LEGISLATIVE ASSEMBLY
Mr Speaker (The Hon. Kevin Richard Rozzoli) took the chair at 2.15 p.m.

Mr Speaker offered the Prayer.

Mr SPEAKER: I draw the attention of the House to the presence in the gallery of a delegation from the Supreme Soviet of the Russian Federation led by Mr Yuri Yarov, Deputy Chairman of the Supreme Soviet of the Russian Federation, accompanied by the Russian Ambassador, His Excellency Mr Viacheslav Dolgov.

Mr Speaker advised the House that he had received from the honourable member for Pittwater notice of a matter of public importance to be listed for discussion at the conclusion of formal business.

Mr CARR: My question without notice is directed to the Minister for Transport. Is it a fact that from 10th April State Rail Authority's CountryLink will deny pensioners and war widows the right to use their travel concessions at Christmas, Easter and in school holidays? Will the Minister immediately overturn this discriminatory policy?

Mr BAIRD: For some time the Government has been looking at the whole question of the usage of CountryLink travel. Honourable members will not be surprised to learn that of those who travelled first class on CountryLink last year 8 per cent paid the full fare. Of those who travelled economy class on CountryLink 15 per cent paid the full fare. Of those who travelled on CountryLink in total last year 65 per cent travelled free. The recommendation from the Industry Assistance Commission shows that a major need for reform undoubtedly exists. Continual haemorrhage of revenue is a major problem in terms of the future of State Rail in New South Wales. People who use their two free entitlements in New South Wales book six months in advance and use them at holiday times and peak times when families who pay the full commercial fare are trying to travel north. If we want to ensure the demise of State Rail we will continue to let everyone travel for free. The Government is considering whether restrictions should be placed on travel during the peak periods and a couple of days at the beginning of the holiday period. At this stage people who would pay a full fare cannot get on trains. The result is that we have trains which are being patronised by those who are not paying anything at all. It is about time that we as a community looked at this question.

Mr KERR: I address my question without notice to the Premier, Treasurer and Minister for Ethnic Affairs. Is the Premier aware of industry forecasts that the New
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South Wales job market will continue to increase over the next three months? If so, what action is the Government is taking to ensure this State leads the way in attracting overseas firms to invest in job-creating industries?

Mr McManus: Thank you, Mr Keating.

Mr SPEAKER: Order! I call the honourable member for Bulli to order.

Mr GREINER: The honourable member has a great sense of humour. Before I start, I will join with the House in welcoming Mr Yarov and the group from the Supreme Soviet of the Russian Federation. I also acknowledge the presence in the gallery of the Maronite Archbishop of Australia, Archbishop Hitti. I am sure that the House would wish to acknowledge his presence.

Mr SPEAKER: Order! I call the honourable member for Broken Hill to order. There is far too much interjection. The Premier is the only member who has the call.

Mr GREINER: As the Daily Telegraph Mirror reported today, New South Wales is the top State in job growth. The truth is that unemployment in New South Wales has been, on a regular basis, the lowest in Australia. Last month it was the lowest in Australia. It is our intention that the rate of jobs growth will continue, achieving sustainable, real, long-term jobs. It is our intention to make sure that the progress that we have made in reforming New South Wales over the past four years goes on to provide a solid basis for the future of this State. As the honourable member for Cronulla suggests, it is true that Kelly Consultants -

Mr SPEAKER: Order! There is far too much audible conversation in the Chamber. The Premier should be heard in silence. I call the honourable member for Drummoyne to order. I call the honourable member for Coogee to order.

Mr GREINER: Kelly Consultants yesterday pointed out that in New South Wales, in areas as diverse as banking and finance, retail, wholesale and hospitality, the outlook is for considerable improvement. Indeed, the State outlook is very much better than the national outlook. Those areas are where the jobs are likely to be and where the opportunity to create jobs will be for the long term, thus giving the young people of New South Wales something to look forward to. The House will have noted that a week ago Sony EMI, which is a world music company, made an investment decision creating over 150 jobs in western Sydney, with associated spin-offs. That plant will make compact discs for the whole of South-east Asia, an industry in which, at face value, one might have expected Australia to be unable to compete. We are actually able to compete, and to compete very effectively, not only in the domestic market but in the region. Today at lunch time I was pleased to be in the electorate of the honourable member for Cronulla -

Mr SPEAKER: Order! I call the honourable member for Smithfield to order.

Mr GREINER: - at the opening of a new Toyota parts and international service centre. That provides an additional 160 jobs. It involves not only jobs for New South Wales, but also the training of 1,500 people for the entire South-east Asian region. Again, we are talking about jobs which are not for the short term to get over the recession the Prime Minister has created over the last nine years, but the opportunity to have jobs that are smart jobs and which are going to last.

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Mr SPEAKER: Order! I call the honourable member for Rockdale to order.

Mr GREINER: A couple of weeks before that the House will recall that Optus, the second telecommunications carrier, made a decision that involved 1,250 jobs in New South Wales directly and a considerable spin-off. In a short time the Chief Secretary and Minister for Administrative Services will be announcing the decision on network management -

Mr SPEAKER: Order! I call the honourable member for Canterbury to order.

Mr GREINER: - of New South Wales Government telecommunications, which again will involve a significant and lasting boost to job prospects for people in New South Wales. No only are we getting jobs, but we are getting the right sort of jobs. Seeing the delegation from Russia in the gallery reminds me that in areas as diverse as the Land Titles Office, where we have a very good chance of taking the preliminary agreement that has been signed and exporting world-class technology, last night they were talking to the Minister for Agriculture and Rural Affairs about the prospects for training farmers and agricultural people from Russia in Australia and in Russia, in an effort to lift the productivity of the Russian agricultural sector. We are close to signing an agreement in the yeast industry. A New South Wales company leads the world in yeast technology.

The general point is that right around the State there is significant room for hope and confidence about prospects for young people. But it is only based - and the better performance of New South Wales compared to the rest of Australia now and in the future is only based - on the sort of reforms that the Government has been implementing: reforms in railways, roads, electricity, the labour market, in ports and right across the public sector in all the areas of infrastructure, the areas referred to in Mr Keating's statement the other night. The fact that the Government has led the way and created a climate in which the private sector here and particularly overseas is willing to invest has laid the foundation and the basis for the jobs performance in New South Wales. The Government is committed to continuing that process of reform so that the sort of jobs I have mentioned and thousands of others will continue to become available to the young people of New South Wales, and New South Wales will continue to be tops in terms of jobs growth.

Dr REFSHAUGE: My question without notice is to the Minister for Sport, Recreation and Racing and Minister Assisting the Premier. Does he stand by his claims that the first phase of the privatisation campaign is costing taxpayers $2.5 million? Is the Minister aware of industry calculations that show that $1.2 million was spent between 1st January and 16th February and that $5 million will end up being spent? What is his revised costing and when will this campaign end?

Mr SPEAKER: Order! The question was heard in silence. The answer will be heard in silence. I call the honourable member for Blacktown to order.

Mr Carr: On a point of order. It is clear that the Minister heard none of the question whatever. I hand him a copy, to assist.

Mr SPEAKER: Order! No point of order is involved. I call the honourable member for Londonderry to order.

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Mr SOURIS: I waited very patiently all last week for the Opposition to raise some question about the advertising of privatisation.

Mr SPEAKER: Order! I call the honourable member for Ashfield to order. I call the honourable member for Coogee to order for the second time. I call the honourable member for Ermington to order.

Mr SOURIS: I recall that when the advertising campaign commenced for privatisation, phase 1, the Leader of the Opposition said to the press that this was such a great issue - the greatest issue of all time - that it would be raised even above Eastern Creek. All last week I came in readiness and brought my red folder, but have had to wait a whole week for the very first pathetic question to be asked eventually, and it is related only to the cost of the GIO privatisation advertising campaign.

Mr SPEAKER: Order! I call the honourable member for Auburn to order.

Mr SOURIS: The advertising campaign that is currently under way for privatisation will lead through phase 1, which is presently under way, and gradually will scale down towards the end of that phase and scale up in terms of GIO corporate advertising, leading through to phase 2, prepared by the Government, and for which an application has been made to the Australian Securities Commission. It will have a phase of pre-registration for the prospectus and will get under way within a couple of weeks -

Mr SPEAKER: Order! I call the honourable member for Kiama to order. I call the honourable member for Parramatta to order.

Mr SOURIS: - ultimately leading to stage 3, which will be the launch of the prospectus and the invitation to take up shares - in other words the transfer period involving the GIO. It is absolutely important that this advertising campaign is undertaken and in the way it has been undertaken so that the Government is able to achieve -

Dr Refshauge: On a point of order. The question was directly about the costing of the campaign and when it will end.

Mr SPEAKER: Order! There is no point of order. The Deputy Leader of the Opposition well knows that he is taking a trivial point of order.

Mr SOURIS: It is absolutely and vitally important -

Mr Whelan: On a point of order. The Chair may not have any control over how Ministers answer questions, but a question must be put and a Minister has to hear it fairly. It is clear that the Minister has not -

Mr SPEAKER: Order! The honourable member for Ashfield may well want to comment on the way the Minister has been answering the question, but he knows that no point of order is involved.

Mr SOURIS: I am dealing absolutely directly with the relevance of and justification for the expenditure in answering the question.

Mr SPEAKER: Order! I call the honourable member for Blacktown to order for the second time.

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Mr SOURIS: The honourable member has asked a question about expenditure and should wait for an answer.

Mr SPEAKER: Order! I call the honourable member for Wallsend to order.

Mr SOURIS: It is vitally important for the privatisation of the GIO that this campaign is undertaken to reach the maximum number of public persons, potential policyholders and shareholders in the GIO. It is absolutely vital that we reach in the order of 200,000 to 300,000 people. The reason for the greater difficulty is that the GIO, unlike the Commonwealth Bank, which has a 1300-branch network, has only 125 branches and is generally concentrated in New South Wales -

Mr SPEAKER: Order! I call the honourable member for Wallsend to order for the second time.

Mr SOURIS: - whereas the Commonwealth Bank is associated with a full range of branches across Australia and has greater access to public participation. It was very important during the passage of the legislation and in the negotiations with all the Independents - and I gave the undertaking on behalf of the Government - that every effort would be undertaken to ensure the widest possible public participation in GIO shares. That is exactly the motivation for the expenditure of the money which will come from the proceeds of the float itself. During phase 1, as I have said on several occasions in the media, air time and press space will cost in the order of $2.5 million, excluding production costs and excluding the costs associated with both phase 2 and phase 3. The entire amount of that is totally justified on the motivation -

Mr SPEAKER: Order! I call the Deputy Leader of the Opposition to order.

Mr SOURIS: - of ensuring the maximum possible participation in the GIO so that it is truly a public float and not an institutional participation in a make-believe float, exactly as is being seen in Victoria where the legislation not only enables the Government to cannibalise the institution but also to conduct trade sales to specific institutions. This is a genuine public float with genuine communications and advertising to ensure the widest possible number of participants.

Mr HAZZARD: My question without notice is directed to the Minister for Health Services Management.

Mr SPEAKER: Order! I call the honourable member for Drummoyne to order for the second time.

Mr HAZZARD: What action is the Government taking to care for people infected with the AIDS virus and to minimise transmission of the virus in the community?

Mr PHILLIPS: A short time ago my colleague the Minister for Health and Community Services made an announcement of a $26 million boost to HIV and AIDS services over the next two years. Funds would go to government and non-government organisations providing HIV and AIDS education, prevention and treatment services, and to HIV sufferers. While New South Wales has no legal liability in these cases, the Government has decided to provide financial assistance to the sufferers. Through a combination of State and Federal money, sufferers of medically acquired HIV will be
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eligible to receive up to $80,000 in financial assistance. The package of financial assistance the Government is providing to HIV sufferers is fair and compassionate. There are potentially 324 people who acquired HIV medically in New South Wales before action was taken in late 1984 to screen and secure the blood supply. This compares with 26 in Western Australia, 110 in Victoria and nine in South Australia.

The Government will distribute funds through the Mark Fitzpatrick Trust, which was established by the Commonwealth Government in 1990 to provide financial assistance to Australian residents with medically acquired HIV. The existing trust provides grants, on a staged basis, of up to $30,000 to people with dependants or $10,000 to people without dependants. At the present time about 180 New South Wales medically acquired HIV-AIDS sufferers are in receipt of funds from the Mark Fitzpatrick Trust. Funds provided by the New South Wales Government will be dedicated to offering financial assistance of up to $50,000 to all persons - with or without dependants - who acquired HIV through a medical procedure administered in New South Wales. These moneys will not constitute a cash grant to the sufferers but will be aimed at providing assistance to secure an improved lifestyle during the period of the disease. That is an important point.

These funds will be additional to those available from the existing trust. This means that New South Wales sufferers could receive a maximum of $80,000. The Government has also decided upon an expanded package of funding to all sufferers of HIV. These enhancements represent continuing State Government increases in the funding of HIV-AIDS services since 1988-89 of $24 million or 80 per cent. The package of funding includes: $6.77 million enhancements to the AIDS budget for areas and regions over the next two year, bringing the AIDS budget allocation to areas and regions over the next two years to a total of $80.34 million; $2.45 million in new funding to non-government organisations over the next two years, bringing the total funding of non-government organisations over the next two years to $12,141,000; and $822,170 to government sector programs.

Mr SPEAKER: Order! There is too much audible conversation in the Chamber.

Mr PHILLIPS: The $6.7 million will be distributed according to a resource allocation formula which seeks to provide equitable access to HIV-AIDS services for all infected people and those at risk of infection. Additional services which are to be funded by the moneys will include additional beds for AIDS patients, diagnostic services, doctors, nurses, day treatment services and education programs. These organisations have a proven track record in leading the way towards integrating HIV and AIDS services into the mainstream activities of key organisations. Testimony to the success of education and prevention programs is given by the stabilisation of reported incidence of HIV infection in homosexual men, and the stability of infection rates among injecting drug users, heterosexuals and as a result of maternal transmission.

Mr SPEAKER: Order! I call the honourable member for Londonderry to order for the second time and the honourable member for Blacktown to order for the third time.

Mr PHILLIPS: A hotline for people with medically acquired HIV has been set up at TRAIDS, Transfusion Related AIDS, a counselling and support service based at Parramatta hospital and funded by the State Government.

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Mr WHELAN: My question without notice is directed to the Minister for Sport, Recreation and Racing and Minister Assisting the Premier. Did Mr Greg Daniels, head of the Liberal Party's advertising agency, Clemengers, write to the Minister's office last December concerning the Government's privatisation advertisements? Did Mr Daniels complain that certain tenderers were given preferential treatment? What was the reply of the Minister's office? Will the Minister assure the House that the tendering procedures were not subverted?

Mr SOURIS: The tendering involved in the GIO advertising program, which was won by DMB and B, was undertaken with absolutely correct tendering procedures. There was a separate committee set up underneath the GIO privatisation taskforce, which I chair. It was the job of that committee to reduce the long invitation list to a short list. It was then a process of inviting the short-listed applicants, of which there were three - Clemengers, DMB and B and Saatchi and Saatchi to make a presentation on the creativity aspects alone which they did, and DMB and B was selected. The honourable member for Ashfield is absolutely correct when he stated that my office received some letters from the agency Clemengers. That Mr Daniels, of Clemengers, wrote to a staff member of my office, wondering about the question of the accessibility of the Government's advisers to other tenderers. Indeed, that particular agency did take advantage of access to a particular adviser. Another agency had access to yet another adviser. But the essence of the question raised in Mr Daniel's letters was in respect of legal requirements under the Australian Securities Commission in dealing with privatisation and the floating of a company on the stock exchange.

The advice given by Allen Allen and Hemsley is quite proper and is quite open, and in fact all of the short-listed tenderers were invited to so participate. Indeed, that is what did take place. Various firms did obtain advice from various advisers, not just from legal advisers essentially. Once that was explained by a staff member of my office, I did not receive a letter. I did not write a letter. Of course, copies of such correspondence did come across my desk. I am entirely satisfied that absolutely correct procedures have been undertaken in the tendering of the advertising agency. I am completely certain that everything was absolutely above board, that total propriety was engaged in at all times and that based on creativity the correct agency was chosen, in my opinion.

Mr PETCH: My question is to the Deputy Premier, Minister for Public Works and Minister for Roads. When will work on the Glebe Island Bridge finally start? What benefits can Sydney motorists expect when the project is completed and how will it enhance our Olympic Games bid?

Mr W. T. J. MURRAY: One of the areas which will receive the most benefit from the construction of the Glebe Island Bridge will be the area represented by the honourable member for Gladesville. The honourable member has been consistent in ensuring that the construction of the Glebe Island Bridge proceeds. I am rather surprised that members of the Opposition, indeed the shadow minister for roads, made no effort to force the Federal Government to honour its promises in respect of this particular project. Late yesterday a letter of acceptance to construct the Glebe Island Bridge was issued by the Roads and Traffic Authority to Baulderstone Hornibrook, the successful tenderer. The signing of the letter of acceptance for part of the $69 million bridge has facilitated immediate construction of the project, with the first workers arriving on site
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today. Drivers caught in the normal peak hour traffic today are able to look across at the construction site and see work on the new crossing, which, when finished, will save them considerable time and money. Initially 250 jobs will be created, expanding to the employment of 1,000 workers as the project proceeds. This will provide a massive boost to the economy of the inner west of Sydney.

The new bridge and approaches, costing $169 million overall, will form an integral part of the city-west link and when completed will relieve the heavily congested section of Parramatta Road between the city and Five Dock. The city-west link upgrade will provide a clear alternative route to and from the city through Haberfield, Lilyfield and joining up with the western distributor at Darling Harbour. The Glebe Island Bridge and approaches are the major component of the upgrade of the city-west link which will be completed in 1996-97. When the new bridge is completed in 1995 it will reduce congestion, lower pollution, reduce travel times, save fuel, lessen wear and tear and provide better access to Sydney's ports. As well as providing relief to Sydney's commuters the Glebe Island Bridge will provide a substantial boost to our Olympic Games bid. The improved road network will be an essential part of transportation between city accommodation and the sporting venues. It will also prove that Sydney has the necessary infrastructure to support its bid for the year 2000 Olympic Games.

The Glebe Island Bridge project is one of the most sophisticated undertaken in Sydney. It will have a massive main span second only to the Harbour Bridge. Balderstone Hornibrook, which is constructing the "Golden Gate" style bridge, believes it is on the cutting edge of technology and will rank proudly alongside its other main architectural achievement, the Sydney Opera House. The bridge will have an overall length of 800 metres and a main span of 345 metres across the entrance to Blackwattle Bay. The bridge deck is to be suspended by cable from two towers of 120 metres in height. The approach and associated roadworks will cost $100 million and will include a viaduct of 800 metres between the Fish Markets and the bridge. The western approaches will also be upgraded to a length of 200 metres.

The State Government is pleased that the project has finally been given the green light, with a promise of funding from the Federal Government, but it is a shame that it was delayed, causing confusion. Funding of the bridge was promised by the Federal Minister for Land Transport, Bob Brown, in 1988 on the site at a media conference, under the glare of the television cameras and just before the Federal election. It is a shame that the Federal Government reneged on its original promise, causing unnecessary inconvenience. The new Glebe Island Bridge is one of the most important road projects undertaken in Sydney. It will relieve the traditional bottle-neck while at the same time providing a boost in employment and economic activity to the city's inner west.

Mr RUMBLE: My question without notice is to the Minister for Sport, Recreation and Racing and Minister Assisting the Premier. What role did the Liberal Party's treasurer, Kevin McCann, play in advising on the tenders for the Government's privatisation advertisements? Was he present at any meeting where some short-listed tenderers were advised to amend their bids? Will the honourable member assure this House that the tendering procedures were not subverted?

Mr SOURIS: The firm Allen Allen and Hemsley was selected in open tender by the Government to be the Government's adviser, in conjunction with Blake Dawson Waldron to be the GIO adviser, in the privatisation. Mr Kevin McCann is a principal
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of that firm and has been involved in the legal work associated with this privatisation. He has also been involved in advising the Government in respect of the legal requirements of the Australian Securities Commission relating to advertising. On behalf of the Government he put together the application which went to the Australian Securities Commission, and ultimately led to the exemptions associated with pre-registration for the float.

Mr SMILES: My question without notice is to the Minister for Conservation and Land Management. Have New South Wales land titles officers and Russian land reform representatives agreed to pilot several land registration projects in Russia? If so, what further action is the Government taking to help establish a New South Wales based land registration system for the whole of Russia?

Mr WEST: I join with the Premier, Treasurer and Minister for Ethnic Affairs in welcoming to the House the parliamentary representatives of the Supreme Soviet of the Russian Federation. Yesterday representatives were given a full briefing by the Land Titles Office of New South Wales on the agreement, signed three weeks ago between New South Wales and the Russian Republic, for Russia to adopt our land title system as a model for its land reform program. The agreement, which was worth some $20 million, for a pilot study is dependent on international financing. I am pleased to report to the House today that initial responses from the World Bank and from the European Bank for Reconstruction and Development have been very encouraging. The World Bank and the European Bank have both told the Land Titles Office that this project is worthy of support. I can assure all honourable members that negotiations in that regard are continuing. The project to establish a pilot land title system will cover three distinctly different land use areas - a city district in Moscow, a Moscow suburb and a rural village on the outskirts of the city. I believe that the pilot study will prove to be successful and beneficial to the people of the Russian republic and the people of New South Wales.

The Torrens title system of land ownership administered by the Land Titles Office has operated successfully in this State since 1863. It gives purchasers a government-backed guarantee of ownership. The Land Titles Office is recognised as a world leader in the field of title systems. The agreement we made with the Russian Republic came after a visit to Moscow last year by the Premier, the Minister for State Development and the Director of the Land Titles Office, Mr Kevin Nettle. This was followed in February by a 10-day visit from a delegation from Russia's State Committee for Land Reform, which culminated on 12th February in the Minister for State Development and me signing the agreement for the title study. Part of that agreement - it is important for this to be noted by the House today - is for New South Wales to enter into a joint venture arrangement with the Russian republic to market the system to other members of the Commonwealth of Independent States.

The potential financial benefits to both Russia and New South Wales from this joint arrangement could be massive. Russia, with 150 million people, spans three-quarters of the territory of the former Soviet Union and the proposed land titles system, covering 1.7 billion hectares, would be the largest in the world. The Russian republic chose the New South Wales system after comprehensive studies. We believe our system has the flexibility to adapt easily to existing land records and the capacity to handle high volume transactions. It is simple, cost-effective and recognised throughout the world by foreign investors. I am confident that following the pilot system in New South Wales, the Torrens title system eventually will be adopted throughout the entire Russian republic. This is our chance to assist in our own small way in the building of a solid foundation for the future of Russia.

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Mr HUNTER: My question is directed to the Premier, Treasurer and Minister for Ethnic Affairs. Does the Government's press advertisements on privatisation state that "it means more money for the Police Service, more money for education and for roads"? What allocation from the sale of the GIO will go to police services, to education and to roads spending? In the absence of any specific spending commitment to these areas, is the Government breaching the Advertising Standards Council code of practice?

Mr GREINER: The honourable member for Lake Macquarie kept a straight face while he read the question, but it is an asinine question. The honourable member would have been listening last week when I said that the only areas in the world where privatisation is any sort of issue are Cuba, North Korea and in the Labor Party in New South Wales. That is it. Our friends from Russia have gone. They have long since settled the debate. The debate has been settled in Albania. The debate has been settled in every former and present-day socialist country. It is obvious that by reducing the debt of the State you not only do all the positive things that come from retaining the triple-A credit rating, which only five or six States in the world have got - I think the House understands the benefit of that not just for us, the taxpayers, the people today, but for future generations of people in New South Wales - if you reduce your debt and your interest payments, you create the capacity therefore either to give tax cuts or to spend money on other things. After the privatisation is a success, which I hope it will be, and which will require this sort of advertising, and after the rest of the Government's privatisation program comes into force -

Mr Moss: Like hospitals too.

Mr SPEAKER: Order! I call the honourable member for Canterbury to order for the second time. I call the honourable member for Granville to order.

Mr GREINER: The honourable member for Canterbury presided over Canterbury council having the worst financial record of any council in New South Wales. The sort of privatisation undertaken by the Labor Party in Canterbury council is a totally different sort of privatisation.

Mr SPEAKER: Order! I call the honourable member for Ermington to order for the second time.

Mr GREINER: Let me say something about hospital privatisation. I think there is a deal of mischief and a deal of deliberate disinformation on the question of the Port Macquarie hospital project. The reality is that the people of Port Macquarie and the Hastings district will be guaranteed access to a public hospital - public hospital standards, public hospital access, public hospital payment, or lack of payment as it in fact is. The only difference for the people of Port Macquarie is that they will have the hospital a lot sooner than they would if they relied upon the normal process.

Mr SPEAKER: Order! I call the honourable member for Oxley to order.

Mr GREINER: That is the only difference. It is a public hospital in every relevant detail.

Mrs Grusovin: For how long?

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Mr GREINER: It will be a public hospital for ever. I am grateful to members opposite. At the end of 20 years there will be renegotiation. There will be another long-term contract. Let me come back to the honourable member for Lake Macquarie.

Mr SPEAKER: Order! I call the honourable member for Ermington to order for the third time.

Mr GREINER: There is a clear benefit in terms of the capacity of this Government, and indeed subsequent governments, to allocate funds to existing recurrent needs or capital needs from the savings that are made as a result of the reduction in debt. It ought to be obvious even to the honourable member that if you reduce your debt by $1 billion you reduce your debt servicing by roughly $100 million. This means that you actually have that much to spend. We can all debate how the money should be spent. What the Government is doing is the only way to maintain the situation and not allow the cancer of debt to eat away the New South Wales budget as it has eaten away the budgets of all the Labor States. The honourable member for Canterbury should talk to Joan Kirner. She has seen the light. In Werribee the Victorian Labor Government, which is to the left of whomever you can be to the left of in terms of ideology, is doing exactly the same thing that the Minister for Health Services Management and his colleague in the other place have done, except it has taken longer to do it and has not yet worked it out.

Mr SPEAKER: Order! I call the honourable member for Ashfield to order for the second time.

Mr GREINER: I would have thought the benefits of privatisation to the State budget are overwhelmingly obvious even to the most thick person opposite.

Mr SPEAKER: Order! I call the honourable member for Port Stephens to order.

Mr GREINER: The benefits of the hospital project in Port Macquarie and of bringing that hospital forward will be very clear to the people of Hastings and Port Macquarie, because they will have a public hospital to go to which under a Labor Government they did not have and would not have.

