the market value of a share at the time of the funded. Under good management, good buyback, a market value rule will apply. The controls and greater confidence in our ability 1850 SENATE Wednesday, 19 June 1996 to manage, that figure is now substantially and their advisers can avoid their taxation less than $8 billion and will continue to fall obligations by making special arrangements over the next few years. The Labor misman- with regard to their off-market buyback agement of government finances over the last arrangements. 13 years means that the government is now I therefore support the legislation. I seek faced with a huge debt and a huge interest your comments, minister, on my suggestions bill on our borrowings. that were originally put forward by the tax This opportunity for dodging tax should institute. I thank the Senate for its attention. have been closed quite a number of years ago. Senator COOK (Western Australia) (5.14 In the Taxation Institute of Australia’s sub- p.m.)—We are debating the Taxation Laws mission to the Economics Legislation Com- Amendment Bill (No. 1) 1996. This bill mittee the suggestion was made that the contains a number of measures. The one I market value of the share at the date of the wish to address my remarks to this afternoon agreement under which the share buyback is the provisional tax uplift factor. I acknow- took place be adopted. If the market value is ledge that the government’s expert in taxation to be adopted, it should be set at this earlier matters, Senator Watson, has just spoken, and period. I think there is some substance in the I want to respectfully disagree with his re- suggestion. I commend it to the minister. The marks about the provisional tax uplift factor. institute suggested that this would avoid the But I am reminded, now that I have seen him unintended consequence where there is an take the chair, that I ought to do so in a arms-length transaction involved in situations continuing mode of respect, as, of course, I where the market value differs from the actual always would. consideration provided. The problem the government has to grapple The institute submits that the adoption of a with on this subject is that, for much of the market value in the buyback provisions debate on this matter, the government is still should be subject to an arms-length exclusion. exhibiting a mentality of opposition. That is A taxpayer should not be assessed on an to say, they are attacking the previous govern- arms-length transaction on an amount that ment and they are arguing that what we said may never be received. If, for example, the and did in government are things that we share buyback price is set in advance under ought to do now. an agreement, there may be subsequent This is an interesting point, because we do fluctuations in the market value of the shares. not have a mandate that was endorsed by the If the share price increases, the share buyback electorate. What we are doing in this debate provisions will be automatically attracted. is simply holding the coalition government to The institute’s submission also draws its mandate—which Australians everywhere attention to a problem which may arise as a think they ought to be held to and which they result of the application of the legislation to ought to honour. It is no good saying to us many employee share acquisition schemes. what our views were. We put our views at the There may be a need for specific exemption election. Unfortunately for us, they did not in the share buyback provisions for these prevail. What is expected to prevail is the schemes to avoid a situation where the em- coalition’s views. That is what Senator ployee will derive a gain on the differential Sherry’s amendment is about—to ensure that between the market value at the date of the the views of the coalition, presented to the share buyback and the original acquisition electorate back in the election, are now price. honoured in government. I say to the minister that both these points The coalition, in the run-up to the election do have merit and I believe they should be campaign, made a great deal about small busi- given further consideration. They do not, ness. Small business is, of course, the vital however, conflict with the general thrust of wellspring of economic growth in Australia. this legislation, which is to close loopholes in The advantage the coalition seized on was to the taxation system whereby clever companies simply repeat facts about small businesses as Wednesday, 19 June 1996 SENATE 1851 if they had made new discoveries. They have provisional tax uplift factor. I have to say not made new discoveries. We have been straight off that at the end of the day the full arguing those things all along. But in the level of tax due to a small business is paid, election campaign, there is no doubt that the whatever the provisional tax uplift factor. coalition made a feature of that and there is Therefore, no-one is here talking about reduc- no doubt that we will hold them to that. There ing the level of taxation. We are talking about is also no doubt that many of the things they the timing of payment of the level of taxation said swayed votes. in this respect. It is interesting to note that the Bureau of That is important. It is important because Industry Economics, that body which is now the more you pay in provisional tax as an going to be broadbanded into the Productivity uplift factor, if the factor is not cast at the Commission, whatever that might end up right level, the more money you do not have being, in its most recent industry survey for use of in your business. For small business, the March quarter made some interesting which is always cash strapped and always observations about the behaviour of the small overpressed, that is an important consider- business sector. One of the remarks—and I do ation. not have it in front of me, but I will para- It has always been a consideration of mine phrase it—relates to job growth. that the best uplift factor is the factor which In the election campaign, the now Prime most accurately predicts what will be the Minister, Mr Howard, railed that Labor had ultimate payment in taxation, because there is let down small business and stunted job a downside in having too low an uplift factor. growth. The BIE report shows that there was The downside is that when the tax year ends massive job growth in Australia during the a small business company can be visited with previous period, including the March quarter, a requirement to pay out a large amount created by small business under the Labor because they have not paid, in their tax year, administration, and that all of the new jobs sufficient in the provisional uplift. That can effectively created in the economy came from come as a bit of a surprise to a company. small business, which, I might say, was a Given that small business is always teetering Labor achievement. on the brink, it can knock some of them over It also points out that on current trends the edge. future investment by small business in ex- I have always thought that the sensible panding their capacity is estimated to be thing here is not to run in a cheer chasing below the levels of what occurred during the mode, trying to pretend that somehow you are Labor period. While it is true that the surveys reducing taxation by changing the uplift of business confidence showed business and factor, but to actually tell the truth about the small business having high confidence—the best way to strike the most reasonable level sort of halo effect you get with a change of of uplift factor. That has been the consider- government—nonetheless, what they say and ation that I have followed. However, as I have what they do are two important distinctions to said, the government in the election campaign be made here. According to the BIE survey, made a big feature of reducing it from eight it is likely that investment by small business per cent to six per cent. They were elected. in the future will be below the levels of last This bill enacts that undertaking. year, as presently indicated. I hope that It does much more than that. It continues, changes, but they are the facts as they stand. for the outyears, to return the tax uplift factor It does not, therefore, reflect the confident to 10 per cent. I am absolutely certain, be- surveys that the government has been lauding. cause small business have told me, that this In the election campaign, small business is not what small business thought was being growth was to improve unemployment, to promised. When one looks at the fine print of increase economic growth and to improve the the election undertaking, the fine print just current account deficit. One of the promises having been recited by Senator Watson in the made by the government was to reduce the chamber here a moment ago, one will see that 1852 SENATE Wednesday, 19 June 1996 the promise was not to reduce the uplift factor It did not come down with any hard changes. to six per cent—as is commonly understood What it came down with at the end of the day and, in terms of media presentations on the was a decision to meet again in another year television, radio and in the campaign litera- and see whether or not in the ensuing period ture, was said many times by responsible the changes that had been lauded at election figures in the government, including the time can, in fact, be delivered. I know that Prime Minister and the then shadow Treasur- there is a lot of disquiet among small business er—but was, in fact, to reduce it just for the about the unhappy outcome of that summit. 1996-97 year. The fact that that was in fact One of the other promises that the govern- the promise, which is relied on now because ment made at election time in that new deal of the fine print, will come as a surprise, and for small business was to cut compliance it has come as a surprise, to small business. costs, that is, to reduce red tape by 50 per In a recent interview, a journalist asked the cent. Unfortunately for this debate right now, Prime Minister: if there is a clash between the immediate bill preceding this one, the what you have promised at the election and EMDG bill, has been on. All of the major cost-cutting to fill the alleged black hole, will business organisations, including the small you repudiate your election commitments in business organisations, gave evidence to the order to fill the black hole? It was a very Senate committee inquiring into that bill that pertinent question. The Prime Minister said, the compliance costs and red tape would ‘No, we will stick by our election commit- massively increase with the passage of that ments,’ in so many words. bill. The election commitment here is for the The government has set up a committee to 1996-97 year. Our view is that that election look at compliance costs. What we are now commitment should be honoured and that the getting is a promise on the never-never, in the outyears ought to be a matter of calculation, hope that that committee will examine it and and it ought to be a matter of being advised find a way through it. What we are now as to the appropriate level after consultation getting from the responsible minister is a with small business so that there is a clear back-pedalling and a softening of his lan- understanding as well. guage as to whether or not compliance costs Senator Watson in his remarks referred to can be reduced and as to whether or not the the coalition document A new deal for small burden of red tape can be cut at all. business. The coalition made a great play of I make the point for this debate, because saying that in the first 100 days what they small business will be watching this debate would do for small business is hold a small very carefully, that, whatever the level of business summit. They have held it. They compliance costs and red tape that the held it just outside of the 100-day limit, but government inherited when it came to office, one would be somewhat unfair to make a it has now added to them. It has now added significant point of that. to them with the passage of the most recent The fact is that the small business summit bill, the EMDG bill. That is the opinion of that was promised would be held was held, business. That is the opinion as adduced in but it was really not a summit. It really was the Senate committee hearing, and it is wide- a ministerial council meeting. What it con- spread. sisted of was relevant federal ministers and Let me now turn to the provisional tax relevant state ministers, with some local uplift factor. My colleague Senator Sherry has government people along for the ride, and pointed out that, by going back to 10 per cent small business being hand-picked and invited in the outyears after 1996-97, there will be an to make set speeches to the so-called summit. extra burden of $540 million imposed on At the end of the day it was a total fizzer. small business. That is what this bill does. It did not come down with anything that The government should not have done that. would reduce the burden of compliance costs Senator Sherry is right to say to all the on small business as it was mooted it would. government senators in this place, who last Wednesday, 19 June 1996 SENATE 1853 year and the year before stood up and made what the reasonable level will be. So every pretty speeches about how they were going to year small business will form itself into a slash the provisional tax uplift factor, that battalion, march on the government, knock on they should cross the floor and vote for this its door and say, ‘Do what you promised in amendment. If they do not, their words do not the election.’ That is the political dimension. count for anything. In fact, their reputations The practical business level dimension is are being held out to dry by the government more important, which is this: what a govern- treating them as backbenchers and as mush- ment should do for the business community, rooms in this case. and which is absolutely desirable in all cases, It has also been said, rightly, that the Senate is give long and strong reliable signals to Economics Legislation Committee, which industry as to what the parameters for their conducted an inquiry into this legislation, activities will be. Tax is an important param- received three submissions and that, in those eter. The government should give long, strong submissions, the cut from eight per cent to six signals about what its tax intentions are. per went was widely—I quote the word used Industry should be able to believe them so in the report—‘applauded’. That is an accu- they can then conduct their business activities rate description of what the submissions did within those parameters. say. If they want to talk to their bank manager But they also referred to the increase from about how much they might have available six per cent to 10 per cent. In those submis- next year to take out a loan to finance busi- sions, the organisations—the Australian ness expansion, they ought to be able to know Society of Chartered Practising Accountants, what the tax uplift factor will be. With the 10 the CPAs, the Association of Independent per cent sitting there, not the six per cent, Retirees and the Taxation Institute Of Austral- business is bound to take the 10 per cent as ia—said that they condemned the move to 10 being the likely outcome and, as a conse- per cent. The report itself, in reflecting the quence, reduce the amount of investment they evidence before it, refers to that view as ‘the might have made in expansion. If it is not 10 move was widely condemned’. That is a per cent—it could be any damn figure—they quote from the report. So it is not a matter of would take the conservative course and saying that we, the opposition, are saying that protect themselves rather than be pushed into this is condemned; the responsible organisa- believing it might be lower when it in fact tions that had made submissions to the in- turns out to be 10 per cent. In other words, quiry have condemned it. On the basis of they might invest only on the basis of 10 per their condemnation, we are trying to give cent. effect to their view and the decision of the The government, by leaving that in this bill, government in the election campaign. is in fact sending a very bad signal to indus- The reason why we are is that, of course, a try that the long, strong signals—the certain- 10 per cent provisional tax uplift factor will ty—that it requires are not there. It is a fall hardest on small business. It will be a variation year to year. This government is repudiation of a government claim. No going to exercise its right to vary it. Against amount of obfuscating will change that. No this background, business, in particular small amount of saying that we are putting it in the business, expects the figure will be six per act for machinery reasons and that we will cent. come to it each year and deal with whether or I make those remarks because I hope the not it should be 10 per cent or some other minister at the table, the Assistant Treasurer figure will calm the disquiet among small (Senator Short), when he replies, will deal business. with what small business should do. Should It will not calm it because the 10 per cent small business, given the remarks of Senator will be sitting there as a legislative fact and Watson, believe 10 per cent? Should it be- small business every year will have to mount lieve it will be eight per cent? Should it think its lobby to try to persuade the government it might be six per cent? How does it plan its 1854 SENATE Wednesday, 19 June 1996 next out year? What does it say to its bank down the track we can check and you have to manager or its loans office when it tries to have all the details on hand to justify what- finance its own further business development? ever decisions you have made.’ I know, from They are important questions for small speaking to people in the regions of Western business. I hope the government can answer Australia, that that is a concern to a great them. In the meantime, I will vote for the six many people and a great many small busines- per cent. I will support Senator Sherry’s ses. amendment to make that the level because I The Greens (WA) have a preferred position believe absolutely that is what the government where in time we think the whole of the tax told the people of Australia and that is what system ought to be subject to a comprehen- the people of Australia expect the government sive review. The starting point of that review to do. would be: what do we think tax revenue in Australia should pay for? What are we hoping Senator MARGETTS (Western Australia) to achieve from tax revenue? From there, (5.33 p.m.)—I rise to speak briefly today on once you have worked out your priorities you the Taxation Laws Amendment Bill (No. 1) would then work out the best system to 1996. Before I talk about the Greens’ position provide that tax review. We make changes bit on this bill, I want to respond to some of the by bit and in the end just simplifying the issues that were raised in Senator Cook’s wording of tax legislation, which we have presentation. There is obviously a growing done in the past, does not address that; it concern amongst small business in Australia simply makes onerous obligations of self- in relation to compliance costs. But, before assessment clearer. That does not help neces- anyone deals with that issue, it has to be sarily if you are the person who is worrying recognised that a lot of that has to do with the about trying to do the right thing—that is, growing trend towards self-assessment in paying the correct amount of tax. taxation. It is not just a problem for small businesses, though obviously small businesses The actual cost to Australia would be huge, feel it as a cost comparative to their output if that has ever been assessed. Perhaps the much more than large businesses or corpora- minister might enlighten us as to whether tions do. there has ever been a study. Maybe someone knows whether there has been a study of what It is also a fairly major worry for many the actual compliance cost across Australia is, individuals. A record number of people, we whether it is increasing and how that might be are reliably told by professional tax associa- mitigated, not by just lopping off taxes but by tions, now feel compelled to employ a tax actually working out a system whereby people accountant to do their ordinary tax. The Tax can be notified of what their tax obligations Pack does not actually work for most people, are instead of their having to work it out and many of the people who do not use a tax themselves. accountant are those who cannot afford it or I turn now to the details of the bill. This have no income to speak of. bill contains two issues that were already We have a growing situation in Australia included in a tax bill of the previous govern- where we are expecting the people who can ment: the tax deductibility of donations to least afford it to spend the most on assessing certain organisations and some changes to their tax, comparative to their wage that is. avoid double taxation in relation to share One wonders whether some study has been buybacks. The first is a routine issue and the done of what the extra cost would be. If we second concerns a complex area of financial provided enough staff within the tax office dealing but does not actually address share they could advise individuals and small buybacks themselves just their tax treatment. business especially of their tax obligations. In Since I have not heard of any objections or that way people would not be tied up in knots problems in relation to these areas I will not of worry and concern over the threat of tax waste time speaking about them, although I audits and somebody else saying, ‘It’s up to may take up the issue of share buybacks at a you but anywhere up to, say, seven years later time. Wednesday, 19 June 1996 SENATE 1855

