CHAIRMAN --I welcome Senator McMullan and the officers of the Department. Senator McMullan, would you like to make any introductory comments?

Senator McMullan --No, Mr Chairman. We are ready to start with the Office of Local Government. We are here and ready to go.

CHAIRMAN --The Committee will commence with division 904, grants to local councils for social and economic infrastructure.

Senator SHORT --Before we begin, Mr Chairman, I do not want to reopen the debate we had yesterday in the full Senate but I want to put on the record formally in this Committee the coalition's view that it is absolutely wrong that this Committee is meeting here today--

Senator SCHACHT --Let us go home then; let us cancel it right now.

Senator SHORT --What about just letting me finish?

Senator SCHACHT --Well, if you say it is wrong I am happy to go home now.

Senator SHORT --It is absolutely wrong for this Committee to be meeting here today without having the opportunity to question officers, particularly of the Treasury and also of the Department of Finance, about the policy implications of the contents of the Appropriation Bills, given the very significant reallocation and revision that they mean to the Government's proposals for infrastructure reform as set out in the One Nation statement and reaffirmed in the Budget. That applies to, I think, all items in the appropriations to date. It applies particularly to the areas of rail expenditure and rail infrastructure and to the local government capital works projects program. It also applies very heavily to the expenditure under DEET, with $76m involved in Appropriation Bill (No. 3) in particular. But if you look at the two Bills as a whole, there are significant reallocations of spending that affect the economic policy position of the Government. Micro-economic reform is said by this Government to be high on its list of priorities, yet we see these Appropriation Bills massively downgrading expenditure on infrastructure reform. It is quite extraordinary that the Government would not allow, with the support of the Democrats--

CHAIRMAN --I do not want to frustrate you, Senator Short, but would you please wind it up because we want to get to questions.

Senator SHORT --I find it quite extraordinary and absolutely unacceptable that the Government has taken--

Senator SCHACHT --It was a decision of the Senate.

CHAIRMAN --Order! Please wind it up--

Senator SHORT --Senator Schacht can have his go, if he has got anything to say, later on.

CHAIRMAN --He is not going to have his go because it is not going to be a debate, so if you would wind it up I would appreciate it.

Senator SHORT --I just want to put on the record again, on behalf of the coalition, the unacceptability, so far as we are concerned, of the decree of the Government that the proper work of this Committee be frustrated by its inability to question officers, particularly of the Treasury but also of the Department of Finance.

Senator SCHACHT --Mr Chairman, could--

CHAIRMAN --We are not going to have a debate--

Senator SCHACHT --It ought to be recorded that it was a decision of the Senate, not of the Government.

CHAIRMAN --Order! We are not going to have a debate but I think it is appropriate that Senator McMullan be given an opportunity to comment.

Senator McMullan --Thank you, Mr Chairman. I will do two things. Firstly, I refer people to the Hansard of yesterday's debate in the Senate. Senator Short did not put any argument at all on that occasion--and does not on this occasion--as to why the proper procedures or Standing Orders of the Senate would justify the stunt he was trying to pull; it is outside the Standing Orders and that is why he fell on his face. Secondly, the interconnected series of assertions that he put forward are in fact inaccurate, but we will deal with that in the proper forum. This is not the proper forum for them. We made the decision yesterday and we should get on with business today.

Senator TIERNEY --I note that the creation of this local works program has largely come out of funding for the national rail project set out in One Nation. I would have thought that the huge capital infrastructure needs of this country would have meant that the rail project was one of the most vital things that should go ahead in this nation. I firstly question why there was this switch in expenditure. Why do we have a situation where, according to One Nation, it was to be spent on rail and now it is to be spent on capital works? Does this indicate a change of priority for the Government, or does this indicate that the Government did not know what it was doing when it started up the rail project, and that it has now realised that it was not far enough ahead in its planning to actually do that?

Senator McMullan --No; it indicates that you are wrong. The local government capital works program started in the Budget. There is a small additional amount of funding for it in this program, which is a reallocation from the One Nation money. That was explained by the Treasurer at the time the money was announced. We think this is a worthwhile project in its own right and that is why it was commenced in the Budget.

Senator TIERNEY --I now refer you to the 1992-93 projections, which show that $150m is to be spent on rail and that the local capital works program is to go up $55m. Is there not some transfer of funding involved here?

Senator McMullan --I would like to say two things: firstly, if you want to ask questions about rail, let us wait until we get to Transport and Communications--

Senator TIERNEY --There is an implication--

Senator McMullan --No, it is an interesting implication but it has nothing to do with the Office of Local Government. I want to make that clear, so let us not waste time. Senator Short has already wasted some of it. Let us not waste any more. The second point is that the local capital works program was initiated as an independent program in its own right, in the Budget. It was well received, and justifiably so. The need for some reallocation has been explained. If you wish to pursue it further, it is open for you to do so when the Department of Transport and Communications is before us. It is a change to the appropriation and you are entitled to ask questions about it at the appropriate time. However, one of the decisions of the Government was that that money would be very effectively used by enhancing this successful program, so that is what we have done.

Senator TIERNEY --I was trying to establish where this funding had come from. It just seems from the adjustment in your expenditures that instead of doing what was a necessary long term project we are suddenly doing a whole lot of short, sharp local government programs, presumably to get some local employment kick-started.

Senator McMullan --I do not understand why you feel the need to ask that question. The Treasurer made it absolutely clear in his speech to the Parliament and in the associated press release of 13 November that the Government had reviewed the progress of expenditure and, while the majority of infrastructure projects were proceeding satisfactorily, there were some delays and, therefore, it had decided to reallocate money. Local government has been one of the beneficiaries. I do not wish to pursue this matter any further because it has got nothing to do with the Office of Local Government. The facts are on the public record. The Treasurer explained the situation and I refer you to his press release.

Senator SHORT --Where is the additional funding coming from, in your view?

Senator McMullan --It is not a question of my view; it is all set out in the Treasurer's November press release.

Senator SHORT --But the fact is that the expenditure on rail is being reduced this year by $150m.

Senator McMullan --It is all on the public record. It is set out in the press release of 13 November. That has got nothing to do with the Office of Local Government, so let us get on with it. We are an hour late already.

Senator SHORT --I thought that you were missing from here for close on half an hour yourself.

Senator McMullan --No, I was here. Let us get the facts right. I said and agreed with people, including some of your colleagues, that, as there was not a quorum, we would resume at 9 o'clock.

Senator SHORT --The rail expenditure is reduced by $150m. Am I not correct in saying that there is nothing to suggest otherwise than, of that, $50m or thereabouts--$50m or $55m--has been, in effect, for this year reallocated to the local government capital works project? If that is not correct, could you direct me perhaps to some statement that will correct that misapprehension on my part?

Senator McMullan --I think the facts are clear. They are set out in the Treasurer's press release of 13 November. How you wish to express it in your own words is a matter for you, but it is set down quite clearly in that press release; and there is nothing to add.

