Wednesday, 24 March 2021
Treasury Laws Amendment (2020 Measures No. 4) Bill 2020; Second Reading
This bill has four schedules. I've spent a bit of time going through the schedules. I also foreshadow that in the course of my second reading reply I will be moving a second reading amendment, and I will go to some of the issues that I will be moving in my second reading amendment.
The bill was referred to a Senate inquiry by the Economics Legislation Committee which reported on 26 November 2020. The Senate inquiry's final report, which was supported by Labor senators, recommend passage of the bill but it did recommend that the bill have some amendments made to it, and I will go to those issues shortly.
Let me deal firstly with schedule 1 of the bill which amends the Income Tax Assessment Act 1997 to allow refunds of large scale generation shortfall charges to count as non-assessable income, non-exempt income, for income tax purposes. The purpose of this provision, sensible in our submission, is to clarify the operation of the income tax law for some affected power generators who receive refunds with shortfall charges when rectifying failures to meet their obligations under the Renewable Energy Target. It's a measure that makes sense to us and a measure which will enjoy our full support.
Schedule 2 of the bill provides additional transitional measures to support the transition from the Superannuation Complaints Tribunal to the Australian Financial Complaints Authority—the Australian Financial Complaints Authority being the successor body to the Superannuation Complaints Tribunal by virtue of legislation of this place, if it serves my memory correctly, some 2½ years ago. The transition was previously agreed to by the government and by the opposition as a response to the Ramsay review into financial services dispute resolution. The great benefit of the Financial Complaints Authority is it is a non-judicial form of alternative dispute resolution, which enables ordinary citizens, without the cost and the burden of having to engage legal counsel, barristers at 30 paces, the capacity to seek redress for an alleged wrongdoing by one of the business entities—namely banks, insurance companies, finance companies, superannuation funds—if a citizen alleges a wrongdoing or a malady at the hands of one of those organisations. In the past, citizens would have to have taken those complaints, those issues, at great expense to themselves, to a court to seek redress.
Having an alternative dispute resolution process provides affordable justice to members who have such a complaint. It's a no-cost jurisdiction, and for the participants within it, a low-cost jurisdiction, which in my submission fulfils an important role in ensuring justice for victims of financial wrongdoing. There wouldn't be a member in this place who, over the course of the past 12 months, has not had cause to refer a member of their electorate to the Australian Financial Complaints Authority to assist them in having their matters dealt with. It's not always perfect, but it's a lot better than a system that operated in the absence of such alternative dispute resolution procedures.
Schedule 3 of the bill doubles the maximum possible penalties that can be set out in a prescribed industry code under the Competition and Consumer Act 2010. This will primarily affect the franchising code. The franchising code is incredibly important. Labor members of parliament have put a lot of time and effort into advocating a better code and improvements in the code. Two years ago we read the report of the Parliamentary Joint Committee on Corporations and Financial Services. They conducted an inquiry into franchising in Australia. The inquiry heard from franchisees across Australia who had suffered from the misconduct of their parent companies.
What we learned from that inquiry and what we learned through many of the complaints that led to that inquiry was that companies such as 7-Eleven, adversely mentioned in many media reports and the subject matter of many of the case studies brought before that inquiry, have profited from the misery of franchisees. Many of the employees of those franchisees were effectively working at below minimum wage rates, while huge profits were flowing back to the parent company. We also learnt that the fault was very often led by the parent company, because they were imposing conditions on the owners of those franchise operations which were only commercial. Those operators were effectively breaking the law by not paying their staff in accordance with the minimum standards operating within those industries or by cutting corners, regulatory and other.
We heard the stories of franchisees like those of the Retail Food Group, owners of the Brumby's chain, Gloria Jean's and Donut King, who suffered under unfair contract terms that gave enormous power to the parent company and shifted huge liabilities to the franchisees. The report went on to make a range of recommendations, including significant increases to penalties under the franchising code—increases that, in our view, matched the significance of the offences that were being conducted and the penalties that were available in other areas of corporate misconduct.
