Policy Statement.  OUR PRIORITIES.  In the past few years, Australia has become a ship without a rudder.  The problem is not that our nation lacks resources, for we have them in abundance. Our problem is not our people, for they stand amongst the best in the world. Our problem is not our political System, which is mature and stable. Yet we are dogged by crisis and beset by difficulties. The fundamental truth is that our physical, human and financial resources are not being used in the most effective manner.  Australia's problems are felt every day by Australian families in ever larger bills and ever smaller pay-packets. Those who have been hit the hardest are those who can least afford it: especially families trying to raise children and buy their own home.  The past few years have seen Australia become less internationally competitive. The deficit on our current account - the difference between what we import and what we export - is growing. The inflation rate is far too high. Australia is going backwards.  Australia's gross external indebtedness is now almost $150 billion. The external debt is Labor's legacy to the next generation of Australians.  If there is no change of policies the next generation of Australians will be the first to face a lower standard of living than their parents.  Our productivity growth is virtually zero. Rather than increase the flexibility of the workforce, the Hawke Government has imposed a regulatory strait-jacket in the form of its 'Accord' with the ACTU. It is denying Australians the opportunity to earn more if they work efficiently.  The Hawke Government has been in power for the past seven years. It is responsible for the present crisis. Labor has made things worse in three ways.  First, it has deliberately pursued a high interest rate policy as the main instrument of its economic policy. It has given up on fighting inflation and cutting wasteful government spending.  Second, the role of government under Labor has increased while the freedom of the individual has diminished. Initiative, incentive, and innovation have been crippled by government intervention, and success has been penalized rather than rewarded.  Third, the Hawke Government has provided the trade union leadership and some other special interests with favors and a veto over government decisions. The Hawke Government has undermined the integrity of our political System. A government should govern for all, but the Hawke Government's method is to make deals with 'mates'. It is the politics of expediency. It is a Government for special interests rather than the national interest.  It is not simply that the Hawke Government has governed our nation badly. Labor has reached a dead-end. It will not take the steps that are necessary for Australia's recovery. It cannot: its mates, especially the trade union leadership have, time and time again, stifled key economic reforms.  Labor is out of touch, out of ideas, out of willpower, and out of time. In the past seven years Australia has gone backwards; but now all Labor offers is more of the same.  The Liberal Party does not believe that decline is inevitable. The pattern of decline can be reversed. A prosperous and secure future can be built Australia can compete - but only if our economy is restructured to meet the competitive pressures we now face.  Our priorities in government will be :  (1) To strengthen the Australian family as the center of society and as the focus of government policy, and to recognize the additional costs of raising children.  (2) To build a more productive and competitive economy in which hard work pays and success is rewarded; to ensure that economic policy raises rather than depresses living standards.  (3) To create a more flexible labor market on a shared purpose between employees and employers.  (4) To establish a framework of smaller, more efficient government.  (5) To provide a sound foreign and defense policy, and to work with our allies to foster the principles of freedom and security.  By concentrating on these priorities, by the end of our first term:  - Tax rate will be cut.  - Interest rates will be lower.  - Government will be smaller.  - Inflation will be reduced.  - Productivity and real wages will be higher and.  - Growth in foreign debt will be brought under control.  STRENGTHENING THE FAMILY.  The harsh reality of the Labor years has been falling living standards. High home interest rates, high taxes, and high inflation have meant crushing and unrelenting pressure on the living standards of Australian families.  In the past few years, Government policies have undermined the security of Australian families. Parent's have found it harder and harder to raise their children.  This has not been the result of adverse world circumstances or national misfortune. It has been the direct result of the Hawke Government's policies.  FAMILY TAX PACKAGE.  We are committed to reducing the pressure on families. Our Family Action Plan is aimed at reducing the burden of taxation, particularly on families with dependent children.  Our initiatives will put $2000 million back into the pockets of Australian families through reductions in tax. To assist parents in the raising of their children, we will introduce:  - A new program of child tax rebates.  - Changes to the dependant spouse rebate.  - A new program of tax rebates for child care.  These new benefits are over and above the Family Allowances and Family Allowance Supplements currently provided.  They have been fully costed and with our other promises will be fully funded by the $2700 million cuts in Government Expenditure set out in our Economic Action Plan and supplementary Election Expenditure Statement in areas such as cutting back on unemployment benefits, rationalization of Aboriginal affairs programs and overseas aid, and contracting out of government services.  As a result of our changes, a typical family with three children could get a 20 per cent tax cut.  For example :  • All families with two young children and a wife earning $5000 per annum will get a tax cut of $1063 per year or $20.38 per week under the Coalition's Family Action Plan. This includes a tax rebate for children and an increase in the eligibility for the dependant spouse tax rebate.  • For a husband earning $26,000 per year, this amounts to a tax cut of over 20 per cent.  • Moreover, all families with three young children (the youngest being less than 5 years) who place their children in child care because both the husband and wife work, will be eligible for a tax cut of up to $49.27 per week under the Coalition's Family Action Plan. This includes a Tax rebate for children plus a tax rebate for child care expenses.  Child Tax Rebates.  We recognize the additional cost involved in raising children. We will give families a better deal.  Tax rebates for children will be available for deduction against the tax liability of a sole parent or the combined liability of both parents in two-income families.  The amount of the child tax rebate varies according to the number of children in each family and the age of the child.  For the first child, the rebate will be $250 a year if the child is under thirteen; and $350 a year if the first child is between thirteen and fifteen.  For the second and each subsequent child, the rebate will be $200 a year for children under thirteen and $300 a year for children between thirteen and fifteen.  Dependant Spouse Rebate.  We will reform the dependant spouse rebate to raise the eligibility threshold and ease the withdrawal rate.  At present, where the dependant spouse earns separate income the maximum rebate is reduced by $1 for every $4 earned (that is, a withdrawal rate of 1 in 4) over a threshold of $282. Our policy raises the threshold to $1000, so that the spouse can earn considerably more without any reduction in the rebate. Further, the rebate will be reduced by $1 for every $6 earned by which the dependant spouse's income exceeds $1000 (that is, there will be a reduction in the withdrawal rate to 1 in 6).  Child Care Tax Rebate.  Labor's mismanagement has meant that in many Australian households both parents are required to work to minimize the decline in their standard of living.  