Senator TIERNEY --But have we not got here a situation where we are just readjusting expenditure? Are you spending extra dollars? Are you not just readjusting expenditure, taking it away from long term projects and putting it into short term projects? Would that not be the simplest way of expressing it?

Senator McMullan --I do not know how often you want to ask this but--

Senator TIERNEY --We are trying to get an answer.

Senator McMullan --The answer is that, if you want an answer according to the Standing Orders, this has got nothing to do with the Office of Local Government. But I am trying to be helpful, and I simply say that what you are trying to do is re-express the Treasurer's press release in your words. I am simply saying that I do not care what words you chose--you are entitled to do that--but the Government's explanation of it is in the Treasurer's release and I have not got anything to add.

Senator TIERNEY --You keep saying that it has nothing to do with local government, but I think it has a lot to do with local government because suddenly it has this great big money pot which has come from somewhere. I think senators have a right to know where local government has received this money pot from and what other projects are not going ahead as a result of this.

Senator McMullan --That might be a matter of democratic right but, with regard to the Estimates Committee and its review of the expenditure of the Office of Local Government, that is not a relevant question. But I am trying to be helpful: I am saying that it is all on the public record, and I will give you a copy if you want. The matter is set down and I have got nothing to add. I could say it in 25 different ways, but I would only be saying the same thing, and that is a waste of time.

Senator TIERNEY --What we are trying to set up is a situation where we are trying to judge the effectiveness of Government expenditure. We are going to be talking to the Transport people later on and we will ask them specific questions about rail and why that project is not under way.

Senator McMullan --That is not an accurate description, but we will get to it when that happens. You are entitled to raise whatever you like then; that is correct.

Senator TIERNEY --Before we get to specific questions on these local government programs, we are going to be trying at the end of the day to establish whether the Government has moved money from what we would have thought was an effective way to spend money in this country--on infrastructure--to a whole series of minor capital works that might create some short term jobs, but then at the end of the day, when the money runs out, so will the jobs. We are trying to create that sort of framework at the start of the day--and I think we are entitled to do that--seeing what, I assume, is an adjustment of Government expenditure from one type of project to another.

Senator McMullan --I note your comment.

Senator TIERNEY --If I could go specifically to local government capital works programs, the guidelines for the local capital works programs stipulate that all $345m for the program were to be allocated by 1 December this year. Has this condition been met?

Mr Calvert --Approximately 98 to 99 per cent of the funds have been allocated.

Senator SHORT --Of funds have been allocated?

Mr Calvert --Of the $345m that was allocated.

Senator TIERNEY --According to the program guidelines, all projects are to be completed by December 1993. Is that still your current deadline?

Mr Calvert --Yes, it is.

Senator TIERNEY --So the councils already know the funding that they are going to get from the Commonwealth and they know the completion deadlines?

Mr Calvert --Yes.

Senator TIERNEY --And they are budgeting for those projects accordingly?

Mr Calvert --Yes.

Senator TIERNEY --So it would be fair to say that, aside from giving councils a small cash flow benefit, the bringing forward of the $55m from next year does not really mean a great deal.

Mr Calvert --It means that they can get the projects completed more quickly than they otherwise would have.

Senator TIERNEY --Has your Department done any estimate on how this adjustment affects jobs? How many extra jobs will it create?

Mr Calvert --The adjustment will not affect jobs in the sense that it is simply bringing money forward. There is no extra money involved.

Senator TIERNEY --At the time of the Budget the Government made much of the local capital works program as a job creation scheme. The Treasurer referred to the program as the centrepiece of the employment package for addressing unemployment problems. In Parliament on 19 August the Minister for Local Government said this of the local capital works program:

The Government believes what it is trying to do is to make a genuine attempt to address the problems of serious unemployment in regional areas.

In a Budget Related Paper, Working for the future, on page 79 it said that the Government expects this program to generate around 13,000 jobs over the next two years. The implicit suggestion at the time of the Budget was that these jobs would be for people currently unemployed.

Since that time the Minister has indicated that creating jobs for the unemployed was only a secondary consideration. Mr Lynch of the Office of Local Government told an Estimates Committee E hearing on 17 September, and I quote from Hansard at page E164:

. . . it is not a requirement, for example, for councils to employ people that are currently unemployed for the purposes of this program.

Would it be fair to say that the creation of new jobs is a low priority in this program?

Mr Calvert --The program is a local capital works program and the intention is to assist economic recovery through fiscal stimulus to local economies. The intention would be that there would be greater employment created, but there was never a requirement, as you rightly point out in Mr Lynch's comments, that unemployed people be taken on. But many councils have taken on the unemployed.

Senator KEMP --Could you give us some figures which show the magnitude of the numbers involved?

Mr Calvert --Because it was not an employment program we did not seek figures in relation to unemployed people being taken on. We have no statistics on that. We have received advice from councils that they are taking on unemployed people but we have not sought statistics on the number of unemployed people who might be taken on.

Senator TIERNEY --How did they come up with this figure that 13,000 new jobs were going to be created under these programs? Everyone's impression at the time was that the people on Jobstart would come off and move onto these programs. It is such an exact figure. It has not been rounded off, it is 13,000. It looks like some sort of estimate must have been made of new jobs created. How did that figure appear?

Mr Calvert --I was not involved in the program at that time and I cannot give you any detailed advice as to how that figure was obtained.

Senator McMullan --Can I just make two points about that: firstly, we are not talking about the Budget appropriation, we are talking about the extra appropriation, so let us really concentrate on that; and, secondly, it has always been the case, and it is self-evident when you think about it, that keeping people in jobs who would otherwise have been laid off is as effective as creating new jobs for people. Each is important if you are dealing with the problem of lack of jobs in the community. Whether the jobs are a continuation of employment for people who might otherwise have lost their jobs, or involve the employment of people who were out of work, they are still a very positive contribution.

Senator TIERNEY --I can understand that, because I understand how you want to prevent dole queues growing, and I see how this sort of expenditure would prevent dole queues from growing, but we got the very definite impression that the whole purpose of this program was not only to do that but to create new extra jobs. We thought the whole thrust of the Government's policy this year was to pump prime the economy to actually get job creation flowing. You have done that through a number of measures in this year, and your Treasurer and other officers have made statements that we are spending so much money and that one of the big aims is not just to keep people in employment but to create extra employment, and we have had figures estimated for it.

Senator McMullan --It is true that a significant part of the Budget strategy is about fiscal stimulus for employment reasons, and One Nation, the Budget and associated measures have had a fundamental job creation objective. The creation of jobs for people already in work, who would otherwise have gone out, is job creation, and there are more jobs than there otherwise would have been and, of course, when you do that, you create indirect jobs too. If you keep people in work and you buy some concrete so that they can lay some pavement, you have created jobs in the concrete manufacturing area or wherever it is. So it has direct and indirect jobs benefit, and this $55m bring-forward will change when those jobs become available. That is what is before us at the moment. It is job creation; it is not exclusively an employing the unemployed objective. Clearly, we will do a lot of that, and my advice is that it has done quite a lot of that, but it is about creating more jobs in the community than there otherwise would have been.

