Nickolas Varvaris (Barton, Liberal Party) Share this | Hansard source

I rise to offer my unequivocal support for the ACT Government Loan Bill. The federal government is faced with a pressing challenge that it must deal with in order to ensure the safety and health of residents the ACT. At present the government is aware that there are potentially more than 1,000 homes in the ACT that still contain residual asbestos fibres. The government is also aware that when dealing with this issue time is of the essence to ensure the wellbeing of affected residents. By providing assistance in the form of a loan to the ACT government, the Commonwealth government aims to provide the ACT with the funds to undertake an urgently needed asbestos remediation program.

In responding to this challenge the ACT government would have to deal with the fact that the cost of the program would add about 20 per cent to their annual budget and cause significant pressure on their fiscal situation. As a result the federal government seeks to propose the provision of a $1 billion loan in order to ensure the ACT government has the ability to commence the remediation program.

The federal government hopes that this loan bill will attract support from both sides of the House. In doing so we hope to continue the long-standing tradition of bipartisanship shown in the house whenever urgent issues affecting the livelihood and wellbeing of Australians are at issue.

The Asbestos Remediation Program, which the federal government seeks to provide a loan to facilitate, will involve the purchase and demolition of more than 1,000 homes in the ACT that contain residual asbestos fibres that were not entirely removed 20 years ago. The problem in this particular instance stems from the use of loose-fill asbestos during the insulation of homes in the 1960s and 1970s, and it is now up to this parliament to finally help deal with this issue once and for all.

The deadly effects of asbestos related injury, including asbestosis and mesothelioma are now well-known to the Australian public and they would expect nothing less than a strong bipartisan resolution to this problem. A solution would not only ensure that further physical damage and injury does not occur but would be a step forward in resolving the uncertainty that still exists for the affected families.

Whilst the previous federal government program removed the bulk of the dangerous material, unfortunately residual fibres have been discovered on some properties. As such, the ACT government has decided that the risk to families and individuals is unacceptable and has sought to ensure that safety is given priority over all else. The coalition agrees that this is a prudent course of action and that to provide a concessional loan would be an effective way to empower the ACT to deal with the issue of houses affected by residual asbestos fibres. By buying and demolishing the potentially affected homes we can ensure that we are helping to take another significant step towards closing the dreadful chapter of asbestos-related issues that have affected thousands across the country.

Last week, the impact statements of 330 families living in affected homes were tabled in parliament. Indeed, the ability for these families to have their experiences recorded in Hansard will assist in providing some valuable perspective for members of both sides to understand exactly why this concessional loan is needed. To enable the granting of this loan, the proposed bill will specifically allow the minister administering the ACT (Self-Government) Act 1988 to enter into the agreement on behalf of the Commonwealth. As the minister who currently administers the act is the Minister for Infrastructure and Regional Development, the appropriation will be provided to that department which will then enable him to provide the loan to the ACT.

The plan to support the asbestos remediation program will involve the commitment by the government to provide a loan for $750 million in the present financial year. Further payments of up to $250 million may be made available via appropriation in the 2015-16 financial year. This is to ensure that there remains a capacity for flexibility in any loan agreement so that the objectives of the program can be met, given that families will be given up until 30 June of next year to lodge their applications for involvement in the buyback scheme. The Consolidated Revenue Fund will be appropriated as an administered assets and liabilities item for the purposes of making payments determined by the written agreement made between the ACT and the Commonwealth government. This will allow the loaned money to be used in an effective way strictly for related purposes concerning the remediation program.

It is important to note that this initiative is not about what the Commonwealth is doing on its own but about what can be done in collaboration with the territory government, who will be administering the remediation. The success of the program is entirely contingent on the close collaboration between the ACT and federal government and it is up to the House to ensure that the Commonwealth government can act in the best interests of the affected property owners. The bill also outlines that whilst the loan is given pursuant to an agreement between the ACT and the Commonwealth, the loan will not exceed $1 billion. This is to ensure that the loan provided to the territory is utilised effectively and in a way which directly addresses the concerns related to residual asbestos fibres in the properties in which it was installed by the insulation company in question, Mr Fluffy. As part of the remediation program, which the government is providing the loan for, the ACT will purchase the affected houses at market price so that the affected home owners and families will not be financially compromised as a result of circumstances which were completely out of their control. The market price will be calculated as if the affected properties did not contain asbestos so that individuals who choose to sign up to the government buyback offer will be compensated for the full value of their property.

The Commonwealth is also aware that the fiscal impact of the asbestos remediation scheme will result in an almost unprecedented blow on the ACT budget. With this in mind, the Commonwealth has resolved to ensure that the financial assistance provided by any appropriation would not additionally burden the territory unreasonably. In order for this to occur, the funding provided by the government will be in the form of a concessional loan, which will reduce the interest cost to the ACT compared to a scenario where the territory would have had to seek a loan on its own. This would have resulted in an additional unfair economic burden on the ACT's budget in the wake of this issue.

This financial year will see $338 million put towards the purchase and demolition of affected homes whilst $412 million will be put towards the buying of land and incurring a modest interest bill of $12 million. A proportion of the loaned amount will also be put towards the safe disposal of the asbestos from the affected properties. This will include the safe removal of the contaminated material following the most stringent of safety protocols. Any contaminated material will arrive at the waste disposal site in a bonded state and be covered with 30 centimetres of soil every day. These procedures will be put in place to ensure the safety of all people in surrounding areas. It is also of value to note that the $1 billion loan will operate as a line of credit and have no impact on the federal budget's bottom line. Once the affected homes have been cleared it is expected that the ACT government shall use the proceeds from the sale of the blocks to repay up to three-quarters of the loaned amount directly from the sale of the cleared properties.

There is no doubt that each family affected by the installation of asbestos in their homes will face a tough road ahead in moving forward with their lives. For many the process of rebuilding homes and lives will be a difficult challenge which will further test their resolve. However, we can at the very least offer the consolation that we have a result so that the process of moving forward can begin. There is no doubt that this a highly emotive issue that faces our parliament today but I am confident that if we can approach this issue in a bipartisan manner we can do our part in ensuring that those most affected can look to the future in a more positive way. I commend this bill to the House.

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