Given the background—given the stories of abuse and exploitation within the franchising sector---it was with great surprise and disappointment that we discovered, when this bill was introduced into the parliament last year, that it barely shifted the dial when it came to increasing those penalties. In effect, it was giving a green light to the egregious behaviour that had been uncovered by that joint parliamentary committee inquiry. Labor made it quite clear to the government that the bill that they brought to the House was not good enough. We flagged it in the other place through the course of the Senate inquiry into this bill. We made it abundantly clear that we would move amendments in this place and in the Senate to ensure that the penalties imposed through amendments to this bill were appropriate to the crimes and the offences that were being conducted. We did not want to see a repeat of the stories in 7-Eleven, Gloria Jean's, the Brumby's group, Donut King and so many other places around the country. The penalty must meet the offence.
Like in so many other instances with this government, they've been dragged kicking and screaming to do the right thing. After exploring every other avenue to get out of doing the right thing, they've been dragged kicking and screaming by Labor to ensure that those penalties within schedule 3 of this bill are appropriately adjusted to meet the recommendations of the PJC inquiry. If my memory serves me correctly, Deputy Speaker Georganas, you actually served on the committee which conducted that inquiry, a matter that you would be fully aware of. I'm sure it's of great embarrassment to the government, but of great relief to Labor MPs in this place, that they are finally, after exploring every other alternative, going to do the right thing and sufficiently increase the penalties under this code. When they introduce those amendments to their own bill, they'll enjoy our hearty support. That deals with schedule 3 in the bill.
I turn now to schedule 4 of the bill, which extends the operation of schedule 5 of the Coronavirus Economic Response Package Omnibus (Measures No. 2) Act 2020, but, additionally, includes a mechanism for further extension of the operation of that schedule, enabling the designated minister to determine by legislative instrument a new date of repeal in response to the challenges posed by the coronavirus pandemic. I have to pause and say: isn't it interesting that, when the government needs to rush legislation into this place to deal with the adverse impact of the coronavirus pandemic, when they think it's worthy they'll do it? And isn't it interesting how deaf they are to the pleas of so many within the industry who are saying they are still being affected by the coronavirus pandemic? There is no relief in sight, yet the government will do nothing to meet their needs.
I say something about that in my second reading amendment, which I'd like to quote from before formally moving it at the conclusion of my remarks. We won't be declining to give the bill a second reading; however, we'll be asking the House to note that the government:
has failed to deliver sufficient economic support to Australian workers, Australian families, and Australian businesses during the coronavirus pandemic …
has not implemented the full recommendations of the Parliamentary Joint Committee on Corporations and Financial Services inquiry into the operation and effectiveness of the Franchising Code of Conduct report, particularly in relation to applying adequate penalties to franchisors who act improperly …
has consistently failed to deliver adequate support for jobs and businesses in the renewable energy sector—
a point that we'll be making more forcefully. We've already introduced important policy in this area through Labor's Rewiring the Nation initiative. We'll have a lot more to say about that in the lead-up to the next election.
They have consistently failed to deliver adequate support for jobs and businesses in the renewable energy sector. And didn't we see that again on display this week, when the minister, who bears the title Minister for Energy and Emissions Reduction, was embarrassed by the publication of an ANAO report which exposed the rorts and the dishonesty in the election commitments to the people of Collinsville in the promise, or the noise around making a promise, to commission a coal-fired power station in their town.
All us who had a fairly detailed understanding of what it would take to commission such a power station—the economics behind it and the enormous burden that that would impose upon taxpayers, the fact that it would increase power prices—knew that this was a chimera, that this was a fraud, that this was a grossly dishonest exercise in an attempt to harvest votes but do nothing for the generation of new power. We knew that it was a fraud from end to end and the ANAO has exposed that and, once again, exposed this hapless Minister for Energy and Emissions Reduction, as quite possibly the worst minister in a Melbourne Cup field of bad ministers. He was exposed this week over $4 billion to a company that wrote to him and said, 'We cannot conduct this feasibility study. We do not have the skills, the know-how or the inclination to conduct this feasibility study.' But what did the Minister for Energy and Emissions Reduction do? He said, 'We don't care; we're going to give you the money anyway.' This is the Leppington Triangle circumstance all over again. 'How much is this parcel of land worth?' '$3 million'. 'Fantastic, we'll give you $30 million; what a bargain.' I would love to play poker against these guys any day of the week. If it wasn't so serious, it would be laughable. The government have consistently failed to deliver adequate support for jobs and business in the renewable energy sector and, by action after action, added to uncertainty and added to the increase in power prices in this country.