Senator TIERNEY --We would have hoped that one of the outcomes of all of this would have been the creation of something like a permanent legacy for improving the economy by improving its infrastructure, which I thought was one of the good things about what you were going to do on rail and have now abandoned.

Senator McMullan --And it still is one of the good things about it--

Senator TIERNEY --Could I finish. If you are going to--

Senator McMullan --I just want you to get the facts right, because if your assumptions in your question are all wrong--

Senator TIERNEY --Let me rephrase it. You have postponed it.

Senator McMullan --Very marginally. We will do that when we get to Transport and Communications.

Senator TIERNEY --I acknowledge that you have postponed it. One would have thought that, if we are going to go $14 1/2 billion into debt, part of that counter-cyclical measure would have been to create some permanent long term infrastructure that has lasting benefit. However, what seems to be happening with a lot of this money--and I am disturbed about, perhaps, a lack of control over the way in which this money has been spent--is that it goes to do things that do not particularly add anything to the economy in the long term. It is a bit like Lord Keynes saying that, if you have people digging holes and filling them in again, it has an economic benefit because you put more money in people's pockets than they spend. You would hope that you would do things that would be a bit more long lasting.

I draw your attention to the example in Byron Bay where evidently a perfectly good pavement was ripped up and replaced with a brick wave pattern. It might look a bit nicer, but I do not see how that adds to anything, and $400,000 was spent on this project. It did not create one extra job, although I will concede, Minister, that it might have kept people in work who might have been out of work. It just seems that we are going so far into debt--

Senator McMullan --That is after--

Senator TIERNEY --We should be doing things that are of permanent benefit to the economic infrastructure of the economy. It does not seem that this is happening with this program.

Senator McMullan --Senator, can I just respond with two points--and I think there is some validity in the question. I am not saying that it is accurately premised, but if the premise is accurate, the point is valid, because a significant part of the spending infrastructure related areas was designed to have an immediate benefit in creating jobs and a secondary benefit in creating an enhanced community after the economy recovers. So there are two rounds of benefits.

I will let the officer respond to the question on the Byron Bay example, about which I do not have any detailed knowledge, of course. I just want to make the point that it is not accurate to say that keeping people in work who would otherwise have been laid off is not creating extra jobs, because, in a straightforward way, it is.

Senator TIERNEY --It is not extra jobs.

Senator McMullan --Yes; of course it is. It is more jobs than there would have been had it not been spent--that is, they are extra jobs. I accept that there is a distinction between saying--

Senator SHORT --That is not necessarily right.

Senator McMullan --Of course it is. If you are saying we are keeping people--

Senator SHORT --It depends on who else would have spent the money on what, if you had not. It is a nonsense statement.

Senator McMullan --I understand that underpins your theory that somehow or other if we do not generate the demand it will automatically be taken up by the private sector. The facts do not bear it out, but you are entitled to have your view.

Senator TIERNEY --Seeing the economy is moribund, I do not think that is going to happen.

Senator McMullan --But Senator Short was implying it was. The point that I am trying to make is that it is creating extra jobs. People are in work who would not otherwise have been in work. Of course, I think the economic theory Senator Short talks about is bunkum, but it is possible to argue that there are downstream adverse effects that will mean that net you will be worse off. I do not think it is right, but I accept that. In the same way that, if we had employed 20 new people to do it, it would have been creating jobs--in the ordinary English language meaning of the word--so it is keeping people in work who would otherwise have been laid off. I am happy to debate that point a bit, but Senator Tierney had a legitimate question about Byron Bay and I would like that to be answered before we go any further.

Mr Calvert --Can I just say something about Byron Bay. It is true that the footpath was replaced, but that was part of a wider project which involved the reconstruction and beautification of the main street in Byron Bay. The council believed, and it was a view we accepted, that it was important for tourism development in that area.

That project had a total cost of $520,000, of which the footpath reconstruction was $80,000. The advice we have is that the road surface had broken down and required upgrading for safety reasons; that the associated footpaths, kerbs and guttering had also deteriorated and had been responsible for a number of injuries, leading to constant complaints by local business interests for restructuring; and, in addition to that, the reconstruction would permit better flood control.So it was not a case of simply ripping up a good footpath and putting a different kind of footpath down. It was a case of a wider project and replacing a footpath that had already caused injuries.

Senator TIERNEY --Can you understand the annoyance of people in Byron Bay? The front page of the Telegraph Mirror showed a photograph of a young man and a heading like `There is no hope for the future'. He really thought that this money was coming into the area and he might have a better chance of getting a job. The thrust of the story was that he was very disillusioned because his council had been given extra money to spend on employment--he thought on new jobs--and he did not have a look-in, nor did any of his mates, because it all went to people who were already in work. The feeling from One Nation and the Budget was that extra jobs were going to be created. Presumably, Byron Bay got the funding because the unemployment rate there is almost double the State average. Can you understand why they would be very annoyed that the extra money that came into your Department did not create new jobs in that area?

Mr Calvert --It was a local capital works program, and we have relied on individual councils to do what they consider to be best for their local area. In doing that we were conscious of the fact that employment programs as such often lead to the kinds of projects that you mentioned earlier that are of little value. The purpose of this program was to produce assets of lasting value in the local community. That was the most important criterion in judging whether or not particular proposals went forward.

Senator TIERNEY --So, despite the Budget statement that 13,000 new jobs were going to be created, your Department did not give councils any guidelines that any new jobs should be created. How was that handled? Was it left totally to the councils as to whether they would create new jobs or use existing employees? Surely, if that is the thrust in the Budget, that should have been carried through the Department in directives to the local councils.

Senator McMullan --How would we have been assisting the employment situation in Byron Bay and what do you think would have been on the front page of the Telegraph Mirror if we had allowed the council to sack 20, 50 or 100 of its existing employees and employ 20, 50 or 100 new ones to undertake that project? I do not understand why you think that is a beneficial thing to do.

Senator TIERNEY --With all due respect, that is a nonsense because we are talking about additional funding. So presumably things would have been carrying on as they were carrying on and they would have been funding projects out of existing funds.

Senator McMullan --I have to say that does not follow.

Senator TIERNEY --We are talking about net extra money in Byron Bay.

Senator McMullan --Of course you are. But what we are obviously, therefore, as a corollary, saying is: this is work that would not otherwise have been done and, therefore, employment that would not otherwise have been generated. You have been saying--and I thought it was an interesting question; but you cannot have it both ways--the problem is you are only keeping in employment people who are already there instead of creating new jobs for unemployed people who hoped that they would get the work. I think that is an interesting question but, if the underlying assumption is accurate, it has to follow that the work that is there for the people previously in employment would not otherwise have been there.

Senator TIERNEY --So we will come to this conclusion then: it was a little dishonest of the Government in the Budget to say that all this extra money into local government was going to create new jobs. What you should have said in the Budget was, `We are going to spend this money on this--

CHAIRMAN --Senator Tierney! Order!

Senator TIERNEY --Can I finish my question?