Whether both parents work from necessity or choice, the cost of child care is expensive.  We will introduce tax rebates for child care. These rebates will be calculated against the tax liability of a sole parent or, for two parent families, on the secondary earner's income.  A rebate of$20 a week will be paid for the first child under five. For each other child under five, and for each child aged between five and twelve, the rebate will be $10 per week.  To receive the rebate, child care expenditure will have to be substantiated. However, a range of child care facilities will be eligible.  These measures will be over and above the current programs for child care. This includes the provision of 30,000 new child care places, support for %6 government funded centers, and fee relief for low income families.  The rebate will also lead to an increase in available child care places as the non-government sector responds to the increased demand for child care.  Our other taxation measures will also assist Australian families including the move to a flatter two-tier tax rate System, abolition of the Capital Gains Tax and its replacement with a Speculative Gains Tax and a return of bracket creep. These are outlined later in the document.  HOME INTEREST RATES.  In the past few years, the Hawke Government has imposed record high home mortgage rates on Australian families. With its lack of will to restrain government expenditure and inability to bring wage rises more into line with productivity increases, Labor has used the blunt instrument of interest rates  3°S" in an attempt to reduce demand. Australia's economic problems, including the problem of high interest rates, have to be tackled at a fundamental level.  The next Coalition Government will conduct monetary policy with the medium-term objective of reducing and eventually eliminating inflation.  A monetary policy pursued steadily over the medium term, in conjunction with our industrial relations, fiscal, and structural policies, provides the only means of reducing inflation.  From day one, we will put our economic policies into place which will bring about a significant and sustainable reduction in interest rates during our first term.  As an integrated package, our Family Tax Package represents fundamental reform. It is the practical expression of our philosophical commitment to the Australian family. A Coalition Government will support, encourage, and maintain the family unit, providing the security and certainty that has been undermined by Labor.  BETTER QUALITY HEALTH CARE.  Labor's health policy has resulted in endless hospital queues, a declining quality of care, and a compulsory tax levy which falls well short of funding even one quarter of Federal health costs. Medicare has caused widespread disruption in public hospitals and placed an enormous burden on dedicated health care professionals.  Health care professionals - from the public, private, and consumer sectors - need to be involved in developing strategies to overcome the deficiencies of Medicare.  This is why our health policy is based on co-operation rather than confrontation. Immediately on attaining office, we will establish a Medicare and Health Insurance Advisory Council, which will draw its membership from all areas of the health care sector and health insurance industry, and include public and consumer representatives.  The Council will undertake a comprehensive review of the health insurance System and advise the government accordingly. The Council's review will adhere to the following principles:  No individual or family will be worse off as a result of policy change.  No State or Territory government will be worse off in the funding of its public hospital System.  Medicare will be retained and improved for those not covered by private insurance.  Taxpayers will be able to 'opt out' of paying the Medicare tax levy by taking out private health insurance, and will be encouraged to do so through the provision of a tax rebate. And genuine competition will be promoted.  Elderly people have a particular need for good-quality health care. We will retain Medicare for the elderly, the disadvantaged and anyone else who wishes to retain the right to be covered by Medicare, just as they are at present.  At the same time, we will encourage and assist more people to take out private health insurance.  Those with private health insurance will be able to opt out of paying the Medicare levy. They will also be eligible for a tax rebate to assist them in meeting their premiums for comprehensive private medical and hospital insurance, which may include 'gap' insurance.  The targeting of this tax rebate towards the bottom end of the income range means that private health insurance will again be an affordable option, even for low income earners.  Under our policy more people will voluntarily go back into private health insurance allowing Medicare to better look after the very people it should be looking after, in particular the aged and the disadvantaged.  The Pharmaceutical Benefits Scheme will be retained and the existing patient subsidies will remain in force.  The Acquired Immune Deficiency Syndrome (AEDS) will be treated as a serious public health problem requiring public health solutions.  Women's health will be a priority, particularly in relation to preventative measures such as breast cancer screening.  Past neglect of mental health will be addressed by working with State and Territory Governments to establish a National Mental Health Data System and a National Mental Health Council to advise government Preventative health measures, including the promotion of improved dental health, will be an important part of overall health policy and be delivered through the Better Health program and other associated measures.  Existing medical research programs will be maintained and expanded over time to produce improved health care and health outcomes.  A MORE PRODUCTIVE ECONOMY.  In our Economic Action Plan and other policies we have released the most comprehensive blueprint for economic reform ever put forward by an Opposition. We offer an integrated, coherent, predictable plan for reconstruction and recovery.  The key to economic recovery is increased productivity through micro-economic reform, restructuring of the labor market, and greater incentive through a flatter, more efficient tax System. Only productivity growth can help us bring the current account deficit and therefore the external debt under control.  Labor has proved incapable of effective economic management. Is has been running the economy on 'Bankcard' for seven years, and the amount due will have to be paid by the next generation of Australians.  TAXATION REFORM.  Any government should work towards keeping taxes as low as possible. This is a fundamental Liberal aim.  Under Labor, Australians have paid more tax than ever before. Tax is now 25 per cent of Australia's Gross Domestic Product.  The main focus of our tax changes will be to provide relief to families as we have indicated earlier in this document.  The tactic of the Hawke Government has been to give a little with one hand while taking a lot with the other. Small cuts in income tax rates have masked the reality that millions of Australians have been pushed up the tax schedule by inflation. This is 'bracket creep'.  By some estimates, 'bracket creep' will impose an additional income tax burden of between $2 billion and $2.5 billion on Australians in the current financial year as inflation pushes people into higher tax scales.  The Coalition makes a commitment to forego the increase in revenue because of 'bracket creep' each year. We will hand back any increase in tax through 'bracket creep'. Never again will inflation be permitted to swell government coffers and rip off taxpayers through 'bracket creep'.  This is a very significant discipline for a government to impose on itself, but one which the Coalition willingly undertakes. It limits the size of government and it limits the tax burden.  Our goal is also to achieve a flatter two-tier tax rate System, with the top marginal rate equal to the corporate rate, by the end of the Coalition's first term.  