My second reading amendment will also go to the issue of superannuation. We'll note on this side that the government continues to refuse to commit to implementing the solemn promise that it made to the Australian people before the last election to stick to the superannuation guarantee levy legislation. Its law, it's been legislated, they promised to do it and now they're walking away from that promise. They have been invited time after time after time to do nothing more sensational than confirm the promise and yet they still will not do it. So I will be moving that second reading amendment and I know there will be a lot of speakers on this side of the House who would like to join the debate discussing that issue.
The bill does some things that will enjoy Labor's support but it falls short for the reasons that are outlined in my amendment. We know what lies at the heart of this government, which has been so on display this week. It has lost its way. Is it any wonder that the government hasn't got a plan for the country because it has lost its moral compass; it has lost its way. It is certainly not focused on the issues that are of concern to ordinary Australians. It is certainly not focused on the issues impacting households as they struggle with flat wages, increased costs and no relief in sight. It is not focused on the issues of those businesses along the East Coast of Australia, who have dealt with fire, who have dealt literally with plague. In fact, they have dealt with all the curses of the apocalypse—fire, plague, now flood, pestilence. They have dealt with all of this, and the government's response, in a few short days, will be to pull the rug out from under them, pat themselves on the back and say 'Job done on pandemic. You are no longer in need of the JobKeeper support.'
The government is doing this because it is so focused on itself. It's dealing with the existential crisis at the heart of the coalition parties, both the Liberal and National parties, which goes to their relationship with women—and hasn't that been on display this week? It is their relationship with women within the ranks of their own parliamentary parties and their failure to understand the concerns and issues of Australian women. If you don't understand, the very least you can do is listen. There was a wonderful opportunity for the Prime Minister to walk outside those doors and listen to the concerns of the women of Australia on Monday last week. But, instead, he was hiding under the desk. If you can't listen, if you can't govern yourself, if you've lost your moral compass, if you are so distracted by the unspeakable affairs that have been going on inside your offices and inside your own party rooms, how can you be focused on the issues and concerns facing everyday Australians? The truth of the matter is this: this government is eight years old, it's tired and it has run out of ideas. Isn't that on display this week?
The government failed, right from the very beginning of this pandemic, to grasp the fundamental link between a health policy response and an economic response. From the very beginning of this pandemic, we saw everybody within this government, from the Prime Minister down, hectoring state premiers, state medical officers and state health ministers when they took tough and sometimes unpopular but very effective and very responsible health measures to protect the citizens of their states and thereby the economies of their states from the ravages of the coronavirus pandemic. They were tough decisions and not always popular but always necessary. It is because of those decisions that those states and the country as a whole are faring comparatively better than most other countries around the world that didn't take a lot of those tough decisions. But the government never got this. They were always quick to criticise, always there to hand out the brick bats and always there to collect the bouquets, but never there to take responsibility for everything.
Isn't that on display again this week? The government told us that by the end of the week there would be four million Australians vaccinated. Remember that? They said we were at the front of the queue and four million Australians were going to be vaccinated. Yet we discover this week it's not four million. You might give them a pass mark if we hit 98 per cent or maybe even 95 per cent.
Ms Rishworth interjecting—
The member for Kingston, a more generous soul than I am, might say at 80 per cent you still get a pass mark. We're not at 50 per cent. We're not at 40 per cent. We're not even at 30 per cent. Ten per cent of Australians have been vaccinated when it should have been 100 per cent of four million people.
What has this got to do with bills directed at the economy? It has everything to do with it. We said right from the very beginning that you can't get the economic challenges right unless you've got control of the health challenges. We have seen from the bitter lessons learned in other countries right around the world where they didn't take the tough decisions that, if you didn't get the health on track, you couldn't get the economics on track, That is why it is curious to us that the government is able to bring this bill before the House which extends certain coronavirus measures but not others. Why is it when we've only got 10 per cent of the population vaccinated that, in a few days, we're going to remove 100 per cent of the support that has been provided to struggling businesses and their workers.