The third element is the change to the they should be making. That is a fairly novel provisional tax uplift factor. Since 1991 the idea. The tax reviews we have seen so far do underlying, or default, uplift factor, as Senator not go anywhere near looking at the system, Cook mentioned, has been 10 per cent. at what we are paying and how we are doing During the last three years that certainly has it. As I said, we will support the opposition been too high. It is my view that, as a basic amendment and, with that change, we will rate, it is too high. There is no reason to build support this bill. in an expectation that consultancies or small Senator SHORT (Victoria—Assistant service business will grow at 10 per cent per Treasurer) (5.40 p.m.)—I start by thanking all annum, especially when the economy is not speakers in this debate—Senator Sherry, growing at anything like that rate. Senator Kernot, Senator Cook, Senator In the past I have said that a fixed default Margetts and you, Mr Acting Deputy Presi- rate is not the best way to go. I think it would dent. I will not take up too much of the be better to work out a formula based on Senate’s time at this second reading stage. indicators such as CPI or gross domestic There are some items which we can take up product change, perhaps modified by some in the committee stage. However, there are a figures about the state of small business few points I would like to take up in response growth. With that as a default amount, the to the contributions that have been made. parliament could vary the rate, but it would Firstly, I reiterate that the Taxation Laws be less likely to require legislative correction Amendment Bill (No. 1) 1996 deals with with such a method. three separate elements. The first element, the As it is, the default rate is high and has deduction for gifts, relates to several new required downward correction each year that deductions under the gifting provisions and I have been in this place. I worry that if the the extension of one or two other gift provi- rate is left where it is the status quo will be sions that have already been granted. There maintained. Any amendment the Senate puts was no comment really on that one way or to a different bill could be removed by the another from any of the speakers. House of Representatives. The second element was that of share We have supported a lower rate in the past. buybacks. Again, there was little disagreement We think the proper way to go is to have a on that issue and it was not widely touched rate which, while it might be low, the govern- on. You, Mr Acting Deputy President, raised ment can argue to raise, rather than having a certain issues and I give you an assurance that rate that is almost always too high and leav- we will look carefully at them. As I under- ing the Senate to lower it. For that reason, the stand it, you raised two main issues in rela- Greens (WA) will support the opposition tion to the share buyback amendments. amendment to change the default rate to six The first was that the market value rules per cent. should not apply to arm’s length transactions. I reiterate: in the end, we think that the tax The second was that the share buyback system needs changing. The starting point amendments might operate inappropriately in should not be: what is business prepared to relation to certain employee share acquisition pay? The starting point should be: what are schemes. I will come back to you and to the we hoping to achieve in various policy areas? Senate with a fuller response to the latter Many groups should be involved in that point. I assure you and the Senate that it has decision making process. Perhaps the com- been carefully noted and the government will munity should have a say as well. have a careful look at it. The starting point for a new tax system I have a couple of comments to make on should be: finding out what the important the first issue that Senator Watson raised. things are on which we want to spend tax; Firstly, as I am sure Senator Watson would what people think is a reasonable amount of agree, it is often very difficult to determine tax; and looking at the various groups which whether parties are dealing with each other at pay tax and at what relative tax contributions arm’s length. The market value rule is an 1856 SENATE Wednesday, 19 June 1996 effective, objective test for determining member had been the champions of small whether parties are dealing with each other at business during their years in office. As small arm’s length. Secondly, irrespective of wheth- business well knows, and as I think most er parties are dealing with each other at arm’s Australians know—I know Senator Cook does length, it would not be appropriate—Senator not want to listen to this, but it is true—small Watson did not suggest in any way that it business suffered more grievously under the would be appropriate—to allow a capital loss burdens imposed by the Labor government to be created by buying back shares for less than under any government in our history. So than their true value. I make those comments the Labor Party should not come in here in at this stage but undertake to give the matter opposition and tell us about their advocacy of fuller and more careful consideration. small business when they all but strangled it The third element, and the main issue dealt to death—and in fact did strangle thousands with, was the provisional tax uplift factor. I and thousands of small businesses into debt, will address most of my remaining remarks to bankruptcy and insolvency during their years that but, before doing so, I would like to pick in office. up on Senator Margetts’s point about compli- One of the key issues on which the last ance. As I understood it, Senator Margetts election was fought was the question of which was talking about compliance with taxation political party was best equipped to give generally. I could not agree with her more on small business the opportunity to breathe that matter. One of the greatest problems we again, to grow again, to create more jobs, to have with our taxation system today is the create more income and wealth, so that the huge growth in taxation legislation that has living standards of all Australians could be occurred, particularly under the 13 years of increased and improved after the depths to Labor rule. I think I am correct in saying that which they had sunk, particularly in the early during those 13 years the income tax act went 1990s, as a result of the most severe recession from something in the order of 1,700 pages to since the 1930s, which was brought on delib- something over 4,000 pages. erately by the then Labor government. So let us not hear too much more hypocrisy from The situation now is that the taxation the Labor Party in relation to small business. system generally—and the sales tax act bears eloquent testimony to this as well—is so The main point that was raised by opposi- immense and complex that I defy anyone, tion speakers in the debate was the question even the most expert tax practitioner, to have of the uplift factor and the government’s a full comprehension of the details of the tax commitment to reducing the uplift factor to act and the taxation laws. They have grown six per cent. There were allegations from both like Topsy over decades now. They have been opposition speakers that somehow or other the added to, layer after layer, and that is some- coalition had broken its election promise to thing that we believe is in major need of reduce the provisional tax uplift factor. rectification and reform. Indeed, I or my It is very interesting that opposition spokes- colleague Mr Miles in the other place will be men do not really seem to be able to get their introducing legislation, if not today, then act together on this. They do not really know tomorrow, to take a first step along the way what they want to say. On 22 May, the to the simplification of the income tax laws. assistant to the shadow Treasurer, Mr Latham, The point is that the cost of compliance is put out a press statement, the first sentence of made far too high. One of the major objec- which claimed: tives that we have in government is to reduce The Federal Government has broken its promise to the compliance costs for taxpayers generally small business and self-funded retirees to set the but for small business in particular. Senator provisional tax uplift factor at a permanent rate of Cook, in his comments on this bill—and I six per cent. will come back to some of those—cried I will come back to that. On 14 June, how- crocodile tears for small business, as if the ever, Senator Cook, in one of the weakest Labor government of which he was a senior press releases I have ever seen, said: Wednesday, 19 June 1996 SENATE 1857