CHAIRMAN --Order! I want to make a point: we are here--

Senator TIERNEY --I want to make a very quick point.

CHAIRMAN --We are here to ask questions about Budget matters.

Senator TIERNEY --Yes, I am going to do that.

CHAIRMAN --We are not here to have a debate. So would you proceed to ask questions and continue on that line.

Senator TIERNEY --I will, and I will finish my statement because it is the basis of the next question.

CHAIRMAN --We are not here for you to make statements; you can do that in the Senate chamber.

Senator TIERNEY --I know it is embarrassing, Mr Chairman.

CHAIRMAN --It is not embarrassing at all. You can do what you want in the Senate chamber.

Senator TIERNEY --If I were in government, I would be very embarrassed by this.

CHAIRMAN --You will not have to suffer that, will you?

Senator TIERNEY --The end of the statement is the basis of my next question, which relates to this additional expenditure.

CHAIRMAN --Get to the question.

Senator TIERNEY --I cannot ask the question, Mr Chairman, with all due respect, unless I make this final statement.

CHAIRMAN --Well, make it short.

Senator TIERNEY --I intend to make it very short; it will be about two sentences. It would have been far more honest in the Budget to say, `We are going to prevent unemployment deteriorating further', rather than say, `We are going to create new jobs'. Therefore, I lead to the next question, which is: in this extra money that is being spent--the specific additional amount--has any estimate been made of the additional jobs that will be created from that additional expenditure or, like this previous expenditure, is it just a matter of holding onto the unemployment rate and not making it deteriorate any further?

Senator McMullan --Can I just have the same licence for two sentences. It is an extraordinary, inaccurate and unreasonable extrapolation to say that, even if it is true in Byron Bay that no extra people were employed--and I do not know whether it is true or not but let me just give you the benefit of the doubt and say it is--therefore the whole project is only about keeping people in jobs rather than creating new jobs. Mr Calvert said the very opposite--you obviously were not listening, although it was in response to a question of yours--when he said that quite a number of councils have advised that they have been employing previously unemployed people. That might not have been a palatable response, so you may have chosen to ignore it; nevertheless, it has been given. And what you have stated as assumption is wrong and unreasonable.

Senator TIERNEY --Is it?

Senator McMullan --Obviously.

Senator TIERNEY --All right, can I give--

CHAIRMAN --Order!

Senator McMullan --I was simply responding with the same licence which the Chairman gave you. There was a specific question, which I think we actually dealt with earlier. Mr Calvert, do you want to respond to the specific question that came at the end of the diatribe?

Mr Calvert --The specific question was: would there be different conditions on the $55m as compared with the earlier allocation? The answer is no.

Senator TIERNEY --Thank you. The whole thrust of what the Parliamentary Secretary just said is that you cannot extrapolate from Byron Bay to the rest of the projects.

Senator McMullan --Even if your assumptions about Byron Bay are right.

Senator TIERNEY --Let me quote a newspaper article concerning what the Lord Mayor of the Newcastle City Council said:

The Lord Mayor, Alderman McNaughton, said yesterday that there was no guarantee the work would go to the unemployed.

He is referring to the new funding. The article states that Wyong shire is doing its work by contract. Singleton's General Manager said:

. . . unless contractors had to recruit more staff no unemployed people would be used. . .

Dungog shire said that it would be using existing council staff. Muswellbrook shire said that no unemployed labour would be used unless subcontractors had to recruit more staff. Port Stephens said that it expected the council would employ subcontractors. I have just gone through the Hunter Valley councils; that is also on the north coast--

Senator McMullan --Do you think employing subcontractors is not creating jobs?

Senator TIERNEY --No. My whole point--

CHAIRMAN --Let Senator Tierney make the point.

Senator TIERNEY --My whole point has been on creating extra jobs. You said that I could not extrapolate--

Senator McMullan --Do you think that does not create extra jobs?

Senator TIERNEY --Wait a minute. You said I could not extrapolate--

CHAIRMAN --Order! You have just quoted a whole number of issues, which I think is reasonable because it shows why you are going to ask a certain question. Would you now get to the question without making statements.

Senator SHORT --Senator McMullan might allow him to ask the question.

CHAIRMAN --I asked Senator McMullan to do that and he is so doing.

Senator TIERNEY --Senator McMullan has said I cannot extrapolate from Byron Bay. I have just covered a whole range of councils on the north coast. So I am saying you can extrapolate from Byron Bay to the rest of the north coast and I would suggest you can probably extrapolate to the rest of the country.

Senator McMullan --Can I just respond as gently as I might because Senator Tierney is not stupid and I do not understand why he pretends to be.

CHAIRMAN --Order!

Senator McMullan --That is perfectly in order; I said he is not stupid at all, I know he is not. So I cannot imagine why he says such silly things.

Senator TIERNEY --I am quoting from the councils. Are the facts stupid?

CHAIRMAN --Order! Your quote is on the record.

Senator McMullan --He says certain councils are not creating any new jobs because they are going to do the work by subcontractors. Do you think subcontractors come from Mars? They are people working. It is called jobs.

Senator TIERNEY --We understand that.

Senator McMullan --I appreciate that you did not want me to interject on you to try to find out what you meant by your silly statements. Please let me respond. The Newcastle Herald of Wednesday, dealing with some of these issues which you raised and dealing with most of the councils which you just referred to, concluded:

That it won't directly guarantee jobs for unemployed people in no way diminishes the helpful impact it will have in areas like the Hunter, which have been hard hit by the recession.

I think that is a fair summary. I will not abuse the time of the Committee by reading the whole of the editorial, which goes through many of those councils and projects and the beneficial economic and social impact of the expenditures. But I think the conclusion is valid. It is self-evident that in most of those councils--from what you have said--jobs are being created directly and also that there will, indirectly, be more jobs created. Depending upon the nature of each project, where the indirect jobs will be created will vary. But the expenditure of that money in the Hunter is, I am sure, extremely welcome in the Hunter, as it should be. It is an area that deserves it. It is creating jobs. It is doing socially worthwhile things. But you are entitled to have an opposite view about what we should do. It is a democracy. But you cannot extrapolate from it the point that you are trying to make. But let us get onto the next question.

CHAIRMAN --I have a short question on it.

Senator TIERNEY --Well--

CHAIRMAN --You had a few. I have a short question on it.

Senator TIERNEY --I have been attacked by a person here and I would like to respond to that.

CHAIRMAN --You will not be denied your opportunity. I have a short question now. Given that the additional money was publicised and the reason for it, would it be your view that the local councils that received the money would have a moral obligation to attempt to use it in such a way that those people who are targeted would get the benefit?

Senator McMullan --They are obliged to spend the money in accordance with the submissions that they have made. Provided they are doing that, it will create extra work. Whether the extra work is for people who may otherwise have been laid off from their employment or from people who are unemployed and who get new jobs is not the sort of detailed decision that I understand the Commonwealth wants to be making in shire councils all around Australia. But Mr Calvert might want to add some detail.

CHAIRMAN --I guess my question was: is it their moral responsibility to spend it?

