House of Representatives

Second Reading Speech

Senator MINCHIN (Minister for Industry, Science and Resources)

I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows-

JUDICIARY AMENDMENT BILL 1998

The Judiciary Amendment Bill will significantly reform the legal services market for Commonwealth legal work. The bill will establish the Australian Government Solicitor, the AGS, as a statutory corporation that will operate as a government business enterprises. It will strengthen the position of the AGS in the market for Commonwealth legal work with private sector law firms.

The reforms will contribute to the delivery of more efficient and effective legal services to the Commonwealth and we therefore ask the Opposition to take a more constructive approach than occurred when the bill was previously debated in November 1997.

This bill has its genesis in the review of the Commonwealth's legal services contained in the so-called Logan report of March 1997.

The report found that maintaining ownership of a government legal practice was in the public interest.

The practice could meet the legal services needs of the Commonwealth and of Government agencies because of its particular focus on government work, its ability to maintain a `whole of governments approach, its strong corporate memory, and the need for a government legal service provider to meet the unique role and needs of the Attorney-General in providing core legal services.

The Government considered all options, including the possible sale of the AGS, but concluded for the reasons outlined in the report, that it should be retained within government ownership.

Establishment of the Australian Government Solicitor

The Government has decided to restructure the AGS as a new statutory body to maximise its ability to operate on a commercial, competitive basis.

Consistent with the usual approach for government business enterprises it will also be able to employ staff outside the usual public service regime.

The AGS will not be established under the Corporations Law, but set up as a government-owned statutory authority headed by a CEO, rather than a board of directors.

It will have the Attorney-General and the Minister for Finance and Administration as `joint shareholders'.

This will not interfere with the legal professional functions of the AGS, nor the Attorney-General's responsibilities as First Law Officer.

The AGS is not, and cannot be, the same as privately owned law firms. Its unique value to government is based on its government ownership and its expertise in delivering consistent and coordinated legal services to government clients.

Some limited core areas of government legal work will be reserved to government legal providers, primarily the AGS, and not available to private law firms.

The reserved areas of work are Cabinet, constitutional, national security and most public international law matters.

The public interest served by having the AGS undertake this role is not inconsistent with it operating at the highest level of efficiency and making a profit.

Competitive neutrality

The bill contains measures to ensure that the AGS will not enjoy net competitive advantages over private law firms by virtue of its government ownership.

In particular, the AGS will be required to make payments representing taxation that would have been incurred if it were a firm of legal practitioners.

The AGS will also be required to pay a dividend, analogous to the return of profits to the partners in a law firm, under corporate governance arrangements to be agreed by the Attorney-General and the Minister for Finance and Administration, after consultation with the CEO for the AGS.

The corporate governance arrangements will take into account the particular structure of the AGS and its function of providing legal services to government.

The AGS will be subject to the requirements of the Commonwealth Authorities and Companies Act 1997.

Legal Services Directions

The bill gives the Attorney General power to issue Legal Services Directions applicable to Commonwealth legal work, whether it is undertaken by the AGS, private legal firms, counsel or `in-house' legal units.

The Directions will provide a framework for the conduct of the Commonwealth's legal affairs, but leave prime responsibility for the effective and efficient use of legal services with agencies.

Once the Legal Services Directions are in place under the Judiciary Act 1903, most Commonwealth litigation will be untied.

This will complete the process of providing choice to government clients that began under the former Labor government in 1995.

It is the logical extension of the measures put in place by the Opposition. Until commencement of the new system, approval for untying of litigation will continue on an ad hoc administrative basis.

The power to issue Directions will ensure that the Attorney-General will be able to manage risks that could arise from the provision of legal services that are inconsistent, lack coordination, or do not address whole of government and public interest issues.

This is necessary with an increased range of government legal work contestable by private sector firms.

As recommended by the Logan report, the Office of Legal Services Coordination has been created to assist the Attorney-General in discharging his First Law Officer role.

The Office advises on rules and policies for Commonwealth legal work, especially litigation.

It will assist the Attorney-General in the preparation and administration of the new Legal Services Directions.

The Office also has an important role to play in advising Government agencies on their obligations in this area and on the purchase and delivery of legal services, so as to achieve maximum efficiency and appropriate risk management.

Conclusion

The reforms introduced by the bill will give the AGS the structure and flexibility in its business activities and legal services work to enable it to continue to provide efficient and effective legal services to government in an increasingly competitive market.

REGIONAL FOREST AGREEMENTS BILL 1998

I am pleased to be introducing this bill, which will provide legislative support to the outcomes being achieved under the Regional Forest Agreement process.

As Honourable Senators know , the Government is working co-operatively with the States to accelerate implementation of the National Forest Policy Statement,-the framework for a long-term and lasting resolution of forest industry, conservation and community interests and expectations concerning our nation's forest.