The income tax structure proposed by the Coalition will reward hard work, responsibility, and success.  ABOLITION 0F THE CAPITAL GAINS TAX.  Millions of Australians have been or will be hit directly or indirectly by the Capital Gains Tax imposed by Labor - a tax which it promised it would not introduce.  Labor has tried to claim that its tax only affects the rich bit it cannot escape the reality that millions of Australians across all income levels will be affected:  - 750.000 owners of farms and small businesses.  - One million individuals with their savings invested in the stock market, and  - Millions of members of superannuation funds.  And the numbers will grow as people die, their estates pass to their families and assets previously exempt become taxable.  We will abolish the Capital Gains Tax and replace it with a speculative gains tax which phases down to zero over five years.  For assets held for less than one year 100 per cent of the realized capital gain will be taxed. For each year thereafter and the asset is held, the tax will be reduced by 20 per cent. For an asset held for five years or more therefore, there will be no tax.  We believe in wealth creation and private enterprise. Our policy to abolish the Capital Gains Tax will remove Labor's de facto wealth tax and death duties. It will reduce the tax burden of superannuants. Our policy is directed towards encouraging and rewarding initiative and hard work.  LABOR MARKET REFORMS AND WAGES POLICY.  If we are to run an efficient internationally competitive economy, we must seek increased decentralization of decision-making so that price and wage outcomes are consistent with the circumstances of our individual enterprises competing in a global trading environment.  The process of liberalization of product and labor markets must proceed hand-in-hand. Sensible wage outcomes will be harder to achieve where regulation or protection policies have allowed management’s and unions to avoid the winds of competition. Similarly, it is harder for those who face such competition to be confronted with centralized wage decisions which do not pay regard to their special circumstances.  Our Industrial Relations policy sets down a detailed blueprint for a more flexible, market oriented approach to wage determination.  It is a blueprint for higher real wages growth underpinned by productivity growth.  Our aims are:  - To ensure a much closer link between wages and productivity.  - To introduce incentive and reward for effort, thus encouraging higher productivity.  - To achieve labor cost growth at least in line with that of our trading partners.  We believe that the most efficient, positive way to achieve these aims is to shift the focus of industrial relations and wage determination to the workplace. Research by the Business Council of Australia suggests that an enterprise-based system could increase enterprise productivity by an average 25 per cent.  A complementary requirement will be to re-establish and uphold the rule of law in industrial relations. The disturbing imbalance of power within the conciliation and arbitration system where unions frequently defy Commission orders with impunity will be redressed. Voluntary agreements will be legally enforceable.  Under our policy employees and employers will be given a choice to:  (a) Remain with the centralized award system, albeit a more flexible and accountable one.  (b) Enter into a certified agreement which allows a greater enterprise focus but which continues to come under the control of the Industrial Relations Commission.  (c) Enter into a new stream of Voluntary Agreements.  These employer-employee contracts - outside the jurisdiction of the Commission - are a significant innovation and will provide maximum flexibility and scope for better performance and reward. While generally available, they will be of particular relevance to the dynamic small business sector which plays such a vital role in wealth creation. They will set a competitive pace for the whole industrial relations System. Agreements may be negotiated individually by employees or groups of employees.  Agreements may take account of the specific characteristics of enterprises such as regional economic conditions and the availability of different types of labor.  These agreements would offer the incentive to remove archaic work practices, introduce new technology and management methods, and improve employer-employee relations.  In particular, they provide the scope for introducing more flexible hours of work, permanent pan-time work and specific rewards for skill, effort and ability.  Our policy details the safeguards which will be available to protect the interests of employers and employees alike, including the provision for at least the minimum hourly award rate of pay for ordinary hours of work.  Complementary to voluntary agreements will be the encouragement of employee participation and incentive schemes.  The task of the next Coalition Government will be to facilitate the introduction of such schemes.  Both the abolition of Labor's Capital Gains Tax and our decision to privatize several major government businesses will also encourage the spread of employee  share ownership schemes.  We recognize, however, that the Industrial Relations Commission will, for the foreseeable future, continue to settle disputes and determine the wages and conditions of employment for a significant proportion of the workforce. It is essential that the centralized System itself develops a more flexible approach, one that encourages enterprise negotiations and is responsive to the needs of individual enterprises and industries while at the same rime taking into account the impact of its decisions on the national economy.  We will legislate to require the Commission to have greater regard for economic factors, especially international competitiveness, productivity and inflation.  We will submit to the Commission that it put in place wage principles based on the concepts of flexibility and competitiveness and which allow for differential wage increases between industries and enterprises.  At the same time, the Commission will be given enhanced powers to ensure compliance with its decisions by employers and employees.  The introduction of genuine voluntary unionism, the requirement for secret ballots before strike action and provision of greater scope for workers to choose their union will help bring about a union structure which is more accountable and enterprise-focussed. In particular, we will facilitate the creation of single-enterprise bargaining units.  The basic difference between the Coalition proposals and Labor's System is that we offer a choice.  Under Labor, there is no choice: employers and employees are locked into a system defined by bureaucracy, rigidity, and conflict.  INDUSTRY REFORM.  During the last election, Labor declared that microeconomic reform was to be the hallmark of its third term. This is another of Labor's broken promises.  The Liberal Party believes that, in general, government assistance and involvement in industry is counter-productive.  It is vital that industries are exposed to, not protected from, changing economic conditions. Our program includes privatization of public enterprises, reductions in protection, the reduction of imposts on business and the rationalization and reduction of business regulations, an open (but monitored) foreign investment policy and the revamping of education and training.  The next government will reduce protection further as part of our overall agenda.  We recognize the importance of predictability in reducing protection to provide a more certain environment for industries to undertake restructuring, and for this reason, will announce a comprehensive timetable of reduction in our first term of Government.  Prior to the expiry of the sector plans for certain industries, we will develop programs for further reductions in assistance to those industries with the aim of speeding the pace of adjustment.  