Senator McMullan --I do not want to be criticising them, but it is true that the choices about who gets the work are made locally, and that is what we would wish.

Mr Calvert --One of the unique features of this program and one reason why I believe it has been successful in what it has done is that it has relied heavily on local councils to put forward their views as to the best way for the money to be used in the local communities.

Senator TIERNEY --If I can just encapsulate what I am saying to underline the point: what all these programs have done, as we showed at Byron Bay--

CHAIRMAN --We are not debating--

Senator TIERNEY --Could I just finish?

CHAIRMAN --We are not debating--

Senator TIERNEY --I know we are not.

CHAIRMAN --We are seeking explanations from the officers and the Secretary.

Senator TIERNEY --Right. But I was attacked just then and I want to respond to that.

CHAIRMAN --Order! It will be a never-ending argument if we do that.

Senator TIERNEY --So you are gagging me.

CHAIRMAN --I ask all parties to ask questions and to give answers.

Senator TIERNEY --I am responding to what has been said because the Secretary has obviously missed the central point.

CHAIRMAN --I say that people should not be debating. That is the point. We are here to get information.

Senator TIERNEY --And in the time we have been arguing it I could have finished.

CHAIRMAN --I doubt that, having listened to what you said earlier.

Senator TIERNEY --Just give me 30 seconds.

CHAIRMAN --All right. After you do that, let us start from there and ask questions and get answers.

Senator TIERNEY --We will start with the example of Byron Bay. We have shown that it has happened through the Hunter as well. What it underlines is the fact that all this money is not creating new jobs; it is just holding the line. I asked the Department whether in the new expenditure exactly the same thing was happening. The indication was, `Yes, it seems that it is not going to create new jobs; it is just holding the line'. Therefore, my basic point is that the Budget statement was dishonest. This whole program as outlined in the Budget was going to create 13,000 new jobs. This additional expenditure will not create extra jobs, either.

Senator McMullan --Would you like a brief response to that? I can say it in two words: you're wrong.

Senator KEMP --Mr Calvert, I wonder whether I could press you so we can get a better idea of the sorts of criteria we are trying to explore and the success of the program. You said that the program had been a success. On what basis do you say that?

Mr Calvert --On several bases: firstly, the speed at which it has been dealt with; and, secondly, the low administrative costs involved. It looks as though they are going to be less than one per cent of the cost of the program, which means that most of the money the Government has allocated is going to the projects themselves and not into administering them. I think the quality of the projects that have come forward has demonstrated the worth of the program.

Senator KEMP --You mentioned that this very large program, which totals all up, I suspect, about $345m, has worked well, that it is a success because the money has been spent, that the administrative costs are low and that you are happy with the quality of the projects. What about the number of jobs created?

Mr Calvert --As I have explained before, the program was a local capital works program, not an employment program, and it was designed to stimulate local economies. I think the judgment is still to be made through the evaluation as to whether it succeeded in doing that. I think we are still out on that one. But the basis on which we would be judging is whether local economies would be stimulated.

Senator KEMP --How do you measure the stimulation of the local economies?

Mr Calvert --One measure would obviously be employment. Another would be the general economic level of activity in those local economies.

Senator KEMP --I think they are both the same, almost.

Mr Calvert --They are related, sure.

Senator KEMP --We seem to be getting into a rather circular argument.

CHAIRMAN --We are not getting into an argument. We are concerned with questions and answers.

Senator KEMP --Trying to work out how the program is going is one of the roles of these committees, with respect, Mr Chairman.

CHAIRMAN --It may well be, but we do it in a certain way.

Senator KEMP --That is exactly what I am doing.

CHAIRMAN --We are not going to argue. We are going to ask questions.

Senator KEMP --In your initial responses to my comments you have downplayed the employment role. Senator McMullan in his comments, I think it would be fair to say, stressed the importance of the employment role in the context of this program. Is that correct?

Senator McMullan --That is what I was asked about. That is what I responded to.

Senator KEMP --Will the 13,000 jobs that were originally forecast be achieved?

Mr Calvert --I would imagine they would be.

Senator KEMP --On what basis do you say that?

Mr Calvert --On the advice we so far have.

Senator KEMP --Could you expand on the types of advice that you are getting? What type of statistics are coming forward which sustain that point?

Mr Calvert --We have some estimates on the number of employment months that the program is creating.

Senator KEMP --Net new jobs?

Mr Calvert --No; they are employment months.

Senator KEMP --What are those figures showing? Can you table those statistics for us?

Mr Calvert --They are showing that we might have the equivalent of 17,000 six-month employment units involved in the program at this stage.

Senator KEMP --Could you take us through that slowly again?

Mr Calvert --I will go back one step--

Senator KEMP --I am just a simple senator, so just tell me the number of jobs that you have been creating.

Mr Calvert --What we have sought from councils is the number of employment months that the projects will involve. We have done some work on that and we have come up with a figure of 17,000 six-month employment units.

Senator KEMP --That rather suggests to me 8,500 employment years. Is that right?

Mr Calvert --Yes.

Senator KEMP --So 8,500 jobs have been created?

Mr Calvert --There is the whole issue of whether they are new jobs or not.

Senator KEMP --Okay. Let us leave off the new jobs issue. The Government has forecast 13,000 jobs. You are saying that the statistics which have been supplied from the local council areas show that 8,500 jobs have been created.

Mr Calvert --No; the Government talked about 13,000 six-month jobs. That is my understanding of what the Government said.

Senator KEMP --Let us just test it. Senator McMullan is at the table and probably has a nice quote for us so that we can get that checked out.

Senator McMullan --I have not; but I think that is right. My recollection is that we said the average length--

Senator KEMP --It is a pretty key question as to whether 13,000 jobs are being created over the year or 13,000 over six months.

CHAIRMAN --If you are seeking information, could the Minister provide it?

Senator McMullan --I do not have it available. My recollection is that it was suggested that the average length of the jobs would be six months.

Senator CHAPMAN --Starting from when?

Senator McMullan --From when the person was employed.

Senator CHAPMAN --Which could vary from where to where?

Senator McMullan --Any time during the 18 months to the end of 1993.

Senator KEMP --It may help if officers who are in the room or at the table could be given instructions so that we can actually get some clear figures as to what this particular program which we are here today to discuss sets out to achieve.

CHAIRMAN --Could those figures be extracted from the system and be made available to the Committee?

Senator SHORT --Does anyone here have a copy of the Budget Related Paper Working for the future?

Senator McMullan --We could provide that. It is not affected by what we are doing today in terms of the $55m, because that is only a bring-forward figure. The statistics will be the same. It is not affected directly by what is before us, but I am happy to provide the data that establishes whether my recollection is correct. I am not sure whether I can do it in the next half hour or so, but we can certainly do it by the time the Committee reports back to the Senate.

Senator KEMP --Page 79 of the Budget Related Paper Working for the future says that the Government expected the program to generate around 13,000 jobs over the next two years. We have heard 13,000 over six months, I have postulated 13,000 over one year, and now I find that in the Budget Papers it says 13,000 over two years. Can someone tell me what this program is meant to achieve?