Mr HATTON: Will the Premier, Treasurer and Minister for Ethnic Affairs give an undertaking that under the aegis of his proposed fair go prices tribunal in New South Wales to police charges such as water, electricity and transport he will include country fuel prices for the people in country areas disadvantaged by a thin web of public transport and in recognition of the problems faced by rural producers?

Mr GREINER: The answer to the question is no. The House will recall that petrol price control was debated in the time of the previous Government in about 1984. The Labor Government and the Opposition of the time agreed that having two levels of price control - State and Federal - did not make a great deal of sense. The Federal Prices Surveillance Authority activity with respect to petrol seemed to be the appropriate way to go. Having said that, the straight answer to the question is no. This is intended to apply to monopoly prices in those areas mentioned by the honourable member and the legislation will be available for further discussion, roughly along the lines of a bill introduced into this House last year. I am aware, and I have been aware for the nine years, next week, since I have been leader of the Liberal Party, of the concern of country people about differentials in petrol prices which, at face value, would appear to be greater than the differentials that might simply be the result of market forces.

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Mr SPEAKER: Order! I call the honourable member for Mount Druitt to order.

Mr GREINER: One might suggest that in some cases there is a suspicion on the part of country people that the monopoly market position or restricted market position in some country towns has been taken advantage of. The Minister for Local Government and Minister for Cooperatives looked at this issue, when he was Minister for Business and Consumer Affairs. We co-operated on the question of racked pricing to at least ensure that the price ex-depot was the same for everyone on a certain day, regardless of where that petrol was going. I have to say that there now seems to be some doubt as to whether that has been in the interests of country consumers and a review is being undertaken, the exact details of which I am not entirely aware. I would be happy to look again at the general question, but the specific answer to the honourable member's question is that it will not be part of the mandate of the monopoly pricing tribunal, which is intended to look at government monopoly pricing.

Mr MORRIS: My question without notice is directed to the Minister for State Development and Minister for Tourism. Has the Minister yet established in what way the Prime Minister's economic statement will assist New South Wales to create jobs? In particular, what impact is the statement forecast to have on the creation of jobs in the tourism industry?

Mr YABSLEY: We hardly need go further than the comments of Max Walsh when he said, on the night the economic statement was delivered, that it is cloud-cuckoo-land stuff. He went on to say, "I am looking for a fairy", referring to the economic statement handed down by the Prime Minister. In fact the statement was something that paralleled the last drunken orgy of the Roman Empire. We had the spectacle of Caligula, Nero and Tiberius, all together to celebrate in a final drunken orgy. It is interesting that the economic statement was predicated on what is recognised throughout the community, among informed sources and among commentators, as an absolutely absurd proposition, that Australia will maintain growth of about 4 per cent over the next four years as the rest of the world languishes in recession. That assertion beggars belief. It is simply not a credible premise on which to base the economic statement.

The honourable member for Blue Mountains asked specifically about the tourism industry. It is significant that the Prime Minister has correctly pointed out that tourism is "one of the great success stories of the 80s and is one of the economic stars of the 90s". He went on to say, "In the next decade the number of tourists coming to Australia will increase from 2.4 million to 6.5 million. That means 200,000 new jobs for Australians". There has been a huge dose of mythology surrounding the contribution of tourism, as set out in the economic statement. We are supposed to believe that this injection of $15 million over two years - $5 million this year and $10 million in the following year - will be a John Brown style boost to tourism that will break the cycle and will attract tourists to Australia as was the case in the late 1980s and particularly as a result of the Bicentenary. Let us put that $15 million into perspective. We must bear in mind that the Queensland Government, that is, the State of Queensland alone, has just contributed $8 million to the promotion of that State in the Asian market and in Japan in particular. That illustrates that the Prime Minister's $15 million is but crumbs off the table. It is chicken feed in terms of what the tourism industry requires to provide the sort of boost needed to create 200,000 jobs and to attract the 6.5 million visitors to which Paul Keating referred.

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There is absolutely no doubt that our competitors will be rubbing their hands with glee to see a competitor such as Australia, with its unique natural advantages, fall by the wayside because of a lack of investment in promotion by the Federal Government. To attract 6.5 million tourists by the end of the century and, therefore, to create 200,000 jobs, to which the Prime Minister referred, Australia must be promoted vigorously. In that respect it is disappointing to the industry and to those sections of the community that would benefit from tourism that the Federal Government could not come to terms with a John Brown style boost to tourism that was needed, which tourism received in the late 1980s. The Federal Government has missed a huge opportunity to exploit the potential of tourism as it relates to job creation and to wealth creation. Far from being the Prime Minister for tourism, as he has been described by his colleagues, the Prime Minister has proved himself to be lacking in any vision of leadership for this vital industry. There is a clear challenge for the New South Wales Government and for other governments around Australia to make sure that resources are allocated for tourism, and to make sure that we take full advantage of the rising star of the 1990s - the tourism industry.

Petition praying that the House urgently reconsider the proposal to demolish buildings at the Cockle Creek railway station and that it make no attempt to reduce the frequency of trains to that station, received from Mr Hunter.

Petition praying that rail services on the Newcastle Central Coast line be restored and that easy access be provided to platform No. 3 at Fassifern railway station by the installation of ramps to the overhead walkway, received from Mr Hunter.

Petition praying that for the convenience of customers, particularly the elderly and those without private transport, the Minister for Housing reappraise the facilities available for the payment of water rates to include post offices, received from Mr Rumble.

Petition praying that the House stop the sale of publicly owned land on the foreshores of Port Jackson and its waterways, including that currently leased from the Maritime Services Board, and retain such land in public ownership; acquire for the public foreshore land whenever the opportunity arises; and optimise public access to the foreshore, received from Ms Moore.

Petition praying that the House take all necessary steps to reduce the traffic volume in Ocean Street, Woollahra, and that Ocean Street be returned to a safe and pleasant street consistent with residential neighbourhood values, received from Ms Moore.

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Petition praying that the Government preserve the Walker estates, including Yaralla, for public use, received from Ms Moore.

Petition praying that the House provide funding to the Royal Hospital for Women to ensure that it maintains its leadership role in women's health care, received from Ms Moore.

Petition praying that because the Royal Agricultural Society Showground, the E. S. Marks Athletics Field, Centennial Park, the Cricket Ground, Moore Park and Queen's Park form part of the original bequest by Lachlan Macquarie as commons land, future planning for this land be subject to open space study, received from Ms Moore.

Petition praying that the House legislate to ban totally the manufacture, sale and use of steel-jawed leg hold traps in all areas of the State as they cause great suffering to all animals and birds, both target and non-target, caught in them, received from Ms Moore.

Petition praying that public money not be wasted demolishing the structurally sound finger wharf and establishing a walkway on the western side of Woolloomooloo Bay but instead that basic renovations be carried out on the wharf and an integrated multimedia arts centre be established, received from Ms Moore.

Petition praying that because of dissatisfaction with the rationalisation of health services the House prevent the downgrading and possible closure of services at Lidcombe Hospital, received from Mr Shedden.

Petition praying that the nudist classification for Reef Beach be revoked and that the beach be returned to general public usage, received from Dr Macdonald.

Petition praying that the proposed logging of the Chaelundi State Forest not be proceeded with and that the area be declared an extension of the Guy Fawkes River National Park, received from Dr Macdonald.

Petition praying that the Government take urgent action to prevent the damage that will be done by the Adoption Information Act becoming effective in its present form, received from Dr Macdonald.

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Petition praying that Portion 490, Gardere Avenue, Harbord, known as Harbord Heathland, be retained as open space for the enjoyment of all citizens of Warringah Shire, received from Dr Macdonald.

Petition praying that the House share with Canterbury Municipal Council the cost of replacing the footbridge across the Cooks River between Church Street, Canterbury and Karool Avenue, Earlwood, received from Mr Moss.

Petition praying that safe toxic trade waste and sludge management methods be implemented urgently at the North Head sewage treatment plant, Manly, received from Dr Macdonald.

Mr LONGLEY (Pittwater) [3.12]: I move:

That this House notes as a matter of public importance the Prime Minister's economic statement of 26th February, 1992, and its impact on the State of New South Wales.

The economic statement made by the Prime Minister will be of great significance to both Australia and New South Wales. It is of great concern, however, that the consensus of opinion is that it is a gamble, a risk, in other words, a statement made for short-term political gain which will result in long-term pain or cost to the economy and employment. It is of great concern also that the significance of such an important statement is not the positive benefits to Australia and New South Wales but rather the great cost. Our State and nation are not known, of course, for media headlines which favour the coalition side of politics. Yet with regard to the Prime Minister's economic statement a selection of headlines such as the following appeared: in the Sydney Morning Herald, "It's a $2.3 billion gamble"; in the Canberra Times, "Keating spends and hopes"; in the Australian, "Prime Minister's jobs and votes grab"; in the Australian Financial Review, "Labor's clever risky play"; and so it goes on - "Keating's great giveaway", "Who is going to pay for it?", "What about when the bill's due?", "To buy an election", and "An unashamedly political pitch for votes". These sorts of one-line epithets all too appropriately characterise what is contained in the economic statement made by the Prime Minister.

It is perhaps useful to review briefly some of the major elements of the statement to refresh the memories of honourable members, especially as perhaps not all members were paying the close attention to the details of the statement that they ought to have done. The grand plan, of course, is to create 800,000 jobs. The measures to revive the economy will cost $2.3 billion. The overall cost for the full time frame within the economic statement is substantially larger, indeed in excess of $16 billion. For the benefit of those members opposite who are economically illiterate, $16 billion is a sixteen followed by nine zeroes - $16,000,000,000. The statement contained a large number of expenditure items, significant tax changes and important items of structural and microeconomic reform. I will briefly summarise the statement in those three categories.

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Within the main expenditure items are included a national railway gauge which will finally extend from Brisbane all the way down the east coast and through to Perth at a total cost of just under $500 million over two years; improved road network expenditure of approximately $600 million over three years; extra funds for the textile, clothing and footwear industry amounting to approximately $30 million in the 1992-93 year and $10 million in the following year; additional funds for JobSkills and JobStart; the establishment of the Australian technology group at a cost of $30 million in the next financial year; a one-off lump sum payment to all families entitled to the family allowance of $125 for a family with one child, rising to $250, at a total cost of more than $300 million; a $3 permanent increase in family allowance supplements at a total cost of an additional $240 million; and increased Federal Government support for technical and further education at a cost of $35 million in the next financial year, rising to $210 million by 1995-96. They are the main expenditure items. The statement contained also reference to a significant number of important tax changes. Those which have been most highlighted were the personal income tax changes - but we all know they are political promises on the never-never.

Mr Chappell: We would just get back to bracket creep anyhow.

Mr LONGLEY: As the honourable member has commented, that will just get us back to bracket creep anyway. Other important tax changes were the acceleration of rates of tax depreciation; an investment allowance of 10 per cent for major projects; tax preferred bonds to encourage private companies to invest in infrastructure; a concessional tax rate for offshore banking units; an increase in the depreciation on new factories, hotels and tourist buildings - likewise for structural improvements; capital gains tax exemption and other concessions for pooled development funds; clarification of the rules on partial debt write-offs, which will be a significant boost for banks and will, I hope, flow through to the lending market; an increase in goodwill capital gains tax exemption to help small business; a cut in the sales tax rate from 20 per cent to 15 per cent for new cars - it is interesting to note that the Prime Minister chose the figure of 15 per cent, which is the same as the goods and services tax rate; and deferment of the initial payment of company tax to 28th September, 1992.

The third major category contained those elements which are important for infrastructure and microeconomic reform: a tenfold increase to $50 million in the value of projects exempt from Foreign Investment Review Board scrutiny and the abolition of the 50 per cent equity guideline for new mines; a reduced liability for smaller information technology companies competing for government contracts; streamlined approval of projects in relation to environmental and Aboriginal issues; changes to the aviation industry with Qantas being able to carry domestic passengers and domestic airlines such as Australian and Ansett being able to fly internationally; more foreign bank licences; a commitment from the unions to a wage outcome consistent with current low inflation; and amendments to industrial legislation to encourage workplace bargaining.

That is a brief outline of the elements of the package. They will have a significant impact on New South Wales but nothing like the negative impact that will flow from that statement. What is of particular concern is that no consideration has been given to the costs associated with these elements. If anything else has to be said about this statement it is that the costs will be high and horrific. What has not been taken into account is that implementation of the elements will almost certainly involve a higher level of inflation. Mr Keating talks about the current low level of inflation; what he forgets is that the current inflation rate is not the underlying inflation rate, which in Australia today, is still solidly in the 3 per cent plus area. It is not the 1.5 per cent which we are
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being told it is at present. But perhaps even more important is the impact this statement will have on the current account deficit, and that will impact directly on Australia's overseas debt. This is exactly the problem Mr Keating faced throughout his time as Treasurer of Australia. In the economic analysis prepared by Price Waterhouse - which I commend as a useful and helpful document to honourable members - it is interesting to find the following statement:

The big surprise in last night's forecast is the strength of the recovery which Mr Keating believes can be sustained without a blowout in inflation or a widening of the current account deficit on the balance of payments.

The Prime Minister's economic statement will ensure that Australia will be faced with those two problems. What we found during Mr Keating's time as Treasurer - and he boasted loudly of it - was a great increase in employment creation. It is true that under his treasurership, employment creation increased dramatically. What he did not say was that for every job created under his treasurership Australia incurred $75,000 in overseas debt. A similar situation will be the result of this package. It is significant that Ross Gittins, economics editor for the Sydney Morning Herald wrote an article precisely on this aspect. The article, entitled "Debt out of sight and out of mind", states:

Read the fine print of Paul Keating's One Nation papers and you discover a startling fact: concern about the current account deficit has been pushed into the background and the goal of stabilising the foreign debt is no more.

Among documents tabled by Mr Keating during his speech was the following statement:

High levels of external debt leave us more exposed to external developments, such as slowing world growth and falls in commodity prices, that could set in train processes leading to sharp reductions in national wealth and living standards.

We have in Australia today a Prime Minister who is not only responsible for Australia's phenomenally high and debilitating foreign debt; he is also prepared to add to that level of foreign debt, irrespective of its impact on Australia and the fact that we are mortgaging our future as a nation. Mr Keating, having made that statement, is culpable. He knows that we are mortgaging our future as a nation. He talks about increasing the growth of our economy, yet he makes no allowance for its impact on our current account deficit, which feeds straight into our foreign debt. He is aware of the consequences. By 1995-96 - the time frame of his statement - our current account and overseas debt problems will be worse than they are today. How can anyone claim to be a responsible Prime Minister and leave us in that situation? Ross Gittins's final comment in his article in the Sydney Morning Herald is very salutary. He said:

But there's one unstated assumption: that, one way or another, foreigners will go on happily financing our bloated current account deficit without ever losing confidence in the wonderful way we're running our economy. Now that's a brave assumption.

The Prime Minister's economic statement is a frightening portent of the future of our nation. It will have a number of significant impacts in New South Wales. A number of one-off fiscal stimuli - by way of Federal financing of projects for New South Wales and other Australian States - were referred to in the statement. The Premier has said, and rightly so, that he will be monitoring carefully the amount of money flowing from Canberra to make sure that, for once, New South Wales gets its fair share. That is very critical. But all the benefits that could flow from this statement will be wiped out because of the size of our foreign debt. This statement seems to mortgage the future of New South Wales and Australia. I commend my motion.

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Mr BOWMAN (Swansea) [3.27]: The honourable member for Pittwater regaled us with a disaster scenario, yet he failed to tell us why he is so gloomy. He asserted that the degree of additional growth that the One Nation economic statement seeks to promote will be extremely bad for us, and that we should be happy to stay in the economic doldrums. The honourable member for Pittwater would then be glad because, as he has worked it out, that would have a beneficial effect on the state of our overseas debt. I emphasise that our overseas debt is not the debt of the Australian Government or the New South Wales Government, although they are components of it. Overseas debt is the debt of the economy. It should be noted - and often it is not - that as well as being partly owned from abroad we also own part of abroad. Nevertheless, I concede that it is important to bear in mind in any kind of economic plan that the level of our overseas debt must be reined in. For the life of me I cannot understand why we should persist with concerning ourselves - as the honourable member for Pittwater would have us do - with overseas debt without worrying about anything else. It seems to me that he is seeking, by implication, a do-nothing strategy, except for the imposition of a consumption tax which, miraculously - in a way which is not clearly specified - it is presumed will do all things bright and beautiful for the Australian economy.

Many people in Australia, including the Premier, believed that the Australian economy would have a softer landing. It is a matter of regret to me, and to honourable members in this House, that we had a hard landing. The assumption of most of the economic commentators quoted by the honourable member for Pittwater was that we would probably have a soft landing, or at least a very much softer landing than we had. Professor Hughes, now at the University of Newcastle, when asked at an economic breakfast of the Hunter Valley Research Foundation, "Do you think we will have a soft landing or a hard landing?" said, in the colloquial, "I'm stuffed if I know." I turned to those at my table and said, "Do any of us know for sure?" and various answers were forthcoming. The Premier of New South Wales - and umpteen others - felt quite a degree of confidence that we would have a soft landing. As it happened, we had far too hard a landing, and the drop in the level of economic activity has not only been tremendously painful for many Australians - whether business proprietors, employees, or those in the professions - but it has gravely imperilled our opportunities to rein in the overseas debt.

It is all very well to say there is a risk in this strategy. There is no absolutely riskless economic strategy for Australia. If any one were to pretend that there is, that would just show abysmal economic ignorance. I wish that there could be a no-risk strategy but there is not. We must make the best of our circumstances. In a deregulated environment that means we must take some risks. It is amazing to me that honourable members opposite - who are wont to praise entrepreneurial attitude and entrepreneurial achievements - should, rather contradictorily, yearn after some kind of no-risk strategy and say, "Look, there are some risks. There is not absolute certainty in this. We cannot get back into the womb with the One Nation statement, and therefore it is a bad thing". It is fatuous; it is crying for the moon. I certainly do not agree, however, that although the strategy is audacious it is by any means foolhardy or formed by the kind of economic ignorance of which it is accused.

Surely to heaven the infrastructural improvements, for example, will do a great deal to improve the efficiency of the Australian economy and to increase our opportunities to process materials, manufacture goods, transport our primary products and the products of our mines to ports and from State to State and, in effect, export more effectively. It is only by achieving a greater exporting capacity and by effective import replacement that we will deal effectively in the long term with our overseas debt. We cannot just sit at the bottom of the business cycle, wring our hands and say, "Gee, it's
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awful but we must not do anything that has the least risk or we will be sunk". I waited in vain for some ray of hope, or at least some suggestions as to what course might be followed by the Australian Government in order to facilitate our struggle to maintain our living standards and, in particular, to lift the Australian economy from the bottom of a recession and, with it, all of the people - and it is a considerable number of people - who are suffering very greatly because of the depth of the recession.

I wish the honourable member for Pittwater had been able to say something about what might be a better alternative. I presume that alternative is the kind of Fightback package we have heard about - the quaintly titled package which certainly would fight back effectively were it to be implemented against any kind of egalitarian ideal or any sense that the burdens of taxation ought be shared reasonably fairly in this State. It was the Federal Opposition that asked, in its quest for freedom of information, for the Treasury figuring about the distribution of taxation if the goods and services tax parcel were to be implemented in Australia. Now it is finding fault, and the Deputy Leader of the Federal Liberal Party was very much affronted that the answer was not what he desired; that his reading of the figures - and I do not believe he can do any figuring for himself - was contradicted by the information provided to him. He was quite at a loss. All Australians know that the argument that John Hewson hopes to put to middle Australia is not, "The nation will be better off" but, "You will be better off. We are fighting back against those insidious ideas about a fair distribution of taxation in Australia. We are going to work the pea and thimble trick with the 15 per cent impost, sure, and we are going to make some readjustments in transfer payments and so on in order to allegedly square things up". But in fact - and the Treasury figuring demonstrates this quite clearly - the distribution of taxation will be transferred downwards.

That is a great way to discourage the working men and women of Australia upon whose enthusiasm and effort, and in many cases pain, we must depend if we are to increase the productive capacity of this country in such a way as to maintain a low level of inflation - and it is the lowest it has been in Australia for a couple of decades - increase our exporting capacity and our import replacement capacity, and really fight back. The real fight back is the program that goes under the heading of One Nation. I give credit to the honourable member for Pittwater - and I hope the following speakers deal as honourably as he did with the distribution of the $2.3 billion between the States - who seemed to accept, and I acknowledge his reasonableness on this point, that the distribution of funds is a pretty fair. There was an accusation - or perhaps there was a genuine fear on the part of the Premier - that the States which have Labor governments would be looked after and New South Wales would be dudded. That did not happen and, consequently, I will not talk at length about it, except to remind honourable members that the infrastructural improvements in rail and roads will benefit New South Wales and the other States in such a way that must make many Ministers in New South Wales very happy because they know the tremendous economic benefits that could flow from these infrastructural improvements. It is only by improving our training system that we can increase the level of productivity in such a way as to succeed in the task of reining in our foreign debt and achieving a reasonable equilibrium in our trading relations with the rest of the world. This expenditure, amounting to an infusion of $2.3 billion, is by no means a madcap burst of Keynesianism. In comparison with the size of the Australian economy it is a very responsible boost.

In light of the lack of confidence among consumers, and especially among investors, it is absolutely essential that there be a degree of confidence in investing and working in Australia, both by native Australians and potential suitable overseas investors. I am amazed that such a modest fiscal infusion should be looked at askance by the
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honourable member for Pittwater, who seemed to fear that Australia's foreign debt would blow through the roof, that inflation would go sky high and that all sorts of nasty things would happen. It was a mad sort of gamble, as he saw it, without any sort of substantiation. It amazes me that he could see it in such a dark light. I think this One Nation package will inspire people to bear with their present pains in many cases and to develop hope and confidence and the surge of energy that is necessary if we are to get it off the floor and carry on effectively with the fight. It is not good enough to run tremendously expensive advertisements in the newspapers saying that privatisation will solve all our problems but fudge how it will solve the problems. The advertisements feature charming little girls and boys sitting in school and smiling people chosen by the advertising agency who look at one another as though privatisation is some sort of miracle that will solve all our problems. There is no dead set correlation between the degree of privatisation in various economies and its degree of success. There is no simplistic one-to-one relationship. Members of the Australian Labor Party are happy to look at any given situation and rationally assess whether privatisation is appropriate. From the Australian perspective, if Australia is to be one nation that is making a vigorous effort to deal with its economic problems, messages of hope should be projected that, though they may be a little optimistic, will inspire people to add to the significant effort being made so that Australia can achieve its aim. [Time expired.]

Mr ZAMMIT (Strathfield) [3.42]: Like most concerned people in Australia, I listened intently to the speech the Prime Minister made in the Parliament entitled "One Australia: a Vision for the Future". I must confess that when he had finished I felt very hollow. What I had hoped he would say he did not say. I felt his speech was a regurgitation of socialism in its purest form: when one is in trouble borrow money and try to buy as much time as possible. The following morning with the honorable member for Pittwater I attended a breakfast at the Sheraton at which Senator Button was one of the guest speakers. He spoke about the package in a rapturous mood. But when it was all over the guests asked Senator Button repeatedly what structural reforms and enterprise bargaining would occur and about the scandalous situation on the Australian waterfront. Senator Button could not reply to the questions. Will anyone in Australia trust Paul Keating's judgment and competence on his past record? The socialist philosophy regurgitated by Paul Keating has repeatedly said that only governments can provide the answers, are more important than individuals, families and businesses and can make better decisions than individuals and families.

Socialists would have us believe that all problems can be solved by governments, provided they are given enough power and taxpayers' money; that redistributing wealth is more important than creating it; that social progress can be achieved without economic progress; that services provided by governments are free and that uniformity and mediocrity are to be preferred over diversity and excellence. That philosophy has been downgraded throughout the world as people have thrown off the shackles of socialism and decided that the only way to go is the way that espouses the rights and the freedom of the individual and his right to go into business, make money and assist in the future upkeep of the country. In 1983 Paul Keating was appointed shadow treasurer. Almost immediately he said he did not want the foreign banks to enter Australia. After the election he changed his mind and allowed them to come into Australia. That was the time of the Bonds and Skases, who got the country into much difficulty and created many problems. In 1986 everyone issued warnings. Responsible business people and economists were saying, "Watch out; the speculative bubble will burst; the heavily indebted corporate sector will crumble". Yet Paul Keating did nothing, preferring a hands-off approach, which turned out to be catastrophic for Australia.

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The end of 1986 was the year of the leveraged buy-outs and the junk bonds. Following the crash in 1987 Paul Keating panicked, as he will panic again soon. In an incompetent misreading of the Australian economy he encouraged the Reserve Bank to reduce interest rates. He overheated the economy to such an extent that he panicked again. The only way he could think of to pull it back was to increase interest rates for home buyers. Has any honourable member in this Chamber heard of interest rates of 18 per cent for families who are trying to buy a house? Total silence on the Opposition benches. After a year and a half of hearing about soft landings we have now had a crash landing. [Time expired.]

Mr CLOUGH (Bathurst) [3.47]: I have listened to both Government supporters who have spoken in the debate but so far have not heard a single word about how the Government will use the infrastructure funding it has been handed by the Federal Government. I take issue with the honourable member for Strathfield. He spoke about high interest rates of home buyers. The average home lending rate now is about 10.5 per cent. From HomeFund, the speciality of this Government, it is 15.9 per cent. The honourable member should not speak about interest rates unless he is willing to accept that the Government is screwing people who have bought homes through the HomeFund scheme at exorbitant interest rates. The New South Wales Government is moribund. It has no idea where it is going. If an asset is not tied down, the Government will sell it; if it is tied down, the Government will do its best to sell it also. I listened intently today to the Minister for Sport, Recreation and Racing and Minister Assisting the Premier. He went round the answers he was required to give to questions about what the State would pay for the privatisation deal.

