Senator COOK(8.38 p.m.) —The Democrats amendment has been fully explained. Let me say, though, that the way I read the Democrats amendment, it is not as all embracing as the amendment that I have put down on behalf of the opposition. That means that, while I will vote for the Democrats amendment, I will still seek leave to improve on it by moving mine at a later moment. This is a very important issue for this chamber. In particular, there are four Liberal Party senators who ought to focus on this debate very closely. They are Senator Campbell, Senator Panizza, Senator Eggleston and Senator Ellison. The reason they should focus on the debate is that they are all West ern Australian senators. This amendment relates basically to gold prospectors and prospectors for other designated minerals set out in the schedule to the act.

Most of the gold prospecting in Australia goes on in Western Australia where there are some 4,000 registered prospectors. I am not sure to what extent there are registered prospectors elsewhere in Australia but, wherever they are, they will be affected.

This provision of the government seeks to deny those who are currently in possession of a prospect, disposing of that prospect after 31 December and realising the conditions on which they entered into the prospect in the first place. This is a complex case of retrospectivity.

Government senators interjecting—

Senator COOK —I note that government senators are interjecting that it is not a case of retrospectivity. For the record, I say go to the record of the Senate Economics Legislation Committee hearing in which the prospectors association, an accountant on their behalf, and, indeed, a former Liberal Party senator in this chamber, former Senator Crichton-Browne, gave evidence to the inquiry—and argued to the inquiry and through the inquiry to this Senate—that this is a retrospective taxing arrangement and should be chopped out.

Let me explain why it is retrospective in terms of its taxation and why Senators Campbell, Panizza, Eggleston and Ellison should cross the floor on this vote—they are senators elected by the State of Western Australia to this states house to represent the interests of that state. There is no interest group in Western Australia that commands more bipartisan support, I would contend, than the small prospector association. Indeed, the mining industry depends on the activity of the small prospectors to discover mineral deposits which would not otherwise be discovered. The reasoning that the government has put up—that this was appropriate in the 1940s and 1950s but is not appropriate any longer—is specious in the extreme. Why those four Liberal Party senators should cross the floor and vote for this amendment is, quite clearly, that they represent the constituents most affected here. Those constituents are wanting to see from their state senators a vote of support for their industry.

The mining industry is carried on the back of prospectors. Without the type of work that these people do, you would not discover the minerals in the first place. These are small people in terms of their business interests. There is an idea that a prospector is someone who will strike it lucky and make a fortune overnight. The truth is that most of these people are very moderately rewarded. They are not excessively wealthy. They are people who work in arduous circumstances.

Senator Campbell —Where were you on the native title debate?

Senator COOK —I take your interjection, Senator Campbell, because you are one of the Western Australian senators who should cross the floor on this matter. If you are concerned about the plight of these prospectors, you should interject now that you will.

Senator Campbell —Where were you talking to the prospectors during the native title debate?

Senator COOK —I notice that you do not interject that you will cross the floor. Therefore, I assume that you will not take an interest in this issue for these prospectors.

This measure was announced by the government in the budget on budget night. Up until then, the provision had stood the test of time over many years. In 1984, the Gutman inquiry came down with the recommendation that this provision stand, not be deleted. That was accepted by the then Treasurer, Paul Keating, and was then proposed to the Senate and supported by the Liberal and National parties.

There are good reasons in income tax principles why we should not allow any person to have an income which is untaxed. But there are no good reasons, in any principles to do with taxation, that the operation of those provisions should be retrospective. It should not be retrospective for this reason. When those small guys got out there and found these deposits, pegged and registered them, they did so against the present law. They had an expectation of remuneration or return in the present legal terms. They improved on their leases in order to try to sell them and make a return but, for whatever reason, on budget night they did not expect that this law would change and they were caught short.

The only sensible way the government can introduce this principle is by grandfathering in all of the existing leaseholders. A way of doing that is by the Democrat amendment that is before the chamber. I frankly think a better way of doing it is by the amendment that I have. But I am prepared to vote for the Democrat amendment. If that fails, obviously, mine would fail. But if it succeeds, I will move mine and test to see whether we can take this the full distance. But it is a retrospective measure. This is a question of putting the Western Australian Liberal senators in this chamber on trial. Are they going to stand up for their state or are they not?