Senator McMullan --What is the problem with it saying `over two years'? That is the time limit of the program.

Senator CHAPMAN --Each job will last only six months.

Senator McMullan --That was my recollection. I do not know why you bothered to ask. I will check and give you the information. There is nothing very startling about it.

Senator KEMP --I stress the importance of this. We are told this is an excellent program and that the money is being spent quickly--which I think is a funny way to evaluate a program; it does not cost much to spend money. You are happy with the quality of the projects, which seems to me to make sense. We are told the program is designed to stimulate the economy and create jobs.

What we are really trying to test is how many jobs are being created by this program, what are the statistics which are being fed back to the Government and do they sustain that? That is why this particular line of questioning is important. If we find out exactly what employment criteria we should use to evaluate the program, that will help us test whether the extra $55m which is being spent will be well spent.

Senator McMullan --I want to make it clear that there is not an extra $55m being spent and that is also on the record. It is a bring-forward of $55m. The project is of the same magnitude; it is simply being spent in a different financial year. That has not changed. Nevertheless, I have undertaken to get that information before you report back to the Senate and I will do so.

Senator KEMP --I thank the Minister. I will be marginally parochial for a while and turn to my own State. The Minister would be aware that in my own State, as one would suspect, a number of councils are not happy that they have missed out on the funding which has been provided under this program. For example, I draw your attention to the problems of the City of Moorabbin, which has a comparatively high level of unemployment. The statistics show that, in terms of the number of unemployed in Victoria, it has amongst the highest. Judging by the submission it has made, it seems to have some projects ready to go. Could you tell us why Moorabbin was excluded from the program and upon what criteria?

Mr Calvert --The criterion for councils to receive funding was their rate of unemployment, which had to be at or above the national average rate of unemployment. Moorabbin was below that and did not qualify. That comment is subject to the qualification that if a council was within a particular region and had a lower unemployment rate than the average, because the region was receiving funding the council in that region received funding as well.

Senator KEMP --Moorabbin points out that it has 4,784 jobless, which makes its level the twelfth highest in the State of Victoria. You are saying that is just tough because, on the basis of your calculations, it would still have a lower percentage than the other councils which received the funding. Is that correct?

Mr Calvert --Yes, that is correct. If we had done it on the basis of the number of unemployed and targeted it to the councils with the most unemployed, the effect of that would have been to disadvantage the smaller councils. In fact, that was something we wanted to avoid. Of the 410 councils that received funding, 280 were non-metropolitan. If we had used an absolute numbers approach, as distinct from a percentage approach, I think nearly all the money would have gone to the cities.

Senator KEMP --Can you give any hope to these councils, which seem to me to have put up a very effective submission through the Municipal Association of Victoria? Is there any prospect of funding? They perceive that they have serious problems and that unemployment is high. Unlike some of the councils which Senator Tierney mentioned, they clearly see that this program has the potential to actually create jobs for the unemployed. Is there any prospect that there may be a further allocation of funds under this program?

Mr Calvert --That is for the Government to answer. As far as we in the Office are concerned, we have been told we have $345m and that is it for this year. Virtually all of the money has been allocated.

Senator KEMP --One would assume that in a large program some projects will not proceed, despite people's best hopes and intentions. Should these councils keep on speaking to the relevant department and sections of the department?

Mr Calvert --I do not think they have anything to lose, but I could not hold out much hope for them in the short term.

Senator KEMP --Apparently the criterion is not the taking on of the current unemployed. You do not consider that projects which show a particular capacity to do that should be given any preference in the allocation.

Mr Calvert --We have done it by council and if a council is not in the 410 it is not eligible.

Senator KEMP --This question will probably be better directed at Senator McMullan. I notice that a comment by Malcolm Farr about the program appeared in the Daily Telegraph. The article refers to the cash that is being thrown around and states:

`Councils are requested to coordinate any media statement they may wish to release with their local federal member or members,' read the fax from the NSW Local Government Association.

No way would any local federal MP want to miss out being photographed handing voters a big fat cheque, the likes of which councils had rarely seen before, at a time when money is scarce.

And most of the MP's able to do this have been from the Labor Party.

CHAIRMAN --Could you get to the question?

Senator KEMP --This is an interesting quote. Even you would be interested in this, Mr Chairman.

CHAIRMAN --Do not assume what I might be interested in.

Senator KEMP --The article continues:

Charges of political favouritism have been levelled at the Federal Government's local government capital works plan from the night the $345 million benevolence was announced.

Senator SCHACHT --You oppose the scheme. You cannot turn up and be photographed giving out the money when you oppose the scheme.

Senator KEMP --Senator Schacht, you are going to have your chance.

CHAIRMAN --Senator Kemp, continue.

Senator SCHACHT --You cannot complain about it when you do not want to give out the money. You are opposed to the scheme.

CHAIRMAN --Order, Senator Schacht! Senator Kemp?

Senator KEMP --Thank you, Mr Chairman.

Senator TIERNEY --You made the program; the money is given out unfairly.

Senator KEMP --Mr Chairman, this seems to have caused major excitement among the Labor members at the table. I wonder whether you can keep your colleagues under control.

Senator SCHACHT --The inconsistency!

CHAIRMAN --Order!

Senator TIERNEY --If you are going to give it out, give it out fairly.

CHAIRMAN --Order! They are just excited with your presentation, Senator Kemp.

Senator SCHACHT --You opposed the scheme.

Senator TIERNEY --Given that the scheme is in existence, will you make sure that it works fairly?

Senator SCHACHT --Surely you do not want to be photographed giving out money from a scheme you oppose.

CHAIRMAN --Order, Senator Schacht!

Senator KEMP --I point out that I have made no comment. I just read out a quote from an article in a newspaper, so Senator Schacht should not get too excited.

Senator SCHACHT --You have been complaining about how much money--

CHAIRMAN --Order!

Senator TIERNEY --You have not been here to hear what he has been doing.

Senator SCHACHT --I have been watching on the monitor. I have been watching this rambling dissertation by the Liberal Party.

CHAIRMAN --Order! For goodness sake! Senator Kemp?

Senator KEMP --Thank you, Mr Chairman. I welcome the protection you are offering from the hysteria of Senator Schacht.

CHAIRMAN --Will you reciprocate by behaving well?

Senator KEMP --When these grants are handed out are all local members told about it, regardless of their political party? I am a senator for Victoria and I have not received one note from any local council asking me to attend any function on this basis.

Senator SCHACHT --You opposed the money being given out. Why would you be asked?

CHAIRMAN --Order! That is well known.

Senator McMullan --I am not aware of any particular preference or discrimination being given to members one way or the other. I cannot help you.

Senator KEMP --You might like to check that out, just to make sure. If local Federal members of Parliament are meant to be informed, senators should certainly be informed and I think local members of parliament, regardless of political affiliations, should be informed. Could you check whether that is actually happening?

Senator McMullan --Notwithstanding my well-known respect for the Senate and senators, I am not sure that in every instance it is necessary for senators to be advised. But I will see what information I can get about the process of informing local members and if there is something I can provide, I will provide it.