I have in my office a video and material that must have cost something to send to me. The Government is wasting its time sending out that sort of rubbish. The people of New South Wales will take the Government's record into consideration when deciding whether the coalition parties are fit and proper to operate the State under their privatisation deals. I represent a railway area in a country electorate. There are four Government members in the Chamber putting forward the idea that they are attacking the Federal Government for what it has done. The Government has not picked up and run with the infrastructure improvements offered by the Federal Government to the State Rail Authority. Today we heard the disgraceful statement by the Minister for Transport that pensioners will not be permitted to travel at reduced rates on certain train services at certain times of the year because they are not paying enough. This is the religion of the New South Wales Government. It looks to making everything pay. If it does not pay, get rid of it. My electorate used to have a considerable railway component. The Government has cut the inside out of the railway system in the Central West and far western New South Wales. When the Prime Minister offered to improve the railway system by relieving the State Government of the responsibility to operate services between Sydney and Brisbane and between Sydney and Melbourne -

[Interruption]

The honourable member for Lismore represents a country electorate. I have not heard him say a single word in defence of the railways in his electorate. He does not have the internal fortitude to stand in this Parliament and defend the railway people in his electorate. The Federal Government has given the State Government an opportunity to use the funds to be saved by not operating the rail service between Brisbane and Sydney and Sydney and Melbourne to do something for railway services in the Central West and the far western areas of New South Wales, but this Government has dropped the ball. Last Thursday afternoon the Minister for Agriculture and Rural Affairs issued a statement
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to the effect that possibly Parkes will be affected by this option. I was lucky enough to read that press release early in the show and I replied to it. I give credit to my local newspapers which published the truth - my reply - and not the rubbish put out by the Minister for Agriculture and Rural Affairs.

The New South Wales Government has compounded the problems faced by the Central West and far western areas by putting pressure on Australian National Railways and Westrail to reduce the Indian Pacific service to one service a week. The Government is not looking at taking advantage of the infrastructure benefits granted to it by the Federal Government. The Federal Government has given the State Government an out by saying it will take over the passenger services on the eastern seaboard and giving the State Government the funds to use in other areas. However, the Central West and far western areas will get nothing. There is one Labor Party member at Bathurst and one at Broken Hill. [Time expired.]

Mr HATTON (South Coast) [3.52]: I welcome the opportunity to speak to this most important matter. I am disappointed with the reception given to the Prime Minister's package. Obviously there is room for debate but we, as Australians, ought to be talking the economy up, grasping the initiatives - no matter where they come from - trying to make these things work and get people back to work. The one certainty about economic policy and economic debate is that the economists get it wrong. On any performance assessment they should be sacked or disregarded. They are not magicians. Economic policy is a matter of choice, according to the philosophy one follows. For almost 100 years prior to World War II there was a marked cyclical pattern in industrial countries throughout the world - the boom and the bust, the crisis and the recession. After World War II there were between 20 years and 30 years of growth. The Keynesian approach of demand management worked, because the theory was that a cost-push, including wages and a demand push - in other words an excessive aggregate demand - fed inflation.

The extreme Keynesians on the one hand viewed unemployment as a product of deficient demand, and on the other hand as voluntary. One of the legacies of the Keynesian debate is that many people in Australia blame the unemployed for being voluntarily unemployed. From about 1973 to 1979 unemployment was right across the world. Unemployment rose. In debating policies on both sides we should not treat Australia in isolation. The argument in Australia is pitched in microeconomic reform terms, that if the microeconomics are right the macroforces in the market will work. In reality they were shown in the 1930s not to work. We must break the boom-bust cycle. This was done and shown to work in the United States of America during the depths of the Depression when the New Deal approach of Harry Truman did in fact turn things around.

There must be a marriage between private enterprise and government. There must be improvements in infrastructure and there must be responsibility in private enterprise - not in the deregulation climate set up by the Hawke-Keating Government where 16 foreign banks rushed in, competed with each other and enormous resources were wasted on takeovers and on real estate. The resources were not used for investment. The accord, the holding down of wages, did not work because the excessive profit was not channelled into proper infrastructure within business itself. Business had no discipline to do that. Business took the profits and made good use of them, but not for the nation's best interest. Business accepted the effective wage cuts but did not channel the profits into infrastructure. That does not happen in Sweden, Japan or in Germany. Industry in those countries accepts its responsibilities. Those industries share their
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responsibilities in a wages policy and they re-invest. For example, Japan has an ongoing program of public works so that when things are good that program can be slowed down, and I instance the major harbour bed expansion in Tokyo. When things are bad money can be pumped into the economy and the wrinkles can be ironed out by putting money into infrastructure and getting people back to work.

I should like someone to tell me where in this debate is the consideration for the way in which small business will get its custom when the unemployment rate is 10 per cent and people cannot afford to buy or to invest. Something must break the cycle. For heaven's sake, let us not have this preaching about the Federal Government wasting $1 billion. What is the alternative? The alternative is to do nothing, to leave the economy on the floor, to leave unemployment at 10 per cent and hope that the macro climate is going to work. It did not work in 1930 and it will not work in 1992. I have every confidence that if all of us in Australia talk up the economy and encourage a policy of a backing a winner, those industries. [Time expired.]

Mr KNOWLES (Moorebank) [3.57]: The honourable member for South Coast obviously has hit the real nerve in this debate, which is how this country can go about establishing a mechanism to break the cycle of the boom-bust that has been inherent in our economy since before Federation. I find it extraordinary that during this debate members on the Government benches have spent considerable time speaking about the dangers of running the national account at a deficit, when for the past 92 years since Federation, with the exception of six years after World War II, the national account has run in deficit. This country has always run a trading deficit. It is a trading nation, a developing nation when compared with world economies. The honourable member for South Coast accurately said that there must be a degree of pump priming by Federal and State governments to demonstrate that there is a reason to invest in this country. With our interest rates in both real and world terms at low levels, such interest rates being capable of attracting investment, what is missing in our economy is business confidence. Clearly the infrastructure programs announced by the Prime Minister last week demonstrate the Federal Government's commitment to establishing a regime where there will be investment, whether it be Government led or not, to try to re-develop business confidence after the business excesses of the 1980s.

I make the point that on this matter of public importance there was the lead speaker, the Minister for Sport, Recreation and Racing and Minister Assisting the Premier, and the duty members of Parliament, but no member from the Government side representing the outer urban electorates such as Camden and Badgerys Creek, where infrastructure spending will be particularly relevant. The honourable member for Pittwater and the honourable member for Strathfield are fortunate to have infrastructure in place. It would be nice to be Ross Gittins who can sit back in trendy Glebe and have the luxury of writing his articles criticising infrastructure spending. He can walk to work down Glebe Point Road where he has government buses zooming past him, a couple of universities down the street, an olympic pool and three or four hospitals. In my electorate youth unemployment is approaching 30 per cent, waiting lists exist at every TAFE, health services are run down and underfunded, schools are overcrowded, transport problems arise because 60 per cent of the local workers migrate from my electorate to go to work.

Infrastructure is a valuable component of any strategy for national recovery. My electorate has benefited quite well, as has New South Wales. New South Wales has received a greater per capita share of the cut up of the $2.1 billion. Specifically, in the southwest is the Hornsby to Liverpool arterial road link at $25 million, the addition to
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the freight line linking Campbelltown to Enfield. Also, the depreciation allowance for industry will mean that industries in my area will benefit from that additional infrastructure. Infrastructure in the southwest of Sydney is a fancy name for jobs. The Federal Government has attempted to stimulate growth and opportunities for jobs. It would be churlish of any government - in particular this State Government - which has done so much to dislocate the economy and reduce jobs in this State - to do anything other than acknowledge the efforts of the Federal Government. The honourable member for South Coast pointed out that infrastructure spending will prime the pump. We must move away from this reliance on the business sector to simply provide funds and hope for the best. Interest rates are down and so is confidence. The "one nation" economic statement will go a long way towards restoring that confidence and hopefully see greater investment in this country. It is hoped that it will recreate jobs, particularly in areas such as those that I represent.

Mr LONGLEY (Pittwater) [4.2], in reply: I thank honourable members for participating in this very significant debate. It is pleasing that members share concern about the importance of this statement. I wish to respond to comments made by a number of honourable members. The honourable member for Swansea said that I had failed to establish, in any particular, why growth is bad. Things can be readily misunderstood but I did not say growth is bad. Growth within appropriate limits is good. The question is not whether growth is good or bad but how it is paid for. The particular point I made was that growth under Keating as Treasurer was paid for at the rate of $75,000 foreign debt for every job he "created". That is the problem. The problem is not growth per se but how it is funded and where the money comes from to achieve that growth. Likewise, the honourable member for Swansea said that I had failed to substantiate why and how foreign debt would grow. Even in the economic scenario presented by Paul Keating, he said the current account deficit would worsen from 3.75 per cent of gross domestic product this financial year to 4.5 per cent in 1993-94 and by 1995-96 it would nearly be back to where it was this year. Clearly, the current account deficit is getting bigger and that means our foreign debt is getting bigger. I did fully substantiate that; it was in the economic statement itself.

The honourable member for Swansea went on to say that there was no riskless strategy. That is true. There is no such thing as a riskless strategy but this strategy is not riskless, it is reckless. This strategy is a gamble, and that is the problem. The honourable member criticised economic assumptions. This strategy is based on assumptions which are simply not believable. Because there is no such thing as a riskless strategy it is important that any reform undertaken is real reform with real jobs, not debt created jobs. Real microeconomic reform is needed. It must actually occur and not be the great long rhetoric we keep hearing from Labor governments and oppositions where nothing actually occurs on the ground. That is the problem. The honourable member for Swansea asked what better alternatives we were proposing. He actually got that one right. Of course the better alternative is the Fightback proposal of the Liberal Party-National Party Federal coalition led by Dr John Hewson. The Fightback proposal is comprehensive and real. It deals with that very question of where the money comes from, not this nonsense emanating from Paul Keating. The honourable member for Swansea said that the funding appears to be divided fairly between the States. At this stage that appears to be the case and New South Wales will be monitoring matters to make sure that does occur.

The honourable member for Bathurst said the Government did not specify how New South Wales would use these particular funds. That is in the substance of the statement by Keating so there was no need to reiterate that. New South Wales will be
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by far and away in the best position to gain advantage from the economic statement. However, the cost will be high. That long-term cost is of great concern. The honourable member for Bathurst said that New South Wales was moribund. What could be further from the truth? New South Wales has just had its triple-A rating reconfirmed. It is one of only five States around the world which has had that rating reconfirmed. New South Wales has the lowest rate of unemployment, one of the lowest rates of inflation and has gone from being the highest taxed State in Australia under Labor to being in the middle rank. All those things demonstrate that New South Wales is by far and away the most dynamic of all States in Australia. The honourable member for Bathurst spoke about country rail and so on. I have been advised that with the Keating statement the Federal Government will completely kill off the Sydney, Lithgow, Bathurst, Broken Hill, Adelaide rail line as a result of the standardisation of the line between Melbourne and Adelaide. Indeed it will be the biggest single killing off of rail in the country line. It is important that those facts be noted clearly.

The honourable member for South Coast made a number of significant statements. He commenced by talking about the need to talk up the economy. There is a legitimate place for that, however, it is important that there be substance behind the rhetoric, behind the words. All too often throughout Keating's treasurership he was talking up the economy, so much so that the belief is that he has cried wolf once too often. The honourable member for South Coast also talked about economists getting forecasts wrong. I could not agree with any statement he made more than that one because economists very consistently get their forecasts wrong. It is precisely because of the truth of that statement that the heavy reliance of Paul Keating's statement on economic forecasts is so dangerous. He is making vast assumptions and relies on low inflation rates, high growth rates, wage outcomes and so on which are very unrealistic. It is precisely because of the comment by the honourable member for South Coast that any reliance on this statement is dangerous. As one of the commentators said, it will lead us into cloud-cuckoo-land. The honourable member for South Coast said that we cannot look at Australia in isolation exactly. That is so true a statement. It belies Paul Keating's trying to pretend that Australia can be isolated from the rest of the world and that we can have a growth rate that will be double that of our major trading partners. Australia cannot be looked at in isolation. We are a competitive world.

The honourable member for South Coast said that some people had said, he believed incorrectly, that if there were microeconomic reform there would be no need for macroeconomics. I agree with the honourable member for South Coast on that. When microeconomic reform proceeds - and it will proceed for some time - there will still be the need for macroeconomic targeting, controls and so on. That is still very much the case and no one at any point has doubted this, least of all those on this side of the House. He then talked about the need to break the boom-bust cycle. That is very true, but it must be underpinned by real reform. The boom-bust cycle is exacerbated by the fact that the Australian economy has so many inefficient parts locked up and unable to advance to world-best practice. That is what we must aim for. The boom-bust cycle can be dramatically lessened by having real and substantive economic reform. That is what we did not see in Paul Keating's statement. The honourable member for Moorebank talked about the need for a degree of pump priming. We need real investment from the private sector. Pump priming, at best, is only a very short-term palliative. It is imperative that we have real reform, and that is what we do not see in Paul Keating's statement. I commend the motion to the House.

Motion agreed to.

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Debate resumed from 26th February.

Mr J. H. MURRAY (Drummoyne) [4.12]: At the outset, the Opposition wishes it to be made known that it is totally and strenuously opposed to the Pilotage (Amendment) Bill, basically because it is just another example of the dogma and improper philosophy being expressed in this Chamber by the Government. It believes that all public sector functions undertaken by the Government are inefficient and, as a consequence, must be undertaken by private enterprise. That is the case with this piece of legislation. It will certainly be to the detriment of the taxpayers of New South Wales. The Minister for Transport, in his second reading speech, painted an extraordinary picture of the Maritime Services Board at the time his Government came to power. Question time after question time, Ministers have come to the table giving a similar diatribe.

Mr Baird: But it is true.

Mr J. H. MURRAY: The Minister says that it is true. If he sits around for five minutes, I will show him why it is not true. I will quote to him his own utterances from years gone by when he agreed that many of the actions of the Maritime Services Board were quite applicable and that certainly he supported them. I have struggled for some time to understand the amazing situation whereby an organisation floating upon a confused sea of inefficiency, overstaffing and outmoded business practices could be allowed to have survived for as long as it did. Taking into account the Minister's utterances, he is shown to be inefficient. It is only when one sees the myriad documents that tend to fall off the back of government trucks and land in the laps of Opposition spokespeople that one gets an understanding of the confusion and inability of this Government and this Minister to get on top of the portfolio. A totally different picture from the picture which the Minister so graphically painted in his second reading speech emerges when one peruses these documents. Indeed, so different is the picture that a less generous soul than the member for Drummoyne might be led to the awful conclusion that the Minister might have been a little selective and economical with the truth.

If one looks at these documents, one sees a more accurate picture of the Maritime Services Board. First, let us look at the work force as outlined in the documents that the Minister conveniently decided not to refer to when delivering his second reading speech to this House. Between 1986 and 1988, MSB full-time staff numbers fell from just under 3,500 to 3,000, a fall of more than 15 per cent. This was part of a process that was set in place with the boards, unions and staff. It was transforming the organisation into a most efficient port authority. A continuing fall was already built in. A measure had already been put in place to process that achievement. As a result of this process, revenue per employee in the five years to 1988 had risen by 40 per cent, a figure the Minister cannot put to this House for the period from 1988 onwards. In that same five-year period, MSB charges had fallen by 32 per cent in real terms, providing a massive benefit to the exporting industries of New South Wales. Indeed, charges to the New South Wales coal industry had fallen by an even greater proportion. From 1984 to 1988, the number of staff who were computer literate went from a low of 40 to nearly 100. This was the highest comparative level of computer literacy in the New South Wales public service. That is not a bad effort for a ship without a rudder.

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Port safety did not escape attention either from this so-called rudderless ship. For the first time an adequate emergency response was provided, with three new fire-fighting tugs and fire monitors fitted to all commercial tugs in New South Wales ports. In 1988 the MSB was funding a capital expenditure program of nearly $60 million annually entirely from internally generated funds. The total level of borrowings between 1987 and 1988 fell by $132 million, and the board's debt to the Treasury fell by $86 million between 1984 and 1988. The Minister could not quote those figures because they would have been embarrassing. The retirement of this foreign debt was decided on not by the current Minister but by the previous board. The board had also appointed specialist private sector fund managers and had achieved a major shift from foreign currency to Australian currency loans. In accident prevention and rehabilitation, the MSB was leading the entire public service in Australia. In the two years from 1986 to 1988, the cost of workers' compensation claims fell by 60 per cent. It was a massive decrease from $2.5 million to $1 million. The board was able to become one of the few holders of a workers' compensation, self-insurers licence.

In 1984 the Maritime Services Board had an unfunded superannuation liability of $73.4 million. By 1988 it had entirely funded that liability at the same time as it was funding all capital expenditure without borrowing, and reducing charges by 32 per cent in real terms. I understand that this is embarrassing for the Minister for Transport and he cannot sit at the table and listen to these statistics which are truthful and show that the information he presents to the Parliament is always coloured and has been entirely skewed. During this time this supposedly dreadfully inefficient organisation had pulled off one of the greatest property coups of the 1980s. It turned a moribund set of old and dilapidated buildings valued at about $19 million into a new head office development valued at about $100 million to the board and reduced its operating costs by $4 million a year. In addition the board achieved the realisation of $65 million for its old head office building, which is now being put forward for use for the public benefit. A major program of disposing of surplus land and buildings had also delivered $80 million in revenue to the board and additional realisations had been put in place for 1989 that would have delivered a further $70 million. While the board has achieved all of these gains it has been able also to reduce its operating costs by 28 per cent. All I can say to the Minister is that he was wrong, wrong, wrong again.

Mr Hartcher: We have heard that before.

Mr J. H. MURRAY: That is right, but in this case it is being said by the Opposition and is effective and truthful. As I said, while the board was achieving these gains it was able to reduce operating costs by 28 per cent. The major pricing reform for which the present Government is happy to claim credit was commenced under the administration of the former Labor Government in 1985 and was virtually completed by the time of the change of government. So revolutionary was that change that by 1988 it had already earned its author high praise from the United Nations as a model for the South-east Asia region. The Minister seems to have had convenient amnesia about this magnificent list of reforms; or perhaps he has selective blindness. Let me quote what the Minister said on 30th August, 1989, when speaking about the previous board and management:

In five years they changed the organisation from being centralised and engineering oriented and set the foundations for a new commercial outlet.

It was kind of the Minister for Transport to mention that so that I could have it recorded in Hansard. I am disappointed that he selectively forgot to mention it in his second
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reading speech. He went on to say that the former general manager of the Maritime Services Board, Les McDonald, had with distinction fulfilled his brief to reform the MSB. They were the Minister's words. He went on to say as follows:

There are numerous poorly managed government organisations desperately in need of his talents. It is my hope that he will accept the offer of a more highly paid position to reform one of those organisations in the same way as he has rebuilt the MSB.

The Minister cannot have it both ways. He cannot denigrate the Maritime Services Board in this House and indicate to the people of New South Wales that it is inefficient and ineffective when in 1989 he said exactly the opposite. The Minister seems to have changed his mind somewhat. In his second reading speech he said:

The task of restructuring the Maritime Services Board has not been an easy one, and this is probably the reason previous governments chose to ignore the problem.

I tell the Minister that previous governments did not choose to ignore the problem; they went about dealing with it in an efficient and effective manner. I have spoken already about some of the microeconomic reforms achieved by the board. A great number of them have been the result of the positive role played by the unions. I shall go through some of them. The MSB has improved staff productivity based on revenue per employee from $96,000 per annum in 1989 to $153,000 per annum in 1991. Further improvement in productivity is expected to be about an additional $46,000 per employee this financial year. That is not bad for a group of employees who under the provisions of this bill will get the axe, will be shafted and have their jobs handed over to private enterprise. The unions are at present in the process of negotiating further restructuring, which will reduce costs by up to $1 million for Port Jackson and Botany Bay pilot operations. Once again these people are doing something for the people of New South Wales, and what will be their return? The return will be that they will be told "Thanks very much, but we are going to privatise you. See you later". The Seamen's Union of Australia, for example, has been prepared to sit down and discuss the MSB proposal to reduce further the crew sizes of pilot vessels, but the MSB has not been willing to discuss the matter. That proposal would save another $400,000 a year, yet the Minister, who claims to be an efficiency expert, who claims to be the guru, will not sit down with the people involved at the workface who can point to a saving of $400,000. He will not talk to them.

The Merchant Service Guild of Australia also is negotiating reductions in pilot numbers. That would save another $300,000 a year. When the so-called loss is the Minister's major reason for privatisation, why has he chosen not to make the Parliament aware of this information? I shall tell honourable members the reason the Minister has not told the Parliament that negotiations are being undertaken that would save the pilot program $300,000 a year. It is because there is a hidden agenda. This legislation has as its hidden agenda to offload the pilot system on to one of the Government's mates. It will be somebody in the maritime industry, and this State will finish up with a vertical integrated monopoly. When a boat comes into Sydney Harbour it will have to go to the same firm for pilotage services, demurrage, wharf charges and everything else, and the Maritime Services Board will be at the end of the table. That is just not good enough. It will lead to inefficiency. I can say truthfully to the Minister that there are occasions when the Opposition believes that privatisation will benefit the taxpayers of New South Wales and provide for better services. But what the Minister is proposing does not fit into that category. It does not come within cooee of any of the major criteria for efficiency. He is going to hand over a government service that runs effectively and provides a safety factor for the people of New South Wales and Australia. He is going to hand it over to private enterprise without there being any real government control. I tell him that he will get problems. As I said, that is the hidden agenda.

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I ask the Minister also why it is that we have to do this for the port of Sydney yet when it comes to Illawarra or the port of Newcastle there is no similar proposal? What the Minister is saying is that the ships that come into Sydney Harbour are different to the ships that go to Newcastle or the Illawarra area. I might be a bit dumb, and sometimes I am easily led, but in reality he cannot tell me that there is a difference in pilot services between the port of Sydney and the other two ports I have mentioned. I will tell honourable members the reason for these actions. This is the first step. This is the introduction of the domino system. The Minister will knock over the port of Sydney and when he has done that, privatised the pilot service and given it to his mates, he will say "Sorry, we have to have conformity throughout New South Wales so the ports of Newcastle and Port Kembla will have to come under that umbrella". The Minister did not mention that in his second reading speech. He did not mention how those two ports have undertaken efficiency campaigns and are working adequately. Those who work in and administer both of those ports believe that privatisation is not appropriate. They have been involved in productivity campaigns and consequently are not interested in privatisation. The real strong man in New South Wales, Mr Moore-Wilton, is standing over the port authority. This weak-kneed Minister is succumbing to that bureaucratic push.

The budget that has been presented to the Minister has been loaded with administrative, maintenance and other costs that are not directly attributable to the pilotage service. Can the Minister explain why a private sector organisation would want to take on this alleged business disaster if it was not profitable to do so? The Minister said that $716,000 went down the drain but he did not mention savings that are in the wings or that costs incurred by other sectors of the port have been loaded in to the income and expenditure statement. That figure of $716,000 is not accurate, and I shall explain why. With the Minister's new view of the old Maritime Services Board having gone out the window, the Government and its administration boast a very poor record. That follows close on the heels of puerile advertisements for which the Government has forced New South Wales taxpayers to pay, advertisements which tell them why they should be grateful for the Government selling their birthright to pay for the Government's mismanagement, waste and ballooning deficit. The Government has no strategy to deal with its own poor administration except to give the problem - and, more important, the profits - to someone else. That is nothing but a cop-out by the Government of its responsibilities. Nothing more clearly illustrates the poverty of the approach to management by a Premier and a Government that have fraudulently - and unsuccessfully - tried to sell themselves to the people of New South Wales as great managers. In The Entrance by-election the Government did poorly, with a 9.4 per cent swing.

Mr Baird: Rubbish! It was a 4.5 per cent swing.

Mr J. H. MURRAY: The Minister should study the final figures, which will be replicated in a State election. The residents of The Entrance had six months prior to the by-election to digest the Government's attitudes and management theories, and expressed their opinions when they voted.

Mr Baird: What did Saulwick say?

Mr J. H. MURRAY: That is a sore point for the Minister but the final result was a 9.4 per cent swing on the two-party preferred system. Nothing could more clearly illustrate what people think about the management approach of the Government. The Minister in his second reading speech explicitly recognised that the pilotage service is a
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natural monopoly. Small wonder that there have been so many expressions of interest in taking it over. What commercial organisation in its right mind would not want to take over a monopoly service, the use of which is enforced by legislation? I ask the Minister: can I get on the bandwaggon? I am in the wrong party for that. Customers have no choice about whether to use a service which has always been provided by the Government. That Government monopoly will be handed over to a private organisation.

To ensure that the monopoly powers inherent in the safety requirements are not exploited, I and the Opposition believe those powers should remain in Government hands. The record of the Thatcher Government and subsequent regulation of such privatised monopolies will not give great heart to the shipping industry using New South Wales ports. I note that the freeze on charges for these services will lapse after only three years: after three years it will be open slather. At question time today, the Minister and the Premier spoke about efficiency and lack of efficiency in the maritime industry, yet the Minister will give a monopoly to a private organisation, which after three years will be able to charge what it wishes. I am not comforted by the Minister's assurance that he will need to approve any increased prices for pilotage services, given the Minister's poor record of having approved massive increases in public transport fares and charges over the past few years. The Minister's record is not good enough. The largest transport charge increases on the Australian continent occurred in New South Wales during the time the Minister has been in a position to approve such charges. The Minister's track record is such that in three years' time any ship entering a port in New South Wales will be hit by hefty charge increases which will represent increased profits for the owners of that monopoly.

We can look forward also to a decrease in the relevance of the regulatory function of the New South Wales Department of Transport. The record of such bureaucracies - which are remote from the action and generally have little or no specialist expertise - is not good in this country and has not been good under the tutelage of the Government. I should not let pass the opportunity to make mention of the Minister's proud reference to the so-called great breakthrough in Government administration, which is the brainchild of the Love Boat picture fancier, Gary Sturgess, whom I noticed in the House a moment ago. He must have known I was going to give him a little credit. The separation of regulatory and policy functions from the operations and administration functions is the sum total of the wisdom that Mr Sturgess has been able to extract from the multimillion dollars of taxpayer's money that he has spent on the army of consultants that he regularly feeds. If I come back to this earth and want another job, I will come back as a consultant for the New South Wales Government.

Mr Downy: We would not hire you: you would not get a job.

Mr J. H. MURRAY: The honourable member for Sutherland says I would not get a job. Anyone can get a job as a consultant for the New South Wales Government if excessive charges are claimed. This apparent inspiration came to Mr Sturgess when he realised that his favourite ideology, privatisation, would founder in the face of the need for a number of instrumentalities to exercise a regulatory function for Government. No problems, thought Gary; just take these functions away and give them to any convenient government department in the vicinity. I gather that some similar thought must have crossed his mind when the Government appointed two Ministers for Health, one for policy and the other for implementation. The Minister for implementation -

Mr Price: The Minister for bad news.