The Statement requires joint Commonwealth-State comprehensive regional assessments of the environmental, heritage, economic and social values of Australia's forests. These assessments, involving a high degree of input from interest groups, form the basis of negotiated Regional Forest Agreements between the Commonwealth and the States.

Regional Forest Agreements (RFAs) provide both a blueprint for the future management of our forests and the basis for an internationally-competitive and ecologically-sustainable forest products industry. RFAs will provide for a world class national, comprehensive, adequate and representative reserve system and will clearly identify those forest resources available for multiple use, including resources available for sustainable timber harvesting.

RFAs, and the comprehensive and transparent processes that lead to them, provide industry, environmental interests and the community with unprecedented certainty.

However, it is clear that industry and environmental groups alike are concerned that future governments may simply walk away from such Agreements. These concerns are understandable-this is exactly what previous governments have done when it suited them.

Therefore, key provisions in certain RFAs already in place are expressed to be legally binding on the parties. However, not all existing RFAs are so expressed and neither are all the provisions that are contained in those agreements.

The Commonwealth now proposes that all existing and future RFAs be strengthened by providing that termination by mutual consent of the parties can only occur 12 months after an intention to terminate the Agreement is notified; thus allowing a full review of the operation of the RFA to be carried out.

In the interests of enhancing industry confidence in RFAs, the Commonwealth also proposes that all RFAs will include positive obligations on the States to initiate compensation action on behalf of industry where a Commonwealth breach of an RFA results in a case for compensation.

We are working with the Victorian and Tasmanian Governments to include these provisions in existing RFAs in the near future. I would also emphasise, in the light of previous debate in the other place, that this process does not amount to opening renegotiation of existing RFAs.

In conjunction with these proposed changes, this bill provides RFAs with the legislative backing to ensure that all Australians have confidence in the long-term future of Australia's forest estate.

This confidence will be further sustained through, firstly, the enactment of State legislation, where necessary, to authorise wood supply arrangements and to declare and protect agreed forest reserves and, secondly, the provision of on-going wood supply agreements and contractual arrangements between individual States and companies where State-owned forests are involved.

In summary, the RFAs themselves remain the focus of the Government's policy approach. We firmly believe that community and investor confidence in forest industries will be best secured by strong RFAs which provide for ecologically-sustainable management of our forests. This bill, together with complementary State legislation and strong wood supply contractual arrangements between industry and State Governments, will provide that confidence .

As I have already stated, this bill provides a broad legislative context for all RFAs, with each RFA including provisions appropriate to the region concerned. Consequently, the bill is concise and has been drafted to ensure it can accommodate the necessary flexibility within, and between, individual RFAs.

One of the bill's main objectives is to provide legislative rigour for RFA termination and compensation provisions.

The bill will ensure the termination of an RFA will have no effect unless it is done in accordance with the RFA's termination provisions. It will also ensure that the Commonwealth is liable for any breach of an RFA it makes which occurs while it is force, even if the Agreement is subsequently terminated or expires.

The bill's provisions will mean the Commonwealth will not be able to agree to "water down" such termination or compensation provisions in the future without legislative amendment. The bill also provides that the termination and compensation provisions in the RFA at the time of the commencement of the bill, or the provisions which apply at the commencement of the RFA itself, whichever is later, will continue to apply.

I reiterate the Government's view that we expect to include in all RFAs the same termination and compensation provisions contained in the Tasmanian and Central Highlands RFAs at the time the act commences, subject of course to any minor changes to reflect differing State processes.

The other main objective of the bill is to remove certain Commonwealth controls and restrictions which, in the past, have been used as an indirect means to attempt to control timber harvesting.

This is in stark contrast to the RFA process, which is based on comprehensive, scientific assessment of the environmental, heritage, economic, and social values of forests in a region.

Such comprehensive assessments, which form the basis of negotiated RFAs, conclude the Commonwealth's environment and heritage obligations in relation to forestry operations in the region.

Consequently, the bill ensures that the effects of RFA forestry operations will be disregarded for the purposes of specified "trigger" sections of the Australian Heritage Commission Act 1975, the Environment Protection (Impact of Proposals) Act 1974 and its related Administrative Procedures, and the World Heritage Properties Conservation Act 1983.

The bill will also prohibit the application of export controls imposed under the Export Control Act 1982 for processed and unprocessed wood sourced from a region where an RFA is in force.

This exemption will extend to plantation-sourced wood from the region, unless the relevant State's code of practice is not approved under the Export Control (Unprocessed Wood) Regulations.