Reducing the Tax Uplift Factor is one promise the The fact is that the rate is essentially not Howard Government will keep, but very sneakily. operative, although it was the uplift factor that So while Senator Cook was saying that we was provided in the first two years of oper- have kept the promise, the shadow spokesman ation under a default uplift factor. The provi- in this area, Mr Latham, said two or three sional uplift factor that was set in 1990-91 weeks earlier that we were breaking the and 1991-92 did coincide with the default promise. The opposition needs to get its act uplift factor of 10 per cent. The uplift factor together as to what it believes on this point. was reduced in 1992-93 to eight per cent and remained at eight per cent for the ensuing The fact is that the coalition’s commitment four years, including the year that we are now was confirmed in its policy document called in, 1995-96. A new deal for small business in which it gave a commitment ‘to reduce the provisional That figure at eight per cent was set and tax uplift factor from eight per cent to six per maintained by the then Labor government, cent’. It was never said by the coalition despite the attempts by the then opposition during the election campaign that we would last year, the now government, to reduce the permanently reduce the rate to six per cent. figure to six per cent. We, then in opposition, What we said, and what we are committed to, moved an amendment in the House of Repre- is having a provisional tax uplift factor sentatives last year to have the uplift factor regime which sets the uplift factor each year reduced from eight per cent to six per cent, at a level which is more in line with the and that was thrown completely out of court nominal growth in the economy. That is our by the then Labor government. long-term commitment. So far as our specific The fact is that, so far as the operation of election commitment is concerned, the com- the default factor is concerned, there is never mitment was to reduce the figure from eight any particular reason, or likelihood for that per cent to six per cent. That is precisely what matter, that the default uplift factor of 10 per we have done and that is precisely what this cent will be the figure to be adopted. It has legislation is all about. for many years been the prerogative of the Under a longstanding provision of the act— parliament to determine each year what the and I will go through the history just brief- uplift factor will be for the ensuing year. That ly—there is a so-called default rate of 10 per is why the actual uplift factor for the last five cent. One would think, from listening to or six years has been well below the default opposition speakers in this debate, that that rate. It is a rate that only applies if for some was either something that had not existed unforeseen circumstance—and it is difficult to before today or that a 10 per cent figure was foresee such a circumstance—the parliament something that had been fixed by this new was unable to set an uplift rate for the follow- government. ing year. It has never happened in the past, and I can see no reason why it would happen That is simply not the fact. The facts of the in the future. Therefore, the default rate really situation are that a default rate was estab- is in many ways an irrelevancy. lished in the Income Tax Assessment Act, and I think I am correct in saying that it was in But to reduce the rate, and I will say a little 1990. That rate was set by the then Labor more on this in the committee stage, from 10 government, the Hawke-Keating government, per cent to six per cent really does not seem and it is a default factor which has existed to be a sensible way to go for any reason. In ever since. So it was Labor that put the 10 fact, it could well create more problems than per cent default rate into the act. For it now it solves. to say, ‘Let’s reduce it,’ is an extraordinary So far as the six per cent uplift factor is act of further hypocrisy, given that the default concerned, we believe that that is a figure rate has been argued over in the ensuing which is more in line with the nominal years. Never did the then Labor government growth of the economy. So long as we con- give any indication that it was prepared to tinue to have, and I stress this, a provisional consider varying that rate. tax regime, we believe that the provisional tax 1858 SENATE Wednesday, 19 June 1996 uplift factor should be—and it is always hard 1 Subsection 221YA(1)(definition of provisional to judge these things in advance—closer to tax uplift factor) the nominal rate of growth of the economy. Repeal the definition, substitute: That is what we are doing. That is what we provisional tax uplift factor, in relation to a year of income, means, until the Parliament undertook to do during the election campaign. otherwise provides, 6%. We have completely met our election commit- ment and, despite what Labor spokesmen may I do not intend to speak too long on this say, it is a fact that it has been very widely matter. I did outline the reasons why the welcomed by small business. Small business Labor opposition is moving the amendment. has not fallen for this trick that the Labor As I said earlier, it is an absolute disgrace Party is trying to put around that somehow or that the new government is breaking yet other we are going to go back to 10 per cent another promise. The coalition’s policy made next year. That is a nonsense. Everyone it very clear that the tax uplift factor would be knows that, apart perhaps from those who six per cent, full stop. We are presented with have been peddling it on the opposition some legislation which makes it clear that at benches. the end of the year it goes back to 10 per cent, not eight per cent. As I have foreshadowed, and I will say a little more in the committee stage, we will not Senator Calvert—You are only jealous. be supporting the opposition amendment in Senator SHERRY—Senator Calvert says relation to the default factor. I do welcome we are only jealous. It is eight per cent at the the fact—and I thank all senators for this moment, going down to six. fact—that the government has decided to Senator Calvert—That is right. meet its election commitment to assist the taxpayers of Australia who are subject to Senator SHERRY—Why are you putting provisional tax. That includes most, if not all, it back up to 10 per cent? That is the intent of the small business people of Australia—the of your legislation. You are an absolute lifeblood of the Australian economy who in disgrace. You have been in government for many ways have been squeezed for many only three months and already you continue years now by the former Labor government to break promises. in terms of having too high a tax uplift factor. As I said earlier, we intend to save small We have kept faith with them, and we will business hundreds of millions of dollars over continue to do so in the future. So I thank the two financial years prior to the next speakers again, and I commend the bill again election, whenever it is scheduled. The Prime to the house. I am glad to see that it will have Minister, Mr Howard, went all over the place its second reading passage. around this country with a bleeding heart for small business, saying, ‘We will defend small Question resolved in the affirmative. business. We have a policy to reduce the Bill read a second time. uplift tax factor down to six per cent.’ In Committee Senator Calvert—We have done it. Senator SHERRY—You have done it for The bill. one year. With the support, I hope, of the (Quorum formed) Democrats, the Green senators and Senator Harradine, we are going to pass this amend- Senator SHERRY (Tasmania—Deputy ment to keep you honest to your election Leader of the Opposition in the Senate) (6.02 commitments, to ensure that small business in p.m.)—As I foreshadowed in my speech in this country is protected and looked after. the second reading debate, I want to move the amendment that has been circulated in the Senator KERNOT (Queensland—Leader chamber. I move: of the Australian Democrats) (6.05 p.m.)—We are going to support this amendment. Schedule 1, item 1, page 3 (lines 5 to 11), omit the item, substitute: Senator Calvert—Of course you would. Wednesday, 19 June 1996 SENATE 1859

Senator KERNOT—Of course we will. I have to say that it is curious to see the We tried to do it ourselves. We tried to get Labor Party in this debate. I do not think they you to support it when we moved it before. I have to remain in Coventry thinking, ‘We remember all the things Senator Watson said can’t say this because we had a different about ‘blocking supply’ at the time I gave my position when we were in government.’ It is speech in the second reading debate, but I do good to see them proposing this amendment. not need to revisit all that. Let us look at why I hope they are going to revisit a lot of other it is appropriate. Back in 1990 when this was things they did in government, too, like set, inflation was running at 7.7 per cent and privatisation. average earnings were rising by about seven per cent. According to Treasury, in 1996-97 Senator Bob Collins—The main thing I inflation will be just three per cent, which is want to revisit is the benches over there. 4.7 per cent lower than it was in 1990, and Senator KERNOT—You might if you average earnings will rise by just four per keep going like this. You might convert the cent, three per cent lower than 1990. We are small business sector. It was interesting to now in our 19th quarter of low inflationary hear the Prime Minister’s attack in question growth and the likelihood of Australia return- time today. It was also interesting to hear Mr ing to the high inflation days of the 1980s is Beazley say that the opposition was going to becoming fairly remote. Thank goodness for introduce its own unconscionable conduct that! So while the 10 per cent might have law, better business law. been appropriate in 1990, a six per cent figure is far more appropriate in 1996. That is another commitment that you lot aren’t going to honour, are you? What is your If things change dramatically, then you can solution? A lot of words, a small business come back to the parliament and ask us to summit—as if they did not have enough of review the rate, not just keep it there for one them, as if we do not know what the prob- year so that you can put out a glorious press lems of small business are—and a few com- release and then do what you want the year mittees, and you are going to have the rely on after. Let us do what you said you wanted to the Labor opposition or the Democrats to do for small business, that is, put it in place introduce a bill which will protect small permanently and come back to review it as business from the unconscionable conduct of you can prove that the circumstances warrant their big business end of town mates. it, not the other way round. It is just too much for you to claim you are the friends of small business when you are We recognise that, if the uplift factor is set not prepared to do anything more than intro- too low, there is scope for underpayment of duce this one measure for one year. That is tax. We will cooperate on that matter. We why I am supporting the opposition amend- also recognise that, if the uplift factor is set ment. at too high a level, obviously taxpayers pay too much—and that is what they have been Senator WATSON (Tasmania) (6.09 doing. Relying on those Treasury figures, I do p.m.)—I think people opposite should be not think there is any reason why the govern- reminded of the situation when Labor was ment should vote against what the opposition actually in power. Under Labor, the provision- are proposing in this amendment. I would like al uplift factor exceeded the actual growth in to hear their rationalisation. I heard Senator income subject to provisional tax in every Watson’s speech earlier. I have been here year between 1991 and 1994-95. The provi- three times and heard what you lot have said sional uplift factor was set by previous Labor on this matter. The last time you tried it was governments at eight per cent for each of the a great con—‘Can’t afford it, small business last four years, including 1994-95. There was doesn’t want it, it’s blocking supply.’ Come no justification for such a high figure either on! I hope you have something better to say by the government or by the Treasury offi- about that this time. cials at committee hearings. 1860 SENATE Wednesday, 19 June 1996