The emergence over the last several years of policies designed to 'pick winners' is of great concern. We also strongly oppose ad hoc industry policies which distort resource allocation and favor some producers over others. We are committed to the repeal of the Kodak Bounty.  Our fundamental view is that governments are in no position to judge the likely success or otherwise of industries. Rather, we believe that the appropriate role of government in industry policy is to encourage an environment in which winners can select themselves.  Decades of protection have discouraged many firms from investing in new technologies, and fostered non-market competition, leaving Australia lagging behind comparable overseas countries in terms of technology use and research and development.  We reiterate, however, our view that direct support from government should be the exception rather than the rule.  DEREGULATION AND PRIVATIZATION.  We believe that the privatization and deregulation of public enterprises are long overdue.  The cost of government regulation is staggering. The Business Regulation Review Unit estimated that the aggregate cost of regulation to business was $47 billion a year, or 19 percent of GDP. Seventeen thousand public servants are involved in regulating business activity at the Commonwealth level alone.  Our aim is to stem the flood of regulations and remove the bureaucratic roadblocks which undermine productivity. We will undertake a systematic review of regulations and repeal any regulations which do not have specific justification. Each department will be required to set a deregulation agenda and report annually on progress.  The rates of return on capital invested in public trading enterprises are significantly lower than those in the private corporate trading sector. Resources are thus tied up inefficiently in public enterprises -predominantly in the important areas of transport and communications. When such essential services are not provided in the most efficient manner, Australian businesses and households suffer through higher prices, inadequate standards of service and lower real incomes.  Our privatization program will be governed by the following principles:  • There should be a clear consumer and/or taxpayer benefit.  • Employees of privatized enterprises will be offered the opportunity to buy shares in that enterprise on a preferential basis, thus promoting employee participation and providing the incentive for increased productivity and strengthened industrial harmony.  . The quality and availability of services to remote areas will be maintained.  . Implementation of the privatization program will be gradual and preceded by a thorough investigation of available options.  • Sale price will not be the key consideration in the transfer of public enterprises to the private sector. In particular, we will not maintain intact the monopoly rights of an enterprise in order to enhance the sale price.  The Coalition has already decided on a number of bodies to be privatized when we are elected:  - Australian Airlines.  - QANTAS.  - Domestic and international airport terminals.  - OTC (49 per cent).  - AUSSAT.  - Housing Loans Insurance Commission.  - Medibank Private.  - Pipeline Authority.  - Commonwealth Bank.  - Australian National Line.  - Snowy Mountains Engineering Corporation.  Privatization, because it increases competition and efficiency. Where possible, we will give employees the opportunity to buy shares on a preferential basis. We believe that employee share ownership provides a common interest in an enterprise for employees and employers and an incentive to improve productivity.  The proceeds of privatization sales in our first year will exceed $ 1.6 billion, which will be used to retire debt interest burden currently being borne by taxpayers by $ 105 million in our first year alone.  Telecommunications changes.  In May 1988 the Government admitted that compared with twelve other major telephone enterprises around the world Telecom had 60 per cent more employees per unit of services.  Under a Coalition Government, Telecom will be required to compete on normal commercial terms in a wide range of services, including the provision of the first phone. Deregulation will make room for new and existing small businesses and independent contractors.  The potential exists for a substantial drop in STD rates, to the benefit not only of business, but also to many rural subscribers for whom a reduction in phone charges and an improved quality of service could be guaranteed.  Furthermore, our reforms by promoting specialist services will reduce the amount of new capital investment required by telecom to meet peak load requirements.  The Coalition proposes to sell a license for establishment of a second cellular mobile telephone service, providing for much-needed competition in this growing market.  A mobile hand-helped phone in Australia currently retails for around $ 2500, with car phones around $1300. By comparison, in New Zealand car phone units cost around $400 and in the United Kingdom they are less than $100. These lower prices reflect the benefits of competition.  Initially only one additional license would be sold, but we envisage additional licenses being made available in five years' time.  Legislation enabling the sale of the second CMTS license will be introduced as early as possible after the election of a Coalition Government.  TRANSPORT. Reform of Waterfront and Shipping.  Labor has proved incapable of carrying out substantial reform on the waterfront and in coastal shipping, despite the fact that our vital export industries would reap huge benefits from change.  The Coalition will ensure that the waterfront and coastal shipping become more competitive and efficient.  The IAC estimates that a 20 percent improvement in labor productivity in the water transport industry as a whole, combined with a faster turn around time of ships in port, would produce an initial cost saving of $860 million in 1986-87 dollars. This would lead to an increase of over $1 billion in GDP in the long run.  Containers lifted per gross working hour in Melbourne are less than half the figure for Rotterdam, with Sydney even further behind.  Other gross inefficiencies on the waterfront are well documented. Under the next Liberal/National Government, those who engage in cozy arrangements through inefficient and costly work practices will no longer be able to hold the rest of Australia, particularly our export industries, to ransom.  There is a desperate need to encourage competition among port authorities and stevedoring companies and to firmly establish a company-based employment System for waterside workers.  The requirement now is not for more compromises which are aimed at covering up the mess but which, in the past, have had only a limited and temporary effect on industry costs.  The government can force the pace of change on the waterfront. The Coalition will not hand over taxpayers' money without ensuring that there will be genuine and permanent change.  A more competitive approach must be taken to stevedoring operations. A present, stevedoring firms operate under national awards which provide identical terms and conditions. Firms cannot use industrial relations practices as a way of gaining a competitive advantage over other firms in the industry.  Employers and their employees should be free to negotiate their own pay and conditions. This will be facilitated by the Coalition's encouragement of voluntary agreements and changes to union coverage arrangements, including voluntary unionism.  Shippers and others should be given the opportunity to offer stevedoring services in competition with established firms.  This approach will spur unions and stevedoring companies to lift their game or to risk becoming irrelevant.  These changes will achieve radical improvements on the waterfront which will boost exports and significantly improve our competitiveness and current account deficit.  The maze of Government and other regulations regarding recruitment must also be swept away. Individual employers should be free to determine how many employees, including casuals, they require. Employers should not be required to recruit labor from the Waterside Workers' Federation Register.  