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Mr J. H. MURRAY: The Minister for bad news now is taking the Premier apart at openings. The Minister is not concerned about having his name on plaques because he is closing hospitals down rather than opening them. A problem has been created: anyone with any knowledge of the health system is aware of the havoc wrought by Mr Sturgess's little gem of inspiration on health administration and health services in New South Wales. If the proposed legislation is passed, the same philosophy, answers and performance will still be evident. It will be an absolute disaster. The Minister indicated in his second reading speech that the pilot service loses between $500,000 and $700,000 a year on operating costs. This seems to be the single reason for the service to be privatised. Unfortunately, however, the Minister has not offered any justification whatsoever for that figure. In fact, the variance of $200,000 is so vague as to be totally unacceptable and meaningless - and has probably been set aside to employ more consultants. The reality is that the pilotage consolidated income, expenditure and appropriation document of the Maritime Services Board Sydney Ports Authority for the month ended 30th June, 1991, shows a deficit of $716,000. But what else is to be seen in those figures? The reality of the $716,000 loss is that it includes an enormous amount of money paid as wages to people who work in other areas of the business unit and would have dealings with the pilot service as only a segment of their duties or in a supervisory role far removed from the actual running of the organisation.

In the consolidated income, expenditure and appropriation document for the month ended 30th June, 1991, internal expenses are shown as $848,000 and Sydney Ports Authority overheads as $1,012,000. How could overheads of $1,012,000 be included in expenditure for pilot services? If that is an example of how Treasury is organising the Maritime Services Board's accounts, no wonder it can come up with figures to produce a result for the Minister. That is not acceptable. If the Minister wishes to use that one criterion of a loss of $716,000 as a reason for selling the service, the Opposition wants much more intensive and accurate assessment of actual costs, expenditures and incomes rather than this flimsy document which has been thrown around as the answer. The Minister has avoided mentioning the ultimate cost of the people who will be employed in the Department of Transport to take over the regulatory and policy functions.

Given the way that inner budget sector departments such as the Department of Transport have exploded under this Government, it is a fair bet that all of those savings mentioned by the Minister, and more, will be chewed up in short order by bureaucrats in another area. I can guarantee they will all be on Senior Executive Service payments. There has not been a government department that has not had an explosion in SES personnel since 1988. That has been debated in the Parliament. Every government department that has been mentioned has experienced increases. The Minister seeks to present an impression that New South Wales is simply in accord with an international trend among countries within the Organisation for Economic Co-operation and Development to privatise port services. It is a little like the throwaway line used by the Premier about the debate on privatisation being in the OECD. The suggestion is an utter misrepresentation of the real position. The extent to which privatisation exists in the OECD varies as much as it does anywhere in the world, because of the widely differing starting points and the ideological stance of the government found in that area. Suffice to say that in the more successful - and that is the key word - OECD countries, there is less than complete enthusiasm for wholesale privatisation. They have seen the drawbacks of privatisation.

It is possible to see some slackening of enthusiasm for unadulterated privatisation even in the newly liberated eastern European countries. That is not surprising, as those countries recognise that with their freedom comes the freedom to be unemployed and without a social security net. The Minister's ideological baggage will not allow him to
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understand, no matter how often he is told, that most of the OECD governments regard their ports as valuable means to assist their local industries. Thus they heavily subsidise port operations for their infrastructure programs. This is true in the United States, Japan, West Germany, France, Italy and also in most of the tighter economies in Asia. It is quaint to realise that the Minister can seriously believe his bureaucrats when they say that just by changing the ownership of the Sydney and Botany Bay pilotage service it will be possible to emulate an alleged record of no industrial disputes since 1874 in the Queensland and Torres Strait pilotage service. That is a lot of garbage. That simplistic thinking is characteristic of the level of sophistication brought to complex policy issues by this Government. Whoever operates the pilot service in future will be dealing with the same union whose members now provide pilotage services in New South Wales ports. The outcome is awaited with considerable interest. The Minister is saying: "You only have strikes in the maritime industry if that industry is run by the Government. There are no strikes in the maritime industry if it is run by private enterprise". That is wonderful logic!

The honourable member for Waratah has had considerable experience in the maritime industry, having been a senior ships officer for three years. He can certainly validate what I am saying. Before rushing into this grossly ill-considered piece of legislation, the Minister has a responsibility to advise the Parliament of all the facts surrounding the pilot service. More importantly, he has a responsibility to examine all opportunities to cut overheads and to increase profits. He has a responsibility to enter into restructuring negotiations with the relevant unions. That is under way, but this Minister called the deal off and said, "We are going to privatise". That is just not good enough. The Minister cannot honestly, in all conscience, say that those 1991 figures are the reason for privatisation. In effect he knows they are bodgie figures; but more importantly, a large component of that expenditure is going to change in the next financial year because of the co-operation of the unions. It is no good the Minister saying he does not think it will be possible to resolve this with the unions. It was resolved with exactly the same unions in Newcastle and with exactly the same unions in the Illawarra area; ipso facto, there is no reason that the same result would not be achieved in the Port of Sydney. I have great concern about the amendment to section 25 as proposed in item (14) of schedule 1 which states:

(2) When a ship is unable, or will in the opinion of the master be unable to enter into a pilotage port within one hour of the time stated for so entering in the application by the owner or master for a pilot, the pilot attending may defer pilotage and cease attendance.

The Opposition has great concern about the legality of that amendment. Who will referee the dispute in such a case where a claim is made on the pilot by the contractor? I am told that it is extremely difficult to determine when and why a vessel is late without actually boarding the vessel. This raises the problem: who will determine any dispute that should - and no doubt will - arise between the authority and the contractor of the pilots? The Minister has a responsibility to advise this Parliament what is meant by that amendment. If it is going to be a body or individual in the Department of Transport, guided by the head of the department, presently Mr Moore-Wilton, honourable members have reason to be concerned. One must also have great concern about the possibility of the successful contractor of the pilot service being granted a monopoly over all of the Sydney ports. One can imagine the granting of the contract to one of the major companies not only to run the pilot service but also to supply the tugs for the vessel, the linesmen and the lines from the vessel to the port. If ever the Minister were looking for a monopoly to strangle a Sydney port, this is just the way to do it. Henry Ford would not have thought he could achieve that, even though he did try.


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Because of the problems of the Government, because the Minister has been inept, the port of Sydney is missing out. Nissan Australia will service its operations through Brisbane. It will not service them through New South Wales. Nissan will do that because the performance of the Minister and his department, and his administration of the Maritime Services Board, have been dismal. The Federal Government has recognised the Minister's poor performance. In the Prime Minister's statement on Wednesday evening he said that additional moneys would be provided for a transport link from Brisbane to port Brisbane - no such luck for New South Wales. The Minister has not grasped the nettle. He does not understand what is necessary to bring about efficiencies in the port of Sydney.

The Sydney Ports Authority pilot service provided staff to erect emergency booms around a ship that was beached in the port of Eden during a recent storm. I ask the Minister whether he is aware of this? The pilotage service is in a position to take this action because it is a government enterprise. No doubt the member for South Coast would be interested to know whether a privatised service would travel to Eden to deal with matters that arise there. I am sure it would not. Ecological disasters could occur in ports along the entire coast of New South Wales and the pilotage service must be used to deal with such problems. I am sure the shadow minister for environment will elaborate on this matter when she speaks in the debate. The Minister should also explain what contingency plans will be put in place to respond to emergencies such as ships aground, pleasure craft accidents, fires, and even aircraft accidents in Botany Bay.

I understand the unions believe that negotiations currently under way with management have the potential to provide a streamlined and profitable service to the Maritime Services Board. There is a potential to earn income for the Treasury. Private enterprise knows that. That is why people are knocking each other down to take over the business. The budget deficit is ballooning daily yet the Government is throwing away an opportunity to earn additional income. The retention of the pilotage service by the MSB is essential to ensure public safety and the continued protection of the environment. It would appear that the only reason the Government can give for privatising the pilotage service is that the current one loses money and there are not the management skills to fix it. What an admission! Apart from being an accurate assessment of the Government's capabilities, that is so unconvincing that we are led to the inevitable conclusion that the Government is pursuing privatisation not as a matter of efficiency, equity or management pragmatism but purely as a matter of ideology. That hardly constitutes a sound basis for sensible stewardship of the public's assets. I implore the House to reject the bill. As I said earlier, the Opposition will vote against the measure.

Mr D. L. PAGE (Ballina) [4.52]: I am very disappointed that the Opposition does not support the bill, particularly for the reasons given by the honourable member for Drummoyne. Basically, they revolve around the dogma that unfortunately seems to have captivated the Australia Labor Party in New South Wales recently - its anti-privatisation stance. Generally speaking, the honourable member for Drummoyne said that the Opposition would not support the bill as it is not in favour of privatisation. I put it to Opposition members that governments are involved in non-core business activities in which they do not need to be involved. If a service can be delivered to the public at the same price or cheaper, and safety and quality of service are not compromised - and this is what we are talking about here - there is absolutely no good reason for the taxpayer continuing to subsidise, to the tune of hundreds of thousands of dollars, a service that can be perfectly adequately performed by the private sector. The honourable member for Drummoyne does not appear to have read the bill very closely. He talked about the people currently providing the service being disadvantaged. Under proposed new section
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32B the Maritime Services Board has to go to public tender for the provision of the service. If those who currently provide the service want to tender, they will be able to do that.

From the comments of the honourable member for Drummoyne one would think that we are setting the pace in New South Wales. That is not the case. Overseas ports have been privatised. The honourable member for Drummoyne mentioned Nissan going to Brisbane. The port of Brisbane is privatised. The honourable member for Drummoyne seemed to suggest that when we came to government the MSB was very efficiently run and that the achievements introduced under this very competent Minister for Transport are not real. The honourable member for Drummoyne must not have read the annual reports of the MSB over the past three or four years. They show that revenue per employee when Labor was in government was $100,000. Today the figure is $200,000 - an exact doubling of the productivity of the MSB under our stewardship. When we came to office the MSB was heavily in debt, owing $400 million; today it owes $250 million. When we came to government the MSB had 3,100 employees; it now has 1,500 employees.

The MSB has paid a dividend to this Government for the second year in a row. That never happened under the previous administration. Members of the Labor Party have the cheek to cast aspersions on the Minister for not improving the management of the MSB. For the first time the MSB has been streamlined and run on commercial principles. The pilotage service does not need to be publicly owned. It does not fit the core activities of the MSB. Basically the MSB is a landlord for the ports. It is not a player and does not need to be engaged in a publicly funded pilotage service. The service can be contracted out and there is no reason why the taxpayer should have to fund the service. I have no doubt that when the service is provided by private enterprise it will be much more efficient. Safety will not be compromised either. Those people piloting the ships into Sydney Harbour and Botany Bay will have to meet the same standards and be licensed in the same way as those providing that service today. The honourable member for Drummoyne implied towards the end of his remarks that charges would balloon after the three-year capped period. The bill provides that charges cannot rise beyond a certain level. Even after the third year the Minister will have regulatory control and will allow increases only if they are fair and reasonable in the circumstances. So all regulatory controls will not be removed.

I shall refer to a couple of aspects of the bill which I think need clarifying. They were not really clarified in the Minister's second reading speech. The honourable member for Drummoyne raised the question of privatisation of other ports in New South Wales, such as Newcastle. This is enabling legislation. It will allow ports in New South Wales to be privatised but it does not say that they must be privatised. I would not mind betting that in future quite a few ports in New South Wales, having seen the benefits of privatisation, will take advantage of what this legislation has to offer. Another point I wanted to raise relates to safety. It has been suggested that should the successful operator employ pilots other than those currently employed by the Maritime Services Board there would be no guarantee that the safety of ships would not be compromised. The Pilotage Act provides that pilots must be licensed, and should the new operator seek to employ persons who are not licensed, or pilots from other ports who are not endorsed for work in Sydney and Botany Bay, those employees will need to be appropriately trained before they can act as pilots. In other words, they will need the same qualifications as those pilots who bring ships into Sydney and Botany Bay at present; that is, they will have to be licensed by the director-general. I am advised that a number of pilots who are now employed by the Maritime Services Board are likely to be employed by the new operator, whomever that may be.

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The bill states that a pilot will act only in an advisory capacity and that the master will be fully responsible for the safety of the ship. A number of people have asked me why the master should incur a penalty of $10,000 for disobeying a pilot safety order and taking a ship to sea. The answer is that although a pilot is an adviser to the master, he is nevertheless a professional seafarer and is therefore required to make a reasoned judgment on the seaworthiness of a vessel on behalf of the port authority. If a pilot boards a vessel to take it out of port but he has reason to believe the vessel is unsafe, he will refuse to take the vessel out and will advise the master and the port authority of his reasons. In those circumstances a master who then proceeds to leave a port without a pilot, thereby risking blocking the entrance to the port or endangering the life of his crew, commits an offence under the Act. I commend the Minister for increasing the penalty for this offence from $400 - which is a farce - to $10,000 which is a more appropriate penalty.

I conclude my remarks by stating the obvious. We are not doing something new here. It has been done in many ports throughout the world, including in Australia, very successfully. In Australia independent operators have worked at Western Port, Port Phillip, Dampier, Gove and Brisbane, and a private operator has conducted the pilotage service in Torres Strait since the 1800s. This is not a new concept. There will be no diminution in the quality of service provided. There will be no diminution in the safety of vessels if they are brought in by a pilotage service that is not necessarily owned by the Government. Under proposed section 34B, if the pilots who now perform that service wish to tender for the work, they will be free to do so and the Government will be bound by its tendering procedures to view that application in an appropriate light.

Mr THOMPSON (Rockdale) [5.3]: The honourable member for Ballina, in his opening remarks, said that the Opposition is captivated by an antiprivatisation dogma. Clearly, that is not the case. If there is any dogma in this debate, it comes from the Government, which has a mindless and cold-blooded commitment to privatisation - privatisation at any cost. It will go to any lengths to push its dogmatic beliefs on to the people of New South Wales. Though this bill deals generally with port pilotage facilities, my prime interest in it arises from the fact that its provisions are to be implemented in Sydney Harbour and Port Botany. Port Botany is a major facility in Botany Bay which is bordered on its western rim by my electorate of Rockdale. Thus I and my constituents have a natural interest in any decision of this Government that is likely to affect the bay or activities in the bay. The bill will enable the Maritime Services Board and port authorities to privatise port pilotage services. The bill continues the trend of this Government to separate regulation from operation and to divest the operation of pilotage services to private enterprise, transferring its regulation from the Maritime Services Board to the Department of Transport. The Minister in his second reading speech stated:

The object of this bill is to enable the Maritime Services Board to privatise the State's port pilotage services. This has been achieved by amending the Pilotage Act 1971 to provide for a port pilotage service to be provided by the Maritime Services Board, a subsidiary Maritime Services Board Port Authority, or an independent operator.

I quote further from the second reading speech:

The principal purpose of the bill is to shed a loss-making element of government business and to enable private enterprise to tender for this previously government-operated service to shipping. It seeks to do this by permitting the MSB to enter into contracts with private companies for the provision of pilotage services at different pilotage ports under contract.

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A pilotage service has operated in the ports of Sydney - that is, Port Jackson and Port Botany - since 1792. Pilotage services have been the cornerstone for the development of the nation as the role of the pilot is to guarantee safe navigation by commercial shipping within the ports. There has never been a private pilotage service in New South Wales. In Australia the majority of pilotage services are conducted by port authorities or State government departments. There are some exceptions, and they are based on historical circumstances. For example, the Port Phillip sea pilots have operated as a private company since the early days of the colony in Victoria. The pilotage service provides pilots to shipping in Melbourne, Geelong and Western Port. The Victorian port of Portland has a pilotage service operated by the Port of Portland Authority, which is a government authority. Though the pilotage services in Victoria are operated as private services, they are controlled strictly and regulated by the Marine Board of Victoria. Not only are pilots licensed but all activities, including the number of pilots, recruitment, ongoing training, fees and charges levied on shipowners and associated matters, are controlled directly by the Marine Board. Such circumstances are not contemplated in the legislation we are debating in this House. In fact, the bill advocates an arrangement that is advantageous to a private company.

The proposal in the Pilotage (Amendment) Bill is to hand over to a private company a natural monopoly. As I said before, the provision of pilotage services was the cornerstone to the development of trade and commerce within the ports of New South Wales. They have generated substantial turnover. At least in the Illawarra and in the Hunter pilotage services are profitable. The service in Sydney should be profitable also. This bill has been introduced as a result of ongoing industrial negotiations over the past two years primarily between the Merchant Service Guild and the Maritime Services Board concerning a revision of the award and the negotiation of a new award for pilots. Those industrial relations have been difficult and protracted. From time to time the board has threatened the pilots and the guild that should agreement not be reached on proposals put forward by the MSB the board will privatise the pilotage services.

It is significant that over the past several weeks detailed agreements and arrangements have been reached between the pilots, the Merchant Service Guild and the MSB Hunter Ports Authority and the MSB Illawarra Ports Authority. Indeed, an award went to the Industrial Relations Commission as a result of hearings before the commission on 23rd December last. The approach taken by the MSB Hunter Ports Authority and the MSB Illawarra Ports Authority has been to negotiate a revised industrial agreement with the pilots but also to incorporate the considerable skills and experience of marine pilots within the port operations management structure of those two ports. This is the basis of the new industrial arrangements contained in the award. The Merchant Service Guild has not been able to reach agreement with the Maritime Services Board Sydney Ports Authority. One must ask why. After nearly 12 months of negotiation throughout 1991, the terms of settlement to finalise the negotiation between the Merchant Service Guild and the Maritime Services Board Sydney Ports Authority were accepted in principle by the authority, the guild and the pilots in November and early December 1991 but when placed before the main Maritime Services Board meeting on 5th December, the terms of settlement were rejected. That was despite the fact that the terms of settlement were supported by senior management including the acting chief executive and the general manager of human resources.

The Pilotage (Amendment) Bill has been introduced in the context of the industrial negotiations that have been conducted during the last two years and the failure of those negotiations. At present the major issue between the Merchant Service Guild and the Maritime Services Board concerns the proposed reduction in the number of
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marine pilots in the Sydney ports. The parties do not agree on redundancy and the guild has commenced proceedings in the Australian Industrial Relations Commission. The guild is arguing for redundancy payments in excess of current New South Wales Government standards. In view of the situation in the real world in relation to redundancy, is it any wonder the guild is seeking to argue that point? The introduction of the proposed legislation at the present time is clearly an attempt by the Maritime Services Board to frustrate the proceedings in the Australian Industrial Relations Commission. It is trying to dud workers in the industry. Simply put, the Maritime Services Board is attempting to privatise the Sydney ports service and ultimately terminate the services of the present marine pilots prior to the conclusion of proceedings currently under way in the Federal commission.

Earlier today the Premier referred to certain places in eastern Europe, but governments of all political complexions - communist, socialist, liberal, conservative or whatever - are committed to widely defined privatisation programs which include the sale of selected public assets and the acceptance and encouragement of the private sector's role in the construction and operation of vital infrastructure projects. The guiding approach of the New South Wales Opposition to privatisation involves a twofold test. This test has been articulated in this House on several occasions during the last few months. That twofold test is, first, what is the social usefulness of public ownership case by case, instance by instance? Second, what is the retention value of the enterprise measured against its sale value? This approach is essentially a broad-based social and economic cost benefit analysis and is the opposite to the Greiner Government's narrow arid financial criteria. In the opinion of the Australian Labor Party, a similar broad analysis should also be employed to judge the merits of private sector involvement in the State's infrastructure. By any objective measure, this bill fails the test. It is strongly opposed by the membership of the unions involved, and for good reasons. It is opposed from an economic viewpoint and from the perspective of harbour safety and environmental protection. In his second reading speech the Minister said:

One of the results of this process was identifying the pilotage services of Sydney and Botany Bay as such a loss-making element. Honourable members will realise that this has not been achieved overnight and a lot of hard work has gone into producing the outcome.

According to the 1991 annual report of the Maritime Services Board of New South Wales, the combined revenue for pilotage services in the three main ports - that is the Sydney ports of Port Jackson and Port Botany, Newcastle and Port Kembla - was $12,424,000. That was an increase of $757,000 from the 1990 figure of $11,667,000. Pilotage charges have not increased since 1986 despite increasing costs and the rise in consumer price index and inflation figures. The costs of pilotage in New South Wales are the cheapest in Australia for main ports. [Extension of time agreed to.]

For this reason alone there is no reason why the pilotage service in the ports of Sydney and Botany Bay should be losing money. The assertion by the Minister of a loss on pilotage services in the Sydney ports is a mechanism to allow the Greiner Government to advocate privatisation. If the decision whether to privatise was based solely on commercial criteria, there would be no case at all for the privatisation of this natural monopoly and essential service to shipping, trade and commerce. In its 1989-90 budget the Maritime Services Board Sydney Ports Authority allocated $1,159,000 for overheads and against the revenue of the pilotage service. With revenue in 1989-90 for the Sydney ports pilotage service of about $6 million the overheads, which were not defined, represented about 19.32 per cent of the total revenue. The authority now claims that the service is making a loss and needs to be privatised. Put simply, the pilotage service is
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being loaded up with excess financial baggage. There is a rort or, at the very best, creative accounting going on and this is being used to justify a political position on privatisation.

In the submission to the Maritime Services Board from M. Fox, the Managing Director of the Maritime Services Board Sydney Ports Authority, dated 27th August, 1991, which advocates the privatisation of the Sydney port pilotage service, attachment No. 5 was entitled "Pilotage - MSB Sydney Ports Authority - Consolidated Income, Expenditure and Appropriation for Month ended 30 June 1991". In that document the following figures are stated: first, income from pilotage, $6,674,000; second, expenditure, $6,378,000; third, deficit for extraordinary items, $716,000; fourth, the expenditure included internal expenses of $848,000 exclusive of wages, fuel, administration and related costs; fifth, Sydney Ports Authority overheads, $1,012,000. The last two figures to which I have referred totalled $1,860,000. Again a rort or creative accounting by the Maritime Services Board Sydney Ports Authority has turned a profit on current income and expenditure into a loss, thus justifying an ideological position on privatisation.

It is interesting to note that the provisions of this bill will apply only to Sydney Harbour and Port Botany. The Hunter and Illawarra ports authorities seem to be happy with existing arrangements, which were arrived at after negotiations leading to structural efficiency agreements with the unions involved. Surely that is the way it ought to be. That is the commonsense way to achieve workplace reform and efficient outcomes. During the past 12 months the three trade unions which cover all employees of the Maritime Services Board Sydney Ports Authority pilotage service have been involved in industrial negotiations with the authority under the structural efficiency principle with the aim of substantially improving the efficiency of the pilotage service. The following issues are under negotiation: first, the closure of South Head signal station, in negotiation with the Seamens Union, with established savings of $220,000; second, a reduction in the number of pilots in the Sydney ports from 21 to 18, in negotiation with the Merchant Service Guild, with estimated savings of $300,000; third, change in transport arrangements, again in negotiation with the Merchant Service Guild, with estimated savings of $300,000; and fourth, changes in pilot tender arrangements involving the elimination of nine positions in pilot tenders and amenities at Watson Bay, again in negotiation with the Seamens Union, with estimated savings of $500,000. Total estimated savings in the order of $1,720,000 are possible due to structural efficiency agreements with maritime unions.

Inevitably, we must reach the conclusion that, by adding the estimated savings resulting from structural efficiency agreements with the maritime unions and the published loss for the year ending 30th June, 1991, the pilotage service would make a considerable profit; and this is not taking into account the extraordinary items totalling $1,159,000. In this instance the Government's case for privatisation is poorly argued, with no attempt being made to justify figures used which allegedly show a loss to the Maritime Services Board. There is no economic or equity rationale for this legislation; it is based purely on ideology. The Government should examine all opportunities to cut overheads and improve revenue before rushing to privatise and before disposing of valuable public assets. To do this the Government needs the co-operation of the unions and their work force. Instead of confrontation members of the Government should sit down, like the people in the Hunter and the Illawarra, and genuinely and honestly negotiate appropriate structural efficiency agreements.

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The passage of this bill effectively will lead to a private monopoly running the pilotage services in Sydney Harbour and Port Botany. This legislation is not genuine, economic reform; it is a sham. The clinical, bottom-line approach of the Greiner Government is far too narrow to guarantee satisfactory protection for present and future consumers, taxpayers, workers and the environment. Only the Labor Party is committed to the maintenance of a strong, dynamic and efficient public sector capable of providing the high quality and responsive community service essential to the development of the economy and the community of New South Wales. The pilotage service should not be privatised. Maritime Services Board management should be told to negotiate honestly and in good faith with its employees, through their unions, for structural reform instead of creating a private monopoly to run the piloting services in Sydney Harbour and Port Botany.

Debate adjourned on motion by Mr Hartcher.

Debate resumed from 26th February.

Mr MARTIN (Port Stephens) [5.22]: The Conveyancing (Amendment) Bill, the Liens on Crops and Wool and Stock Mortgages (Amendment) Bill, and the Bills of Sale (Amendment) Bill, all significant conveyancing bills, refer to the old system used by the Land Titles Office to register and index deeds and certain other documents. At present seven separate registers are required to record various documents. These registers cover deeds, resumptions, bills of sale, liens on crops and wool, stock mortgages, and causes, writs and orders. The purpose of this legislation is to simplify registration and searching procedures by amalgamating seven registers into one, namely, the general register of deeds. The legislation will also combine all index registers into one computerised index. Honourable members should be aware, particularly those not all that versed in this legislation, of the exact meaning of the word "lien". The Macquarie dictionary gives the meaning of the word "lien" as "the right to hold property or to have it sold or applied for payment of a claim". The word "lien" originates from the Latin word "ligament" which means to band or to tie. The purpose of this legislation is to overhaul the registration system of the Land Titles Office. I was pleased to hear the Minister say today that he was going to visit that great socialist country -

[Interruption]

I am sorry; I will withdraw that. Today honourable members heard at length about the co-operation being received from Russian parliaments and the implementation there of a similar system. Having regard to the socialist objectives of honourable members opposite, that liaison is to be commended. Agrarian socialists and Russian socialists will add to the colour of this legislation and enrich the lives of the people of New South Wales. The Russians are looking at implementing a similar system on the other side of the world. The overhaul of the registration system is being continued by the Greiner-Murray Government with the support of members of the Opposition. I have
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always said that members of this Opposition are willing to co-operate with the Government to ensure that everything works for the betterment of the people of New South Wales. These bills will continue the process of replacing the antiquated manual system of recording documents with an updated computerised system - one which is becoming one of the most efficient in the world. These bills will simplify the conveyancing process by putting into place a combined general register of deeds. Apart from making conveyancing much simpler for the public it will speed up the process and save taxpayers $500,000 in the cost of operating the Land Titles Office.