The level of aggregate income that should information we had in the last couple of be subject to provisional tax can be difficult years. to predict. Therefore, in regard to the uplift When we put those arguments to the Sen- factor, for subsequent years after 1996-97, the ate, what did you do the first time? You said, coalition government will set it when the ‘Oh! Can’t vote for it, sorry’ for all of those most accurate information is available. What spurious reasons. What did you do the second is wrong with that? It will be set at what is a time? After you were embarrassed because of realistic figure rather than at the unrealistic the pressure of COSBOA, the small business figures that your government set, Senator coalition and others, what did you do? You Sherry, when you had that absolute grab for came with us, Senator Watson, and what money, when you used every piece of legisla- happened? You refused to press the amend- tion available to try to bring forward the ment when it came back. That was your timing of the tax collections. So don’t be commitment to small business. So please let hypocritical now in relation to what is hap- us not rewrite the record. pening. All of the reasons you gave are very valid We are going to set the figure as accurately and they are valid this time, too. What you as possible at the time when the information did not address was: if it is a reasonable rate is available. It is going to be set at what is now, why can’t it go for more than one year? going to be a realistic growth factor so that You did not address that at all. We can have small business, which also includes self- accurate figures next year as we have this funded retirees who are also subject to provi- year and as we had last year and the year sional uplift factors, can all be treated fairly. before. Of all the people under your administration, Senator SHERRY (Tasmania—Deputy Senator Sherry, it was self-funded retirees Leader of the Opposition in the Senate) (6.14 who suffered the greatest discrimination, and p.m.)—Senator Watson gave a splendid these are the people who are going to get speech in support of our amendment. It was fairness and justice under our system because a splendid speech, Senator, and I invite you they will be brought into a tax regime that is to come over here and vote with us, along equivalent to the thresholds that apply to the with all of your other colleagues who, over full pensioners. the years, made speech after speech about the uplift factor. It was a splendid speech, Senator So we will not lock people into a situation Watson. It is a pleasure for the Labor opposi- in which they may be penalised because of tion to congratulate a government member for changing economic circumstances but rather his contribution in supporting us on this set a rate which is a reasonable reflection of amendment. It really is a pleasure. As I said the growth of the income of provisional earlier, you should be down on the front taxpayers. This is precisely what your govern- bench, dealing with these tax matters, because ment failed to do year after year, to your we would get some accurate information. disgrace. So for the 1996-97 financial year a Senator Bob Collins—You are making him reasonable figure will be set in relation to the blush. economic expectations of the time. I support the stand made by my colleague Senator Senator SHERRY—I am making you Short. I reject the arguments as well as the blush. Senator, you said that the figure is amendment that have been put forward. being set in accordance with the economic expectations of the time. Unless you are very Senator KERNOT (Queensland—Leader pessimistic over there about inflation going up of the Australian Democrats) (6.12 p.m.)— to five or six per cent or you know economic Senator Watson, I have to remind you, after forecasts that you are not telling us, not that that little outburst of rhetoric, what the truth you are telling us much anyway in question was about what happened last time. You time or anywhere else, if economic expecta- accused Labor, and rightly, of the unfair level tions are what they are as a result of the at which the uplift factor was set and the legacy of our government—very good eco- Wednesday, 19 June 1996 SENATE 1861 nomic growth, very low inflation, the highest absolutely full well, and small business knows job growth in 20 years; all of the great eco- it. nomic legacies we left you—then what better I am absolutely amazed that Senator Sherry time to lock in the six per cent figure to help should be prepared to deal so lightly with the small business and self-funded retirees. truth on such an important matter as to so As I said earlier, this will return over the totally mislead the provisional taxpayers of two financial years 1997-98 and 1998-99 a this country, in particular small business. He total of $540 million to the constituency that professes to be a supporter of small business. you claim to represent—small business and I say again, as Senator Watson has—I said self-funded retirees. this in summing up the second reading de- It will be with great pride that I will go out bate—that if any government ever was guilty representing the Labor opposition—it is good of absolutely slaughtering small business in to see Senator Boswell; I hope you are going its whole range of policies, tax and other, to cross the floor, too—to the small farming during its period in office, it was the Hawke- communities, to the small businesses and self- Keating Labor governments of which Senator funded retirees, and remind them of this. I Sherry was a member. will give due credit to Senator Kernot and the Small business knows the situation. Small Democrats for helping support us in returning business knows that your government killed $540 million to those essential areas of the small business. It sent tens of thousands of small business economy and self-funded small businesses broke, bankrupt, insolvent. retirees. I am new to this position. I have You did it year in and year out. You did it as been in this position for three months and I a result of the most incompetent government, am enjoying it. financial and economic management that this Senator Bob Collins—You look as though country has seen virtually throughout its you are. history. For you now to be coming in and Senator SHERRY—I am enjoying it parading yourself as the champion of small because I care about small business and I care business is hypocrisy at its highest level. about self-funded retirees. It is a real pleasure I come back to the facts of the situation. In to be here supporting them as the opposition response to Senator Kernot’s comments, last spokesperson responsible for this matter. We year it was the coalition opposition that first will be reminding them in three years when moved the amendment to reduce the uplift the election comes, if that is when it is held, factor for 1995-96 from eight per cent to six of what we have done in the Senate to protect per cent. We did it in the House of Represen- their interests. We will remind them of what tatives. you did—how you have broken your promise and how John Howard, with his hand on his Senator Kernot—Did you press it when it heart, and Peter Costello and Senator Short came back? and Senator Boswell did this. We will remind Senator SHORT—It is true that we did not them about how you have broken a promise— press it when it came back here the second to rip off $540 million from them. That is time. Do you know why we did not press it? $540 million which, with great pride, we vote There was the real risk that you would have today to return to them. finished up with an uplift factor this year of Senator SHORT (Victoria—Assistant 10 per cent because the Labor government Treasurer) (6.17 p.m.)—Senator Sherry might was not going to accept that amendment. To be enjoying his job but, by gee, he deals very have rejected it twice would have meant that lightly with the truth in this place. He knows the tax uplift factor for 1995-96 would have full well that what he has just put to the been 10 per cent. Whilst we supported the Senate is not true. He knows full well that the reduction to six per cent and whilst we urged government, proposing the bill that we are, is the government to do so, the fact that the then not in any way saying that next year the rate Labor government was not prepared to accept will go back to 10 per cent. He knows that that amendment meant that the uplift factor 1862 SENATE Wednesday, 19 June 1996 would have been 10 per cent. I am surprised nominal growth in the economy. That is our that you were not aware of that. long-term undertaking. That is what we want I turn to the claims by Senator Sherry that to do and that is what we will do. That is we have broken our promises in relation to why this year we have reduced the figure the commitment to reduce the uplift factor from eight per cent to six per cent. That is from eight per cent to six per cent. He was what everyone seems to want. The only not here when I spoke earlier so he may not question at issue seems to be in relation to be aware of the complete confusion within the what you do with the default rate. The propo- government’s own ranks on this issue. On 22 sition that you reduce the default rate now May, the shadow Assistant Treasurer, Mr seems to us to have little if any merit because Latham, put out a statement saying: it is too far out to be able to assess the validi- ty or the usefulness of that default rate. The federal government has broken its promise to small business and self-funded retirees to set the So you do not achieve anything at all by provisional tax uplift factor at a permanent rate of the measure that the opposition is proposing. six per cent. For that reason we will not support the oppo- He used the word ‘permanent’ there, which sition amendment. We will maintain our total was absolutely an untruth because the coali- commitment to the provisional taxpayers of tion never said ‘permanent’. First of all he Australia so long as we continue to have a said that we had broken our promise. provisional tax regime to set the rate each He then went on later in his release to year when we are better informed as to what quote the coalition’s statement in its policy the outcome and the prospects for growth in paper ‘A New Deal for Small Business’, the economy over the year ahead will be, to which said that we promised to ‘reduce the set the rate as near as we reasonably can at provisional tax uplift factor from eight per the nominal rate of growth. Fiddling around cent to six per cent’. That seems to us pre- with the default rate has no relevance to that cisely what we are now doing. But Senator situation. Peter Cook just three or four weeks later—on Senator WATSON (Tasmania) (6.22 14 June, last week—put out a statement the p.m.)—I regret that there has been some first sentence of which was: ‘Reducing the tax misunderstanding, perhaps, in listeners’ minds uplift factor is one promise the Howard as a result of the sorts of issues that have government will keep.’ In other words, Sena- been raised in the debate today. The govern- tor Cook is saying that we have kept the ment is delivering 100 per cent on its election promise. Mr Latham is apparently saying that commitment to reduce the uplift factor from we have not. But you all know full well that eight to six per cent for the provisional year we have kept the promise because our com- 1996-97. The concept of a default provision mitment was to reduce the uplift factor from has been around for a number of years, as the eight per cent to six per cent. That is precise- opposition well knows. I regret that Senator ly what we have done. To suggest that it is Kernot in her deliberations and reflections on going to go back to 10 per cent next year, as last year’s amendment was a little confused. Senator Sherry has done, is a total distortion The amendment related not to the default of the truth. I am pleased to see that Senator option but to the actual rate for the current Sherry has a little accepting smile on his face. year. My recollection was that the Democrat Senator Sherry—I raise a point of order. amendment, which had a lot of attraction, was I am not smiling at your response and your not the default provision. comments; I am smiling at Senator Collins The Senate heard that Treasury officials at here and the conversation we are engaged in. committee hearings were unable to actuarially Senator SHORT—It did not look like it to support the eight per cent. It was the former me, but I will let that one go. The coalition government’s tremendous grab for extra announced during the election campaign that money and the bringing forward of the timing it would reduce the provisional tax uplift of taxes that were the determinants. The factor to a level which is more in line with Keating government said that if the Senate Wednesday, 19 June 1996 SENATE 1863 pressed the amendment the government would change our mind on that one because Mr exercise the default option of 10 per cent. The Keating might take that to an election.’ What opposition, which was the Liberal Party at the about the land fund bill? You said, ‘Sorry, we time—knowing Keating’s grab for money— had to change our mind on that one, too. We was not prepared to place small business at can’t press the amendments on the land fund the risk of a default option of the order of 10 bill because Mr Keating might take that to an per cent and backed down. Senator Kernot election as well.’ This is the same. This is well knows why we did not press the amend- what this was about as well. It was about the ment that was moved in the House of Repre- politics. It was not about Mr Keating’s threat. sentatives and debated here. The Keating It was about the politics. You were backing government said in no uncertain terms: ‘If away at a rate of knots from giving any kind you press this issue, you will have to carry of trigger at all that might have caused a the cross for the additional provisional tax double dissolution. that small business will have to pay.’ However, the politics of now mean that We have honoured our commitment 100 per here we are debating again. That is great. The cent. We are delivering on that commitment politics of now mean that we have got a 100 per cent. We have said that next year and really constructive amendment from the subsequent years we will set that figure opposition, so let’s get on with it. Let’s pass annually as it applies to the next year in it. Let’s send it to the House of Representa- relation to the prevailing economic circum- tives and let’s see what they do, but let’s tell stances so it can realistically reflect the them that we intend to press it. increase in economic activity and in taxable Senator SHERRY (Tasmania—Deputy income and so that there is not this grab for Leader of the Opposition in the Senate) (6.31 money. p.m.)—I could not agree with Senator Kernot Senator KERNOT (Queensland—Leader more. It is pleasing to see Senator Ferguson of the Australian Democrats) (6.30 p.m.)— walk into the chamber. He is the chair of the Senator Watson wants to rewrite history Economics Committee. Are you leaving now? again. Senator Ferguson—I couldn’t yell at you Senator Bob Collins—Are you two going from down there. to do this all night? Senator SHERRY—I thought you were Senator KERNOT—No, I hope this is the going to cross the floor and vote with us. I last thing I am saying, Senator Collins. The quoted you extensively earlier in the debate, foreign minister is running around the world Senator Ferguson. I quoted the fine words and trying to rewrite the foreign policy of this fine contribution you have made over the past country for the last decade. In here we are few years on this issue, pointing out that the seeing a little bit of revisionism, too. You provisional uplift factor should be reduced. have to take one opportunity to at least Senator Short—That is precisely what we challenge it. have done. It is what the bill is about. Although Senator Watson says the reason Senator SHERRY—You are doing it for the former opposition did not press the one year. As I pointed out earlier, the amendment was because big, tough Paul coalition’s policy and new deal for small Keating was going to threaten them and say, business is that the provisional tax uplift ‘Look, we’re going to exercise the default factor will be reduced by two per cent to six option,’ I can remember the politics of the per cent, which is more in line with the time. The politics of the time were about an nominal growth in the economy. opposition with leadership problems who were But what do you present us with today? A doing whatever they could to avoid double bill for one year only. What happens beyond dissolutions and being difficult. that? Labor is making sure we assist small What did you change your mind on? business and self-funded retirees. That is what Migration bills. You said, ‘Sorry, we had to we are making sure of today. We are going to 1864 SENATE Wednesday, 19 June 1996 lock in the six per cent maximum; we are Senator FERGUSON—It was a very good going to lock it in as a maximum. If the report. growth rate in the economy continues at current pace, which is very good—a great Senator Kernot—It was a Democrat legacy from Labor—and if the inflation rate reference. continues as low it is, then perhaps this Senator FERGUSON—The initial refer- should go lower in future years, not higher as ence was from the Democrats, but let me tell you are proposing. you that the terms of reference were expanded Senator Watson—We are not proposing quite a great deal before we referred it to the that. committee. I concede, Senator Kernot, that the initial reference was relating to uplift factor Senator SHERRY—Your proposal is to only. By the time that report was finally put leave it on the never-never; you are saying, down, it dealt with a lot of other very import- ‘Let’s look at it in a year when we need more ant issues besides the uplift factor and how money.’ What we got last week at the Premi- small business in this country should be ers Conference was another breach of election treated. What we said prior to the election commitments. You said that there would be was that we would be reducing the uplift no new taxes and no expansion of existing factor to six per cent, and we are going to do taxes. What did the Treasurer dish up to us it. last week? A $1.2 billion new sales tax, Senator Watson. You should all be ashamed Senator Sherry—I quoted you. For one of yourselves. You should be crossing the year; that’s all you are proposing. floor to support us on this amendment. Senator FERGUSON—In 12 months time, Senator FERGUSON (South Australia) if the situation is the same, I am quite sure (6.33 p.m.)—I am sorry that I was not here to that the people involved in the Treasury will hear Senator Sherry’s earlier contribution, but make sure it is still at six per cent, if the I had an important meeting which obviously conditions are still the same. was more important than the contribution you made. Let me say, Senator Sherry, it is very Senator Sherry—Economic conditions are intriguing to hear you come in here and say going to get worse under you, are they? that the provisional uplift factor should be Senator FERGUSON—Senator Sherry, reduced to six per cent, and should stay there. you ought to know and remember the deci- What about your own attitude last year? You sions that you made when you were on this said eight per cent. We were quite prepared side of the chamber last year. We wanted to to come down to six per cent last year, but reduce the uplift factor to six per cent because where was Senator Sherry? it more reflected the CPI. We would have Senator Sherry—It wasn’t our policy; it is liked to have gone down further, but we knew your policy. the impact that it was going to have on the Senator FERGUSON—It was not your government revenue, and for that reason we policy. Well, if it was good enough for you agreed that it should be six per cent. last year to suggest that it should only be Senator Watson—And Keating’s threat! eight per cent, we have gone further than that. Your policy always meant that it should revert Senator FERGUSON—I understand to 10 per cent at the end of each subsequent Keating’s threat. We knew the impact it year, to be reviewed. would have on revenue, and for that reason we said no, we will only take it down to six You will remember, Senator Sherry, if you per cent; otherwise it would have too big an took the trouble to read the report of the impact on the budget projections. You would committee, which looked into the taxation not even come at that. Eight per cent was the treatment of small business— most you would come down to when the CPI Senator Sherry—Excellent report; good and the inflation factor were far lower. Eight report. per cent was as far as you would go. Wednesday, 19 June 1996 SENATE 1865