The exemption will further apply to any other Commonwealth law which prohibits or restricts exports to another country, or which has the effect of so doing, unless that law expressly refers to wood sourced from an RFA. While we understand that it is not possible to bind a future Commonwealth Parliament from legislating within its Constitutional responsibilities, this bill provides this Parliament with an opportunity to express its clear intention that such controls not be placed on wood from a region where an RFA is in place.

I would like to respond to a concern raised by the Opposition when this bill was before the previous House of Representatives. The Member for Perth suggested that the bill somehow asked the Parliament to blindfold itself and "give to the nine RFA agreements that have not yet been signed, sight unseen, the same benefits it seeks to accord to three signed RFAs."

The bill already deals with this concern. I would emphasise that for any agreement to gain the benefits of this bill, the comprehensive and stringent definition of a Regional Forest Agreement contained in clause 3 of the bill must be met-and met in full. .

Such an agreement must have had regard to assessments made of environmental, endangered species, national estate, world heritage, indigenous heritage economic and social values. It must provide for a comprehensive, adequate and representative reserve system. It must provide for the ecologically-sustainable management of the region's forested areas. And the agreement must also make it clear that it is a Regional Forest Agreement for the purpose of providing long-term stability of forests and forest industries.

This comprehensive definition ensures that the Parliament can be satisfied about the consistent nature and quality of Regional Forest Agreements-now and into the future.

This bill therefore provides solid legislative backing for the outcomes being achieved by Regional Forest Agreements and the detailed processes that lead to them. It is yet another significant step in ensuring that we all-governments, environmental and heritage interests, forest industries, and the communities and families across regional Australia that depend on them-can have confidence in the future of Australia's forests.

This bill is part of a series of Government initiatives in this important sector.

In conjunction with the RFA process, the Government has also committed over $100 million to the Forest Industry Structural Adjustment Program to assist native forest industry businesses and workers affected by the introduction of such Agreements.

In addition, in line with our strong commitment to industry development, the Commonwealth has allocated over $31 million to the Wood and Paper Industry Strategy to promote growth and investment in forest industries, including greater downstream processing and value-enhancement, plantation development and farm forestry.

Under the Natural Heritage Trust of Australia, a further $36.5 million over 4 years has been provided to the Farm Forestry Program.

In relation to plantation development, the Government is a key partner in `Plantations for Australia-the 2020 Vision', along with State and Territory governments and the plantation growing and processing industries.

The Commonwealth has allocated $1.9 million from the Prime Minister's Greenhouse Package to meet its obligations under the Plantations 2020 Vision.

These initiatives effectively refute claims that this Government is not committed to industry development, downstream processing and value-adding in forest industries. I can assure the Senate that the Government will continue to encourage sustainable, regionally-based and internationally-competitive Australian forest products industries.

In particular, we will take a whole-of-government approach in encouraging industry to address the current trade imbalance in forest products through on-going import replacement and export development.

This bill represents an important element in underpinning our industry development commitment. Strong, comprehensive and long term Regional Forest Agreements mean the policy stability that is essential for investor and community confidence in the future of our forest industries. At the same time they also ensure the protection of the unique environmental and heritage values of our forest estate.

I commend the bill to Honourable Senators.

WORKPLACE RELATIONS LEGISLATION AMENDMENT (YOUTH EMPLOYMENT) BILL 1998

This bill will amend the Workplace Relations Act 1996 and the Workplace Relations and Other Legislation Amendment Act 1996 to remove the uncertainty surrounding junior rates of pay by exempting junior rates, on a permanent basis, from the age discrimination provisions of those acts. The bill will also amend the principal object of the Workplace Relations Act to include within its scope the protection of young people's competitive position in the labour market, the promotion of youth employment and the reduction of youth unemployment, and these will also be objects to which the Australian Industrial Relations Commission must have regard in making and varying awards. In particular, the bill will require the Commission to support youth employment by ensuring that, where appropriate, awards that apply to work that is or may be performed by young people include junior rates of pay.

Madam President, members of this Parliament-particularly the Labor Party-who are concerned about the welfare of the young employed and of the young unemployed should match that concern with bipartisan support for this bill.

Madam President, junior rates have been a feature of the wages system in Australia since early this century. Age-based junior rates of pay are set as a percentage of the adult rate, and usually increase annually until adult rates are payable.

Over half of employees aged under 21 are covered by junior rates, with almost a third of these in retail trade, the single most important industry as far as youth employment is concerned.