Opposition members will support this legislation to ensure that people - particularly those in rural areas involved with crop mortgages - their livestock and their crops are protected. This legislation will enable them and the Registrar General to effect mortgage arrangements more efficiently. Opposition members are somewhat concerned about the computerised index. As we get further down the track I am worried that we are likely to reach a situation, particularly if we use the old system, where we cannot guarantee titles. I know what the old conveyancing system means for this Parliament, for lawyers and for the protection of people. The Minister must guarantee that people - particularly people in the rural communities - are able to be protected. I hope that the Minister, in replying to the debate, guarantees the genuineness of this register. I and every genuine member of this Parliament should be concerned if there is any dropping of standards in the Land Titles Office. It will set back much of the great work that has been done over the years. The computerised index would have to be checked regularly and would have to be foolproof. In the long term I would hate to see solicitors and people in the industry taking out insurance to guarantee land titles. For this reason taxpayers and the people of the State must be protected. There is a reference in the legislation to the fact that members of the Law Society were consulted. I hope that stock and station agents and everyone involved in the industry - not just bankers and members of the Law Society - were consulted. I ask the Minister, in responding to this debate, to tell us how many of these people were consulted. I want a guarantee from the Minister that this is in the interests of everyone.

Mr ACTING-SPEAKER (Mr Tink): Order! It being 5.30 p.m., pursuant to sessional orders the debate is interrupted.

Mr COCHRAN (Monaro) [5.30]: This afternoon I rise, not to grieve on behalf of any constituent within the Monaro electorate, nor to express any particular concern, but rather to commend the Director of the Rural Assistance Authority, Graeme Maslin, and his staff and also the rural counsellor for my particular area in the southeast of New South Wales, Mr David Bellamy. I commend those people because, during times of extreme hardship for the rural community, they have gone beyond the call of duty to ensure that those people have been able to sustain their businesses and their production. The Rural Assistance Authority, in my experience, has revealed a great deal of compassion, understanding and very genuine concern for the rural landholders in my electorate. I take this opportunity to express my appreciation to members of the authority who have acted in that way, over the past two years in particular. In recent days I have had an opportunity to discuss this issue with Daralyn Sharman, who is an accountant with Michael Boyce and Company of Cooma. I have been told of many occasions when both the rural counsellor, David Bellamy, and the Rural Assistance Authority have gone out of their way to assist members of the rural industry to overcome their enormous financial problems in these difficult times.

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One matter deserves drawing to the attention of the Minister for Agriculture and Rural Affairs - I raise this matter in the hope that the Minister at the table will mention it to him. Some difficulty has been experienced by applicants under the rural assistance scheme who seek to obtain interest subsidies when their borrowings are non-commercial. This is common practice within the rural fraternity, where a property is handed down the line from one generation to the next. As honourable members would realise, the rural industries are subject to peaks and troughs according to world markets and other factors such as fire, drought, flood, recession, depression or the Paul Keating economic statement. From time to time those involved in the rural industry find themselves in economic troughs. It is necessary for governments to heed the call for assistance from the communities and assist them by propping up the industry during these difficult times.

The concern expressed by Daralyn Sharman was that the difficulty experienced in obtaining interest subsidies in respect of non-commercial borrowings made it extremely difficult for those families where the father has passed property on to his son, along with a debt - that being a debt in the form of a loan to the son - and the son was required to pay interest to his father on that loan. It is necessary that there be some form of assistance available in respect of non-commercial borrowings. Might I also commend the Minister for Agriculture and Rural Affairs, Mr Armstrong, for his persistence on behalf of the rural community in his dealings with the Federal Government in the past 12 months or two years in particular; in extending himself to the degree that he has done in obtaining the present levels of subsidy and the availability of finance for our rural industry in New South Wales. The Minister has gone out of his way, as has the Rural Assistance Authority, to ensure the continued viability of the rural industry in New South Wales.

Mr PHILLIPS (Miranda - Minister for Health Services Management) [5.34]: I thank the honourable member for Monaro for once again clearly articulating to this House the particular problems confronting country people during the current recession. I am sure that the Minister for Agriculture and Rural Affairs will be more than willing to take his remarks on board. I will certainly pass them on and ensure that the honourable member receives a response.

Mr J. H. MURRAY (Drummoyne) [5.35]: Yet again, this Government is making life harder for those who are willing to try to improve their employment prospects through further education. I draw the attention of the House to the plight of a good friend of mine, Mr Tom Fisher, who recently enrolled in an 18-week restricted licence electrical disconnect-reconnect course held at West Sydney TAFE at Petersham. Prior to Christmas, Mr Fisher had had a long and prosperous association with Master Foods but, unfortunately, due to the policies of the Greiner Government, the firm closed its doors and relocated, and Mr Fisher was made redundant. Since then Mr Fisher has been seeking employment. However, due to his inability to find suitable employment in the depressed Sydney job market, he decided to upgrade his skills through TAFE by enrolling in this particular course.

Mr Fisher was astounded to learn, when he contacted TAFE, that he would need to pay $350 for the 18-week course. That was early in January. What must be borne in mind is that Mr Fisher is unemployed. He has a wife and two children. The fee of $350 for a three-hour course per week to upgrade his skills is preposterous. Because Mr Fisher felt compelled to upgrade his skills in the present economic climate in the hope of obtaining employment, he paid the fee in mid February. Lo and behold, to compound
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this inequity TAFE contacted his wife at home two days after his enrolment to advise that the enrolment fee had risen to $450. How are the unemployed who are willing to obtain additional skills supposed to feel when, two days after enrolling in a course, they are told they have to pay an extra $100? No wonder Mr Fisher and his fellow unemployed are disillusioned and disheartened. They are not only discouraged by the cost of certain TAFE courses, they are also given wrong information.

The fact is that when 15 people are enrolled in a course at a cost of $450 per head, TAFE is receiving $100 per hour from unemployed people to provide what is a basic employment course. That is nothing but scandalous. It is almost what the Government pays its consultants. We then have the Minister telling honourable members that the Government is providing places in TAFE colleges for the unemployed, in courses such as this. What he has neglected to state is that, while he is providing them with a course it is not free. It costs $450. I understand this course is relatively new, but, after completion of the course, the student may obtain a certificate from the Building Services Corporation and be employed anywhere in Australia. In this matter also the unemployed undertaking this course are further disadvantaged because they must pay for certification from the Building Services Corporation at a cost of approximately $90. Another cost facing Mr Fisher relates to the fact that this course is available only at the Petersham TAFE necessitating the outlay of large sums of money on transportation to attend the course.

A key policy element of both the Federal Government and the more progressive unions in this State is an emphasis on multiskilling. Mr Fisher is a classic example of an unemployed family man trying to take part in the change in the Australian work force, yet this State Government imposes a ridiculously large fee for the technical and further education course he wishes to undertake. No wonder the unemployed in this State are denied the opportunity to become multiskilled when they are constantly disillusioned by the hidden cost behind TAFE courses. Furthermore, the courses can be changed at a moment's notice. I ask the Minister to look closely at this situation because I believe it is a disincentive for the unemployed, when they are down and out and need government support, to find it is not forthcoming. Instead, they are hit over the head with $450 enrolment fees when all they want to do is upskill their abilities.

Mr PHILLIPS (Miranda - Minister for Health Services Management) [5.40]: I note the comments made by the honourable member for Drummoyne on behalf of his constituent. Because of the honourable member's courtesy in bringing this matter to the attention of the Minister earlier, the Minister has been able to provide me with a response on his behalf. Due to other commitments the Minister is unable to be in the House at this stage. He has asked me to convey to the honourable member for Drummoyne that the course he referred to at Petersham College of Technical and Further Education is clearly a commercial course offered by TAFE on a fee-for-service basis. If Mr Fisher applied for a mainstream course, he would be eligible for an exemption from TAFE's administration charges. The whole point of offering fee-for-service courses is to expand the number of TAFE places available and, in particular, to meet the needs of specific businesses.

To state the obvious: if TAFE did not offer these fee-for-service courses, Mr Fisher, and many others like him, would be even more disadvantaged by not being able to enrol at all. As for Mr Fisher's unemployment, that is a regrettable result of the Federal colleagues of the honourable member for Drummoyne and, in particular, Mr Keating. Normally I pass on to the Minister genuine representations made by certain members, but I cannot help but note that the honourable member for Drummoyne wants
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to blame the policies of the Greiner Government for Mr Fisher's unemployment. I hope Mr Fisher will see my comments. If I remember rightly, New South Wales has the lowest unemployment rate in Australia. It has a triple-A rating, which only five States in the world have. Everyone is envious of the State's rating, which is a recognition of the Government's good management. Thirteen of the 15 economic indicators show that New South Wales is leading Australia and also that Labor governments around Australia are following the good economic management lead that New South Wales gave them during the previous year. The other States are adopting this Government's policies. On the other hand, Australia has a Prime Minister who gave us a recession he felt we had to have. He subsequently apologised because he did not realise it would be so bad. Now he is trying to accelerate us out of the recession. I am sure that if Mr Fisher looks carefully at his position, he will find it is due to the economic policies of the Federal Government. [Time expired.]

Mr FRASER (Coffs Harbour) [5.43]: I express concern on behalf of a large number of my constituents in the Coffs Harbour electorate with regard to the proposed water scheme for the electorate. In last September's local government elections Bellingen and Coffs Harbour shire councils put up referendums asking where the people would prefer a new water supply for Coffs Harbour to be located. In the Bellingen shire 84 per cent of the people voted against a Bellingen scheme, while 8 per cent voted for it. In the Coffs Harbour city area, 60 per cent voted for a Bobo scheme, which was one of the two options put up, while 30 per cent went for the Bellingen scheme. That gives an indication of how the people in the electorate feel about the proposal. As a result, the Mayor of Coffs Harbour and I looked at a number of options. We came up with the option of pumping water from the Nymboida River down to Coffs Harbour from the weir. It was a good idea, except it would cost $44 million - about the same price as the Bellingen scheme. However, there was no storage. Other money, which the State Government does not have at present, would be needed to provide the storage. Also, there was no suitable site. Coffs Harbour City Council has now indicated that it will adopt the preferred scheme of the Public Works Department, which is Bellingen. That scheme is unacceptable to the people of Bellingen -

Mr Jeffery: And the members.

Mr FRASER: And definitely the members. The honourable member for Coffs Harbour supports me on this because we share that beautiful sleeping giant of a town known as Urunga. There needs to be a re-think of the Bellingen scheme, which is not an ideal alternative. Instead of having 11,000-megalitre storage, we would have to look at 20,000-megalitre storage and ask the State Government and the Public Works Department to provide better roads and infrastructure within the Shire as part and parcel of the scheme. The State should consider a regional water scheme. In the past week Mr Keating has introduced his kick start economic package but has not considered the needs of the people of the North Coast. It would have been lovely if Mr Keating had said the Federal Government would look at funding a regional scheme, which could be placed in the Clarence catchment area on the Little Nymboida. That could provide a water supply that would last for a hundred years or more for the people not only from the Coffs Harbour and Bellingen areas but from Brunswick Heads to Macksville. The scheme would incorporate the shires of Byron, Ballina, McLean, Ulmarra, Copmanhurst, Nymboida, the cities of Lismore, Grafton and Coffs Harbour, and the Bellingen and Nambucca shires.

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Governments need to consider not what is good for local government areas but what is good for a region. I call on the Federal Government to support a scheme on the northern rivers to provide water to all those areas. Such a scheme could attract private money. The scheme has been put to the New South Wales Water Council. The electricity that a dam in the area could generate could be sold to county councils by a private investor, or by Elcom. These days, Elcom makes money from selling power to county councils. A dam such as the one I have proposed could offset the cost of the water supply to shires and local government councils, which could pay either for water or electricity from the scheme. That would offset the cost either to private investment or a Federal-State government mix. That would enable the needs of the people of the northeast to be met, not just for 10 or 15 years - the bureaucratic attitude these days is to provide something for 10 to 20 years - but for one hundred years. The people of Bellingen and Coffs Harbour, as well as the people of Brunswick Heads and Macksville, would get their water supply. Instead of considering only local government areas, the Government must look at the future. The Federal Government, State Government and local government must work hand in hand to recognise that need and give the people on the North Coast the basic services they need, such as a regional water supply. Honourable members in this State Government should put pressure on the Federal Government to get the scheme under way.

Mr PHILLIPS (Miranda - Minister for Health Services Management) [5.48]: I listened with interest to the briefing the honourable member for Coffs Harbour gave this House on the water problems confronting his electorate on the North Coast. Honourable members would be aware that on the weekend the honourable member for Eastwood and I had the pleasure of attending a Government members' conference in the Coffs Harbour area. When taking a shower or having a shave I noticed a sign in the place we were staying that clearly said: "Please conserve water. There could be water restrictions on. Please check with the front desk". As Minister for Health Services Management I know that the North Coast area is one of the fastest growing area in New South Wales and has a long-term growth prospect. The proposal of the honourable member for Coffs Harbour that the Federal and State governments and others should not be looking at piecemeal development of the North Coast water supply but should take a more regional, long-term approach to the problems, has a lot of merit and credibility. This House and the various Ministers concerned should take careful note of the remarks made by the honourable member for Coffs Harbour. He has been fighting long and hard to have the health care needs of his area high on the funding priority list, and I know that he will continue to pursue this issue until a satisfactory solution is found.

Mr DAVOREN (Lakemba) [5.50]: I wish to draw the attention of the House to the problem of flooding in an area under the control of the city of Bankstown. The drainage system in the area is a bit of a hotchpotch. Some drains were controlled by the council and others by the Water Board, but I am pleased to report that now the drains are the responsibility of the Water Board. The drainage system was designed in the early 1920s, with the result that it is not adequate to handle the additional runoff from development in the area. When flooding occurs insurance companies walk away from the problem and residents have great difficulty in persuading the Water Board that it is responsible for picking up the tab for any flood damage caused by inadequate drainage. I am sure members of this House have experienced that same problem. A representative of the Water Board inspected the drainage system at Como Road adjacent to the Chullora railway depot, which abuts the Hume Highway. In a letter addressed to me from the Water Board the board admitted there is a problem. In part the letter stated:

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It is anticipated that the main components of the programme will take at least six years and in excess of $25 million to complete. The full programme will only proceed, however, following extensive community consultation which will gauge local acceptance of the programme.

I do not see that that would be a problem as the residents want something done. However, the punch line appears in the last sentence of the paragraph in which it is stated:

This will also assess whether the local community is willing to pay additional charges for the improvements.

Already residents are paying an additional $20 every quarter to cover these sorts of matters, plus a drainage rate which is assessed on the value of the property. It is galling that the Water Board suggests this work will be done only if the community is willing to pay additional moneys. If the $25 million cost were shared by the residents their contributions would represent a considerable amount, even spread over a period of six years. In all probability the Water Board has neither looked at the long-term problems nor gradually improved the drainage system. Something more concrete should be done. I guess the residents would be prepared to accept the fact that the works will take five to six years if they could see some gradual progress, but it is unfair to suggest that they should also pay additional moneys.

The drainage runs underneath the Hume Highway into land owned by the State Rail Authority, where it becomes merely an open, unlined and overgrown watercourse. The water builds up and cannot escape. Drainage from the workshops also flows into the watercourse. It should be the responsibility of the State Rail Authority to regularly clean out the watercourse and not sit back and leave that task to the Water Board. Indeed, it is not within the powers of Water Board staff to enter upon land owned by the State Rail Authority. I seek the assistance of the Minister to do something about the drainage in that area reasonably quickly, at least on a temporary basis, to prevent the houses of residents becoming flooded after torrential rainfall. The residents are faced with the problem that the Water Board and insurance companies walk away from costs reimbursement. It is a fearful problem, and probably is a problem confronted by residents all over the metropolitan area. [Time expired.]

Mr PHILLIPS (Miranda - Minister for Health Services Management) [5.55]: I commend the honourable member for Lakemba for raising these problems. I am sure all honourable members would sympathise with his constituents. There are few things more upsetting to residents than to have drains backing up and causing flooding to their homes, with all the associated inconvenience and damage, only to find that local government or State authorities walk away from the problem. Most honourable members would sympathise with that problem, and it should certainly be addressed. I am more than happy to pass on the member's concerns to the Minister to ensure that the problem is addressed in either the short, medium or long term.

Mr HARTCHER (Gosford) [5.56]: The issue of flooding and its associated problems, especially for individual residents and businesses, is not confined to the Sydney metropolitan area. It affects very much the Central Coast and my own electorate of Gosford. In the early hours of Monday, 10th February, the city of Gosford experienced yet another devastating flood. About 80 homes and a similar number of small businesses were flooded above floor level. This major flooding impacted in particular on Erina Creek, the central business district of Gosford, the Narara Valley and west Gosford.
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Although some of those areas are not in my electorate, a large number of them are. The Central Coast and the city of Gosford are interrelated when facing up to this serious problem of constant flooding. The area has had four major floods in the past four years, affecting about 500 houses and businesses. I submit that on any estimation that constitutes a severe problem, and for those who are individually affected it represents a blow of devastating proportions. When members of Parliament visit places that have been subjected to natural disasters they are moved by the personal loss suffered by their constituents. It is appalling to walk along streets and see homes that have been flooded four times in four years. The residents of those homes have been psychologically devastated by the experience. They look at the sky every time clouds form and wonder whether their homes will be safe as the rains fall and the creeks rise.

Clearly considerable inappropriate development has taken place in the Narara and Erina valleys. This has caused a major flooding problem. As urban development on the Central Coast continues the rate of water runoff increases and the creeks are unable to cope with the flow. The water cannot escape into the Brisbane Water and it starts to back up, regardless of whether it is high tide or low tide. Of course the problems of urban planning are well known. However, what is not generally known is that in the 1880's many of the areas affected were subdivided as model farm projects. The council cannot now do anything to stop these properties coming on to the market and houses being built. The properties are sold when the area is dry and buyers do not believe they will ever be affected by flooding. However, in the past few years that has proved to be tragically wrong. The Gosford council has undertaken various studies and calculations. It is estimated it will cost approximately $54 million to repair all the Gosford flood damage and to ensure that the area remains flood free in the future. This will involve major reorganisation of its truck drainage system, acquisition of affected properties in Erina and Narara valleys, engineering works and social solutions for afflicted people.

With the support of the Minister for Natural Resources the council has acted commendably by applying the principle of user pays. The council has not simply gone with its begging bowl to the State and Federal governments. It has imposed a drainage levy of $40 per year on all ratepayers, with a concession of $20 per year for those with a pensioner health services card. This raises revenue of approximately $2 million a year. Assistance has been sought also from the Federal and State governments and some assistance has been received. Last year Gosford council received $700,000 from the State Government and $400,000 from the Federal Government. One does not stand up here to have a go at either Government but simply to identify them and to plead with both governments to acknowledge the very real problems faced by the Central Coast and ask them to give the assistance necessary to overcome those problems. At the present time the Federal Government is budgeting for more than $5 million in flood relief for the whole of New South Wales. [Time expired.]

Mr PHILLIPS (Miranda - Minister for Health Services Management) [6.1]: I thank the honourable member for Gosford for his descriptive presentation to this Parliament of the impact upon the people in his electorate of the major floods in Gosford on 10th February, with 80 homes flooded and many small businesses and households affected. It is obviously a serious concern that four major floods have occurred in a growth area, a satellite city of Sydney. When the flooding recurs the impact on the emotions and personal lives of people obviously is long term. It is commendable that planning is in progress and that council and water resources personnel have been working together to find short-term and long-term solutions. The honourable member for Gosford emphasised the importance of funding from Federal and State governments. The resolution of one flooding problem in this State cost $54 million, so $5 million allocated
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by the Federal Government is not sufficient and does not address the problems of development and growth, particularly in the Gosford area. It is important that the Federal Government acknowledge that this is not just an occasional problem but one that has been repeated many times everywhere. All government agencies need to clearly acknowledge that this is a major, long-term problem, and one that will worsen with more development. We need to address it financially in our long-term planning. The honourable member for Gosford has brought an important matter to the attention of this Parliament and I am sure all honourable members will carefully note his comments.

Private members' statements noted.

[Mr Acting-Speaker (Mr Tink) left the chair at 6.4 p.m. The House resumed at 7.30 p.m.]

Debate resumed from an earlier hour.

Mr MARTIN (Port Stephens) [7.30]: As I was saying before dinner, a number of questions need to be answered. I ask the Minister to address them. I know that this is riveting legislation and that it is very important for the people of New South Wales. We are supportive of the legislation, and we would like those few questions to be answered so that we can assure the people of New South Wales that their interests are being looked after.

Mr CHAPPELL (Northern Tablelands) [7.31]: I am pleased to support the Conveyancing (Amendment) Bill and cognate bills. The measures contained in the bills will consolidate and simplify the existing old system deeds registers. The bills will result in seven existing registers being combined into one general register of deeds. The existence of so many registers can be traced back to the piecemeal approach to legislation in the past century. Whenever a need was felt for a new register for a type of document, a new register was created instead of existing ones being consolidated. The general register of deeds was established in 1897. [Quorum formed]

The registers for bills of sale and liens on crops and wool and stock mortgages were established in 1898; the register of causes writs and orders in 1920; and the register of resumptions in 1930. The various separate registers have existed ever since, each with its own index. Clearly it is an entirely sensible measure to combine these separate registers into one register in one location. Currently, a person wishing to buy old system land needs to search in several different indexes and registers in order to establish a clear chain of title to that parcel of land. This is not only time consuming and costly, but also increases the chance of error. For example, if a person omits to search a register, important information could be overlooked. The fact that the various indexes to these registers are contained in book form adds to the difficulty and time taken to conduct searches and adds to the likelihood of mistakes being made. Combining the different registers and indexes into one will clearly simplify the searching process. A searcher will
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have only to consult the index to the general register to find information about documents previously contained in other registers. The process will also be simplified by computerising the index to this new, combined general register. Instead of having to comb through volumes of manually recorded indexes, a searcher will have the information on a computer screen at the touch of a button. In addition, combining the registers will enable lodgment procedures to be standardised and will assist lodging parties.

Combining the registers will also have benefits for the Land Titles Office. Storage space and staff time will be saved as procedures are simplified and redundant tasks eliminated. For example, removing the requirement for extracting index information will free staff for other duties. In a number of respects, the bills will bring provisions governing old system deeds registration into line with those governing Torrens title documents under the Real Property Act. For example, for the first time the use of standard memoranda will be allowed for old system documents. By allowing a regular user, such as a bank, to register the standard conditions of its mortgage as a once only memorandum, those conditions can be included in later mortgages simply by referring to the registered number of the memorandum. The bank will not have to repeat every condition in every subsequent mortgage, thus making subsequent mortgages shorter and saving paper and printing costs. This facility already exists for Torrens title documents and it is only fair that it should be extended to include old system documents. These bills have concrete benefits for government and other users. Major users, such as banks, were consulted and they certainly support the proposals. I have pleasure in supporting these bills.

Mr COCHRAN (Monaro) [7.36]: I support what the honourable member for Northern Tablelands has said and I have a great deal of pleasure in supporting the Conveyancing (Amendment) Bill and cognate bills, as would any other representative of a country electorate who has had anything at all to do with the Land Titles Office and the system which has been in place for many years in the recording and maintenance of files in that office. This bill provides an opportunity to modernise the way in which the old system records are kept in the Land Titles Office. It introduces modern technology into the maintenance of those records in the same way in which it is applied to the Torrens title records kept under the Real Property Act. For some time the Land Titles Office has been upgrading its system of reporting and using computerised Torrens title records. Now that is to be extended to the old system records. As would many other honourable members, I can recall, both as a member of the public prior to being elected to Parliament and now as a local member, in dealing with the Land Titles Office, the laborious task and the painstaking operations of searching old system records, yet the Torrens title records were available at the push of a button. It will no doubt be pleasing to many country solicitors as well who have anything to do with the search of old system records. As a result of this legislation, they will now have the opportunity to make the best use of the modern technology that is now available.

The current procedure in preparing index entries is a long, laborious task. The Land Titles Office personnel were involved in a number of steps: carefully studying each document lodged to extract the relevant information; the preparation of a preliminary index; the collection of statistical information; the normal typing, checking, sorting and ordering of index entries; manually inserting entries in the index; and the preparation of a permanent index. What an enormous waste of time and energy that is when such modern systems are available. Under the new system index entries will be typed directly into the computer from the indexable particulars form, and will be made available to the public and the department. That will eliminate several steps in the process and save the
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time and resources of the Land Titles Office. I am informed by the Minister that the Government will save about $500,000 a year as a result of the introduction of this new technology. In addition to providing cost savings the new system will be of maximum benefit to users. I have a great deal of pleasure in supporting the bills.

Mr FAHEY (Southern Highlands - Minister for Industrial Relations and Minister for Further Education, Training and Employment) [7.41]: On behalf of the Minister for Conservation and Land Management I am pleased to reply to the debate. I thank the honourable member for Port Stephens, the honourable member for Monaro and the honourable member for Northern Tablelands for their contributions and support of the proposed legislation. The honourable member for Port Stephens raised a number of questions, which I shall answer. I should say broadly that this is a necessary step in the simplification of registration of titles in this State. Over a period of 15 years I had considerable exposure to old system title. The complexity of that title created considerable difficulties and an enormous storage problem for the Land Titles Office. In many instances tracing back to a good root of title in a particular chain of title can take one back to the early 1800s. I recall on numerous occasions, as the honourable member for Camden will appreciate, dealing with titles and documents that were in the name of Elizabeth Macarthur, who seemed to own almost everything around Camden where the chain commenced. Ultimately that process led to additional expense and a degree of uncertainty in respect of title. The proposed process is part of the ongoing efficiency drive that the Land Titles Office has been undertaking in the computerisation of titles for several years. This is a progressive step.