You ought to remember that, because we AYES wanted it to go to six per cent. In our pre- Crowley, R. A. Denman, K. J. election promise we said we would bring it Foreman, D. J.* Forshaw, M. G. Jones, G. N. Kernot, C. down to six per cent, and we are bringing it Lees, M. H. Lundy, K. down to six per cent. It will be reviewed Mackay, S. Margetts, D. again in 12 months time, just as you used to Murphy, S. M. Neal, B. J. review it every 12 months, except that when Ray, R. F. Reynolds, M. you were in government you would not even Schacht, C. C. Sherry, N. consider bringing it down to eight per cent. I Spindler, S. Stott Despoja, N. West, S. M. Wheelwright, T. C. can still remember when it was 10 per cent. Woodley, J. Small businesses suffered by paying 10 per cent, particularly those with uncertain incomes NOES Abetz, E. Alston, R. K. R. who were not capable of putting in an adjust- Baume, M. E. Boswell, R. L. D. ed provisional tax return because they could Brownhill, D. G. C. Calvert, P. H.* not estimate their income to the extent that Campbell, I. G. Crane, W. they could be sure they would fall within that Crichton-Browne, N. A. Ellison, C. small limit of error that you are allowed to Ferguson, A. B. Gibson, B. F. have in providing an additional return for Herron, J. Kemp, R. Knowles, S. C. Macdonald, S. provisional tax. MacGibbon, D. J. McGauran, J. J. J. Senator Bob Collins—It is 10 per cent Newman, J. M. O’Chee, W. G. now, Senator Ferguson. Panizza, J. H. Parer, W. R. Patterson, K. C. L. Reid, M. E. Senator FERGUSON—It is 10 per cent in Short, J. R. Tambling, G. E. J. the legislation, but we are reducing it to six Tierney, J. Troeth, J. per cent. Vanstone, A. E. Watson, J. O. W. Woods, R. L. Senator Bob Collins—All I am saying is that you don’t even need a very long memory. PAIRS Beahan, M. E. Macdonald, I. Senator FERGUSON—You don’t need a Evans, C. V. Chapman, H. G. P. long memory, but you as a government did Faulkner, J. P. Teague, B. C. not reduce it from 10 per cent for those years. McKiernan, J. P. Minchin, N. H. You ought to be ashamed of your own actions * denotes teller in government. The actions that we are taking Question so resolved in the affirmative. to bring it down to six per cent for this year Bill, as amended, agreed to. ought to be supported. Bill reported with amendment; report Question put: adopted. That the amendment (Senator Sherry’s)be agreed to. Third Reading The committee divided. [6.42 p.m.] Bill (on motion by Senator Short) read a third time. (The Chairman—Senator M.E. Reid) Ayes ...... 35 NOTICES OF MOTION Noes ...... 31 —— Introduction of Legislation Majority ...... 4 Senator SHORT (Victoria—Assistant —— Treasurer)—by leave—I give notice that, on AYES the next day of sitting, I shall move: Bell, R. J. Bolkus, N. Bourne, V. Burns, B. R. No 1—That the following bill be introduced: A Carr, K. Chamarette, C. Bill for an Act to amend the Aboriginal and Childs, B. K. Coates, J. Torres Strait Islander Commission Act 1989, and Collins, J. M. A. Collins, R. L. for related purposes. Aborignal and Torres Colston, M. A. Conroy, S. Strait Islander Commission Amendment Bill Cook, P. F. S. Cooney, B. (No. 2) 1996. 1866 SENATE Wednesday, 19 June 1996

No. 2—That the following bill be introduced: A in this country recognises the value of the Bill for an Act to amend the Migration Act mining and resources industry to this nation. 1958, and for related purposes. Migration Legis- It also has a major benefit to people in re- lation Amendment Bill (No. 2) 1996. gional areas of Australia because that is where ADJOURNMENT the majority of our minerals are. The ACTING DEPUTY PRESIDENT The maps that are provided benefit not only (Senator Colston)—Order! There being no the mining industry but also land manage- debate on government documents, I propose ment. This is the government that wants to the question: flog off one-third of Telstra and put a billion That the Senate do now adjourn. dollars for an indefinite period into the envi- ronment because they consider it to be of Australian Geological Survey concern. They want to remove the capacity of Organisation AGSO to be able to provide the mapping on Senator WEST (New South Wales) (6.47 which they can base land management in this p.m.)—I want to continue this evening with country. That is absolutely ridiculous. It is a a topic that I had commenced this afternoon double standard. It is a false economy because in the debate on matters of public interest— the more information we have about the land what is happening to the Australian Geologi- and the geological make-up of this country, cal Survey Organisation. I want to go on the better we will be able to manage our land, beyond that, in the time I have tonight, to talk the more we will know precisely where our about some of the other attacks on regional mineral resources are and the better we will programs and regional organisations by this be able to assist the farming community as government. well to cope with things like dry land salinity caused by rising water tables. The Australian Geological Survey Organisa- tion, as I mentioned earlier, is a Public Ser- We are discovering that when water is put vice body. It underpins Australia’s interna- into some of our natural geological formations tionally competitive energy and mineral salt is leached into the surrounding country- resources industries by maintaining a high side and surrounding areas. It becomes vitally quality geoscience knowledge and skills base. important that we continue to know where I get that definition and wording from the these areas are. The more research and data coalition’s 1996 resources policy statement. we have, the better we will be able to manage But we now discover that they are going to our natural countryside. But this government have something like a 27 to 30 per cent cut obviously does not care about that. in their staff numbers. We are going to be AGSO provides a base information line losing that skills base. from which organisations and companies are The coalition policy states that this is the able to go out and research. I spoke earlier organisation that provides baseline informa- today about the Newcrest mine at Cadia in the tion and related services to the mining indus- central west. Anyone who read the Sunday try and is crucial for the maintenance of an papers would have seen the two-page article attractive regime for investment in Australian on this project and the benefit and value that minerals and energy exploration and develop- it is going to bring to the community. ment. There are other mineral deposits being This government—the same government discovered in other areas of central western that four or five months ago was making this New South Wales. I know that AGSO has statement—is in fact going against what they also been involved in a joint project with the spoke of in their policy statement. They have governments of South Australia and New obviously just forgotten the value of this South Wales in the Broken Hill area. They organisation. We know, from media reports in had a plan for a five-year mapping program. the Australian,intheNew Scientist and in That has been reduced to 2½ years. some other very reputable journals, that the Anybody who is familiar with the area of industry itself is very concerned. Everybody Broken Hill and with Broken Hill itself will Wednesday, 19 June 1996 SENATE 1867 be aware that that ore body is decreasing, it primary producers and the woolgrowers in the is running out. We need to undertake as much area. research as possible to provide baseline data to encourage and to facilitate the entry of During the election campaign, the honour- mining companies into further exploration in able member for New England (Mr Sinclair) that area. If we do not, I think that we are said that he would guarantee that this particu- going to be criminally negligent in not pro- lar establishment would stay open. However, viding the people in that community with the on reading the local media in recent times, it possibility of further development in the has become quite apparent that he is unable mining industry for which they have the to give that guarantee. He should never have infrastructure and the skills base and for given the guarantee, because he is unable to which they are rightly very proud. deliver the guarantee. He, like everybody else, is having to wait to see what the outcome is Broken Hill several years ago suffered a going to be. major problem when Pasminco closed one of the mining shafts because of inaccessibility I noticed in the Armidale Express of the and low commodity prices. We have to make 10th of this month that he has urged com- sure that we do not lose the rest of Broken munity support. I would also urge the com- Hill. If you have cutting of funds to the joint munity around the area and those involved in project of the state and the federal govern- rural production—the New South Wales ments and cutting back of the project from Farmers Association and organisations like five years to 2½ years, you have to realise that—to do as he says, to get in and support that you will have less information. the maintenance and the retention of the CSIRO establishment at Chiswick. It is vitally Of course, you have to add to that the fact important. that the skillshares out there are being cut. They do not know what is going to happen to I note also in an editorial from the Armidale the CES offices. All this erosion of services Express that they are also saying that it is and facilities in these areas will have a major time for ‘Sinkers’ to get stuck in. In fact, they impact upon these communities. I urge people are calling on him to do something and to to be very conscious of the impact that the make sure that his government, the govern- reduction of funding for, and the reduction of ment of which he is a member, does not close staff numbers at, the Australian Geological this establishment. It would be to the detri- Survey Organisation is going to have on ment of the primary producers, to those who people in that particular area. are involved in the research and to those who are involved in the nearby University of New Another thing that is under threat is the England. These sorts of facilities in rural CSIRO station at Chiswick, near Armidale. Australia are vitally important. They are just This involves the CSIRO’s animal production two instances of what is going to be cut by division, which has done a lot of research on, the current government. and has given support to, the merino wool industry. People are aware that the wool Parliamentary Association for UNICEF industry is suffering pretty tough times at present. The last thing that they need is to Senator CHILDS (New South Wales) (6.58 lose this CSIRO research facility at Chiswick. p.m.)—The Parliamentary Association for UNICEF met today to elect office bearers for The research facility ties in and works very the term of the new parliament. I wish to con- closely with the cooperative development gratulate the new president of the association, centre at the University of New England, at Mrs Kathy Sullivan, a Liberal member of Armidale. There is a synergy between the two parliament, and I wish her every success in organisations. You are getting the scientists this important role. Larry Anthony from the and research fellows from both organisations National Party was elected secretary of the working together and working for the benefit association, and Australian Democrats Sena- of the local area and for the benefit of the tor-elect Lyn Allison is our new Treasurer. I 1868 SENATE Wednesday, 19 June 1996 remain with the association in the role of The progress made in immunisation and vice-president. primary health care has occurred in less than As is traditional, the office bearers reflect one generation. Five million fewer children the all-party cooperation which has always die each year from the preventable diseases. existed in the association. The Parliamentary Fewer children are blinded, crippled or men- Association for UNICEF was formed nine tally retarded from preventable diseases such years ago and is a group of parliamentarians as polio. who support the aim and the work of the But, of course, the news is not all good. In United Nations Children’s Fund. UNICEF has poor countries, eight million children still die a long history of providing practical assist- each year of preventable causes such as ance to women and children in the world’s measles, diarrhoea, malaria, pneumonia and poorest countries and is actively involved in malnutrition. That is about the total popula- areas such as immunisation, literacy programs tion of New South Wales and Queensland. I and seed loans to allow poor families to must stress that these diseases are preventable. become economically self-sufficient. Many can be treated by simple remedies such Often when we see images of starving as oral rehydration therapy, which I men- children on television, or hear the statistics of tioned earlier. Others can be inoculated high infant mortality caused by preventable against. Some $75 is enough to save 200 diseases, we feel helpless. The 30-second children from blindness with vitamin A news grab that focuses on death or disaster supplements, and $26 can buy blankets for 10 gives us no insight into the good work being small children. done by agencies around the world such as Most children who die, die of five easily UNICEF, nor do these news grabs convey the treated conditions—measles, diarrhoea, malar- fact that not only is progress possible but is ia, pneumonia and malnutrition—and 80 per actually happening. cent of children brought to health centres in Tonight I want to talk about the 1996 developing countries are suffering from one UNICEF report, The progress of nations. The of these five conditions. Eight million chil- report was launched just last week in Sydney dren die each year of these causes. Measles by Justice Marcus Einfeld. The progress of kills more people than AIDS. Respiratory nations monitors the achievements of count- infections claim more lives than cancer. ries around the world in meeting commit- Community health workers in these countries ments they made at the historic 1990 World can be trained in just 11 days to save these Summit for Children. Countries are ranked young lives. With 14 basic drugs and referral each year according to the progress they have services, these health workers can successfully made in a number of areas including immuni- meet the needs of 80 per cent of the children sation, poverty, malnutrition, education of brought to local clinics and health centres. girls, health services for women and maternal The progress of nations also addresses health. maternal death. About 600,000 women die in The good news from The progress of pregnancy and childbirth around the world nations report is that immunisation is saving each year leaving one million orphans. Many the lives of three million children each year. of these maternal deaths are preventable. The In 1980, 20 per cent of children in the devel- progress of nations report states that ‘for oping world were immunised. Today the every woman who dies, approximately 30 figure is 80 per cent. Oral rehydration thera- more incur injuries, infections and disabilities py—that is, the sugar and salt mixture—saves . . . maternal mortality and morbidity . . . is one million children’s lives each year. These the most neglected tragedy of our times’. sachets are one of the cheapest ways possible Malnutrition continues to be a problem. to save human life. They cost only $1 for Half the world’s malnourished children are in seven packets—seven lives saved for just $1. Bangladesh, India and Pakistan. Some 67 per Yet without this basic care many children die cent of Bangladeshi children are malnour- of simple diarrhoea. ished. About 700 children can be fed for $105 Wednesday, 19 June 1996 SENATE 1869 worth of high protein biscuits, and $45 will for UNICEF in the last nine years. I also buy a week’s supply of unimix cereal for 35 thank my colleague from the Australian children. It is obvious what just a few dollars Democrats, Senator Robert Bell, who for quite can do, yet aid spending is at a 20-year low. a long period of time has had the job of being Each year since the end of the Cold War, treasurer of UNICEF and has discharged that $250 billion less has been spent on weapons duty with great aplomb. yet, tragically, little of the ‘peace dividend’ has been channelled to the world’s neediest Bougainville people. Aid has only increased $1 billion per Senator SPINDLER (Victoria) (7.08 year in real terms. p.m.)—Firstly, I would like to congratulate Much of the public attention given to The and express my support for Senator Childs progress of nations report has focused on the and his report on the activities of UNICEF. I issue of child poverty. Child poverty in the concur that the wellbeing and the lives of industrialised world varies from three per cent children are the responsibility of all of us. I in the Nordic countries to 22 per cent in the am particularly pleased that Senator-elect Lyn United States. The progress of nations report Allison, who will be following me here as a says, ‘In all industrialised nations for which senator for Victoria, is taking an active role information is available, children in solo- on the committee. I express my thanks to the mother families are at greater risk of poverty.’ office bearers who have carried it so far. The good news about child poverty is that In this debate on the adjournment I want to government action can save children from speak about the revised second edition of a poverty. In 11 of the 18 developed countries report on human rights abuses against the surveyed, government action has cut poverty people of Bougainville compiled by Marilyn in half. Currently in the United States groups Havini. Titled, A Compilation of Human such as Stand for Children are working Rights Abuses Against the People of Bougain- towards cutting the child poverty rate in that ville 1989 to 1996, Vol. 2, the report is also country. About 10,000 concerned citizens known as ‘Marilyn’s List’. I give notice that marched on Washington calling for continued at the end of my contribution I will seek to government support for welfare programs table the report. It has been shown to all which address the needs of poor children. parties in the Senate and agreement for Children have become a political issue in tabling has been obtained. Washington. The report has some 55 pages of incidents, Australia, along with Canada and Ireland, including people being killed, tortured, has a child poverty rate of more than 10 per wounded and raped. It is a horrendous report. cent. In Australia, half the children living in It is one that we should take note of, seeing poverty have single mothers. We must con- that the incidents it describes have occurred tinue to address poverty in Australia and we in our region. We must take every action that must be ever vigilant against attacks on our we can to reduce these horrible crimes. society or its social welfare safety net. It is I can do no better than to read into Hansard shocking that a country with as many re- the foreword written by Dr John Ward, the sources and as much wealth as Australia has New South Wales co-ordinator of the Medical any child poverty. It is an indictment on all Association for the Prevention of War. It runs Australians that we have such a figure. as follows: I do not have time to develop the issue To the near north of Australia lie three of the tonight but we as parliamentarians must world’s many conflict-ridden countries—Bougain- continue in our bipartisan search for practical ville, East Timor and West Papua. They contain solutions. The future of children is too im- some of the most spectacular beauty and most productive land in the world and should be areas portant for any cheap point scoring. of peace, culture and sustainability. Finally, as Senator David Brownhill, who It is not a coincidence that each contains a resource is the secretary of UNICEF, is in the cham- in great demand in the affluent world—copper in ber, I place on record my thanks for his work Bougainville; gold in West Papua; oil in the Timor 1870 SENATE Wednesday, 19 June 1996