Under current arrangements junior rates will not be able to continue after 22 June 2000. At present, junior rates are exempted from the provisions of the Workplace Relations Act and the Workplace Relations and Other Legislation Amendment Act designed to prevent and eliminate age discrimination in awards and agreements. The exemption expires on 22 June 2000 (although, under the present legislation, the Australian Industrial Relations Commission can extend the exemption on a case-by-case basis in accordance with Full Bench principles). This means that after 22 June 2000, if a suitable replacement for junior rates has not been found, young employees who are currently paid at junior rates will have to be paid at adult rates unless each and every award and agreement that contains junior rates is given a special exemption. Madam President, one does not have to be an economist to reach the conclusion that such a move would price young people out of jobs.

Senators should note that the current situation is an improvement on arrangements that prevailed prior to the Coalition being elected in March 1996. Under the former Keating/Beazley Labor Government, junior rates of pay would have ceased to be lawful on 22 June 1997, under legislation introduced by the Labor Party in 1993 and 1994. Without the Coalition Government's deferral of this law thousands of young people would already have lost their jobs to Labor Party ideology.

This Government's preferred position has always been that junior rates should be allowed to continue indefinitely-a position reflected in the Workplace Relations and Other Legislation Amendment Bill 1996 as originally introduced into this Parliament. However, following discussions with the Australian Democrats when that bill was before the Senate, the Government agreed as a temporary measure to limit the exemption to a further three years, and to put in place a mechanism for the Australian Industrial Relations Commission to review the feasibility of abolishing junior rates of pay. This reflected a compromise position only agreed to by the Government as a way of avoiding the legislated removal of junior wages. The Coalition agreed to the review on the clear understanding that our policy would continue to be for the retention of junior rates and that we would seek a mandate for this legislation at the next election. We are now seeking to implement that mandate.

It is also the Government's view that in order to provide support for youth employment junior rates should be more widely available. The Government's support for the retention and extension of junior rates was articulated in Minister Reith's Discussion Paper which was issued in June 1998-Protecting Job Opportunities for Young People. More importantly, it was a policy specified in black and white in the Coalition's pre-election workplace relations policy, More Jobs, Better Pay and publicly debated during the last election campaign. That policy has now been endorsed by the Australian electorate. This bill gives effect to that policy.

Madam President, the Australian Industrial Relations Commission is currently conducting an Inquiry into the feasibility of replacing junior rates with non-discriminatory alternatives, pursuant to section 120B of the Workplace Relations Act. The Government has made a submission to that Inquiry, together with the governments of Victoria, South Australia, Western Australia, the Northern Territory and the ACT.

In that submission we demonstrate the critical role played by junior rates in maintaining the competitiveness of youth in the labour market and encouraging youth employment. We show that junior wages help young people by giving them a foot in the door into employment.

We also demonstrate that any move to abolish junior rates would lead to an increase in youth wages, and in turn have a detrimental effect on youth employment. This would be a highly irresponsible move, particularly given the delicate labour market situation that confronts young people. Quite frankly, this Parliament should be dealing with policy issues designed to put more unemployed young people in jobs (such as the Coalition's unfair dismissal reforms) rather than spend its time (as we now have to) completing the reversal of Labor legislation which would have wrecked existing jobs of young people.

Madam President, the anti-discrimination provisions of the Workplace Relations Act are concerned with equality of opportunity just as much as with equality of treatment. In this context, junior wages are a special measure that operates beneficially to meet the particular needs of young people in the labour market, who are generally recognised as needing special assistance. Lower wage costs relative to adults assist young people to gain employment by compensating for the disadvantage that young people experience due to their relatively lower skills, experience and maturity compared with adults.

In the Government's view, any theoretical objections to junior rates are greatly outweighed by the inequities that would flow from their abolition. This point was made simply but eloquently in a letter to the Adelaide Advertiser from Paul Madden, Executive Director, Baptist Community Service (SA) when he stated:

It seems to me that a fundamental question must be asked: "Is it better for a young person to have a lower wage and the opportunity to develop valuable skills or to have an adult rate and no job at all?" (The Advertiser, 5 November 1998)

Madam President, the uncertainty surrounding the current interim arrangements does not create a stable environment for the employment of young people. Young people and employers are entitled to know that their jobs and employing rights are secure. This bill will create that certainty.

The importance of this legislation was stressed in a media release from the Australian Retailers Association, which stated:

"The failure of the Commonwealth Parliament to pass such amendments will have a massive impact on youth unemployment in Australia" said ARA Chief Executive Officer, Phil Naylor.

"Our membership survey response which included the employers of about 80 per cent of young people in the retail industry, indicates that about 200 000 jobs would be lost in the retail industry alone." (Australian Retailers Association, Media Release, 2 November 1998)

I turn now to the terms of the bill itself.

The bill amends provisions in the Workplace Relations Act 1996 that relate to the principal object, awards and agreements, and provisions in the Workplace Relations and Other Legislation Amendment Act 1996 that relate to award simplification.