The honourable member for Port Stephens concluded his contribution by saying that it is hardly riveting stuff for the people of New South Wales. This proposal will save about $500,000 a year and I would not suggest to anyone, even members of the Opposition, that that cost saving is insignificant. One could argue that it is equivalent to the provision of half of a Cabbage Tree Point Road. That amount would contribute greatly to hospitals and the Police Service in this State. That will enable the freeing up of money to be put towards other projects, such as police, hospitals and roads. I hear constantly the request being made about Cabbage Tree Point Road. Only 50 per cent has to be contributed locally and this Government might be sympathetic. If 50 per cent was contributed through Commonwealth funding or other funds -

Mr Martin: On a point of order. The Minister is supposed to be replying to matters raised in the debate. I appreciate what he is saying and would like it to be recorded but it does not relate to matters that were raised in debate on the bill.

Mr SPEAKER: Order! The honourable member for Port Stephens sounds as though he is trifling with the House. He has yet to come close to substantiating a point of order.

Mr Martin: Though it has been said -

Mr SPEAKER: Order! The member is trifling with the House.

Mr FAHEY: The provisions of these bills will free up $500,000 a year which can be put to useful purposes in other areas of need. Specifically in answer to the matters raised by the honourable member for Port Stephens, he sought a guarantee that the computerised index would be 100 per cent foolproof. He can be assured that the Registrar General will take all necessary steps to ensure that the index is as accurate as can be made humanly possible. Again as a result of my experience with the Land Titles
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Office and the workings of the Registrar General I am able to say that a good service is provided. On numerous occasions I wished they were wrong, but they were not. Computerisation has not lessened the efficiency of the system. The honourable member asked also about a State Government guarantee of title. That shows his ignorance in that respect. There is no State Government guarantee of title in respect of old system title. Such a guarantee exists in respect of Torrens title. So no more and no less will be provided by this procedural step than exists at present. I draw the attention of the honourable member to the words of the Minister for Conservation and Land Management at the second reading stage when he said that the bills are intended to make only procedural changes to the registration process and to the way the registers are kept. They are not intended to change the substantive law regarding the effect of registration of any document.

The honourable member for Port Stephens should be aware that this legislation is procedural and has nothing to do with guarantees that exist at present. Finally the honourable member asked who was consulted about these bills. The Land Titles Office prepared a discussion paper and circulated it to 43 organisations, which included the Law Society of New South Wales, major banks and lending bodies, the National Farmers Federation - which obviously has an interest in this matter because much of the title to property in the country is in the old system mode - the Local Government and Shires Association and the Stock and Station Agents Association of New South Wales. All replies received in response to that discussion paper were favourable. This is a worthwhile step taken by the Government and the Land Titles Office in the context of microeconomic reform. It is a real and progressive step in that direction and will lead to a more efficient and an easier system and will save $500,000 a year. I commend the bills to the House.

Motion agreed to.

Bills read a second time and passed through remaining stages.

Debate resumed from 26th February.

Mr MARTIN (Port Stephens) [7.48]: I lead for the Opposition on these bills. As members of Her Majesty's loyal Opposition we will be supporting the proposed legislation. These bills will amend the Strata Titles Act 1973. The main purpose of the Strata Titles (Part Strata) Amendment Bill is to allow for a strata subdivision which may include a mixture of private, residential and commercial uses. For example, it includes residential strata units, retail and car park areas. The legislation will also allow a private developer to subdivide a building in this manner. As much as any other member of the House I appreciate the importance of being able to take that action. The Eastgate development at Bondi Junction, the Connaught Building and other developments are prime examples of the need for this legislation. However, there are some questions about the legislation that call for answers.


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Specific questions must be answered by the proposed legislation. Though, generally speaking, most strata title legislation is administered by a Minister other than the Minister for Conservation and Land Management, the proposed amendment relates to title and is therefore dealt with in this way. One wonders, on reading the bill and hearing the Minister's second reading speech, whether assistance is being offered to developers beyond what normally could be termed reasonable. The Opposition, at its three levels of assessment of the proposed legislation - which it undertakes for all legislation before making a decision about how bills should be handled in the House - has been concerned about the most important issue of the resolution of disputes. The concern is based on the terminology in the bill that a developer is to be encouraged to refer disputes to the Strata Titles Commissioner or to arbitration. That terminology would give developers a degree of leeway which may not be in the best interests of the ordinary men and women of this State. Knowing some of the developers who are very active in the electorate of Port Stephens - some of whom are not very reputable - I would want much more protection for the public. I must say that most developers in the electorate of Port Stephens are honourable but we have our share of those who give that industry a bad reputation.

Though the Port Stephens electorate extends from the Hunter River to the Bulahdelah bridge it has few of the strata subdivisions at which the proposed legislation is aimed. The primary object of the bill is to achieve consolidation in major urban areas, which is necessary in this era. How will a body corporate administer the management of such a development? How are shares and influence in the body corporate to be allocated proportionately to allow for commercial, residential and car parking requirements? Is such a development to be valued on area or merely shareholding? If those questions are addressed and answered, misconceptions about the proposed legislation will evaporate. The object of the bill is to improve the ability to affect strata titling in this State. The proposed legislation will greatly influence local government in its attempts to work towards urban consolidation.

I hope, given that the majority of members opposite are North Shore residents, that urban consolidation starts at Palm Beach, comes to Manly and goes back to the Pacific Highway at Chatswood. If urban consolidation works successfully there, we could then look beyond those areas to ensure that the ordinary men and women of this State are happy about it. The Opposition supports the proposed legislation but the questions I have raised must be answered. The Opposition must be assured by the Government that justice will be sought for the ordinary residents of this State. The public must be made aware of insurance requirements and the fair and equitable proportioning of those requirements. We must know about the jurisdiction of the Strata Titles Commissioner and whether developers are being looked after. I support the bill.

Mr CHAPPELL (Northern Tablelands) [7.55]: As the Minister said in his second reading speech, these bills will be of advantage to both large scale developers and smaller landholders who wish to avail themselves of the facility for multipurpose use of a single property. The measures will also become effective instruments for achieving increased urban consolidation. I am sure the disparaging comments to some residents of certain parts of the metropolitan area by the honourable member for Drummoyne will not prevent the benefits of the proposed legislation flowing through to those who may have an interest in urban consolidation, as we all must have if we are to be realistic. Because the bills enable different uses within the one complex there should be greater incentive and scope for inner-city land to be used for residential purposes. On that score alone the legislation is worthy of support.

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The bills also reflect a commendable level of co-operation between a number of different interest groups which have participated and which will be affected by these proposals. The bills enjoy a wide range of support from bodies whose representatives formed an advisory committee which recommended to the Government what the principal features of the proposed legislation should be. Apart from the Land Titles Office, the government bodies that were represented on the committee included the departments of business and consumer affairs, housing, planning and the valuer-general. From the private sector the Law Society, the Institute of Surveyors, and solicitors Mallesons Stephen Jacques all brought to the committee process their own experience and expertise. The particular assistance provided by Mr Bob Browne, the Strata Titles Commissioner, should be especially acknowledged.

It will fall to the Strata Titles Commissioner to administer most of the important new provisions which relate to strata management statements. Such statements are provided for in a new division 2B, which the principal bill seeks to insert in the Strata Titles Act 1973. These statements, which are to be registered in the Land Titles Office, will contain disclosure by the developer of the way in which the building will be managed by what is known as the building management committee. That committee is to be made up of each body corporate for strata schemes comprised within the complex as well as the owners of any parts of the building outside such strata schemes. To allow for flexibility, in any case where any such body corporate or owner does not wish to become involved in this administration it will be possible for them to refrain from joining the committee. Quite properly, some of the provisions of the strata management statement will be mandatory. These will include such matters as the appointment and functions of the building management committee and of its office-bearers, and procedures for amendment of the strata management statement.

Importantly, the statement will be required to contain provisions for the settlement of disputes and complaints about management of the building. The statement must indicate whether the disputes or complaints are to be referred, where appropriate, to the Strata Titles Commissioner or to a Strata Titles Board. Alternatively, provision may be made for such issues to be resolved by arbitration. The main bill contains the facility for such strata management statements to deal with a range of other matters, all of which will aid in proper management of the building. These will include such things as safety and security measures, control of noise, regulation of trading activities, and so on. In other words a strata management statement will do two things: first, it will set out a reasonably sophisticated code for management of the building; and, second, because of the compulsion for it to be lodged for registration with the related strata plan, thus becoming a matter of public record, any prospective purchaser or lessee will have full notice of its provisions before any commitment is made for involvement in the scheme. The Strata Titles (Leasehold Part Strata) Amendment Bill operates to introduce into the Strata Titles (Leasehold) Act parallel provisions for strata management statements. These measures combine to illustrate once again the Government's total commitment to rational land development, consistent with a proper level of consumer protection. I support the bills.

Mr MORRIS (Blue Mountains) [8.0]: There are two particular features of these bills that I would like to highlight. The first is the provision in the Strata Titles (Part Strata) Bill that will enable part of an existing building to be subdivided under the Strata Titles Act. This it will do by amending section 7 and replacing section 8 of the Strata Titles Act 1973. The provisions are not entirely novel. Under the Strata Titles (Leasehold) Act 1986 it is possible for a leasehold strata scheme to be created for just part of a building. That Act is a special code having application to what it calls a
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prescribed authority. That simply means the Crown, a statutory body or a council - entities owning land which, though suitable for privately funded development, could only be made available on a leasehold basis. The new Act will extend the facility for strata subdivision of part of a building to land in private ownership, land governed by the Strata Titles Act. To do this the new legislation also has to remove from the Strata Titles Act a technical bar to such a proposal. As the Strata Titles Act stands at present, a survey restriction has precluded such part subdivision. Specifically, under section 8 of the Act, there has to be lodged with a strata plan a registered surveyor's certificate that the building concerned is wholly within the perimeter of the land. It will be seen that if the land to be subdivided comprises part only of a building it is just not possible for a certificate in those terms to be given.

The Strata Titles (Part Strata) Amendment Bill introduces a replacement section 8 and a related proposed schedule 1A. New section 8(2)(c) will require that the surveyor certify that relevant requirements of the schedule have been met. Where strata subdivision of part of a building is sought the new requirement will be that the stratum parcel concerned, and the building of which it is part, are wholly within the site of the building, and the surveyor's certificate will be to that effect. That overcomes the present prohibition. It should not be imagined that the provisions of the former section 8 were unintentional or accidental. Indeed they were not. But at the time of their enactment in 1973 it had been thought, rightly or wrongly, that there was a need to keep within the control of one body - the body corporate of the strata scheme - all matters such as building management, maintenance, insurance, and so on. The fear was that such matters would become far too complex if a strata plan were to include only part of a building.

This brings me to the next notable feature of this legislative package. Both bills include parallel provisions for overcoming the management difficulties which had been earlier perceived. They do this by requiring lodgment of strata management statements provided for in new divisions to be added to the Strata Titles Act and Strata Titles (Leasehold) Act respectively. These statements take effect as agreements under seal as between the various parties holding interests in the building concerned. New schedules deal with the form and content of strata management statements, which, as the name suggests, govern the management of the building generally and in particular such matters as the settlement of disputes and complaints, the composition, functions and meetings of management committees, safety and security measures, and so on. This principal feature of the bills marks them as important new measures which will further the Government's policy of facilitating diverse land use for the benefit of the community generally. I support the bills.

Mr FAHEY (Southern Highlands - Minister for Industrial Relations and Minister for Further Education, Training and Employment) [8.5], in reply: Had the honourable member for Port Stephens bothered to read the bill in any detail, he would not have asked the questions he did. To ensure that it is abundantly clear to all members of the Opposition, provisions relating to insurance contributions are detailed in item (12) of schedule 1 to the Strata Titles (Part Strata) Bill. There is clear indication in subsection (4) of proposed new section 83 that the proportion of a premium for a damage policy in respect of a building referred to in subsection (2) is payable by a body corporate or other persons. The body corporate is clearly the strata section of the building; the other person is the entity in which the remainder of the building not under strata is held. The premium payable by a body corporate or other person is the same proportion borne by the other person as the replacement value of the part or parts of the building subject to the strata claim concerned or held in fee simple in relation to the replacement value of the whole building. It is based on valuation. Other subsections of proposed new section
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83, which the honourable member for Port Stephens may care to look at; set out how insurance problems may be overcome if one of the parties fail to make their contribution.

The second matter raised by the honourable member for Port Stephens was the settlement of disputes. That aspect was adequately covered by the honourable member for Northern Tablelands. Proposed schedule 1C to the Strata Titles Act refers in part to matters which must be included. Clause 2(1)(d) of the proposed schedule 1C requires an election as to whether disputes are to be resolved by the Strata Titles Commissioner or the Strata Titles Board or an independent arbiter, which can include the courts. This is a much needed step to free up the opportunity that should be available for the development of property, particularly residential property. The law provides as per the 1986 Act that the facility is available only to a prescribed authority, which is defined in that Act as being the Crown, a statutory authority or a local council. The opportunity is provided for private developers to take advantage of air space and develop strata in a commercial residential mix. Clearly that creates opportunities that would not otherwise be available. This is a much needed and progressive step to provide maximum opportunities for urban consolidation. I support the bills.

Motion agreed to.

Bills read a second time and passed through remaining stages.

Debate resumed from 25th February.

Mr J. H. MURRAY (Drummoyne) [8.9]: In the 1950s governments responded to the growth of cities with a policy of dispersed decentralisation which often meant incentives for firms to relocate in the country. Many of those decisions were not viable. However, as a consequence of these early policies, the results in many cases were unimpressive as decentralisation degenerated into pork-barrelling. The growth centres concept of the early 1970s was based on the acquisition of lands and, to some extent, on the compulsory transfer of large numbers of government employees to those areas. During the Whitlam era a number of well publicised and well funded attempts were made to decentralise the Australian population. I do not believe it is appropriate to go through that now but honourable members are aware of many of those earlier efforts. Unfortunately not all development corporations were the success that their founders had envisaged.

The Opposition does not formally oppose the bill before the House. However, the Opposition has a strong reservation about some aspects of it. The Minister in his second reading speech indicated that the purpose of the bill was to amend the Growth Centres (Development Corporations) Act 1974 by dissolving the Bathurst-Orange Development Corporation and the Macarthur Development Corporation. I understand that this will be done: firstly, by allowing the creation of new development corporations for vital urban redevelopment; secondly, instructing how the assets, rights and liabilities of the development corporations are to be settled upon their dissolution; and, thirdly, removing the existing provisions for a development corporation to exercise local government powers. However, the Minister in his second reading speech failed to explain what I believe is the bill's hidden agenda. He forgot to mention that proposed new section 23C gives power to the Minister, through the Governor, to dissolve a
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development corporation without recourse to Parliament. At present the Minister cannot dissolve a development corporation without seeking Parliament's approval. For instance, this bill seeks Parliament's permission to dissolve both the Bathurst-Orange Development Corporation and the Macarthur Development Corporation.

Under section 5 of the principal Act the Minister does not require Parliament's approval to establish or alter the personnel of a corporation. This is entirely proper and correct. But the Opposition is unhappy with the proposed mechanism, namely, that the Minister can simply inform the Governor that the development corporation be dissolved or created at the Minister's political whim. I believe this mechanism will allow the dissolution of development corporations to be abused. For instance, if a Minister is also the member for a particular region and wishes that a development corporation be established in the electorate in order to gain a political advantage, under this legislation he can simply ask the Governor to close down the development corporation in a region and move it to an electorate where it will have more political advantage. Conversely, if a development corporation operating in the Minister's electorate opposes the Minister - the Minister for Local Government and Minister for Cooperatives would understand what this is about, because most of the corporations are in country areas - under this legislation the Minister can order the closure of the corporation without reference to the highest court in the country, the Parliament. I believe that aspect of the legislation needs close scrutiny. Checks and balances are required. Honourable members opposite must remember that not all the best bowlers are in the one team. Not all the Ministers on the benches opposite are the best available. They do make mistakes. Putting this unmitigated power in the hands of a Minister without the Parliament having the ability to scrutinise his actions is a step in the wrong direction.

Parliament ought to have the right to judge whether a development corporation should be closed or not. The Minister should have to report in the House the reasons behind the ministerial actions. When the Minister for Local Government and Minister for Cooperatives was in opposition he was very keen to have scrutiny of the Parliament. When he missed out on having his point of view presented he would walk out the doors, puff on a few cigarettes, dampen his spirit and come back. He was a great champion of this Parliament scrutinising the actions of the Minister. Yet he has presented a bill which does not provide for this. I ask the Minister: why change a system that works? Why change to one that has the potential to be abused? Proposed new section 23E of the bill, which the Minister conveniently ignored in his second reading speech, establishes what is to be known as the Ministerial Development Corporation. I ask the Minister: who are to be the members of this ministerial corporation? Subsection (2) of proposed new section 23E throws little light on the matter because we do not know who will make up the corporation. I understand there is no provision for outside appointments to the corporation. Is the corporation simply the Minister? It is not clear in the bill. If this is the case, it will become an effective shield for the Minister.

I have argued that proposed new section 23C would allow the Minister at whim to manipulate development corporations. Get me straight: I know the present Minister would never dare to undertake such an action. He is a parliamentarian and he believes in the Westminster system. Members of this Parliament have to look after the future of the people of New South Wales. Other Ministers could be more Machiavellian. That is why I have raised this matter. I am not imputing any devious attitudes to this Minister. He may not have carriage of this type of legislation in future. I am appealing to him to protect the interests of the community and the members of this Parliament. Proposed new section 23E protects the Minister from the blame that would naturally flow from the manipulation allowed under proposed new section 23C. That is to say the Minister, when
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blamed for manipulating development corporations, could simply say that it was not his doing but the doing of the Ministerial Development Corporation, thereby distancing himself from the action.

I believe proposed new section 23F(2)(b) contradicts proposed new section 23D, which allows the Ministerial Development Corporation to dispose of the assets of the development corporation. However, proposed new section 23F(2)(b) grants the right to Treasury to take the assets of the dissolved corporation. The impact of this sleight-of-hand is significant. It applies only to successful corporations. For instance, if a corporation has been successful and has come to the end of its life expectancy and has, say, $2 million of assets - I suppose with the value of land in the Bathurst area and the Macarthur region this is reasonable - Treasury, being strapped for cash, as is presently the case, could seize the assets to prop up the budget. That is not fair and equitable. The Opposition believes the Minister should be instructed to direct that the assets be allocated to the future development of the region that the corporation has served. For instance, I am sure members who speak in this debate will agree that the assets in areas around Camden and Campbelltown should not be sold up and the money go to the Treasury to be used for the privatisation of a hospital at Port Macquarie. The funds should be used for the local community.

I am sure that members will bring this point forward to the Minister. It is logical that money from the assets of the corporation should be used for the benefit of the area in which the corporation evolved. It should be used to improve the infrastructure of the region. This bill is a clear example of a desperate Government granting Ministers unreasonable power by the back door. I know that the Minister was not aware of the implications until I raised the matter in the House. I am sure that he will now take the matter up with his bureaucrats for analysis so that in another place an amendment to overcome the problem may be moved. The Opposition does not oppose the bill. However, the Opposition will closely monitor the bill's operation and will pursue the Government vigorously if there is evidence of ministerial abuse of power.

Dr KERNOHAN (Camden) [8.20]: I wish to speak in the debate on the Growth Centres (Development Corporations) Amendment Bill which is probably appropriate as I spent three years as a representative of Camden council on the Macarthur Development Corporation. The boards of the Bathurst-Orange Development Corporation and the Macarthur Development Corporation were created in 1974. However, the concept of growth centres which was first promoted in the 1960s, following an international trend, was designed to encourage decentralised growth of major population centres and to stimulate capital investment and infrastructure programs in Australia. It is fair to say that since the establishment of the development corporations they have over a period achieved a creditable record and compare favourably with the more internationally recognised new town developments, particularly those in the United Kingdom. These achievements include the provision of new housing, commercial and industrial developments, together with considerable social infrastructure which was co-ordinated in a planned and orderly fashion by the development corporations. The creation of the development corporations in 1974 provided a focal point for land consolidation and planning and for a co-operative approach with the local councils of the areas. However, it must be recognised that their tasks have now been completed.

Visions, particularly in Macarthur, of creating a new community and providing for industrial and commercial development in those areas, have generally been achieved. Now the corporations are concentrating mostly on the disposal of existing property assets. Since the announcement in 1990 by the Minister of the wind-up, the Business Land
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Group, which now manages the Bathurst-Orange Development Corporation and the Macarthur Development Corporation has disposed of approximately $60 million worth of land. More than 100 hectares of land have been brought into productive use and this has contributed towards job creation in the regions. The establishment of a Ministerial Development Corporation with the primary focus of disposing of the remaining land will enable the Business Land Group to concentrate on its activities of attracting key industries to those areas, in particular the Macarthur district. I emphasise that one of the greatest problems in the Macarthur area is the lack of employment. The fact that the ongoing job of the Business Land Group will be to attract commerce and industry to the Macarthur region is of utmost importance to the people of that area.

To date the attraction of major national and international companies, such as Bradford Insulation, Kimberley Clarke, Pilkington Australia, Otis Elevators and Volvo Australia, has been due to the expanding population base and, thus, the availability of a large, diversified and skilled work force as well as their strategic location adjacent to main transport routes. The Property Services Group, through the Business Land Group, will continue to provide serviced industrial land sites both in the Macarthur area and, on behalf of the ministerial corporation, for industry in other significant areas around the State, including Berkeley Vale. In addition, the group will soon embark on the marketing and disposal of significant industrial land at Chullora. The Business Land Group will complete its outstanding works program to ensure that there is a stock of developed industrial and commercial sites, particularly at Minto, Ingleburn and Smeaton Grange, to meet the market demand as that changes over time. I am sure that the honourable member for Campbelltown would join me in welcoming the establishment of industrial and commercial sites at Ingleburn, Minto and Smeaton Grange.

Opportunities to build on the success of development corporations in co-ordinating land consolidations, business planning, infrastructure development and orderly marketing will no doubt arise in future. The bill therefore brings the Growth Centres (Development Corporations) Act up to date to ensure that, when the necessity arises, such as the future development of the olympic site at Homebush Bay, the powers will be appropriate. Accordingly, the bill will ensure that future corporations do not follow the interventionist approach of some more recent development authorities but utilise the established processes of government and respect the necessary co-operation with local councils. The bill affirms that the Environmental Planning and Assessment Act, the Land Acquisition (Just Terms Compensation) Act and the Local Government Act will be used in all instances. I support the bill.

Mr KNIGHT (Campbelltown) [8.25]: This is the second time this bill has been before the House and the second time on which I have had an opportunity to speak in the debate. I am sure honourable members will be delighted to know that I will not traverse entirely the ground I covered on the last occasion. I should frankly admit that it was not the most enlightening speech I have made in this House and those honourable members who heard it do not deserve having to hear it again. This is the second attempt to bury the late but unlamented Macarthur Development Corporation. It is an organisation which consistently failed to perform throughout its lifetime. It is not inconsistent with its strange behaviour that its burial has been as much a farce as its life was. In fact, it is odd to see that the most life it has shown has been at the graveside. The organisation, as part of the growth centres plan, was originally conceived during the Askin period when Campbelltown was to become a satellite city of the metropolitan area. There was intended, as indeed happened, massive forced growth in the Campbelltown, Appin and Camden areas. Much of the growth occurred in Campbelltown, although the Government still plans to force more and more people into the area, despite our pollution problems. A lot of the projected growth is yet to hit Camden and Appin, and it is the subject of massive controversy in both those areas.

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The Whitlam Government enthusiastically embraced the growth centre concept and provided significant resources for growth centre corporations in Albury-Wodonga, Bathurst-Orange, Monarto and, for some time, in the Campbelltown three cities area. The body as initially conceived was to have a mixture of powers over planning, development and infrastructure provisions. Early in the 1980s the Macarthur Development Board, as it was then known, lost the planning power. At the same time it lost its way because when it lost the planning power - the power over zoning and the construction of the physical plan for the area - it did not lose the planners who were responsible for doing that work, nor did it lose its belief that it should be doing that work. All it lost was the legal and statutory power to actually do the work and to implement the plans.

We had an amazing situation for a number of years where a body with absolutely no planning power maintained a huge staff of planners and traipsed around from council to council trying to give totally unwanted advice about planning. Whenever council planners or aldermen asked why they were offering this advice and what it had to do with them, the Macarthur Development Board planners would insist that theirs was the responsible body although the legal position clearly showed that it was not. Indeed, Stephen Martin, who is now the member for Macarthur in the Federal Parliament, was at that time heading the Campbelltown regional office in of the Department of Environment and Planning which did have the planning powers. He suffered the bizarre indignity of rolling up to council meetings with the planning powers and the professional advice, and having to explain that the people present from the Macarthur Development Board who earned the large salaries and who intended to talk about planning, were there for no purpose whatsoever and that their presence was totally redundant. The Macarthur Development Board never adjusted to its changed role or to the diminution in responsibility and status. In the end the body became a failure which ended up doing nothing but flogging industrial land.

I do not claim that all of the people who worked for the Macarthur Development Corporation were useless. Some of them were fine public servants. Some of the community people who served in advisory capacities played a valuable role. I wish to mention three people in passing. Bruce MacDonald, who at one stage was the town clerk of Campbelltown, went on to become the general manager and also, in the early stages, deputy chairman of the then Macarthur Development Board. Bruce was a public servant of great dedication with a sincere commitment to Campbelltown. Arthur Jones, a primary school principal, sometime alderman and permanent environmentalist in Campbelltown, brought a level of compassion and understanding of people and the environment to some fairly rigid bureaucrats at the board. When Ian Henry, who now chairs Centennial Constructions Pty Limited, became chairman of the board he provided some impetus for the board to do something about selling the huge stock of industrial land which the board had been unsuccessful in moving. Some terrible people also worked for the Macarthur Development Corporation. I am too charitable to mention them all by name. One brief story illustrates what a disaster that organisation was. In its early days the Macarthur Development Board was responsible for constructing the flood mitigation works in Campbelltown and Camden. It built a terrific channel at enormous public expense. The channel, a huge canal, had detention basins and ran right through the heart of the industrial area virtually bisecting the entire Campbelltown local government area down the middle. It was, indeed, a work of art.

Mr J. H. Murray: The Venice of the west.

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Mr KNIGHT: As my colleague the honourable member for Drummoyne says, it was of almost Venetian proportions. Not long after the construction was completed, I received a deputation from representatives of the Macarthur Development Board and local councils demanding that I do something about obtaining State grants and matching funds from the Federal Government to rebuild the canal to a new standard. The new standard was to cope with the one-in-100-year flood. The only problem with that was that the standard was laid down by the Department of the Environment and Planning at a time when the Macarthur Development Board still had planning powers. The standard was to be administered with local government. The Macarthur Development Board had built this massive multimillion dollar flood mitigation service to the one-in-80-year standard. On the one hand the same organisation was responsible for administering the new standard of one-in-100-years and, on the other hand, it had built the flood mitigation service to the one-in-80-year standard. It was a total disaster of true Sir Humphrey Appleby proportions. The taxpayers of this State, through the Federal Government, the State Government and local government then had to pay to fix the job when the concrete was barely dry, the Macarthur Development Board having failed to meet its own standards.