Gap. The rapaciousness of the mining companies I hope that the production of this second volume of and the colonial governments which support them, Marilyn’s list jolts the world out of its apathy and including militarily, leaves no room for the limited forces the PNG Government to seek a peaceful aspirations of the indigenous peoples. resolution of the conflict. The people of Bougain- ville have suffered too much and must be allowed Attempts by the indigenous peoples to protect their to return to their villages, families and peace. environment and culture and to benefit from the resource exploitation of their land have resulted in If we cannot resolve this conflict, it augurs poorly violent repression. This has been most brutal and for the next century when countries will be disput- calculated in East Timor where approximately 20 ing over scarce resources such as water and energy. per cent of the population have been killed by the The future of humanity is bleak unless we face the Indonesian military forces over the past two true nature of the behaviour which lies just below decades. our thin veneer of morality. In Bougainville, the killings clearly number thou- I believe that those words are a fitting fore- sands but, in addition, the surviving population is word to this report. forced to live in the most difficult circumstances. In conclusion, I wish to acknowledge the Normal food production is sabotaged, resulting in starvation and undernourishment. Health services work of Senator Christabel Chamarette on this are almost non-existent with no doctors, few nurses issue. Senator Chamarette tabled the first and virtually no medicines. Many people have been edition of this work and I know she remains forced away from their villages into the more strongly supportive of the campaign for peace sheltered mountains, often living in caves. Unfortu- pursued so relentlessly and at great personal nately, among the many international trouble spots, sacrifice by Marilyn and Moses Havini and Bougainville is of little strategic importance to the major global powers and rates little attention in their colleagues. I commend the document to international fora. The undisciplined PNG military the Senate and seek leave to table it. forces are allowed to perpetrate their crimes with Leave granted. little international condemnation. Aust-Home Investment Scheme Marilyn Havini is one of a number of brave, dedicated individuals who work tirelessly to call Senator O’CHEE (Queensland) (7.16 the attention of the world to the tragic situation in p.m.)—I come to the chamber tonight to Bougainville. Her documentation of human rights discuss a matter which I have discussed on abuses in Bougainville has been an invaluable resource for politicians, negotiators and activists for previous occasions, and that is the collapse of the present and, hopefully, a record for addressing the Aust-Home Investments scheme which ran justice issues in the future. in Queensland some years ago, and which was the subject of investigation by the Aus- Australians, in particular, cannot turn a blind eye to the tragedy of Bougainville. Apart from its tralian Securities Commission. The comments proximity, Australia is the country with the closest I am making in this place tonight I am mak- ties to PNG and its major military ally. We provide ing here for one reason, which is that I cannot military advisors and equipment which have, make these comments outside this chamber. undoubtedly, contributed to the skills and resources of PNG forces in Bougainville. The use of Austral- I have been forced to come into the cham- ian-made Iroquois helicopters as gun ships and for ber to make these comments because of the the disposal of bodies at sea is the most infamous number of people who have written to me example of our complicity. asking me my opinion of the conduct of the It is hard to understand how we have allowed this promoters of the scheme. I would have liked previously beautiful, abundant, peaceful country to to be able to write to those people personally be reduced to terror, impoverishment and disease. but I cannot do that because, if I do write to It is only possible while we maintain the delusion those people personally in reply, I could be that Bougainvilleans are, some how, different and guilty of defamation because, in the state of less human than ourselves. Queensland, truth is not a defence to an The real truth is that it is the perpetrators of this action of defamation. I want all honourable tragedy, and the people who stand aside and allow senators to know why I have gone to this step it to continue who are less than human, not the to do this tonight. unfortunate victims. Even less human is the system of greed and overconsumption that places more What I intend to do is not give a detailed importance on resources than people. history of the collapse of Aust-Home Invest- Wednesday, 19 June 1996 SENATE 1871 ments and its investigation, but rather give a Suffice it to say the investigation by the potted history and pick up the essential prob- Australian Securities Commission was seri- lems that existed with this group, with the ously flawed. It led to a Senate inquiry and investigation, and highlight to honourable that Senate inquiry by the Legal and Constitu- senators the fact that the people who were tional Affairs Committee found substantial behind this scheme are now promoting a failings in the investigative conduct of the similar scheme in New South Wales, aimed Australian Securities Commission. The Aus- at ripping off innocent investors in the coal- tralian Securities Commission has amended its fields of the Hunter Valley. conduct in many ways, but not all of the The Aust-Home Investments scheme arose recommendations of the Senate committee out of something called the Queensland were picked up by the previous government. growth investment scheme, which was an The promoters of that scheme have infiltrat- incorporated association which was used by ed the fighting fund that was set up by the the promoters to encourage people to make investors when the scheme collapsed. The contributions to a scheme and seek a tax fighting fund was set up for one purpose: to deduction. It was supposed to be a negatively represent the investors against attempts by the geared scheme so that people notionally Australian Taxation Office to make the borrowed from a finance company money that investors liable for penalties, as though the was then lent to another company within the investors knew that the scheme in which they group. It was a non-recourse loan and they had put their money was a fake. claimed a deduction in their tax liability for The truth is that investors did not know. the interest servicing costs. That scheme was They honestly believed that there were closed down. The promoters then rolled it millions of dollars of investments. The truth over into a group of companies collectively was that there were not millions of dollars in known as the Aust-Home Investments investments and the money that those inves- scheme. There were a number of companies tors paid, which was notionally interest, was in this scheme. skimmed off by the promoters and used for In many cases, people claimed tax deduc- their own purposes. It was a dreadful abuse of tion on the basis of an interest liability which those people’s trust. So a fighting fund was they met. They never actually put up the set up. Through efforts that I had made and principal sum that was notionally borrowed, through efforts of the fighting fund, an agree- but they did pay the interest and they paid the ment was reached with the Australian Tax- interest through deductions from their wages. ation Office that eliminated many of those Many of the people who were inveigled into penalties. Many of the investors were still this scheme were coalminers in central liable for substantial sums of money to the Queensland. Other people were dragged into Taxation Office—but not the penalties. the scheme because the promoters had infil- The promoters have infiltrated that fighting trated the charismatic churches in Brisbane. fund and are using it to promote the view that Most of the investors, as I said, put up their there was nothing wrong with Aust-Home money because they paid interest on notional Investments. Nothing could be further from loans from the finance company that were on- the truth. This scheme was a sham and the lent into the investment company. Some intent of the promoters was fraudulent. The unfortunate investors actually parted with promoters, however, have used the fighting sums of money that were principal, that were fund and the resources of the fighting fund to capital, as well as paying interest on notional tell the investors that there was nothing wrong loans. with the scheme because the promoters were The promoters came under investigation by never charged. the Australian Securities Commission and the I want to tell the Senate the reason why the investors were also subject to investigation by promoters were never charged. It is because the Australian Taxation Office. I have dis- the Australian Securities Commission bungled cussed this matter in some detail before. the investigation, and all of the evidence that 1872 SENATE Wednesday, 19 June 1996 was obtained was obtained under derivative also believe that the nature of the fund, which immunity. In other words, they got the evi- he controls through telling the trustees what dence because the directors produced informa- to do, is fraudulent and is just as flawed as tion or confessed to certain things. But, the Aust-Home scheme. If it is ultimately because of the derivative immunity rule that exploded by the Australian Securities Com- existed in the Corporations Law at the time, mission or the ATO, it could lead to substan- that evidence could not be used in a court of tial tax liabilities on investors. law to prosecute those men. I urge any investor who has any informa- That is the only reason why the promoters tion about the Pioneers Trust to make that of this scheme were not prosecuted. It is not information available to the Australian Securi- because they were innocent; it is because the ties Commission as a matter of urgency. I investigation was bungled. That is why I said also urge them to be extremely wary of Mr in the Senate last year that the scheme was Bell. His conduct has left many people sub- essentially fraudulent, not that the investors stantially worse off. (Time expired) had a fraudulent intent. In fact, the investors were the victims. The intent of the promoters Drought was fraudulent. I hope that sets the record Senator TIERNEY (New South Wales) straight for the investors who have been (7.26 p.m.)—I rise in this adjournment debate writing to me. to refer to drought exceptional circumstances Now let me move on. One of those promot- in the Upper Hunter. The Senate will recall ers, a Mr Trevor Bell, is an undischarged on many occasions through 1994 and 1995 bankrupt as a result of his involvement in the that I pointed out repeatedly the failure of the scheme. However, in spite of being an undis- former Labor government to address this charged bankrupt, Mr Bell directs the oper- matter. But it was too little too late. It was ations of a similar fraudulent scheme in New almost the end of the drought before they South Wales in the Hunter Valley called the finally gave any assistance at all. Pioneers Trust. He uses the same modus In the other place the other night, the operandi, which is to infiltrate the coalmines member for Hunter, Joel Fitzgibbon, took to and get the coalminers and their families to revising history on this matter. I think he pay up money which is, theoretically, interest largely did this to square-off some of his on notional loans which, as far as I can see, father’s failings in this area when he was the do not exist. member for Hunter. The minister for primary He has told the investors in New South industries has revoked some areas for excep- Wales, ‘Do not provide any information to the tional circumstances drought, and the rural Australian Securities Commission because lands protection board in the Upper Hunter they will victimise you.’ He has used the has taken off the areas of Denman, Singleton unfortunate experience of investors in Queens- and Scone but left in Merriwa parts A, B and land, who suffered as a result of a bungled C. ASC investigation the first time round, to Joel Fitzgibbon used this adjustment to the keep those investors from disclosing what coverage of the scheme to evoke unnecessary they know to the Australian Securities Com- fear amongst farmers in the Upper Hunter. mission. I understand that Mr Bell is still an The speech was a dishonest presentation only undischarged bankrupt and is likely to remain telling half the truth. The reality is that an undischarged bankrupt for a long period of Merriwa does stay in under exceptional time because of his conduct. circumstances. For the other areas—and this It is also, of course, an offence under the is the important point—Commonwealth assis- Bankruptcy Act to be involved in the promo- tance for eligible farmers will remain for the tion, formation or management of a com- following six months. This includes drought pany—and a company, I understand, is invol- relief payment for living expenses, interest ved in this trust—even if you are not a direc- subsidies of up to 100 per cent and Austudy tor, whilst being an undischarged bankrupt. I benefits by the exclusion of on-farm assets Wednesday, 19 June 1996 SENATE 1873 from the assets test. The Howard government Department of Foreign Affairs and Trade—East is providing these benefits to Upper Hunter Asia Analytical Unit—Reports— farmers for a further six months and aid to Asia’s global powers: China-Japan relations in Merriwa indefinitely. We recognise that the 21st century. drought recovery is not instantaneous, and our government has set up a special rural task Pacific Russia: Risks and rewards. force, announced by the Minister for Social The following documents were tabled by Security (Senator Newman), to address ongo- the Clerk: ing assistance to farmers when household support ends. What the member for Hunter Australian Capital Territory (Planning and Land has said is misleading, and it has created Management) Act—National Capital Plan— unnecessary anxiety for farmers in the Upper Amendment No. 12. Hunter. Civil Aviation Act—Civil Aviation Regulat- The PRESIDENT—Order! Under sessional ions—Civil Aviation Orders—Exemption— order, the time for the debate on the question CASA 9/1996. that the Senate adjourn has elapsed. Public Service Act—Determination— Senate adjourned at 7.28 p.m. 1996/32, 1996/33, 1996/35-1996/40, 1996/42 DOCUMENTS and 1996/70-1996/73. Tabling LES 1996/12. The Parliamentary Secretary to the Minister for Social Security (Senator Kemp) tabled the Sales Tax Determination—STD 96/7. following government documents: Taxation Determination—TD 96/30-TD 96/32. 1874 SENATE Wednesday, 19 June 1996