Our coastal shipping strategy has several elements:  - negotiate with New Zealand to open trans-Tasman shipping to foreign vessels plying the route on longer journey.  - phase out cabotage over five years, initially through more lenient granting of single voyage permits.  - interim tariff protection of 10 percent to 15 percent would be provided to help shipping companies to adjust to the abolition of cabotage.  and  - repeal of all economic sections of the Navigation Act, including regulation of  minimum manning levels.  Roads.  Under Labor the level of road funding has declined by 30 per cent in real terms, despite huge increases in the revenue gained through fuel excise.  In our first year of government we will increase funding by an amount equivalent to one cent per liter of excise duties.  In addition, we will increase road funding by the equivalent of a further one half of one cent per liter of excise in the second year and a further one half of one cent per liter in the third year so that, by the end of our first term, funding will have been increased by the equivalent of two cents per liter of excise duties per year. This amounts to an addition of over $ 1000 million in road spending during our first term.  One of our first priorities will be the implementation of a major upgrading program for the Pacific Highway, to be completed by the year 2000. As with this project other spending priorities for road funding will be determined after consultation with State and local governments.  A more competitive transport sector will raise national productivity, and encourage exports.  Increased use of Rail Freight.  Private enterprise has expressed an interest in greater access to the rail network.  The scheme would involve giving access to permanent ways, under negotiated terms, to private enterprise for it to operate its own or leased rolling stock on existing railway lines. The Federal Governments can exert a leadership role through the Australian Transport Advisory Council in order to encourage the States to enter negotiations for private sector use of railway lines.  Heavy vehicle freight is expected to increase by 60 per cent during the next decade which will more than double wear and tear on existing roads. This proposal will direct freight away from the road system, thereby easing pressures on the road network.  PRIMARY INDUSTRY.  Primary industry, including forestry and fisheries, provides 50 per cent of Australia's net export income. Australia's rural industries are entering a period of growth and diversification. The application of new technology can, in a suitable economic environment, bring about a substantial increase in the export of value added farm products and import replacement.  The objectives of our rural policy are to ensure that this optimistic forecast for primary industry achieved.  Primary industry today is often affected more by general macro-economic policy than those policies which are industry specific. Therefore the general policy initiatives of a Coalition Government have a beneficial impact on the Industry. They include:  - Tariff reform which reduces agricultural input costs.  - Improved transport and waterfront efficiency.  Trade policies that are directed at increased access to markets for Australian primary produce.  - Structural adjustment that allows primary industry to positively react to market forces.  - Support for primary industry research and development projects in order to maintain Australia's leading role in agricultural technology and productivity.  - Measures that provide income stability to agriculture.  However, several specific measures will also assist the industry:  - Removal of tariffs on imported agricultural machinery and spare parts where they are not made in Australia.  - A credible and predictable commitment to wool promotion.  - Reinstatement of95 per cent underwriting for the Wheat Industry.  - Establishment of a Forestry Industry Research Fund and re-establishment of Rural Research as a major part of CSIRO research effort.  - Maintenance of effective quarantine arrangements.  - Provision of a tax write off in the year of expenditure for farm business electricity connection.  - Reduction of agricultural export inspection charges to a maximum of 50 per cent of the total cost of the service.  - Adjustments to Labor's assets tests for farm family retirement, for Austudy and for the Isolated Children's Scheme.  TOURISM.  The pilots' dispute, exacerbated by thy intervention of the Hawke Government, is one of the worst industrial disputes in Australia's history. It has cost 22,500 jobs in the tourist industry and over $650 million in direct losses.  Our Tourism Action Plan is a comprehensive plan of action designed to permit Australia's tourist industry to reach its full potential as a major export earner and employer with initiatives that will substantially decrease the cost of air transport and tourism packages in particular.  The key elements of the Plan are :  - Maintenance of the Tourism Recovery program.  - Opening up the skies by freeing up of the air rights regime to allow international airlines easier access to Australia.  - Allowing foreign carriers to carry their own traffic between Australian ports.  - Allowing QANTAS to continue interlining the traffic of other carriers.  - Priority upgrading of Sydney's Kingsford Smith Airport.  - Active encouragement to charter operators from overseas to begin new services.  - A more focussed role for the Australian Tourist Commission.  - A review of the sales tax regulations so that Australia can become a more attractive 'shopping' destination for international tourists. And  - Privatization of QANTAS and Australian Airlines.  IMMIGRATION.  Australia's national interest requires an immigration intake attuned to our economic needs. A Coalition Government will select people for immigration to Australia as individuals, regardless of race, religion or origin.  In choosing additional migrants we will place a premium on migrants who are able to make a direct and immediate contribution to Australian society.  We will increase Australia's migrant intake by approving migrants who are younger and who are skilled, knowledgeable, educated and employable. Particular emphasis will be given to expanding the number of migrants with financial resources and entrepreneurial skills.  This approach will not end the admission of migrants under the Family Reunion category. Rather it will adjust the proportions within a larger total migrant intake toward a greater number of migrants with skills and entrepreneurial capacities.  A Coalition Government will also continue to fulfil Australia's international obligations to provide for the resettlement of refugees.  A sound immigration program has lasting benefits for Australia and should not be subjected to unpredictable changes. We will introduce a five year rolling program for immigration commencing in our first year of office.  A FAIRER AUSTRALIA.  In a democracy, a government must govern for all.  The Labor government has adopted the pattern of making policy according to short-term political pressures and political bargains with interest groups. It governs not for the many but for the few. We will govern not for special interests, but for the public interest.  UNEMPLOYMENT BENEFITS.  We are committed to a reduction in taxes for working Australians and a limit on the time for which unemployment benefits are paid. This will provide a structure of incentives, which will encourage people to find jobs.  We will provide unemployment benefits for a limit of nine months, which is a reasonable period to assist those who are seeking work.  People who remain unemployed beyond the nine month period in which they have received unemployment benefits and who are not capable of providing for themselves and/or their family will be eligible to apply for Special Benefits subject to the more rigorous testing which applies to the provision of these benefits.  Unemployed people under eighteen, and school and tertiary leavers over eighteen with no dependants, will be entitled to the Job Search Allowance rather than unemployment benefits.  