The Macarthur Development Corporation was a failure of bureaucracy, political will and resources. All honourable members who have a serious interest in an interventionist role in government should be concerned about the failure of the bureaucracy because government works when the bureaucracy works. The bureaucracy - and I use that word in the general rather than the pejorative sense - has a role to implement policies and make things happen. It is of grave concern that an organisation formed for that purpose failed. For those of us who support a serious and important role in the public sector, it is of grave concern that such opportunities are frittered away by incompetence and inefficiencies. It is interesting to note that the Government is proposing the removal of an organisation that had both a consent power and a development role and the passing of much of that responsibility back to local government. That proposal has been introduced and supported by the Minister for Local Government and Minister for Cooperatives who is nodding his head in agreement. Yet his colleague the Minister for Planning and Minister for Energy, who is responsible for planning in the inner city, is doing exactly the reverse. He is trying to take consent powers away from inner city councils and give the State Government greater power to force through its own development proposals. That is an interesting juxtaposition and must make for some fascinating discussion in Cabinet and the party room.

The failure of political will is of grave concern. The bureaucracy was allowed to flounder and governments of both political persuasions did not take a sufficient hands-on role to ensure that things were made to happen. Above all there was a failure to provide resources and money. Where does that leave Campbelltown now? Growth was the one thing that happened. However, the growth was not organised by the Macarthur Development Corporation. The planning allowed for the subdivision of land and people to move in. The Department of Housing developed land and other people subdivided it. Campbelltown is still growing. It has enormous pollution. Job availability is extremely poor because the number of people in the work force who moved into the area was far superior to the number of jobs brought in to the area to match that work force. Above all, the Macarthur Development Board failed to provide adequate infrastructure. Increasingly during the Wran period the infrastructure was provided by other government departments and under the Greiner Government by no one at all.

The honourable member for Camden should be deeply concerned that a replication of this failure is likely to be visited upon her doorstep in South Creek, Cawdor
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and other places in the electorate of Camden where the population will come but the infrastructure, facilities and services will not accompany them. She will continually be like a dog trying to chase its tail in her efforts to secure facilities to match the population. In closing, I wish to mention the important point made by my colleague the honourable member for Drummoyne relating to what is to happen to the money raised from the sale of assets. As I understand it, the present intention is that any money raised from the sale of the remaining assets in the form of industrial land will be returned to the State Treasury. As the honourable member for Drummoyne said, there is a crying need for the money from that source to be allocated to the area that needs it the most. The Macarthur Development Corporation has failed the people of Campbelltown. It would add insult to injury if the funds that result from the sale of its few remaining assets are not ploughed back into long overdue infrastructure but are nicked by the State Treasury and provided to marginal Liberal Party or National Party electorates where the need is not so great and the moral imperative not so strong.

Mr PEACOCKE (Dubbo - Minister for Local Government and Minister for Cooperatives) [8.37], in reply: I listened with great interest to the contribution of the honourable member for Drummoyne. I thank him for his kind comments about me which I greatly appreciate. However, the issues that he raised were basically without substance. I wish to make two points. Under both Liberal and Labor administrations, it has always been the function of the Minister to appoint members to the boards of what were formally called development corporations. That is what happened with the Bathurst-Orange Development Corporation and the Macarthur Development Corporation. I do not think that caused too much trouble or dispute. Why should that system be changed now? More difficulties and problems would be created. In relation to the money that is made from the sale of land owned by the Macarthur Development Corporation and the Bathurst-Orange Development Corporation, I draw the attention of the honourable member for Drummoyne and the honourable member for Campbelltown to the fact that when I delivered my second reading speech I said I thought there would be some profit from the Macarthur Development Corporation and that probably the Bathurst-Orange Development Corporation would break even. I said also:

Those outcomes do not take into account the writing off of certain loan interest charges by the State and Commonwealth governments.

It would be very nice to do what the honourable member for Campbelltown said, that is, to put the surplus back into the Campbelltown area. I, like the honourable member for Campbelltown, am aware of the immense problems of Campbelltown. On that issue the honourable member for Campbelltown made a thoughtful contribution. It would be very nice to put that money back; however, any growing city, including many cities in the country, are forced into desiring growth. When they get growth they have to cope with the infrastructure themselves. My home city, which is growing but certainly not at the rate of Campbelltown, has immense problems in providing infrastructure. The ratepayers meet those problems and, in a sense, that is as it should be. Over the years the Macarthur Development Corporation, with all its faults, brought employment into the Campbelltown area that would not otherwise have been there. In the time that I have administered the Macarthur Development Corporation I have found the staff to be able, conscientious and, so far as they have been able, they have done a good job. But the time has come for that corporation to be wound up and for things to move on. The honourable member for Drummoyne again raised the issue of my power as Minister or the power of any successor to dismiss a corporation. Obviously, he did not read far enough into the bill for proposed new section 23C(3) states:

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The Minister is not to make such a recommendation -

It is referring to the dismissing of a corporation. Proposed new section 23C(3) then states:

- to the Governor unless the Minister is satisfied that the development corporation concerned has substantially completed its planning and development functions in respect of the growth centre for which it was constituted.

Obviously, there is a provision in the bill to qualify the power of the Minister. The intent of proposed new section 23C is to permit the early wind-up of the corporation without further legislation. I make no bones about that. It is cumbersome for any government - be it this Government or anyone else - to get legislation through the Legislative Council, to wind up a corporation which has completed its job and to set sunset provisions for corporations and reduce bureaucracy when it is not needed. I believe that the honourable member for Campbelltown would be right behind that sort of approach. It can, therefore, set a time frame for the performance of a corporation. The ministerial corporation will be solely responsible to the Minister; in effect, corporate sole. The ministerial corporation is in its wind-up phase and there is no need for accountability requirements beyond the Public Finance and Audit Act, the Annual Reports Act and the Freedom of Information Act, which cover the accountability provisions. There is no point in muddying the waters on those issues.

The Government intends to create new development corporations for the urban redevelopment areas of Homebush Bay, city west in Sydney and Honeysuckle in Newcastle. The redevelopment areas represent an opportunity to improve significantly the urban environment of Sydney and Newcastle and not repeat the mistakes of the past. The Government, through its extensive landholdings, can act as a catalyst for private sector development by co-ordinating the planning, developing and marketing of surplus land by attracting private sector investment. The value of public land can be optimised and the costs to the public of providing infrastructure can be minimised. I believe that is exactly what the honourable member for Campbelltown and the honourable member for Drummoyne were saying. Australian and overseas experience indicates that the effective development of a strategic site by government requires an instrumentality with the ability to co-ordinate the development process and the powers to consolidate properties; the ability to manage, develop and market land within the development area; the ability to enter into contracts, including joint venture contracts, with the private sector for the orderly development and the provision of infrastructure; the ability to acquire land if necessary; and the ability to undertake borrowings in order to facilitate early infrastructure development. In evaluating the possible means of carrying out the orderly development of these sites account has been taken of the need to ensure accountability whilst retaining, so far as possible, the ability to operate commercially - a proper and worthy objective.

Having considered the opportunities to create appropriate vehicles to co-ordinate and manage the development of these strategic sites, the Government has concluded that the creation of development corporations under the Growth Centres (Development Corporations) Act is the most appropriate mechanism. The three projects are characterised by their scale and by the large amount of government land that will become available for disposal over a number of years. The large amount of surplus government land becoming available for disposal in each area was the initial trigger to the Government considering comprehensive redevelopment initiatives. Of course, government land is in fragmented ownership, particularly in city west where the main landholdings are held by eight different State Government agencies, with a further nine
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semi-government or Federal Government instrumentalities also holding land. The overall objective is to recover and recycle derelict or underused land or property and, in so doing, attract private sector investment and create an attractive urban environment where none previously existed. I am sure that every honourable member in this House would agree that that is very worthy. While each of the areas is similar in character, each is also unique. Homebush Bay is a vast, valuable but relatively underutilised area close to the geographic and demographic centre of Sydney. The 660-hectare site is larger than Sydney's central business district and it is the focal point for Sydney's bid for the Olympics 2000.

The Government has recently commenced a 20-year major urban renewal program at Homebush Bay which will see the site developed for a variety of uses, including major sporting facilities, the Royal Agricultural Society showground and recreational precincts, as well as residential, commercial and retail centres. The area covered by the city west urban redevelopment strategy is approximately 300 hectares, of which around 100 hectares is surplus government land. Of this, 37 hectares is available immediately in Pyrmont and Ultimo. With over two million square metres of additional floor space, about 16,000 new residents, 48,000 employees and private sector investment of over $5 billion over the life of the project, this represents the largest urban redevelopment and consolidation project yet attempted in New South Wales - an extraordinarily good and exciting development. The Honeysuckle project in Newcastle consists of around 45 hectares of surplus State Government land located in a strategic position adjacent to the existing Newcastle central business district and stretching for over three kilometres along the harbour foreshore. The Honeysuckle project, upon completion, will create up to 9,000 new jobs on site with around 3,500 residents living in the project area. It is an extraordinarily exciting project for that great city of Newcastle and I believe it will transform Newcastle. The Honeysuckle project and adjoining surplus government land provide the city of Newcastle with one of the greatest opportunities to rejuvenate its social and economic base.

All three projects are examples of surplus land becoming available as a result of structural change on the waterfront and changes in other industries, as in the case of the brickworks and the abattoir at Homebush. As a consequence of these changes, large tracts of surplus land are becoming available. This Government recognises the opportunities this presents to achieve a wide variety of significant benefits: first, as a catalyst for private sector investment; second, as a means of co-ordinating the urban renewal process and provision of infrastructure; and, third, as a means of attracting people back to living close to the centre of the city and as an example of the Government's commitment to sensible urban consolidation. Fourthly, as a means of providing improved public transport systems in the project area with light rail proposed for city west, an integrated bus and rail system for Homebush and also for Honeysuckle in Newcastle; fifthly, as a stimulus to job creation; sixthly, as a means of opening up large areas of harbour foreshore land for public access and enjoyment - something much desired by the citizens of this city; and, seventhly, as a means of creating a very attractive urban environment.

To ensure that these substantial benefits are achieved, a co-ordinating entity is required. As I have already stated, there is to be a development corporation for each project area. The Government, having observed the performance of earlier development agencies in this State proposed amendments to the Act to allow early wind-up of the corporations on completion of their task, and to separate the redevelopment co-ordination role from the development consent role - something which the Government believes is essential. The establishment of development corporations for these three urban
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redevelopment projects under the management of the Property Services Group will provide the most effective co-ordination and will apply the property expertise necessary to ensure that the vision of the projects is achieved. Accountability for their performance will be achieved through a board for each corporation. The corporations will be subject to the normal Act to ensure further accountability. Lastly, I would like to commend the Leader of the Opposition for his support for the proposals, as outlined in his statements in the press last November. His call for the establishment of a development corporation for the City West project was timely and a clear recognition of the need for such entities. I commend the bill.

Motion agreed to.

Bill read a second time and passed through remaining stages.

Debate resumed from 26th February.

Mr MARTIN (Port Stephens) [8.52]: At the outset, I would like to say that the Opposition will support this legislation. This is good legislation, in so far as it does something positive about sewage sludge. I am a little concerned that it has been described in this House in glowing terms. This legislation is really about utilising up to 3,000 tonnes of wet sludge per day. Some questions which must be answered will be raised in my contribution this evening. Primarily, the bill seeks to amend the Fertilizers Act to amend the definition of "soil improving agent" to include a substance containing sewage sludge that is manufactured, represented, supplied or used as a means of replacing, augmenting or improving soils. The bill also seeks to increase maximum penalties and provides for a fee for a person applying to be an analyst for the purposes of the Act, as well as making other minor and consequential amendments.

It is not just the Sydney Water Board which is faced with problems relating to sludge. The Hunter Water Board and other authorities face this problem. In my electorate alone the Hunter Water Board has been putting primarily treated sewage from the whole of Port Stephens into Boulder Bay. That will cause major problems. I am sure the Hunter Water Board would envy the opportunity to use that sludge elsewhere rather than discharge it into the ocean. Having worked for 18 years in fisheries research, I have strong feelings about this issue, as have my constituents. Any sensible and thinking person will be aware of the amount of sludge that must be utilised. We must consider the best ways of using that sludge. First, I address a question to the Minister so that he can deal with it in his reply. It concerns the Hunter Water Board's wish to discharge sludge into old coalmines. This is a proposal causing serious concern in the Hunter Valley. It is an issue supported strongly by some and opposed violently by others. I ask the Minister to tell the House if there are possible alternatives to the proposal and what volumes of sludge would be considered an economic unit to treat for agricultural purposes in the Hunter Valley. I ask the Minister to address that issue. I raise these matters because my colleagues the shadow minister for the environment and the honourable member for Newcastle are attending a briefing session on forestry legislation that will be rammed through this Parliament tomorrow. As a result I have carriage of this measure.

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One matter that must be raised is what material is to be extracted from the sewage. Is it phosphorus material or organic matter? Why in his second reading speech did the Minister refer to sludge as grease, solid matter, domestic and municipal waste and solid matters produced in septic tanks? I know it may irk some members to listen to this type of debate, but we must address these issues. Those terms used by the Minister in his second reading speech must be clearly defined for the people of New South Wales. When speaking about municipal waste and solid matters we must know whether we are referring to faecal matter or whatever. That must be clear because alarm bells are ringing in the community about the aims of this bill. It is obvious that with 70 major sewerage systems discharging into the Darling River, for instance, and the blue-green algae problems that occurred prior to last Christmas, there are problems with discharging sewage sludge and excessive nutrient into our waterways. I refer to my comments about phosphorus substance contamination. Phosphorus material is probably the main cause of algae blooms in fresh water, an issue of serious concern regarding inland water systems. Perhaps this legislation is tailored for western Sydney sewage treatment. If that is so, that should be mentioned in the bill, instead of the glowing references which suggest that this bill is designed to cover all the sludge problems of New South Wales.

In 1984 research work started on this project. I am pleased to tell the House that that was an initiative of the Labor Government at that time. There are considerable benefits in the proposal for agriculture in that sludge can be treated and end up environmentally acceptable. There are better ways of disposing of waste than discharging it into the oceans. Organic material can be used profitably and effectively for agricultural purposes. The Minister indicated in his second reading speech a set of guidelines to assist in that project. Also in that speech was a cloudy statement. Those who understand agriculture and know about the treatment of sewage have problems about coming to clear conclusions about what the Minister has in mind when he said in his second reading speech:

The research which has been conducted as part of this program confirms that, with proper treatment and controls as to contaminant levels, certain grades of sludge are quite suitable for unrestricted release on the open market for use as soil-improving agents, and that other grades are suitable for release on the basis that they are used in forestry and other applications not involving the production of food for human consumption. This bill provides the legal framework in which this may happen and legislative support for the guidelines.

The major problems associated with the reuse of sewage sludge are the level of contamination of the sludge with toxic chemicals, heavy metals and the like and the potential for the spread of disease through pathogens in the sludge.

The proposed legislation does not clearly deal with the problems. If they are to be dealt with by way of regulation, the Opposition wants clear indications. I challenge the Minister to reveal the potential for the spread of disease through pathogens. I imagine the bill was drafted prior to the publicity surrounding the discovery of Legionnaire's disease in potting mix recently released on to the market. That matter must be addressed and the Government must give assurances to the Opposition and the people that the public health authorities have been thoroughly consulted on that issue. The community cannot afford the spread of Legionnaire's or similar diseases. The Minister may or may not wish to address that. If he sidesteps it on this occasion, the Opposition will take up the matter at a different level. I say that because in his speech he said, "Both these problems will be addressed in the bill". The other problem is contamination with toxic chemicals, heavy metals and the like. I know those contaminants are covered by other legislation relating to the Environmentally Hazardous Chemicals Act, but the bill must contain clear assurances and set standards so that the people who apply the legislation understand clearly what it means. I wonder whether the Water Board, the State Pollution Control
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Commission, the Total Environment Centre, environmental groups and the people closely associated with these sensitive environmental problems were consulted. The Minister's second reading speech includes the words:

The bill extends the provisions of the Fertilizers Act as they presently exist to include the supply as well as the sale of soil . . .

I question how those words relate to the present legislation. I worked for the Department of Agriculture and the Fisheries Division for 22 years. I have serious doubts whether the proposed legislation will extend the current provisions. The Minister mentioned also in his speech that registration could be cancelled. I wonder whether cancellation of registration is the most severe penalty that manufacturers whose products have fallen below relevant standards will suffer. I think that the proposed legislation in addition to providing for cancellation of registration should include other penalties. Perhaps it could include a provision for a manufacturer to show cause why future applications should not be refused if he continually flouts the legislation. The Minister said the bill is the first of its kind in Australia. This means that similar legislation has not been tested in any other area, put up to scrutiny or been fine tuned. If that is so, perhaps we have been a little light-hearted in the way we have approached the legislation. Perhaps there should have been more working parties and more input from all the parties concerned in this serious issue.

The Minister's speech was full of clichés. He said that the bill provides a process for addressing at least part of the problem that sewage sludge creates that is both environmentally and economically sound. The process has never been tested. This is the first time it has been released publicly. Therefore, I question how serious the Minister is and whether his speech contains glowing words to ensure that the legislation gets public support. In supporting the proposed legislation Her Majesty's loyal Opposition has taken it apart. I have asked questions that I hope the Minister will be able to address because the legislation is vitally important. It will be closely monitored in the future. If the process is done well, it will be a success for New South Wales; if it is done sloppily, it will be a wet and soggy mess for all the people of New South Wales. I thank the House for the opportunity to speak on this occasion.

Mr SMALL (Murray) [9.7]: I support the Fertilizers (Amendment) Bill, which covers the supply of sewage sludge for soil improvement of agricultural land. Sydney's huge population of 3.5 million creates a major, growing sewage problem. Sewage disposed of through ocean outfalls creates an enormous number of problems. The Government has implemented measures to purify that sewage so that people can use the beaches. Albury, on the Murray River, is facing many problems with sewage disposal. For a number of years Albury City Council has disposed of its treated effluent in the Murray River. With Albury's population growth the council is investigating how it can overcome its increasing disposal problems. The council has proposed disposing of its 11,000 megalitres of liquid waste through the Corurgan irrigation scheme. Though the irrigators need more water for irrigation, they have rejected the council's proposal. The problem of developing ways and means for the future disposal of sewage sludge has been referred back to the Albury City Council. Consequently this has caused untold problems and concern to the people on the Murray River.

I am pleased that the Department of Agriculture and those in authority are investigating this difficult matter, in which New South Wales is taking the lead. It is not a matter where New South Wales can look to other States and other places in Australia or perhaps overseas for guidance. The leadership role in which the Minister for Agriculture and Rural Affairs will play a principal part requires a lot of understanding
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and initiative in facing up to environmental difficulties. We cannot ignore this problem. The use of sewage sludge on agricultural land is still in the experimental stage, but I am pleased to read that a booklet has been published and guidelines have been drawn up to provide for this. The booklet identifies different soil types in New South Wales, where there are high acid and salinity levels. That all has a bearing on the disposal of sewage effluent and in being able to use sewage sludge as a fertiliser.

The guidelines and safeguards to successfully utilise sewage sludge will benefit farmers and they will feel secure in being able to use it. Organisations involved in the treatment and utilisation of sludge as a fertiliser will include local councils, the State Pollution Control Board, the Department of Agriculture, farmers and, in Sydney, the Water Board. The guidelines must be correct and proper, because the fertiliser will be used to produce food for human consumption. The large number of raw dry fertilisers used for increased yields for vegetable production - and I refer to sheep, horse, cattle and poultry manures - suggest that it is high time that we made use of human waste fertiliser. Solids account for only 0.1 per cent of sewage, as against 99.9 per cent liquid. However each day throughout the State 5,000 tonnes of wet sludge can be converted from those solids.

Great care and responsibility must be taken when sewage sludge is being used. Sludge must be free of chemicals and other harmful elements. Any sewage from industrial areas must be checked to ensure that it is free of contaminants or other pollutants that would be dangerous when used as a fertiliser. Some two months ago it was suggested that the blue-green algae on the Darling River was caused by farmers using fertilisers and chemicals. Although it is true that those chemicals contribute to the blue-green algae, it has been proved that elements of sewage are one of the greatest contributors. It is most important to look at other uses for sewage sludge. It is my understanding that the Fertilisers (Amendment) Bill will ensure that the vast majority of sewage sludge in New South Wales will be safe and free of contaminants.

It is extremely important to note that class A sewage sludge fertiliser will be available for purchase for general use in a bagged form with a registered brand name and the contents itemised. Class B will be distributed under strict control according to the local circumstances and treatment. As Class C will not be suitable for fertiliser, it will be used for landfill or will be burnt. The regulations will stipulate that sewage sludge must be clean, and the bill establishes the appropriate standards. The capabilities of the land in question must be considered. Only light applications of the fertiliser should be used and annual checks should be made to ensure that the application is correct and proper and that the soil types are acceptable for the use of sewage sludge. Councils will need to play a role in soil testing, and the State Pollution Control Board will be required to give advice. Any fertiliser produced from sewage sludge must be free from nutrients, heavy metals and trace elements. The application of sewage sludge on agricultural land in New South Wales is a new technique. It recycles organic matter and nutrients for low fertility soils. The risk of human pathogens, heavy metals and organic pollutants entering the food chain can be controlled by good management practices. I emphasise that good management practices are absolutely imperative to ensure that any use of sewage sludge fertiliser is beneficial to all and is also environmentally sound. Guidelines on the safe use of sewage sludge will improve and protect the environment and will also safeguard public health. I support the Fertilizers (Amendment) Bill.

Dr KERNOHAN (Camden) [9.19]: I speak to the Fertilizers (Amendment) Bill because I believe that the use of sewage sludge as an agricultural fertiliser is of the utmost importance on all counts. For many years, while I was director of the University
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of Sydney farms at Camden, I was aware of and followed with great interest the research carried out on sewage sludge by Dr Tony Ross and his colleagues at the Veterinary Research Centre at Glenfield. As a result of this research a set of guidelines has been developed by Dr Ross. It is interesting reading that I would recommend to every one of my colleagues, and I am not being facetious. This is the most comprehensive set of guidelines currently in use in Australia, which were prepared only after seven years of thorough and painstaking research. The majority of practical trials that have been carried out on the use of sludge were and are being carried out in the Macarthur area. Many of the farmers using the injection process for liquid sludge - which is called biosoil - are friends of mine. To date we have talked about the process and use on farms and I have heard no complaints from them.

The use of sewage sludge always has implications regarding the environment, food chains and health. However, the very stringent guidelines that have been prepared for the use of sewage sludge were set down and organised with the co-operation of, and to satisfy the requirements of, the New South Wales Department of Health and the former State Pollution Control Commission. I will restrict in general my comments to the use of liquid sludge for broad-acre agriculture because I believe it is an extremely important, wide and profitable use for agriculture. The sewage authorities must categorise sludges and only those with very low levels and specific levels of pathogens, heavy metals and certain organic nutrients are deemed suitable for agricultural use. Just as important, the land on which it is to be used must be deemed suitable. It has to be level to gently sloping, a specific distance from any stream or waterway and cannot be waterlogged. It must have buffer strips of set sizes adjacent to property boundaries or any dwelling. The land should not be stony or rocky and one should note the vegetation on it. It must be securely fenced and, more important, soil testing for existing levels of all nutrients and pollutants must be carried out before sludge is applied.

People are worried about such matters as infectious diseases. In 1981 the World Health Organisation described a wide range of microbiological hazards in sludge and, most important, in raw sludge. However, the risk is significantly reduced by biological and chemical treatment of sludges by aerobic or anaerobic digestion processes as will be the sludges we propose to use. The greatest risk is salmonellosis and beef measles tapeworm. However, the important thing is that all the sludge must be incorporated into the soil on the day of application, either by the injection process of liquid sludge or by ploughing in of the more dewatered variety. Grazing of animals is not permitted for one month, with a three month non-grazing period for high-risk new-born animals or lactating animals.

If it is proposed that food be grown on this land, food grown above the ground, for example lettuce, should not be grown for one year. Food grown below the ground, such as carrots, should not be grown for five years. As to nitrogen and phosphorus pollution in either surface or ground water, sludges are significant sources of nitrogen and phosphorus, and, if leaching or runoff occurs, pollution can be present. However, the surface and ground water contamination by nitrogen is lower with sludge than with conventional fertilisers because only small amounts of soluble nitrate nitrogen and volatile ammonium nitrogen is present in sludge. The remainder is organic nitrogen, which is a slow release source. Less contamination occurs with organic nitrogen than with nitram or urea, which are conventional chemical and inorganic fertilisers which have a high concentration of soluble nitrogen. Once again, any risk of pollution by nitrogen or phosphorus is minimised by incorporation.

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The guidelines specifically require that the total nitrogen loading applied in any year be restricted to the annual nitrogen demand of the pasture or crop to be planted or being grown. Under most circumstances phosphorus, when applied to soil, becomes tightly bound to it. Streams generally become polluted with phosphorus because of erosion or movement of soil particles with phosphorus bound into it. Therefore, erosion prevention is an effective control measure. Once again, incorporation minimises pollution should runoff or sheet erosion occur, and of course sludge improves soil structure. Where one has improved soil structure and fertility, better plant growth occurs. Better plant growth means less erosion and runoff. Some people like to think that heavy metals are or could be a real problem. Several heavy metals are common pollutants in sludge. They include mercury, cadmium, lead and such elements as that. The application of sludge at agronomic rates based on nitrogen requirements limits the annual loadings of heavy metals. More importantly, the cumulative loadings or lifetime loadings for soil are specifically set and indicated.

As with other things I have mentioned the topsoil concentration of metals must be measured each year before any further sludge is applied. The limits that are set for heavy metals are very conservative by world standards, and this is because of the nature of Australian soils. On the east coast in particular the soils are acidic, low in organic matter, have low cation exchange capacity and thus have a lower ability to bind heavy metals. Animals grazing under Australian conditions also ingest soil. This is important not only with heavy metals but also organochlorine pesticides. Dieldrin, heptachlor and chlordane were used to control ground inhabiting insect pests until 1985 when they were banned for this use. However, some plants take up these pesticides from the ground and animals eating these plants and soil bearing it deposit residues in body fat where they may persist for many months or years. These residues are also excreted in milk. Everyone remembers the shipments of Australian beef to Japan which exceeded the maximum residue limits. However, one must bear in mind that these are legal limits not safety limits.