The bill will amend the principal object of the Workplace Relations Act. The principal object of the act is to provide a framework for cooperative workplace relations which promotes the economic prosperity and welfare of the people of Australia in a number of ways. The bill will include protecting the competitive position of young people in the labour market, promoting youth employment and reducing youth unemployment as ways in which the workplace relations framework can contribute to economic prosperity and welfare.

The bill will insert an additional object and requirements in the Commission under Part VI-Dispute Prevention and Settlement-of the Workplace Relations Act. These will require that the Commission's powers and functions in relation to making and varying awards be performed and exercised in a way that protects the competitive position of young people in the labour market, promotes youth employment and assists in reducing youth unemployment.

The Commission will also be required to ensure that, where appropriate, awards provide support for youth employment through appropriate junior rates of pay. For example, where awards apply to work that is or may be performed by young people it is appropriate that they contain junior rates. By protecting existing junior rates, and making junior rates more widely available, these provisions will contribute towards enhanced job opportunities for young people and complement the changes to the principal object of the Workplace Relations Act. They recognise the links between junior wages and youth employment and unemployment. It is an important policy objective of the Coalition that Australia's workplace relations system has as much to do with addressing the interests of the unemployed as the system claims to do for the interests of the employed.

An existing requirement to which the Commission must have regard in performing its functions in relation to dispute prevention and settlement is the need to prevent and eliminate discrimination on a number of grounds, including age. A new provision will make it clear that junior wage provisions are not to be treated as constituting discrimination by reason of age.

The bill provides a permanent exemption for junior rates from provisions designed to prevent and eliminate age discrimination in certified agreements.

The bill amends items 51 and 54 of Schedule 5 of the Workplace Relations and Other Legislation Amendment Act 1996, which deal with award simplification. In reviewing awards under item 51, the Commission will be required to ensure that if awards apply to work that is or may be performed by young people, they support youth employment by including junior rates of pay where appropriate.

The bill amends item 54 by providing a permanent exemption for junior rates from award simplification provisions designed to prevent and eliminate age discrimination in awards.

The Government will also proceed to make consequential amendments to the Workplace Relations Regulations to ensure the protection of junior rates in Australian Workplace Agreements.

I commend the bill to the Senate and present the explanatory memorandum.

ABORIGINAL AND TORRES STRAIT ISLANDER HERITAGE PROTECTION BILL 1998

The Aboriginal and Torres Strait Islander Heritage Protection Bill 1998 was debated and passed by the House of Representatives on the 4th of June 1998. However, the bill lapsed on the prorogation of Parliament and is now being reintroduced. This has given the Government an opportunity to consider the second report of the Parliamentary Joint Committee on Native Title and the Aboriginal and Torres Strait Islander Land Fund, and to make some changes to the bill.

The key features of the bill remain the same and include:

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the establishment of a Director of Indigenous Heritage Protection to assist the Minister in the administration of the bill;

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encouragement of the resolution of issues by negotiation and mediation;

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a requirement that heritage significance be assessed according to indigenous traditions, observances, customs and beliefs;

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the provision of protection for culturally sensitive information; and

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provision for accreditation of State and Territory heritage protection regimes that meet specified standards.

In reintroducing the bill the government has redrafted portions of the earlier bill to clarify some of the existing clauses, and to add some new provisions. A number of the changes arise from consideration of the Joint Committee's reports.

The bill now includes a requirement for the Director of Indigenous Heritage Protection to have an understanding of indigenous culture and heritage and an ability to deal with indigenous people in a culturally sensitive manner. This will ensure that the person who fills this pivotal role will have the understanding and expertise to deal with what will often be sensitive and difficult issues.

During the Parliamentary Joint Committee hearings it became evident that the term `minimum standards' was creating a significant misunderstanding. The term `minimum' was intended to indicate that the standards represented the essentials of a sound heritage protection regime, not that only a low or minimal level of protection was required. We have decided to clear up this misunderstanding by deleting the word `minimum' and instead referring to `the standards for accreditation of State and Territory heritage protection regimes'.

The Committee recommended that the standards for accreditation be amended to require "blanket" protection of heritage areas and objects. Blanket protection implies that all significant areas and objects, whether they have been previously identified or not, are protected and can only be disturbed if permission is granted to do so. This puts the onus on a developer to ensure that no heritage sites are at risk before work goes ahead. In response to this recommendation standard (a) has been redrafted to clarify its intent and ensure that all accredited State and Territory regimes do provide blanket protection.

The Parliamentary Joint Committee recommended greater indigenous involvement in decision making on the significance of heritage sites and objects. In order to implement this, standard (c) now requires explicit indigenous involvement in advance work approval processes. This will ensure that indigenous people can be involved at the earliest possible point in any heritage protection issues.