QUESTIONS ON NOTICE

The following answers to questions were circulated:

Overseas Students outside the jurisdiction of the Commonwealth. For this reason, direct enforcement by any Australian (Question No. 19) agency of Australian licensing or accreditation Senator Tierney asked the Minister for requirements presents significant legal and practical Employment, Education, Training and Youth difficulties. Affairs, upon notice, on 18 April 1996: However, the Ministerial Council on Education, (1) Could individuals, companies or corporations Employment and Youth Affairs (MCEETYA) has offering services as ‘student recruitment agents’ be developed a Code of Practice (the MCEETYA made subject to a licensing or an accreditation Code) for the provision of international education scheme through the Australian International Educa- and training services by Australian institutions. The tion Foundation. MCEETYA Code specifically requires providers to (2) Have universities, TAFE colleges or private be responsible for the actions of their appointed education providers set in place any code of agents in relation to the marketing of services to, conduct or self-regulation to oversee the provision and the application processes for, overseas students of services to overseas students enrolling at Aus- and to make every reasonable effort to ensure that tralian institutions. at all times these agents act in the best interests of the applicant and the provider. (3) Will investigations along the following lines be undertaken into allegations concerning certain The MCEETYA Code is given the force of law service practices which are ‘ripping off’ overseas in some States and Territories, where compliance students coming to Australia: (a) are some students with it is explicitly required by State or Territory being charged to fill out enrolment applications legislation. The Code is further supported by when in fact universities make no charge for this section 12 of the Education Services for Overseas procedure; (b) are some student recruitment agen- Students (Registration of Providers and Financial cies advising students on study options when they Regulations) Act 1991 (ESOS Act) which requires have no capacity or qualifications to offer advice providers of courses to overseas students not to in this area; (c) how prevalent is the practice of engage in misleading or deceptive conduct in influencing students to transfer from one institution connection with the recruitment of intending to another institution, sometimes after little more overseas students. In addition, section 6A of the than a semester of study, so that the agent can gain ESOS Act (1991) holds private providers respon- a commission from each new enrolment; and (d) is sible for the pre-paid student fees from the time the alleged practice of some agents discounting a they are received directly by a provider or their proportion of their commission to gain an enrol- agent. ment sending the wrong signal to international students, namely that Australian education is not as It would be inappropriate for this regulatory good and more compromising of standards than function to be undertaken by the Australian Interna- some other nations. tional Education Foundation (AIEF). The role of the AIEF is to position Australia as a respected and (4) What evidence is available about an audit of influential partner in the international education, the standards and accountability of ‘private educa- research and training community. It is an indus- tion providers’ in Australia. try/government partnership with a key objective (5) What level of follow-up and accountability being the promotion and marketing of members’ is enforced to ensure that private colleges offering products and services to prospective overseas advanced diploma or associate diploma level students. In fulfilling this objective the AIEF is awards are maintaining education standards and are developing specific programs to support off-shore not devaluing Australia’s education system and agents who act on behalf of members by providing reputation. them with timely advice and information on policy Senator Vanstone—The answer to the and procedures related to study in Australia, enhancing their understanding of Australian educa- honourable senator’s question is as follows: tion and training systems, and providing them with (1) The majority of recruitment agents for over- up to date information and materials on study in seas students operate offshore and are therefore Australia. Wednesday, 19 June 1996 SENATE 1875