These reforms mean that unemployment benefits will not constitute a permanent alternative to work. They will prevent people from sliding into a pattern of permanent dependence.  At the same time, we intend to reform the national employment and training effort to make it more coherent and flexible. Several schemes will be eliminated and others targeted more effectively.  Increased emphasis will be placed on skills training strategies and restructuring and there will be less emphasis on job creation and job subsidy schemes.  RAISING EDUCATIONAL STANDARDS.  Unlike the Labor Government, we have a non-discriminatory approach to education. We are committed to better education for all Australians.  Schools.  While recognizing that primary responsibility for schools resides with the States, we see a need for higher standards, greater parental choice and increased local accountability.  Working in consultation with State government’s and non-government school authorities we will establish a National Standards Monitoring program 506 to provide an objective measurement of teacher training, school curricula, testing methods, and student performance.  Funding.  Our funding policy emphasizes choice and equity. We recognize the right of every Australian child to a reasonable measure of Commonwealth support for education.  In the case of government schools, the Commonwealth's full direct and indirect contribution so to the 100 per cent funding of each primary and secondary student at a government school will continue to be paid directly to State governments. The total Commonwealth grant money will be determined in respect of every child enrolled at a Government primary or secondary school.  For non-government schools and Systems we will introduce a simpler and more equitable funding regime incorporating a basic per capita grant with additional needs-based funding. We guarantee that during the implementation of this new funding mechanism for non-government schools, no school or school system will receive less per capita funding than it would have received under Labor's recently announced policy. We will also provide an additional $10 million per annum for building projects over a three year period starting in 1991.  Higher Education.  In higher education, we will dismantle the centralized bureaucracy of Labor's Unified National System and withdraw the arbitrary requirements for the amalgamation of institutions. Our aim is to restore the autonomy and integrity of Australia's higher education institutions.  We will abolish Labor's $1800 (indexed) graduate tax, replacing it with a $ 1200 annual tuition charge, backed by government guaranteed loan arrangements.  Institutions will be allocated scholarships exempting one in four students from the tuition charge. These scholarships will be awarded on the basis of merit and/or need, at the institution's choice. In other words, at least 85,000 students each year will have free higher education.  A FAIR GO FOR WOMEN.  Under Labor, real choice for women - in employment, life-style, and family opportunities - has been reduced. We intend to decisively reverse this trend.  Women will benefit from the greater flexibility of working conditions afforded through voluntary agreements between employers and employees. More flexible hours and pay will be a major advantage for those who have to cope with both work and family commitments.  We recognize that many women, because their employment patterns are interrupted by family responsibilities, do not have access to superannuation schemes. The introduction of Retirement Savings Accounts will encourage and enable women to plan for a secure financial future.  To help married women continue their contributions while out of the workforce their spouse will be entitled to tax deductions for contributions made to the account on their behalf.  The Coalition Government will act immediately on an area of major concern to women in Australia - breast cancer.  Nearly 2500 women die each year from breast cancer and it is estimated that at least one third of these tragedies could have been prevented by early detection.  We will increase the number of screening units so that more women have easier access to effective screening at a cost of $10 million in the first year.  SECURITY IN RETIREMENT.  Our policies for the Aged have two primary objectives:  (i) To ensure that pensioners are able in live in dignity and financial security.  (ii) To encourage ail Australians, through a range of initiatives and tax incentives, to properly plan for and improve their life-style in retirement.  Our aim is to see that older Australians receive a fair go, and are accorded the respect they deserve. Our focus is on increasing their opportunities and choices.  Labor has constantly eroded the security of the elderly. Its policies have been confused and inconsistent. It has changed the pension income test seven times in seven years. Our policies are clearly explained in our Economic Action Plan and our Retirement Income Policy.  In the area of health we are committed to retain and improve Medicare as it operates for the aged.  Our proposals to allow taxpayers to "opt out" of Medicare will reduce public hospital waiting lists. This will allow the elderly to gain quicker access to hospital services.  We have given a guarantee that all existing social security benefits for the aged will be maintained, and we have undertaken to enhance benefits in the most important fields.  Among our initiatives are commitments to:  • Modify the assets test to ensure that the age pension is not withheld from those in genuine need.  • Raise the superannuation lump sum tax-free threshold from $60,000 to $125,000.  • Abolish compulsory retirement for those who would qualify for the aged pension but who wish to remain in employment or live off savings and give them increased pension payment for each additional year of deferment  • Relax the administration of the Pension Income Test.  We are determined to ensure that the living standards of the elderly of Australia are fully protected.  VETERANS.  War veterans deserve the greatest understanding, recognition, and support that a responsible government can afford. We will maintain a separate, modem Department of Veterans' Affairs.  In giving this commitment we recognize the compensatory nature of repatriation expenditure. Notwithstanding these difficult economic times, we reaffirm our commitment to:  Maintain a separate and comprehensive Repatriation General Hospital System.  Maintain the Disability Pension Scheme.  Maintain the Service Pension Scheme.  Maintain the War Widows Pension Scheme.  Restore the Independent Monitoring Committee.  Rectify existing anomalies in the repatriation System.  As a result of a 1989 Budget decision the ex-Prisoner of War community has been split into two groups as far as dental benefits are concerned -those who were captured by the Japanese and those who were captured in European theatres of war or elsewhere. The limit on dental benefits will be removed for all ex-Prisoners of War.  ENVIRONMENT.  The protection and enhancement of the natural environment for the benefit of all Australians will be a central concern of the next Coalition Government. A healthy, attractive environment is as important a bequest to the next generation as a soundly functioning and productive economy. We see the environment as a community asset; it is therefore appropriate that its protection should be a community responsibility.  The Labor Government has failed to establish clear principles of environmental management. In several cases, such as the Coronation Hill gold mine, it has ignored the existing procedures for environmental assessment in response to immediate political pressures.  The Hawke Government's lack of consistency has turned important environmental issues into battlefields on which no-one wins. Labor is motivated by political pressure rather than the interests of the nation and it begins from the premise that environmental protection and economic development are incompatible.  