The Committee, following the recommendations in the Evatt report, recommended that in order to ensure indigenous involvement in heritage protection processes, that decisions on the significance of areas and objects should be separated from the decisions on protection. In response to this recommendation a new standard has been drafted that mirrors the requirement in the Commonwealth regime for a separation of decisions on significance from decisions on protection. This standard also requires decisions on significance to be made in consultation with indigenous people. This is a significant additional requirement for a State or Territory heritage protection regime and it implements one of the key recommendations in the Evatt report. This will provide for increased indigenous involvement in the administration of any accredited State or Territory heritage protection regime.

I am aware that the issue of `national interest' was raised in the debate on this bill in June. It was suggested that national interest be defined in such a way that it is the very act of protecting indigenous heritage that is in the national interest. Amending the bill in this way would potentially involve the Commonwealth in all indigenous heritage protection cases. This is contrary to the Government's policy of providing a clear delineation of responsibilities between the Commonwealth and accredited States. Indeed, if the Commonwealth were in a position to review all State decisions, there would be no incentive for States or Territories to seek accreditation.

The standards for accreditation will ensure that accredited State and Territory regimes offer comprehensive and fair heritage protection processes. There should be no need for recourse to the Commonwealth in an accredited regime, except where it can be argued that a site has some special qualities that suggest that its protection may be in the national interest. It should be remembered that where a State or Territory does not meet the standards for accreditation the Commonwealth regime will always be available as an avenue of last resort.

A number of the minor suggestions made by the Committee have not been included in the revised legislation. For example, the Commonwealth is requiring a high level of protection but not uniformity of practice between State and Territory regimes. States and Territories have unique social, cultural and legislative environments and the standards need to allow flexibility for States and Territories to have regimes that can meet the prescribed standards but in a locally appropriate way.

Some minor changes have been made to the saving provisions in the bill to ensure a smooth changeover in Victoria from Part IIA of the 1984 act to new State heritage protection legislation.

In conclusion I would note that reform of indigenous heritage protection legislation is long overdue. The 1984 act was introduced as a temporary measure by Labor and has presented many difficulties for both indigenous people and other interests, and for governments administering the act. I am pleased that we will be able to address these problems through this bill. The bill will ensure that a fair and transparent process is established for the protection of indigenous heritage at both the Commonwealth and State levels.

NATIONAL MEASUREMENT AMENDMENT (UTILITY METERS) BILL 1998

The National Measurement Act 1960 (the act) provides the legislative basis for the Australian national measurement system. The objective of this act is to ensure that measurements are made on a consistent basis throughout the nation and are compatible with measurements in other countries.

While trade measurement in reticulated water, electricity and gas already falls within the ambit of the act, the act does not provide a detailed measurement control system to enable traders to easily comply with its broad requirements for legal traceability. This bill amends the act to provide mandatory requirements for specified utility meters as recommended by the Review of Australia's Standards and Conformance Infrastructure (the Kean Report).

The Kean committee recognised that the present system of utility measurements was wasteful, inadequate in today's environment and inappropriate to address the privatisation and corporatisation of utility authorities. In recommending an amendment of the National Measurement Act, the Kean committee was aware that a State and Territory based solution would not effectively address the trans-border nature of the utility sector which includes the National Electricity Grid and inter-State gas pipelines.

The proposal contained in this bill has significant benefits for utility meter manufacturing industry, utility companies and consumers. National pattern approval and verification will provide local manufacturers of utility meters with the efficiencies and benefits of scale of a single national market for utility meters.

As a consequence of international harmonisation of requirements, the proposal will enhance export opportunities for local manufacturers of utility meters. While the proposal will expose local manufacturers to additional competition from imported meters, it will at the same time safeguard them against unfair competition from substandard imported meters.

The proposal contained in this bill will provide direct benefits for utility companies by eliminating multiple, inefficient testing of utility meters for pattern approval purposes that is only partially effective. The associated cost burden will be removed and the exposure of these companies to risk arising from the purchase of substandard utility meters will be greatly reduced.

Consumer confidence in utility metering will be increased because of the independent third party approval and auditing of meters, reducing the present asymmetry of information between utility companies and consumers. This will translate into indirect benefits to utility companies because of fewer consumer complaints and a consequent reduction in transaction costs.

The proposal contained in this bill will cause additional costs for utility meter manufacturers but these will be more than compensated for by the efficiencies and benefits of scale associated with a single, national market for utility meters and the increased access to export opportunities. In addition the proposal has clear benefits for consumers, utility authorities and State and Territory regulators. However it is not possible to quantify these ben efits. There will be minor costs to the National Standards Commission associated with coordinating the systems

The bill broadens the objects of the act to embrace the verification of utility meters and extends the functions of the National Standards Commission to ensure that utility meters used for trade are verified. The bill introduces a new section 4A that defines the extent to which the amended act will exclude State and Territory laws relating to utility meters used for trade. In particular this section provides for the concurrent operation of State and Territory laws relating to the reverification of utility meters used for trade and the in-field replacement of meters that give inaccurate measurements.