Particular activities being undertaken by my to facilitate a students’ application to an Australian Department’s Education Counsellors based in institution. In this respect, agents are authorised by Australian Diplomatic Missions in key markets is the Australian institution for which they recruit to support agents representing Australian institu- students. These institutions are bound by codes of tions, including the development of a code of practice, derived from the MCEETYA code of ethical practice for education recruitment agents, practice, which articulates the institution’s responsi- conducting agents’ fora to provide information on bilities in selecting and dealing with agents. These Australia’s international education policies and responsibilities are given legal effect through the practices, and facilitating the agents understanding ESOS Act (1991) which, directly and through of, and commitment to, ensuring that only bona implication, requires providers to be responsible for fide students who meet all Australian visa require- the actions of their appointed agents. ments apply for visas to study in Australia. Those intending overseas students who choose to Although the AIEF does not act as a regulatory do so may apply directly to the institution of their body it does provide an effective forum for the choice. For example, the Universities Admission industry to make known views on those measures Centre provides a mechanism whereby students are which will provide best support for the long term able to apply directly to a participating institution. growth and integrity of the industry. (3b) As stated above, education and training (2) The MCEETYA Code informs State/Territory providers are responsible for the actions of their legislation and administrative procedures for agents in the recruitment of intending overseas approving providers of services to overseas students students. In order to support providers in ensuring who are then placed on the Commonwealth Regis- that their agents are meeting "best practice" stand- ter of Institutions and Courses for Overseas Stu- ards in the delivery of their services the AIEF is dents (CRICOS). It also forms the basis of sector working with agents nominated by its members to specific codes of practice in the provision of improve the quality of their services. Additionally, services to overseas students. the Department of Immigration and Multicultural Affairs (DIMA) is developing a program whereby Sector specific codes of practice have been selected reputable agents in major student source developed by peak industry organisations including: countries offshore will be offered a "preferred the Australian Vice Chancellors’ Committee agent" protocol. The agents, who have demonstrat- (AVCC); Australian TAFE International (ATI); the ed a commitment to ethical practices in preparing English Language Intensive Courses for Overseas bona fide student visa applications, receive a Students Association (ELICOS Association); and competitive advantage by being authorised to issue the Australian Council of Providers of Education visas directly to students. and Training (ACPET). (3c) Overseas students in Australia are free to These codes of practice seek to promote the transfer from one institution to another provided development and maintenance within each sector they maintain the conditions of their student visa. of high standards of education and support services A provider’s registration on CRICOS may be to overseas students. Sectoral codes of practice cancelled if a provider, directly or through their typically encompass activities involved in the agent, has engaged in misleading or deceptive marketing of sectoral products and services, conduct in connection with the recruitment of an selection and enrolment of overseas students and intending overseas student. My Department does the provision of appropriate support services such not maintain records of students who change their as "International Student Contact Officers" to course after commencement. provide counselling and advisory services to overseas students. (3d) As stated above, Australian institutions are bound by the MCEETYA Code and industry codes In the private sector of the industry codes of to select agents who provide a high level of practice complement the Tuition Assurance service. Schemes (TASs) which operate under the ESOS The price an agent charges for the services Act (1991). Each provider offering courses to provided to students is a matter for the market to overseas students must be a member of a TAS or determine and is agreed upon between the Austral- have in place an alternative prescribed arrangement ian institution, the agent, and the intending overseas to protect students’ fees. A TAS ensures that student. My Department has no evidence to suggest students will be provided their tuition by another that the market forces applying to the provision of member of the TAS should the original provider be agents’ services is impacting negatively on percep- unable to provide their course. tions of Australia’s education and training services. (3a) Australian institutions, including universities, The number of overseas students applying to study generally utilise the services of overseas based in Australian institutions continues to grow, with a agents to recruit students for their courses. These 15.6% growth in enrolments in 1995. This growth agents may charge a fee for a package of services in education and training exports contributed 1876 SENATE Wednesday, 19 June 1996 approximately a net $1.5 billion surplus to (1) What was the average operating grant per Australia’s balance of payments in 1995 and is a equivalent full-time student unit (EFTSU) for the key contributor to the strong export performance of 1974-75 to 1986-87 financial years for all institu- service industries as a whole. tions in real terms. (4) The ESOS Act (1991) provides the regulatory (2) What was the total amount of EFTSU framework for ensuring the quality of courses and funding for all universities for those same years. the financial probity of course providers to overseas students. Senator Vanstone—The answer to the All providers offering courses to overseas honourable senator’s question is as follows: students must be registered on CRICOS. To be registered on CRICOS providers must meet the (1) Higher education funding is allocated on a accreditation requirements of their respective calendar year basis. As a result, figures have been State/Territory authority. provided for calendar years rather than financial Under the ESOS Act (1991), course providers years and are in Budget 1996 prices. In broad who are not the recipients of recurrent government terms, an institution’s level of operating grant per funding (non-exempt providers) are required to EFTSU is determined by the planned Common- maintain trust accounts to ensure the prepayment wealth funded student load and total operating of course fees by overseas students are protected. resources. During the period 1975 to 1987 total The monitoring of these trust accounts is undertak- operating resources included separate funding for en by my Department. general recurrent, equipment and minor works grants. Non-exempt providers are required also to meet the TAS requirements of the ESOS Act (1991). An independent review is currently being con- Funding per EFTSU on total ducted of the ESOS Act (1991) involving consulta- Year Operating Resources tions with provider organisations, State/Territory (a) authorities and the peak overseas student body. The ($) preliminary conclusions of the review indicate 1975 12,654 broad support from all major stakeholders for the 1976 12,461 continuation of a national regulatory mechanism to 1977 12,521 ensure the continued high standard of course 1978 12,656 quality and financial probity in the industry. 1979 12,813 (5) The accreditation and monitoring of course 1980 12,764 standards offered by private colleges is the respon- 1981 12,617 sibility of the relevant State/Territory authorities. The Commonwealth has assisted in the develop- 1982 12,382 ment of a consistent and national approach to 1983 11,784 qualifications accreditation through the Australian 1984 11,567 Qualifications Framework (AQF). This framework 1985 11,408 ensures that the levels, titles and intent of qualifi- 1986 11,290 cations are consistent on a national level using 1987 11,184 qualification descriptors built on quality bench- marks for knowledge, skill, understanding and (a) Source: National Report on Australia’s Higher performance. The AQF provides clear educational Education Sector for 1975 to 1982. Figures for and training pathways through the school, vocation- 1983 to 1987 from Commonwealth Funding for al training and university sectors. Higher Education, 1983-1997 an analysis published The AIEF is developing a promotion strategy to in October 1995 by Department of Employment, capitalise in overseas markets on the strengths of Education, Training and Youth Affairs. Australia’s single, unified framework of qualifica- tions. As previously indicated Higher education funding is allocated on a calendar year basis. Figures have Higher Education Funding been provided for calendar years rather than (Question No. 36) financial years and are in Budget 1996 prices. Total funding per EFTSU is based on planned Common- Senator Margetts asked the Minister for wealth funded student load and includes funding for Employment, Education, Training and Youth operating resources, capital and special research Affairs, upon notice, on 7 May 1996: grants for the university sector. Wednesday, 19 June 1996 SENATE 1877

Commonwealth funded student Funding per EFTSU on Year load—planned total Resources (‘000 EFTSU)(a) ($)(a) 1975 217 15,550 1976 229 14,185 1977 238 14,110 1978 240 13,868 1979 241 13,645 1980 242 13,405 1981 245 13,088 1982 248 12,838 1983 260 12,295 1984 267 12,118 1985 277 12,019 1986 285 11,927 1987 294 11,842 (a) Source: National Report on Australia’s Higher Education Sector for 1975 to 1982. Figures for 1983 to 1987 from Commonwealth Funding for Higher Education, 1983-1997 an analysis published in October 1995 by Department of Employment, Education, Training and Youth Affairs.

Universities so two sets of ratios are reported. The first set, for (Question No. 37) 1994, includes casual staff data, the second, for 1994 and 1995, excludes casual staff. The student- Senator Margetts asked the Minister for staff ratio for the ‘G8’ universities in 1994 (includ- Employment, Education, Training and Youth ing casual staff) was 14.3, and for 1994 and 1995 Affairs, upon notice, on 7 May 1996: excluding casual staff 16.6 and 16.8, respectively. (1) What was the staff-student ratio for the ‘G8’ (2) For the remaining universities the student- universities for the 1994-95 and 1995-96 financial staff ratio for 1994 including casual staff was 15.9, years. and excluding casual staff 19.0 and 19.8 for 1994 (2) What was the staff-student ratio for the other and 1995, respectively. universities for the 1994-95 and 1995-96 financial (3) State student-staff ratios in 1994 including years. casual staff were as follows: New South Wales (3) Is the ratio different for different States; if so, 15.6; Victoria 15.2; Queensland 15.8; Western why. Australia 15.7; South Australia 13.9; Tasmania 14.8; Northern Territory 12.1; Australian Capital (4) Is the ratio different for former College of Territory 15.6; and Australia 15.3. Student-staff Advanced Education universities; if so, why. ratios excluding casual staff in 1994 were: New (5) How does the ratio compare with other South Wales 18.3; Victoria 18.2; Queensland 19.1; Organisation for Economic Co-operation and Western Australia 19.0; South Australia 15.7; development Nations. Tasmania 16.0; Northern Territory 15.3; Australian Senator Vanstone—The answer to the Capital Territory 19.1; and Australia 18.1. 1995 Student-staff ratios excluding casual staff were: honourable senator’s question is as follows: New South Wales 18.6; Victoria 18.7; Queensland (1) Student and staff data are collected on a 19.5; Western Australia 19.4; South Australia 17.0; calendar/academic year basis, not a financial year Tasmania 18.4; Northern Territory 16.1; the basis. Presentation of data as student-staff ratios, Australian Capital Territory 18.6; and Australia and not staff-student ratios as requested by the 18.5. Differences in ratios between States may Senator, is standard within the higher education reflect the nature of the universities in each State. sector. Student-staff ratios are defined as the ratio For example, universities with higher postgraduate of student load, excluding industrial experience loads will have lower student-staff ratios. The pre- load, in EFTSU (equivalent full-time student units), 1988 universities, in particular the ‘G8’, have long to academic staff with teaching only and teaching- established postgraduate programs. Thus States with and-research functions, in FTE (full-time equiva- proportionately more students at pre-1988 or ‘G8’ lence). 1995 casual staff data are not yet available universities will generally have a lower student- 1878 SENATE Wednesday, 19 June 1996 staff ratio than States with higher proportions Capricornia: (a) in the past financial year; and (b) attending post-1988 universities. since 1983. (4) There is no straightforward comparison (2) In each electorate for each individual road between ‘former Colleges of Advanced Education’ project, what was the project, the date of comple- and other universities, because many of the pre- tion and the expenditure. 1988 universities absorbed Colleges of Advanced Education. However, we can compare pre-1988 (3) How much money has the Federal Govern- universities with post-1988 universities. The ment spent on road projects in each State and student-staff ratio in 1994 for the post-1988 univer- Territory: (a) in the past financial year; and (b) sities (including casual staff) (16.1) is higher than since 1983. that for the pre-1988 universities (G8—14.3, others Senator Alston—The Minister for Trans- 15.6). The ratios for each category, excluding casual staff, in 1994 were 16.6 for the ‘G8’ univer- port and Regional Development has provided sities, 18.1 for the remaining pre-1988 universities the following answer to the honourable and 19.9 for the post-1988 universities. In 1995 the senator’s question: ratios increased for each category of university to (1)(a) Leichhardt $6.5m, Herbert $18.0m, Ken- 16.8 for the ‘G8’, 18.8 for other pre-1988 universi- nedy $30.9m, Dawson $16.6m and Capricornia ties and 20.7 for post-1988 universities. $17.6m. (5) The OECD publication which lists details of (b) Leichhardt $187.0m, Herbert $274.5m, Ken- the education systems of OECD countries is nedy $416.5m, Dawson $468.2m and Capricornia ‘Education at a Glance’. The most recent release $279.1m. lists 1993 data but does not report student-staff ratios. These are in addition to the $342.6m made available to Queensland as untied grants since 1991 Road Funding and which were available for use on the State’s (Question No. 43) roads. (2) A description of each project, including its Senator Ian Macdonald asked the Minister location, expenditure and year of completion is representing the Minister for Transport and published in the annual reports tabled in Parliament Regional Development, upon notice, on 7 under the Australian Bicentennial Road Develop- May 1996: ment Act and the Australian Land Transport (1) How much funding has the Federal Govern- Development Act, copies of which are publicly ment spent on road projects in each of the elector- available. ates of Leichhardt, Herbert, Kennedy, Dawson and (3)(a) See the attached table.

Commonweath Funding for Roads—1983/84 to 1994/95(1)

1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95

($m) ($m) ($m) ($m) ($m) ($m) ($m) ($m) ($m) ($m) ($m) ($m) (3) (5) (4)(6) NSW 405 398 401 387 391 384 437 530 545 678 545 542 VIC 230 254 255 243 240 236 276 313 335 418 319 313 QLD 257 263 258 250 247 241 269 299 319 443 302 293 WA 146 156 159 154 148 150 160 162 179 213 150 149 SA 99 98 98 95 85 88 91 103 108 144 101 97 TAS 54 53 47 46 47 48 50 54 59 76 54 55 NT 35 42 41 40 37 39 40 56 51 69 40 39 ACT (2) 20 28 36 38 - 7 12 13 13 16 11 14 Australia 1,246 1,291 1,295 1,252 1,194 1,193 1,335 1,530 1,608 2,057 1,523 1,503 NOTES: (1) Amounts are actual dollars. Covers funding for categories including—National Highway, National Arterial, Urban, Rural and State Arterial, Provincial Cities and Rural Highways, Local Roads, and Black Spots. (2) ACT funding—in 1987/88, Commonwealth road funding to the ACT was not handled by this portfolio, and is not separately identified in the Budget papers. In 1988/89, actual funding for roads and public transport and equipment was grouped together in the Federal Budget Paper No.1 under the heading ‘Road Transport in the ACT’ totalling $73.4m. Wednesday, 19 June 1996 SENATE 1879

However, funding for road construction could not be separately identified in this amount and has not been included in the Table. The $7m shown was allocated under the ALTD Act for the January-June 1989 period and was for State Arterial and Local Roads. (3) From 1 July 1991, Local Road funding was untied—amounts included in table. (4) From 1 January 1994, National Arterial funding was untied—amounts included in table. (5) 1992/93 figures include One Nation funding of $358 million. (6) 1993/94 figures include One Nation funding of $166 million.