Senator SHORT --I would assume it relates in the same way as the announcements for the national prices network.

CHAIRMAN --Order!

Senator SHORT --Can I ask a couple of questions?

CHAIRMAN --Yes.

Senator SHORT --As I understand it, the Government is now saying that job creation was not a primary aim of the program--in essence, I think that is what you are saying. If that is the case, why was the selection of councils to be allocated money based on the level of unemployment in each community?

Senator McMullan --I suppose I understand the question because of the words that you have used, but it just seems inane. It is quite clearly an economic stimulus and therefore it is part of the employment program that was set down in the Budget. So, quite clearly, it relates to areas where there is higher unemployment.

Senator TIERNEY --It is completely illogical, though.

Senator McMullan --It is kind of Senator Tierney to state his view, but it is not true.

CHAIRMAN --Order! We are not interested in comments of that nature.

Senator McMullan --When you provide economic stimulus, you seek to do it where there is the greatest need for it. When you are doing something for local councils you look at the criterion for determining need, and a sensible rational criterion that most Australians would share is that a usual benchmark is to look at where the unemployment rate is highest.

Senator TIERNEY --But you have said that it is not creating extra employment, so why use that criterion?

CHAIRMAN --Order! Can I suggest--

Senator TIERNEY --It is totally illogical.

Senator McMullan --Look, you thickhead, I have not said that. I have said the opposite on every occasion.

Senator TIERNEY --I know when you get trapped you come out with this abuse. How about arguing the point rather than abusing--it is illogical.

CHAIRMAN --Order!

Senator McMullan --The fact of the matter is this--

CHAIRMAN --Will honourable senators be quiet for a moment? As I understand it, this Committee today will provide an opportunity for the Opposition to question the Minister and his officers. If honourable senators want to waste time, then it will be their loss. All I ask is that we do it effectively and efficiently.

Senator McMullan --The only strand of assertion that this program is not about increasing the total amount of employment has been put by Opposition senators, and I dispute that. It has always been clear, from the Government's point of view, that this is about creating economic stimulus which will improve employment and, in the process, provide community facilities. That is unequivocally clear. That is why the criterion was unemployment. It seems to me to be perfectly appropriate. If Opposition senators think we should have had another criterion, that is fine; that is a legitimate point of view.

Senator TIERNEY --No. I just would have liked you to have created some new jobs out of it.

CHAIRMAN --Order!

Senator McMullan --Quite clearly it has created new jobs.

Senator TIERNEY --But you said it did not.

CHAIRMAN --Order! Questions are being asked. Let them be answered.

Senator McMullan --Actually, they have been answered. People have cottonwool in their ears. The officer said there have been 17,000 units of six months employment created. That does not sound too bad to me. I think there are probably a lot of Australians out there who appreciate it, but Senator Short and Senator Tierney are entitled to oppose it if they wish.

Senator TIERNEY --No new jobs though.

CHAIRMAN --Further questions. Senator Short?

Senator McMullan --That is just not true. The continuing assertion of it does not make it any more true.

Senator TIERNEY --You still have not proven that it is creating any jobs.

CHAIRMAN --Order!

Senator McMullan --I will not respond to that again. I have made my last response.

Senator TIERNEY --Extra jobs; is that simple enough for you?

CHAIRMAN --Order!

Senator McMullan --It has created extra jobs. The officer has said it has created 17,000 six-month units.

Senator TIERNEY --How many extra new jobs?

CHAIRMAN --Order! Senator Tierney, we are not debating the question.

Senator TIERNEY --No; we are trying to get the proper answer.

CHAIRMAN --No; you have answers. You just will not listen to them.

Senator TIERNEY --I have listened to them. They do not make sense.

CHAIRMAN --They do not have to make sense to you. The answers are there. Other people will make the assessment.

Senator McMullan --Without drilling a hole and pouring the information in, I cannot do any more. Please, Mr Chairman, let us get onto the next question.

Senator TIERNEY --It is a pity you are missing the point totally.

Senator SHORT --I wonder whether Mr Calvert could provide to this Committee--I presume he will have to take this on notice--the precise details of the composition of those 17,000 six-month units.

Mr Calvert --I do not know what you mean by `the precise details'. Do you want the break-up between unemployed and contractors and council workers?

Senator TIERNEY --Precisely; that would be very useful.

Mr Calvert --We cannot do that because we have never asked the councils how they were proposing to employ people to do the work.

Senator SHORT --Even if you can show us--and I am asking you to do that--the details of the 17,000 units, are you saying that, in the case of a particular project in a particular local community or local government area, you cannot even tell us how many of the job units associated with that program are generated within that community? Let us say the project was contracted out and done by a firm that was located in a very low unemployment area; would you know that?

Mr Calvert --No. We have asked councils to concentrate their work on local content, but we have not asked them for specific details of precisely where their contractors come from and how many people they are employing.

CHAIRMAN --Have you got feedback as to whether they have agreed to do that?

Mr Calvert --Yes. Obviously local councils are intent upon doing the best for their local areas and, wherever possible, I am sure that is happening.

Senator SHORT --If I understand you correctly, you just said that you are not only not asking them where the employment is coming from, but also you are not asking them whether they are employing additional people. Is that what you are saying?

Mr Calvert --That is right. It is a local capital works program.

Senator SHORT --If that is the case, what is the basis of your statement that 17,000 job units are available?

Mr Calvert --As I mentioned earlier, we asked the councils for the number of employment months that the job would create. So we have a macro figure, as it were, but we have no break-up of what it comprises.

Senator SHORT --I have asked you to provide the Committee with details of the composition--any composition, for that matter--of the 17,000 job units that you say have been created. In response to that question, what will you provide to the Committee?

Mr Calvert --I will provide an estimate on a State by State basis of the number of six-month job units that we have calculated.

Senator SHORT --Will that estimate be based on data you have received from the project recipients?

Mr Calvert --It will be based on that and on a survey that we did in New South Wales.

Senator SHORT --But I thought you said that you have not found out from any of the recipients just how much employment is in each project.

Mr Calvert --No, I said that I did not know the break-up of the employment between unemployed contractors and council workers.

Senator SHORT --In the city of Brunswick, which is in my area, $1.2m is to be spent on restoring shopfronts, roadways and footpaths, and the purchase of new street furniture, to attract shoppers, tourists and visitors to Sydney Road--on which, I must say, most of the shops are closed because of the recession. How much employment is involved in that project? Do you have details from the city of Brunswick?

Mr Calvert --The city of Brunswick gave us an estimate of person months of employment generated by the program.

Senator SHORT --In other words, you will be able to provide the Committee with all those estimates provided to you by each municipality to which grants are being given.