Being above that limit does not indicate toxicity to the consumer. No one will allow threats to a $2 billion per annum export market. Therefore, very stringent testing and standards will be applied for these components as possible components of sludge. The problem of such residues was found in areas where rapidly changing land use occurred - where people went from growing maize, cotton and potatoes to grazing cows, et cetera. The level of residues in the soil will decline over the years. It took about 10 or 15 years in the United States for soil contamination levels to decline after organochlorine pesticides were banned. On the safety of sewage sludge - this is important and the only objection anybody could have to the measure - so long as the regulations incorporate all these guidelines, including the written agreement between the sludge suppliers and farmers, such that farmers will be protected, I can see no problems whatever with the use of sewage sludge. I support the bill.

Mr WINDSOR (Tamworth) [9.30]: When I became a politician, I thought that I would never drift into the mire, but here I am today dealing with sludge. It is with a great deal of pleasure that I support the Fertilizers (Amendment) Bill. For many years I have been interested in the use by China of by-products in the maintenance of the fertility of land. The productivity of their land has always fascinated me. This legislation ushers in the recycling of nutrients for use by the agricultural sector. Though the Government and the Opposition generally display a lack of common sense on some environmental issues, I congratulate the Minister for Agriculture and Rural Affairs, his staff, and the Department of Agriculture on taking this positive step. It is good to see that agriculture has not taken a back seat but is leading the environmental debate, as I have always believed it should. I see this as a great step forward from the current methods of sewage disposal and towards helping agriculture in the future.

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I shall speak briefly to this legislation as most matters of concern have already been raised by the previous speaker. It is worth noting that sludge may be applied directly to agricultural and reclamation sites or processed further and incorporated into soil conditioners and fertilisers. Because sludge may contain some undesirable contaminants, such as pathogens, heavy metals and toxic organic chemicals, the Department of Agriculture has issued guidelines on the use of sludge and products containing sludge. Having had personal experience with the use of sludge as a practising farmer, whose property adjoins a sewage treatment works, I can attest to the beneficial aspects of sludge use to the condition of the soil and the productivity of subsequent crops. I note that within the guidelines of the bill the recommendation is that limited applications be applied to agricultural lands by the Environmental Protection Authority. A further use of sludge, which is probably not readily recognised, is as a fertiliser. As the honourable member for Camden mentioned, the release of nutrients will be slowed down. Many honourable members would be aware that blue-green algae is a problem in some of our waterways. Any products that we can use in the fertiliser industry that slow down the release of nutrients and prevent algae blooms can only be of benefit in the future.

The agricultural guidelines incorporate the requirements of agencies such as the State Pollution Control Commission, the soon to be established Environment Protection Authority, and the Department of Health. They specify limits on chemical contaminants, procedures to control pathogens, and the uses to which the products can be put. The Department of Health has additional requirements for the use of sludge and sludge products sold to the public. Minimum heat and composting treatments are specified, and packaged products are to be labelled to indicate the content of sludge. The bill extends the present provisions of the Fertiliser Act to include the supply as well as the sale of soil-improving agents contained in sewage sludge. This will ensure that any dealing with products containing sewage sludge is controlled under the bill. It will also ensure that a trace-back system will be in place to enable the recall of a product if a violation of contaminant standards is detected.

The operation of the legislation will be closely monitored by officers of the Department of Agriculture after its introduction. Registration will be denied to any product which does not meet the prescribed standards and products found after registration to have fallen below those standards will have their registration cancelled. As has been mentioned by the Minister and others, the sludge will be classified. Poor sludge with heavy metal contaminants, et cetera, will be regulated under the Hazardous Chemicals Act, and the good sludge will be able to be used for agricultural and other purposes within the limits of the guidelines of the Department of Agriculture and other agencies. This is not the least cost approach to the disposal of sludge, but in my view it is the best approach and will be within sustainable agricultural guidelines. The benefits of applying sludge to land have already been mentioned. I can attest to the improvement in soil structure, the improvement in organic matter and the increase in infiltration rates through the use of sewage sludge. Increased infiltration rates have an impact on soil erosion and on the amount of water that can be stored in subsoils. So far as soil structure is concerned, the use of sludge is not beneficial particularly given the guidelines controlling its use. The honourable member for Camden mentioned the nutrient percentages involved in some sludges. I said previously that there is a slower release of nutrients.

In conclusion, I highlight the economic value of the use of sludge. One of the great problems is that at times we tend to take a one-eyed approach to either environmental or economic issues. I believe that this legislation is taking a two-eyed approach to a problem that we all have to face. It should stand as an example to some
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members in this House in relation to other environmental and economic arguments. If we assign a value to sludge of $40 per tonne, which is equivalent to the current poultry manure price, the agricultural value of the sewage sludge produced in New South Wales - this is equivalent to 350 dry tonnes per day - is approximately $7.3 million a year. As a phosphorus source alone - and most people in this House would realise that Australia is a nation deficient in phosphorus as a resource nutrient - this is equivalent to 30,000 tonnes of single superphosphate per year, valued at $7.1 million. Sludge affords a unique opportunity to recycle nutrients and organic matter through the soil and to reduce the need for chemical fertilisers. In many areas where sewage sludge is produced, there is ample farmland of low fertility greatly in need of the benefits which sludge can provide. I wholeheartedly support the legislation.

Dr MACDONALD (Manly) [9.40]: Mr Speaker, you may be wondering, as others may be, what more could be said about sludge. Indeed the word sludge is almost an onomatopoeic type of name; it easily rolls off the tongue. Sludge does have great value. I make a few remarks as a member who does not come from the agricultural or rural sector of the State. Rather I am an urban conservationist. For that reason my remarks will be directed to the benefits of disposal rather than re-use of sludge. It is interesting, as the honourable member for Tamworth said, that the environmental and financial advantages are virtually complementary. I have spent many years wrestling with the question of the beneficial re-use of products produced from urban headland sewage treatment plants. The Water Board in conjunction with the Department of Agriculture is now examining the benefits of the re-use of such products. It was considered previously that sludge had a calorific value equivalent to that of brown coal. It was used purely as a means of incinerating other components of waste produced at the North Head plant. The community in that region has fought for many years to find a more beneficial re-use for sludge. It is interesting that the Department of Agriculture should introduce at this time this excellent amendment to the Fertilizers Act.

At present the urban environment is confronted by enormous problems associated with the disposal of sludge - in the case of North Head, about 30 tonnes per day. I noted in the Minister's second reading speech that he spoke about the disposal of 3,000 tonnes of wet sludge a day in New South Wales. The Manly area has problems with the disposal of only 30 tonnes which necessitates the movement of one truck every 24 minutes within the peninsula to dispose of that product. Apparently most of the material is disposed of for landfill purposes. These events have occurred at the right time: the Water Board is beginning to look towards the environmental advantages of re-use, and the Department of Agriculture is seeking to include provisions for control of the use, sale and supply of sludge. I commend the Minister for his comments in his second reading speech on the need to take action for the control and regulation of disposal of sludge. In its purely domestic form sludge is a relatively harmless substance, apart from its pathogenic content. The disposal of urban sludge includes a risk of industrial contamination as a result of industry using the sewerage system as a waste dump. With rural sludge there is a risk from organochlorines and pesticides. We must be wary of that.

I am confident that the type of controls that have been built into the amending legislation and the guidelines that have been introduced already and will be included in the regulations will satisfy the safety requirements. We are looking for quality control from source to sale. That will allow for integration between the Department of Agriculture, the new Environment Protection Authority and, one hopes, the Department of Health. The community I represent welcomes control of the use and sale of sludge as the beneficial disposal of a problem they have experienced. This will bring about a
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happy alliance between a problem and a benefit. I welcome the bill. I do not see that there should be any concerns about a risk. There is a public perception that sludge might carry a risk when used on agricultural land, but the safeguards built into the amending legislation are perfectly satisfactory.

Mr ARMSTRONG (Lachlan - Minister for Agriculture and Rural Affairs) [9.45], in reply: I thank honourable members who have contributed to the debate: the honourable member for Port Stephens, the honourable member for Murray, the honourable member for Camden, and the honourable member for Manly. It is worth while to draw to the attention of the House for the record the background of those honourable members. The honourable member for Port Stephens, who led for the Opposition, before he became a member of this place was employed with the Department of Agriculture and, I understand, is a horticulturist. The honourable member for Murray is a practising farmer in the tense area of the south of the State, around Deniliquin, and has experience with irrigated rice and broadacre farming. The honourable member for Camden is an eminent researcher and acknowledged scientist. The honourable member for Tamworth is a broadacre dryland farmer. The honourable member for Manly is a medical practitioner. All of those members, who come from diverse backgrounds, have seen fit to support the concept of the proposed legislation. I am deeply indebted to them for the enormous breadth of support they have given to the legislation. That is significant and worth while recording for posterity.

A number of questions were raised by the honourable member for Port Stephens. I should address some of them in brief. He queried the definition of sludge. The definition of that term in the legislation is drawn from the definition contained in the Clean Waters Act. He asked also for clarification of whether the legislation would incorporate regulations and definitions applicable to the Hunter Water Board in its desire to put sewage sludge down old coalmines. The only use that is permitted under this legislation is beneficial use. Non-beneficial uses of sludge are dealt with in the Environmentally Hazardous Chemicals Act and its associated chemical control orders. If the honourable member had bothered to do any research, he would have learned that for himself. This is pioneering legislation in regard to the use of sludge in Australia. Overseas the use of sludge on land has been a longstanding practice in many countries. It is widely and safely practised in most developed countries, including the United States, Canada and European Economic Community countries, including the United Kingdom. Australia has the opportunity to benefit from the experience, research and papers produced in those countries. It can adapt the latest technology and learn from it.

So far as consultation is concerned, a wide range of stakeholders have been consulted. The steering committee included representatives from environmental and farming groups, both of which are important when one has regard to the concept of the legislation. I should inform the House that the regulations will include modern controls of the microbiological hazards in sludges released for beneficial re-use. Further, legionella bacteria are common in soils. They are not unique to sludge. Sludge was not a component in potting mixes associated with the recent deaths of two people in Queensland. I hope that those responses will answer some of the matters raised. It is fair to say that the only disappointing facet of the debate was the attitude of the Opposition, which has a heavy responsibility to provide an alternative opinion, to seek weaknesses in legislation and put forward constructive arguments. In this case the member who led for the Opposition clearly had failed to do any research. He chose to concentrate on the second reading speech. His contribution contained no factual content. I was disappointed at that failure. It is a disappointment that the Opposition, which supports this legislation and claims it was the Labor Party which developed the research, failed to make any positive contribution to the debate. Its contribution did do justice to the legislation or the process of parliamentary democracy.

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Guidelines to be incorporated by regulation will require a written agreement between the sludge producer and sludge receiver before any sludge is applied to land. That agreement must include the following information: name and address of the landowner receiving the sludge; location, map grid reference, legal description and Valuer-General's number; intended land use of the site of homestead where sludge will be applied; sketch map showing main site features and where sludge will be applied; size of each application site in hectares; copy of a written site approval by New South Wales Agriculture; approval from the State Pollution Control Commission to apply waste; origin of the sludge and the methods used for pathogen, odour and insect reduction; the nutrient, heavy metal and organic compound concentrations in the sludge and the soil before application; method and rate of application of sludge per hectare; statement indicating the landowner's and plant sewage treatment authority's compliance with the guidelines; and the landowner's agreement to post-application access by staff of New South Wales Agriculture and other government agencies to carry out the monitoring program. Those guidelines will keep an accurate track of where sludge is and enable ongoing monitoring of commercial and real effectiveness of the re-use of sludge and its benefits or otherwise to agriculture. I pay particular thanks to New South Wales Agriculture for its work and dedication over the years on this project. Members of Parliament often take the bouquets but on this occasion the real credit should be given to those - the scientists and the people writing up the minutes - who helped develop this program. I hope the project succeeds if for no other reason than because of the work and dedication of those people.

Motion agreed to.

Bill read a second time and passed through remaining stages.

Debate resumed from 25th February.

Mr AMERY (Mount Druitt) [9.53]: I lead for the Opposition, which supports the Government in introducing this bill. The bill has its origins in the Associations Incorporation Act, which was introduced in 1984 and took effect on 1st July, 1985. Shortly after the introduction of that bill the Council of Social Services of New South Wales published a booklet entitled "Incorporation: Explanation of the Associations Incorporation Act" by Graham Wheeler. When the principal Act is amended by the passing of the amending bill I suggest that the Government sponsor and perhaps encourage republication of such a guide, or an amended version of it, for the information and guidance of the various associations which come under the umbrella of the legislation. When the original bill was passed a number of organisations in various electorates expressed much disquiet about legal and financial liability for actions and the possibility of losing homes. At that time publication of that booklet did much to show those associations how to conduct their affairs and the extent of their legal obligations.

During the period the Act has been in operation a number of problems have arisen, as indicated by the Minister in his second reading speech. As a result a number of discussion papers were issued, many organisations were canvassed, and responses were sought and, when lodged, considered. The amending bill deals with many of those concerns that were raised by the associations. I focus on four matters. The first is the provision to expand membership of bodies incorporated from individuals and corporations to encompass unincorporated bodies. The Minister in his second reading speech gave a
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very good example of the Ethnic Communities Council, an umbrella organisation representing about 400 related groups. The Minister said that many of the organisations under the umbrella group were unincorporated bodies. The principal Act required that any one of those organisations wishing to become associated with the umbrella organisation had to nominate a person affiliated, in that case, with the Ethnic Communities Council. The amending bill will enable a group to register with or to become associated with that body under its own name and not that of an individual nominated by the organisation. That has been a concern of a number of ethnic communities and community groups. I am pleased that the Government has addressed that issue in the bill by amending the definition of "member" as set out in item (1)(c) of schedule 1 as follows:

From the definition of "member", omit "who" wherever occurring, insert instead ", body or organisation that".

The explanatory note states:

At present, because the definition of "member" in relation to an association refers to a person (i.e., an individual or a body corporate), it can be argued that unincorporated bodies or organisations are prevented from being members of associations for the purposes of the Act.

That major concern was raised with the Opposition some time ago at a number of ethnic community functions. The Opposition is pleased that the Government has addressed that problem. Second, the bill simplifies the winding up procedures of associations, in particular in relation to the disposal of property. Section 53 of the principal Act requires an association to vest surplus property in a similar association whether incorporated or not. I was advised in a departmental briefing that New South Wales is the only State in Australia with such a restriction on disposal of property. The bill will remove that restriction. As a result the disposal of property will be left to the determination of a special resolution by members of the subject association, and the process of distribution of property will have to be approved by the Commissioner for Consumer Affairs. Proposed section 53(2) states:

In a winding up of an incorporated association, the surplus property of the association is to be distributed in accordance with a special resolution of the association.

Proposed subsection (2A) of section 53 states:

Any such distribution of surplus property:

(a) must be approved by the Commissioner; and

(b) is not to be made to any member or former member of the association (other than a member or former member which is an unincorporated association having, at the time of the distribution, rules preventing the distribution of property to its members); and

(c) is subject to any trust affecting that property or any part of it.

On the winding up of an association a contentious issue often arises as to the disposal of property. On many occasions State Government departments have assisted associations and supplied typing facilities, storage files, et cetera, and it is important that all such property is accounted for when various associations are wound up. The underwriting clause in the bill states that any such procedure by an association to resolve a dispute has to be approved by the Commissioner for Consumer Affairs. The Opposition supports that proposal. The third matter dealt with in the bill is the appeal mechanism. That aspect
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has been strongly argued by the Minister in his second reading speech. At present a dispute that arises with an association as to a ruling by the Commissioner for Consumer Affairs must be determined under the legislation by the Supreme Court. That is not only costly but time consuming. The bill before the House gives authority for a Local Court to assume the function of the Supreme Court as referred to in the principal Act.

The fourth substantive provision is only a housekeeping matter. It provides for an improvement in the standards required to maintain proper accounting records, register of members and minutes of meetings. That provision is included in the principal Act, but it has been expanded in the amendment bill. The Opposition certainly supports the bill and has no problems with the comments made by the Minister in his second reading speech. The bill has been examined and no complaints have been made by the various organisations. The Opposition is happy to assist the Government in the passage of this bill through both Houses. When the bill becomes law the Opposition will expect the Government to sponsor the publication of another explanatory booklet for distribution to all incorporated bodies in New South Wales. The Opposition urges the Government to continue the review process to ensure that any concerns raised by the associations through the operation of this bill are addressed. Perhaps further amendment bills could be discussed at a future date. I support the bill.

Mr TURNER (Myall Lakes) [10.2]: I support the bill. I agree that further information should be given to the community and to those groups that to date have availed themselves of the Associations Incorporation Act. It is a mechanism which has provided a great deal of assistance to voluntary groups within the community, providing them with some form of secure knowledge that they will not be challenged directly and personally. However, it may be appropriate to reinforce those provisions. It may be time to pep up the community groups who are not taking advantage of the Act and to promote and publicise the benefits of this important piece of legislation. The Law Society produced a very good video which was available to community groups and which highlighted the importance of the Associations Incorporation Act and the reasons why those groups should incorporate. The Attorney should give consideration to that type of information being provided to groups that are not presently incorporated. Not all groups want to be incorporated and that is one of the matters that is addressed in this amendment. However, there is no doubt that this concept has been embraced and has worked well for the last seven years. As the honourable member for Mount Druitt said, there has been a continual consultative process to fine-tune the Act. These amendments are part of that process.

The honourable member for Mount Druitt set out clearly and concisely the proposed amendments in principle. There are four of them. The first one is in relation to the ability of unincorporated bodies to become members of an association. This provision is overdue. It is a reaction to the present situation where some bodies may for some particular reason not wish to become incorporated. If a representative of an unincorporated body sought to become a member of an incorporated association, that person as an individual would become a member rather than representing the views of the unincorporated body, though in practical terms the representative would report back to the unincorporated body. However, he would not have any status within the association. This proposed amendment allows the strong unincorporated bodies within our community to be represented in an incorporated association. The voluntary winding up provisions are probably the most important in the bill. If an obscure association wishes to wind up and dispose of its property, that process can be very messy. It may not be possible to find an organisation that is of similar outline or that has the same objects. This amendment makes it significantly easier for the winding up and disposal of the assets of the organisation.


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The bill emphasises that an incorporated body cannot voluntarily cancel its incorporation unless it has paid its debts and its liabilities. Item (16) of schedule 1 to the bill sets out stringent procedures in this regard. Associations that wish to go into voluntary liquidation must ensure that they proceed in accordance with those provisions. The bill provides that the voluntary cancellation of incorporation must also be approved by the commissioner. He would give such approval only if the liabilities and debts of the association were paid up. A provision is also made that any unexpended grants must be repaid to the Government. On the winding up a payment to members from the assets of the incorporated body sought to be wound up is not allowed. That provision is to safeguard the honesty provisions of the members. The third significant amendment is related to the appeal mechanism. It is illogical to expect these associations to lodge an appeal in the Supreme Court from a decision of the commissioner. The associations by and large would represent sporting groups or ethnic groups within our community. They are an extension of the voluntary groups with which we are all familiar, and to expect those groups to go to the Supreme Court would be rather like using a sledge-hammer to crack a nut. The amendment provides for those groups to go to the Local Court. Such a provision will enable any costs order to be kept to a bare minimum. It will also make available a speedier and informal resolution of any matter that may arise.

Finally, the bill deals with matters of dispute resolution. There will always be disputes, particularly in these sorts of organisations, about the association's direction. The Act provides that the model set of rules can set out a dispute procedure that must be adopted, or the association can change the model set of rules to its own formula to solve its own arguments. However, a system must be in place because the dispute must be resolved. The amendments contained in the bill provide for a set manner in which to resolve disputes. If individual groups do not wish to follow that procedure, they can follow the procedure set out in the model set of rules, which would have to be approved by the commissioner. The balance of the amendments are housekeeping matters. The bill provides that proper accounting records, a register of members and minutes of meetings must be kept. That is a normal procedure for any organisation that is charged with some form of community function, particularly if a monetary element is involved. These are good amendments. They enjoy the support of both sides of the House. They can only make it easier for those organisations that have taken advantage of incorporating under the Associations Incorporation Act to operate under the provisions of the Act. They will make the Act more streamlined and perhaps bring it up to date. I support the bill.

Mr NAGLE (Auburn) [10.10]: The area of unincorporated associations seeking incorporation is interesting. There is a national code dealing with incorporated bodies. The booklet entitled "Incorporation: An Explanation of the Association" was mentioned by the honourable member for Mount Druitt. It contains a cartoon showing a person at a meeting rescinding the rules of an association by burning them. This is the problem of unincorporated associations with a great many individuals competing -

Mr Amery: Like a branch meeting.

Mr NAGLE: Obviously in the Liberal Party, not in the Labor Party. Many people may want to change the rules. People may have been charged by the club. In the club of which I am a member one of the directors made the fatal mistake of expressing to another director, a female, his view about her personality. She then charged him and he went before the board of directors and was suspended for three months. He wanted to take on the club in the Supreme Court claiming a denial of natural justice. I might say that the legal advice I gave was right. He has not spoken to me since but he did not take
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action in the Supreme Court and that saved him a lot of money. The Bradley egg farm case dealt with this matter. The Hogan and Holman case dealt with a famous Premier of Victoria. Many other cases have involved unincorporated associations. In some cases unincorporated associations have won because they were unincorporated. One such case involved the Western Suburbs Rugby League Football Club and the New South Wales Rugby League. In 1983 Wests were kicked out of the competition. Wests took on the league, which had tended to stand over Wests. The honourable member for Ashfield will remember the series of court cases that lasted for three and a half years.

In the first series of cases Western Suburbs, as an unincorporated association, won because the rules that governed it and its relationship with the New South Wales Rugby League, which was also an unincorporated association, were such that the league did not have the power to get rid of Wests. The New South Wales Rugby League then incorporated and Wests remained unincorporated. It then had articles and memorandum of association. Wests applied to join the league in the next year. It was rejected because it was in breach of the articles to the extent that the league decided that Wests should no longer be in the competition. In the next year and a half legal action proceeded, ending in the High Court in Adelaide. I am proud to say in this House that I was one of the junior barristers in the case. Even though Wests lost in the High Court it was able to drag out the case with the league before it could win. Now all the organisations are incorporated and subject to that nice provision under the national Companies Code called minority oppression.

It is pleasing that object (e) of the bill intends that the rules of unincorporated associations are to make provision for the resolution of internal disputes between the members and between the members and the association. Clause 21(5) provides the mechanism for resolution of disputes between members in their capacity as members and between members and the incorporated association. I hope that the intent of the provision will be effective in dealing with disputes. In many unincorporated associations or, as they will become, associations incorporated, there will be difficulties in dealing with problems between a director who expresses a view which is not pleasant to another director who happens to be female and who charges him. At another club a bouncer was charged for bumping a director's son and was suspended for a year. He sought redress in the Supreme Court but by the time a decision was reached there remained only one more month of suspension.

There are difficulties in mediating, arbitrating and conciliating. I hope that in years to come we will be able to establish rules and mechanisms within incorporated small clubs to mediate. The hearings list of the Supreme Court of New South Wales is jammed. In the last few months I spoke to a judge who said that if two judges sat in the Supreme Court from 9 to 5 with no lunch break for five days a week for the next 42 years they would probably clear the backlog of personal injury cases. We do not want the Supreme Court tied up with disputes between clubs and their members. These types of matters should be mediated, arbitrated and conciliated. I hope that among the provisions in the bill eventually will be a mechanism for doing this. I note that the Attorney General said in his speech:

I do not regard it as appropriate for the Attorney General to interfere in any way with the deliberations of the committee. However, the Government will provide the committee with whatever assistance may be required.

We should set up ways and means to mediate such disputes and keep them out of the court mainstream. It is good that we are now reaching a stage at which we can look at
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similar minority oppression provisions as appear in the national Companies Code. Someone may have a grievance about members of a club carrying out activities which are inconsistent with the rules. They should not be burning the rules when they do not suit them. I am concerned that ethnic groups in unincorporated associations might face such problems although ethnic groups in my constituency seem to get on well together. I have not had many problems with regard to disputes about their rules. Where there are rules and factional groups - we all know about factional groups in this place - there may be disputes. We should find a mechanism to mediate, arbitrate and conciliate on important issues.

The provisions regarding voluntary winding up of corporations and keeping accounts are very important. Many disputes stem from problems about the keeping of accounts and what minutes have been kept. There may be a problem with, say, a municipal Labor Party caucus meeting at which minutes were not kept. One of the aldermen may decide to charge his colleagues, only to find that the minutes have not been kept. It is an unincorporated association. The minutes cannot be produced on request. The minutes may be inaccurate. The bill is a good step forward to stop people burning the rules. I hope that mediation, conciliation and arbitration will prevent a recurrence of the problems that Western Suburbs had when it had to go to the High Court of Australia and in the end make some lawyers rich, present company excluded.

Mr COLLINS (Willoughby - Attorney General, Minister for Consumer Affairs and Minister for Arts) [10.19], in reply: I thank all honourable members for their valuable contributions to this important debate this evening. One thing that never ceases to amaze me is the way in which members, captured by the moment and proposing to make only brief remarks on bills, can become immersed in the legislation very quickly and embellish it with detail such as we have heard this evening. I want to deal briefly with one point raised in the debate. It is proposed that pursuant to the passage of this amending bill the model rules will be amended by legislation to provide that internal disputes will be dealt with by community justice centres. Each association will be free to deal with internal disputes in a different way - for example, by the appointment of an honorary arbitrator - so long as a mechanism is provided for it in the rules. It is the Government's intention to ensure that the workloads of the extremely hard-working courts are not increased by this measure but, rather, decreased. The purpose of the legislation is to try to reduce the workload in our courts. I believe that is why the bill has attracted the support of both sides of the Parliament. Accordingly, I want to assure those honourable members who have participated in the debate that the legislation will be monitored carefully. If further improvements are needed down the track, they will be introduced at an appropriate time. I give the assurance that the Department of Consumer Affairs will look closely at the effect of this legislation. I commend the bill.

Motion agreed to.

Bill read a second time and passed through remaining stages.