We do not accept the "us-against-them" mentality. We believe that it is possible to balance environmental protection and economic development to the satisfaction of the vast majority of Australians.  Our environment and conservation policies are set within a comprehensive framework which lays down the broad principles through which protection of the environment and the sustainable use of its resources can be integrated.  Our National Conservation Strategy aims to:  Integrate conservation and development, emphasizing common ground rather than differences.  Focus on the underlying causes of environmental problems as well as the symptoms.  Accumulate and disseminate knowledge on the environment, in the form of a national land use inventory.  Educate the community and individuals about the interdependence of resource conservation and sustainable development.  We acknowledge the importance of Australia's federal System in environmental policies and management.  We believe that any environmental issues that may arise between the commonwealth and the States can be resolved through negotiating. We will work with the States and act firmly in the national interest whenever it is necessary to do so.  Our approach will emphasize consistency, predictability, and co-operation. A Coalition Government will establish guidelines for the protection and use of the environment which are firm and fair.  We are proud to have made the first entries on the World Heritage list and under us no World Heritage sites will be de-graded or de-listed. Building on our record, we are now announcing a number of new initiatives.  Soil Conservation.  We are committed to the existing 10-year Land Care program. We will double the funding for soil conservation in our first year and maintain that increase for at least our first term of government. In our first year this means we will increase funding by $23.2 million to $46.4 million. The additional funding will be split between:  • $18.2 million in additional funding for soil conservation under the Land Care Program. We will ensure that the bulk of these extra funds are directed to local projects undertaken by Land care groups. We will also encourage landholders to undertake projects on their own land to repair and prevent land degradation caused by soil erosion and salinity.  • $5 million for expanding the definition of works eligible for deductibility under Section 75D of the Tax Act to specifically include expenditure on the establishment of trees, shrubs or pasture species designed to combat or repair erosion.  Along with the repair and prevention of land degradation, the additional funding for soil conservation will result in an improvement and rehabilitation of habitat for many species of our unique wildlife.  We will also explore with various farming and conservation organizations the possibility of other tax measures to encourage such activities as agro-forestry which have the potential to arrest soil erosion while providing additional resources for our timber industry.  Pilot Urban Waterways Renewal Study.  We recognize that the majority of Australians live in an urban environment and that they are concerned about the quality of that environment and especially the quality of their urban waterways.  As an initial step we propose a pilot project to conduct a study of the problems of the Brisbane, Derwent and Tamar Rivers.  The Commonwealth will bear the cost of this study and we are confident it will be supported by relevant Local and State Government authorities.  In addition to its direct involvement with conservation, a Coalition government will encourage the private sector to repair, sustain, and protect the environment.  Beach Pollution.  The Coalition Government will support an application by the NSW Government for a special additional borrowing allocation under the Loan Council's Global Borrowing Agreement to fund development of infrastructure for the clean up of sewerage and beach pollution. "Special Additions" are not uncommon. Western Australia has continually received one over recent years to assist in projects by the State Electricity Commission of WA (SECWA).  Allocation of Malabar Land for Extension of Sewerage Treatment Works.  We will provide to the New South Wales Government approximately 14ha of land at Malabar for the construction of extensions to their sewerage treatment works. In conjunction with the State Government, we will guarantee the future use of the Anzac Rifle Range.  Antarctic Center.  Tasmania already has close geographic and historical links with Antarctica. Valuable research and service facilities relating to the southern continent will be enhanced, in full co-operation with the Tasmanian Government, by the development of an Antarctic Museum in Hobart.  Such a museum would be the first stage of the overall development of an International Antarctic Center. We will initiate moves to attract corporate support for the project and will work in co-operation with the State Government to provide joint funding to commence the construction phase. The estimated cost to the Commonwealth will be $ 1.5 million each year for the next three years.  ABORIGINAL AFFAIRS.  Our policy approach to Aborigines and Torres Strait Islanders starts from the belief that all Australians share a common national future.  The policies of the Labor government have, far from promoting self-sufficiency amongst Aboriginal Australians, entrenched a pattern of dependence.  To provide a new vision, we will:  . Provide programs which meet the real needs of Aborigines and Islanders.  • Place the highest priority on improving the health of Aborigines and Torres Strait Islanders.  • Improve the administration of Aboriginal Affairs and improve the delivery of services to those most in need.  • Increase the proportion of funds reaching Aborigines and Torres Strait Islanders in need.  . Maintain the Institute of Aboriginal Studies.  • Protect and promote Aboriginal culture.  • Work with the States and Territories to achieve greater school attendance by Aboriginal children.  • Continue to address areas of social and legal discrimination. We oppose and will abolish the Aboriginal and Torres Strait Islanders Commission, which by its nature seeks to separate rather than unite all Australians.  We strongly believe the proposal for a treaty is flawed in legal, political and historical terms and will not proceed with treaty negotiations believing a treaty will cause great divisions in the Australian community.  DECLARING WAR ON DRUGS.  Drug-related crime and violence is a major threat to our way of life. In Government we will crack down on the drug industry by:  Ensuring Australia's coastline is effectively patrolled to guard against drug runners.  Giving the Australian Federal Police, the National Crime Authority and Australian Customs more support to fight drug smuggling and distribution.  Providing for tougher sentences for major drug crimes.  Using Federal funds more effectively to deal with the problems faced by Australia's 70,000 homeless youth.  HOMELESS YOUTH.  We are committed to the principle that parents have the primary responsibility for providing adequate care for their children. Unfortunately, too many children are abused and left without adequate in-come, education, health services and accommodation.  Their situation is the result of both complex social and economic pressures including family break-down, drug, alcohol and sexual abuse resulting in the inability of many to complete their education and acquire job skills.  Our primary objective must be to address the causes of youth homelessness rather than continually establishing new programs directed at the effects. Consequently parental responsibility must be emphasized and we will support the States in their efforts to restore children to their parents.  When this is not possible, or the children would be placed at risk, we will ensure that both Federal and State programs are better integrated so that children can be assisted to continue with their education or training and receive adequate counseling, accommodation and income support prier to entering the workforce.  LOCAL GOVERNMENT.  