Mr Calvert --We have found that the estimates were badly out because the councils had not understood the question. Because of that, we did an extensive survey in New South Wales to question them about the person months figures that they had put in. We found that, for instance, many councils had misinterpreted the question. We then made a separate estimate on the basis of interviewing about 56 councils in New South Wales and have come up with an estimate for New South Wales and have extrapolated that to Australia. So we have figures for individual councils but, after talking to those councils, we believe that many of them have misinterpreted the question. For instance, a number of them thought the person months issue was simply a question of how many unemployed people they were taking on. There were all kinds of interpretations of the question. With the benefit of hindsight, we should have asked it better.

Senator SHORT --As I understand it, you have rejected the information that was provided by councils because of your concern about the accuracy of the data?

Mr Calvert --Yes.

Senator SHORT --So you rejected that information. You have done a survey of 56 councils in New South Wales. How many recipients were there in New South Wales?

Mr Calvert --I cannot give you the exact figure; there were about 70. It was most of the councils in New South Wales. They provided roughly 28 per cent of the program, so it was a fairly big sample.

Senator SHORT --So you have no data on the remaining one-quarter to one-third of the councils in New South Wales that were recipients and you have no data at all on any of the councils in the other States?

Mr Calvert --No, we have data.

Senator SHORT --But it is data that you have rejected.

Mr Calvert --Yes. We believe that it is inaccurate.

Senator SHORT --So, in effect, you have no data from any of the other States on which you are prepared to base any reliability.

Mr Calvert Yes. As I have said, it came back to the question we asked. As we subsequently discovered, it was subject to a considerable amount of misinterpretation.

Senator SHORT --It follows from what you have just said that you have no idea, in relation to any project in any area, other than perhaps the 56 councils that you have surveyed in New South Wales, whether they have generated any employment or, if they have generated any employment, how much of it has been from people who were previously unemployed or how much of it was generated from people within that local government area.

Mr Calvert --In isolated cases, councils have written to us and told us what they are doing. But we have no figure on a State by State basis to provide that breakdown.

Senator SHORT --Do you have any information, even from the 56 councils that you surveyed in New South Wales, on how much of the employment that was generated from those projects will be permanent?

Mr Calvert --No.

Senator SHORT --How many of the 17,000 job units--which is much less than the 13,000 jobs referred to in the Budget related paper, on a reasonable interpretation of them--will be permanent?

Mr Calvert --I do not have any figures on that. I cannot guess.

Senator SHORT --There are no figures available?

Mr Calvert --There are no figures on permanent jobs.

Senator SHORT --I come back to a point we were talking about before. I confirm the quote that Senator Kemp read, which was subject to confirmation. Page 79 of the Budget Related Paper entitled Working for the future: jobs, skills, innovation of 18 August 1992 states:

The Local Capital Works Program outlined in Chapter 6 will generate around 13 000 jobs over two years.

I have a couple of other questions. Am I right in saying, as a point of fact, that the council contribution was required to be in the range of 10 to 20 per cent or more?

Mr Calvert --Yes.

Senator SHORT --That is the council contribution as distinct from the community contribution?

Mr Calvert --Yes.

Senator SHORT --I referred to the city of Brunswick project. I have a press release from the MAV on it. The project budget was $1.19m, the Commonwealth contribution was $1m and the council contribution was $90,000. There is a shopkeepers' contribution, but from what you are saying you would not count that. The council contribution of $90,000 is much less than 10 per cent of the $1.19m. Why would that project have been included?

Mr Calvert --I am sorry. I have misled you, as far as the contribution is concerned. I have looked at the guidelines here.

CHAIRMAN --I take it you misled us unconsciously.

Mr Calvert --Yes; not deliberately. The senator reminded me, when he went on with the question, that the guidelines say that it is expected that projects will normally involve a contribution of between 10 and 20 per cent by local councils or communities, but flexibility will be exercised. We exercised that flexibility by saying that, if a council was receiving money for a number of projects, the important thing was that over all those projects the council and community contribution should be within that range. In fact, our overall figures indicate that council and community contributions have exceeded 20 per cent.

Senator SHORT --So the 10 per cent minimum is council and community contributions?

Mr Calvert --Yes.

Senator SHORT --Do you have any information that you could give the Committee on how many and which councils have declined any allocation they might have been granted under the program?

Mr Calvert --The answer to that is that no councils have declined their allocation.

Senator SHORT --None at all?

Mr Calvert --No.

CHAIRMAN --Not to your knowledge?

Mr Calvert --Not to my knowledge. I can say that with a good deal of certainty because, as I explained to Senator Kemp earlier, between 98 and 99 per cent of the funds have been allocated and we are in the process of allocating the last 30 projects; all our reconciliations indicate that no council is going to decline its funds.

Senator SHORT --I direct this question perhaps to Senator McMullan rather than Mr Calvert. You have said this morning that in your view there are jobs generated as a result of this program, although there seems to be no information apart from that survey information to substantiate that in any quantitative sense. Why then did the Government not allocate significantly more funds to this program, if it is such a job generator?

Senator McMullan --It is like every other program; there is always a balance between

the revenue available and the demands made upon it. There are always more good ideas than there is money to go around, so one has to make choices and balance money available for expenditure and desirable objectives. As part of making that balance in the Budget, this was the conclusion to which the Cabinet came.

Senator SHORT --But you produced a Budget that did not seem to be worried too much about the bottom line when it came out with a $13 1/2 billion deficit. Why not chuck in another half a billion and tackle your unemployment problem even more through this program? What is another half a billion dollars to you?

Senator McMullan --We are so fearful of the attack you would make upon us if we had a bigger Budget deficit that we would not have dared do so.

Senator TIERNEY --I refer to the back page of Working for the future, which states, `Employment impacts of the package'. It sums the matter up by saying that rail will create 4,000 direct jobs, road infrastructure will create 9,000 direct jobs and the local capital works program will generate around 13,000 jobs. Do you not think any reasonable person would interpret that to mean that in each of those cases you are creating additional jobs--in other words, reducing the dole queue; that these are net extra jobs? For anyone reading that statement, do you not think that is a reasonable interpretation of the English in this statement?

Senator McMullan --But you are the only one who thinks it is not, Senator Tierney.

Senator SHORT --No, he is not the only one.

CHAIRMAN --Order!

Senator TIERNEY --Not at all. I think people thought the whole thing was about extra jobs.

Senator McMullan --Then I am afraid the shortcoming which you have must be contagious, but I have nothing to add.

Senator TIERNEY --You are very thick, Senator, if you do not understand what I am saying.

Senator SHORT --There is no other way that that statement could be read.

Senator TIERNEY --That is what it means. You might not like it, but that is what it means.

Senator McMullan --What I am saying is that he misunderstands what has happened, not what we said.

Senator TIERNEY --You are the one misunderstanding--deliberately, I believe.

CHAIRMAN --Order! Nobody is suggesting, certainly not me, how you have to ask your questions, and nobody can suggest how Senator McMullan should answer them.

Senator SHORT --The record will speak for itself.

CHAIRMAN --It certainly will, Senator Short. You are right. That completes the Department of Immigration, Local Government and Ethnic Affairs. The Department of Employment, Education and Training will be next Department. We will have a five-minute break while the Committee has a private meeting.

Short adjournment

[10.32 a.m.]