Senator LEES —My question is directed to Senator Hill, the Minister for the Environment. Minister, isn't it true that as a result of the Telstra profit announcement on Friday, Telstra—based on year by year results—contributed an extra $840 million in dividends and company taxes more than it did last year? Isn't it true that this $840 million, combined with the $160 million that the Department of Finance estimates that the sale would actually cost if it went ahead, surely gives you your $1 billion? So shouldn't you immediately move to set up the Natural Heritage Trust Fund some 18 months earlier than planned? Shouldn't this money be allocated as a priority to fix all those environment problems and all those issues you have come into this place and talked about so eloquently for the last few months? Shouldn't we now be moving, 18 months ahead of time, to set up the fund?

Senator HILL —Apart from debating the detail of the profit levels—which is something that my colleague started to do, and no doubt it is a debate that is going to continue—I think that the honourable senator is really double counting because any profits that are made by Telstra are fed into recurrent expenditure, which of course was running, under the previous government, at a deficit level of approximately $10 billion.

Senator Conroy —It is only two per cent.

Senator HILL —You might dismiss a deficit of $10 billion. Over the last five years the accumulated deficit was something like $86 billion—over $50 billion in the last three years alone. This was the record that we inherited from Labor—Beazley's black hole—that we had to do something about. That is why I have said—I think to you, senator, and to others in this place—that we have sought to continue the current expenditure for the environment at about the levels of the past. But what we recognise—because we failed to appreciate in the past how fragile the Australian environment is, so very significant damage has been done to it—is that there is now a need for a major capital infusion to restructure and reinstate that environment.

That is why we said that the answer is to sell part of one of our own capital assets, in this instance a telecommunications company, to reinvest part of those proceeds—$1 billion of those proceeds—in the natural environment. We still believe that is the best way to go, to establish that capital fund, which will be substantially in excess of the normal recurrent expenditure to be able to do the things to benefit the environment that normal recurrent expenditure has not been able and continues to be unable to do.

Senator LEES —Madam President, I ask a supplementary question. I thank the minister for his answer; but these were unexpected profits and unexpected company taxes that were being paid. Are you now, as environment minister, saying that you are quite happy for this to be spent elsewhere—go off into other areas of the budget, or into black holes or wherever—rather than actually advocating and hopefully campaigning within cabinet for your portfolio area? Many conservationists believe that the linking with Telstra in the first place was rather a cynical exercise to get out of spending anything at all on the environment. So is that where we are really back to—the fact that you really do not have any commitment to actually spending any money on the environment?

Senator HILL —With respect, Madam President, that is a nonsense. We are spending some hundreds of millions of dollars a year on the environment.

Senator Sherry —Where?

Senator HILL —The point is that that is not enough. We are actually spending more than you had forecast in your last budget for this year, Senator Sherry. You might reflect on that. You claim to be some sort of budget expert. Go back and look at last year's budget papers, look at the forecast for the environ ment for this year, look at our actual for this year and you will find—

Opposition senators interjecting—

Senator HILL —Oh, there was some further events along the road! Bearing in mind, Madam President, the extent of the problem of us inheriting a $10 billion deficit, I think we have done an extraordinarily good job in keeping up the level of expenditure. But it is not enough. That is the point and I use this opportunity to reiterate it. We need a major capital infusion. We have provided a way to do that and we wish that you would only support it. (Time expired)