We will reinvigorate Australia's System of local government. Labor has constantly attacked the funding basis of local government, introducing uncertainty and instability.  We will restore tax sharing as the basis of general purpose grants to local government by matching in our first year the amount provided for in the present Government's forward estimate for 1990/91, specifically $716.7 million. At the end of the first year, this sum will be calculated as a percentage of actual total Commonwealth taxation revenue received in 1990/91 and untied general purpose grants to local government for subsequent years guaranteed at that fixed percentage. This will arrest the decline of general revenue assistance as a proportion of commonwealth taxation receipts.  A SECURE AUSTRALIA.  Over recent months, we have witnessed the transformation of the world's most important political conflict of the past forty years: the Cold War.  We have seen the grand failure of communism in Europe, and the attractive power of political and economic freedom has been plain for all to see.  The word of the 1990s will be more complex and interdependent than ever before. There will be an emphasis on the management of resources, the maximization of the new economic opportunities that are opening up a concern with environmental issues and with health issues such as drug use and AIDS. For all these changes, there are important elements of continuity.  Competition between states will continue. The potential for instability, particularly within our own region, will remain. Protectionist pressures may increase.  Labor' s foreign policy has too often been driven by domestic political considerations, not international realities.  As Labor's China policy tragically demonstrates, Labor has concentrated too much on personalities and too little on hard-headed assessments of our national interest.  Australia's scope for a constructive international role has been hindered by Labor's mismanagement of the national economy. We offer a different way of managing our international interests. We will:  Undertake a major review in a White Paper of the economic and security implications within the Asia-Pacific region of the historic changes taking place in Europe and elsewhere in the world.  Maximize our economic opportunities in a changing world, giving a special priority to the Asia-Pacific region.  Maintain an active and mutually beneficial involvement with the United States in the economic and security affairs of our region.  Develop Australian - US security relations under ANZUS.  Revitalize our economic relationship with Japan through a new framework of co-operative trade, marketing, and research opportunities.  Redress Labor's failure to maximize Australian involvement with the South Pacific Island countries.  Target development aid, particularly in South-East Asia and the South-West Pacific, more effectively.  Pay close attention to the environmental impact of development projects undertaken with Australian aid.  Seek a comprehensive, democratic, and peaceful resolution of the Cambodian conflict (including legal action for genocide in the International Court of Justice against the leaders of the Khmer Rouge in the late 1970s).  Australia's international interests in the 1990s will require realistic policies, not wishful thinking. A Coalition Government is best equipped to fulfil them.  The first responsibility of any Australian government is to ensure the security of the nation against military attack or other forms of pressure that threaten our basic freedom.  We are committed to maintain a strong and self-reliant Australian defense force, capable of defending our national security interests and co-operating effectively with our friends and allies.  There are five fundamental requirements for a coherent and credible long term defense policy which have been absent under the Hawke Government. These are:  • A strong economic base, growing fast enough to maintain our competitive position internationally and especially in the Asia Pacific region. The Hawke Government's economic policy failures have diminished our international standing and resulted in a failure to sustain a consistent financial commitment to achieve the objectives it proposed for the Australian Defense Force (ADF) in its 1987 Defense Policy Information Paper, "The Defense of Australia 1987".  • Integration of foreign, economic, trade and defense policies within an overall strategy for national security. The failure of the Hawke Government to achieve this integration has been most evident in South East Asia and South West Pacific, with potentially serious consequences for regional stability.  • An effective strategic planning process for Defense, ensuring agreement between the key decision makers in the Government and the Defense Organization on strategic doctrine, financial guidance and ADF force structure development. There is still no organized, continuous process of strategic planning integrating political and defense thinking. The result is ad hoc Cabinet decision making, discontinuities in financing and consequent disruption of our defense effort.  • Effective organizational structures and management processes for Defense, ensuring the best possible allocation to achieve the Government's objectives. Although there have been some improvements in organizational structure and management processes in recent years, the Defense Organization is not well equipped to manage its resources to best effect. Misallocation of resources has led to a weakening of operational capacity and the crippling problem of personnel wastage from the ADF.  • An understanding of the human contribution of defense - those who elect to serve in the armed forces, and their families, whose feeling of self respect and whose physical and mental well-being have suffered under Labor Government policies.  A Liberal National Government will redress Labor's deficiencies by:  Restoring Australia's economic heath and our ability to maintain a consistent allocation of national resources to our Defense effort. Establishing a Security Committee of Cabinet supported by a National Security Unit.  Redefining Australia's Defense strategy to make it more outward looking and more co-operative with our regional friends and allies. Acting decisively to improve management structures and processes within the Department of Defense.  Redressing the critical neglect visited on Service personnel and their families by Labor which has resulted in low morale and record wastage rates.  Labor has not met its targets for defense spending. It has now indicated that it will cut $80 million from next year's Defense forward estimates to pay for its election promises.  In our first year, we will maintain Defense spending at projected levels in real money terms.  In particular, Labor has neglected the interests of our Service-men and Service-women and their families. Members are leaving our defense force in record numbers. Our defense capability has been weakened as a result.  We will improve the management of defense so as to restore the morale and effectiveness of all three Services. We will re- allocate from within the Defense Budget around $70 million to personnel and Service family needs to meet their most pressing problems and to improve management, morale and effectiveness.  We will increase assistance to schools that wish to establish cadet units or to maintain existing units.  THE AUSTRALIAN RENEWAL.  The issue for the 1990s is the renewal of Australia: of family life, of economic institutions of the right of choice, of Australian society itself.  We have the vision, the ability, and the strength to take Australia through the next decade and into the next century.  We will reinvigorate Australia's basic values, drawing on the inherent strength of our people and the fundamental unity of our society.  Australia's problems are too complex to be solved overnight. But with determination and courage they can be solved.  We offer our commitment and our energy in the cause of Australian renewal. We offer faith and conviction. We offer the hope of a better future for Australians and their children. In this election we are offering the answers for the new decade. The answer is Liberal.