This matters and it matters a lot. I don't argue, and I have never argued, that JobKeeper should be an ongoing wage subsidy to every business in this country. I don't believe it. I never argued it from the very beginning. In fact, I was one of the very few who said, when JobKeeper was initially implemented, that there needs to be an activity test. That was because I wanted to ensure that, if a small business whose workers were getting JobKeeper—some of whom were getting more than they were pre pandemic—could safely have their workers come in and do meaningful work which was within their skill and classification and capacity and they could perform that work and that was justified and reasonable, then they should be doing it. I did not support a proposition that JobKeeper should be stay-at-home money. I thought that, if we were to stay true to the proposition that JobKeeper was about maintaining the relationship between the employee and the employer, then there needed to be an activity test. So nobody can fit me up with the argument that I said, 'JobKeeper is free money; it's sit-down money forever.' I've never argued that, not from the very beginning, nor do I argue that every business is out of the woods, because, quite simply, they're not.
We've talked about the travel industry, and we've talked about the hotel and hospitality industry. I take a very, very simple approach to this that even members of the coalition would understand. If government says to otherwise viable industries, 'You are not allowed to operate; we are closing you down in the public interest for the public good,' then there is a moral and ethical obligation to then provide some support and assistance to those otherwise viable and good businesses, that you have said, in the public interest, are being shut down. This is exactly what has happened in the travel industry. If you're a travel agent or if you're running a business that almost entirely relies on international tourism, we have said to you: 'There is no market for you. We are closing your business down because it is in the national interest and in the public interest to do so.' How can we say to those businesses, 'At the end of the month we're pulling the rug out from under you, with no support for you and no support for your employees'? It beggars belief.
I would think that, if you went through the ranks of travel agents in this country, you would find more coalition voters than Labor voters. It's just a hunch. Why has the coalition abandoned that group of businesses which have supported them so loyally for so long? The answer to that is quite simple. It is for the same reason that they cannot hear the pleas of Australian women who are saying: 'The culture in this place stinks. The culture in our workplace stinks. We need change and we need leadership from the top.' And the reason that Australian women are saying that, the reason that those travel agents are saying that, and the reason that people within the hospitality industry are saying that is that the government is not listening. It is not listening. It is so distracted with its own internal problems and so distracted with its own internal scandals that it cannot attend to the basic business of running a government and the basic system of providing some justice to the tour operators, to the travel agents and to all of those people to whom this parliament and this government has said, 'You're out of business for the foreseeable future.' There should be a second sentence: 'You're out of business for the foreseeable future, but we're going to look after you.' Instead this government says: 'You're out of business for the foreseeable future and you're on your own. Off you go.' We say that's not good enough, and our second reading amendment, which I now formally move, draws attention to that issue:
That all words after "That" be omitted with a view to substituting the following words:
"whilst not declining to give the bill a second reading, the House notes the Government:
(1)has failed to deliver sufficient economic support to Australian workers, Australian families, and Australian businesses during the coronavirus pandemic;
(2)has not implemented the full recommendations of the Parliamentary Joint Committee on Corporations and Financial Services inquiry into the operation and effectiveness of the Franchising Code of Conduct report, particularly in relation to applying adequate penalties to franchisors who act improperly;
(3)has consistently failed to deliver adequate support for jobs and businesses in the renewable energy sector; and
(4)continues to refuse to commit to implementing its election promise to deliver the legislated increases to superannuation".
The bill, as introduced into this House, was deficient. The government has been shamed into addressing the deficiencies in schedule 3 of the bill by increasing the penalties that are imposed upon head franchisors for the crimes and offences that they perpetrate on small businesses. And that's what it's about, by the way. You might be forgiven for thinking this is just about the employees, but it's not, because there were two lots of victims in those franchising scandals. There were the small business operators and there were the employees of those small business operators, and we want to ensure that the penalties that are imposed fit the offence, and the bill, as we understand it to be amended by the government, will address that issue.
With those very, very brief comments, I commend the bill to the House.