The bill requires that utility meters used for trade, not prescribed as exempt in the regulations, must be verified by the National Standards Commission or a verifying authority appointed by the Commission for that purpose. One of the requirements for verification is that the pattern (design) of the utility meter has been approved by the Commission under the existing pattern approval provisions of the act.

Provision is made for the Commission to audit the work of verifying authorities to ensure both that the meters conform to their approved pattern and that they have been correctly verified. Enforcement provisions are included to provide the Commission with access to evidence in the event that offence provisions of the bill are contravened. These enforcement powers are similar to those of a trade measurement inspector in a State or Territory jurisdiction.

It is intended that all classes of utility meters will initially be exempted from the application of these new provisions. Following the satisfactory completion of consultations and the expiry of an agreed introductory period, the exemption will be lifted for a particular class of utility meter. Provision is made in the bill for utility meters already being used for trade to remain in use provided that they give accurate measurement.

Recommendation 6 of the Kean Report, to which this bill relates, has been accepted by both the present government and the previous government. In addition, the proposal is strongly supported by the utility meter manufacturing industry.

Madam President, I commend the bill to the Senate and present the explanatory memorandum.

CLASSIFICATION (PUBLICATIONS, FILMS AND COMPUTER GAMES) CHARGES BILL 1998

This bill and the complementary Classification (Publications, Films and Computer Games) Amendment Bill 1998 re-introduce into the House two bills that lapsed in the Senate upon the calling of the recent Federal election. The previous bills were passed by the House on 4 December last year.

The Classification (Publications, Films and Computer Games) Charges Bill 1998 imposes charges for applications for classification of publications, films and computer games and for related services provided for under the Classification (Publications, Films and Computer Games) Act 1995.

This bill and the Classification (Publications Films and Computer Games) Amendment Bill 1998, give effect to the Government's decision that full cost recovery will be introduced for the Office of Film and Literature Classification. Further details of this and other measures are contained in the Second Reading speech for the Classification (Publications, Films and Computer Games) Amendment Bill 1998.

I commend the bill to the Senate.

CLASSIFICATION (PUBLICATIONS, FILMS AND COMPUTER GAMES) AMENDMENT BILL 1998

The Classification (Publications, Films and Computer Games) Amendment Bill amends the Classification (Publications, Films and Computer Games) Act 1995 consequent upon the proposed enactment of the Classification (Publications, Films and Computer Games) Charges Bill 1998. Among other matters, the Amendment Bill contains administrative provisions relating to the collection of charges for classification and other services imposed by the Classification Charges Bill.

The Classification (Publications, Films and Computer Games) Act 1995 is part of a Commonwealth, state and territory co-operative legislative scheme for the classification of publications, films and computer games and enforcement of classification decisions made under it. That act establishes the Classification Board and the Classification Review Board and provides the procedures for the classification of material. Complementary state and territory enforcement legislation contains offences relating to the exhibition, sale or hire of publications, films and computer games, both classified and unclassified, in the respective jurisdictions.

At present, fees for applications for classification and other services under the act are prescribed in regulations made under that act. From 1 November 1997 the fees so prescribed are set at one hundred percent cost recovery for the provision of those services.

In the May 1997 Budget context, the Government decided that from 1 July 1998 full cost recovery would be introduced for the Office of Film and Literature Classification (OFLC) by changes to the charging structure for those using its services. The Office services the Classification Board and the Classification Review Board.

This timetable was not met as the former bills did not secure passage through the Senate prior to 1 July 1998. Those bills lapsed following the calling of the recent Federal election.

The Government's decision means that revenue from classification and other services provided by the OFLC must also cover activities ancillary to the provision of classification services. These include certain research, policy development, ministerial support and payments to the states and territories for enforcement and related purposes

These activities are related to an efficient and effective co-operative classification and enforcement scheme. They assist in ensuring that the classification decisions are acceptable to applicants and the public generally and in maintaining the integrity of the Australia-wide scheme. However, their cost cannot, for Constitutional reasons, be included in the fee for the provision of classification services.

Implementation of the Government's decision therefore requires that charges for classification and related services be imposed as a tax. This decision ensures that those who benefit directly, and indirectly, from the work of the OFLC pay the full cost of its operations.

The Amendment Bill proposes the removal of references to prescribed fees in the Principal Act and their replacement with references to charges prescribed under the Classification Charges Bill.

An exception applies to applications by the Commonwealth, states and territories for use in the investigation and prosecution of an offence. The efficacy of the co-operative censorship scheme depends on effective enforcement. Under the intergovernmental agreement between the Commonwealth, states and territories the fees for applications for classification for enforcement purposes will not exceed the cost of providing the services and these fees will continue to be prescribed by regulations under the act

The Amendment bill also removes some of the formal requirements in making applications for classification of material for the investigation and prosecution of an offence. This is to overcome the failure of two prosecutions in 1997 due to a lack of compliance with all the formal requirements of an application for classification of the material concerned.

The charges are set out in the Schedules to the Classification Charges Bill. They have been set at an amount calculated to meet the estimated revenue needed to fully fund the OFLC's operations for the first full financial year in which they take effect. The structure of the charges set out in the Schedules reflect the approach which was agreed to with the industry, in the current fees regulations which came into effect on 1 November 1997.

The Classification Charges Bill makes provision for amending the Schedules by regulations made under that bill. There is no real alternative to such a provision as the revenue needed to meet full cost recovery for the OFLC will vary over time and the charges set out in the Schedule will need to be revised accordingly. Parliament will, however, retain ultimate control over the level of charges to be imposed.

The Government is aware that increases in the cost of classification and other services are of concern to some of the users of OFLC services. In particular, concern has been expressed about the effect of cost increases on the classification of material that has a limited market appeal in Australia.

As foreshadowed in the Attorney-General's second reading speech last year on the former bill, he appointed an independent body to review the charges structure with a view to seeing whether greater equity can be provided to applicants who submit material for classification that has a more limited market appeal.

That review was undertaken by Ernst and Young in Melbourne and a copy of their Review of Statutory Charges for the Classification Publications, Films and Computer Games was made available to representatives of the opposition parties and independents in the Senate and, more recently, to the opposition spokesman on Attorney-General's matters.

The review's conclusion was that there is no single compelling argument supporting continuation of the proposed charging structure or, alternatively, changing the charging structure to provide concessions based on limited market appeal. In light of the factors set out in the review, the Government does not support limited market appeal mechanisms of the kind canvassed in the review.

However, the Government considers that there is a case to enable certain material, where limited distribution is involved, to be classified at reduced rates. This should encourage diversity of specialised product availability by making it more economic to release such product onto the Australian market. It should also aid compliance by distributors of such material with Australia's classification system.

The bill therefore allows the Director of the Classification Board to waive, in whole or in part, classification charges for limited distribution special interest material which comprises a documentary record of an event or which is of a cultural or like nature if it is in the public interest to do so.

This discretion is to be exercised in accordance with principles issued by the Director with the agreement of the Commonwealth Attorney-General after consultation with state and territory censorship ministers.

Examples of special interest material for limited distribution that could be covered by the expanded waiver power are set out in the explanatory memorandum.

The Government has been advised that the impact of the expanded waiver power on the Office of Film and Literature Classification's budget will not be significant-a loss of revenue of about $54,000 per year-although it is expected that up to 100 publications, films or computer games may be classified at reduced rates per annum.

Under the Principal Act, films for business, accounting, professional, scientific or educational purposes are exempt from classification as is computer software falling within those categories that contains a computer game. It may be that, in the medium term, the extent and the structure of the current exemption scheme needs to be reviewed to see whether it should be extended to include some of the material that the Government proposes be included in the waiver of charges provision. However, this requires negotiation with state and territory censorship ministers and amendment of complementary state and territory legislation. The Attorney-General raised this matter at the last censorship ministers' meeting and further work on the proposal is being undertaken.

Implementation of full cost recovery for the OFLC means that the industry should expect that the OFLC will be efficient and effective in delivering high quality and impartial services on behalf of the Australian community which represent value for money to its clients. To this end, a statutory time limit will be introduced to apply to classification decisions, requiring that such decisions be made within twenty business days following receipt of a valid application or such shorter period as is prescribed in the regulations. Failure to comply with this requirement must be reported upon in the OFLC's Annual Report.

Furthermore, in order to ensure appropriate industry input into the operations of the OFLC, it is proposed to establish formal consultative mechanisms. This will give the industry opportunities for providing input into charges scales and appropriate performance standards for the Office.

The imposition of charges by the Classification Charges Bill is estimated to generate an additional $2.15 million per annum in savings to the budget in the first full financial year of its operation.

I commend the bill to the Senate.

Debate (on motion by Senator Quirke) adjourned.

Ordered that the Classification (Publications, Films and Computer Games) Amendment Bill 1998 and the Classification (Publications, Films and Computer Games) Charges Bill 1998 be listed on the Notice Paper as one order of the day and the remaining bills be listed as separate orders of the day.