Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Assistant Minister for the Republic) Share this | Hansard source

The Investment Funds Legislation Amendment Bill 2021 returns to the House following the completion of a Senate inquiry. Three key issues were raised in that inquiry that relate to this bill: firstly, the proposed partial FOI exemption for documents of the Future Fund and Future Fund Management Agency with respect to their investment activities; secondly, the removal of the Future Fund Management Agency staff from the Public Service Act; and, thirdly, the $650 million maximum disbursement from the Medical Research Future Fund, which amounts to a cut to a commitment that was made by the Abbott government in respect of the Medical Research Future Fund and its disbursements.

On the partial FOI exemption, two main points were raised during the Senate inquiry. The first one is, on the one hand, the inconsistency from this government when it comes to this particular partial FOI exemption, and, on the other hand, making industry superannuation funds disclose particular financial information, including internal valuations of unlisted assets, and values and positions taken in derivative markets at regular intervals. Thankfully, the government has backed off on that issue. It was part of the government's Your Future, Your Super reforms and it was scheduled to commence on 31 December this year. It would have put industry superannuation funds in particular, but others as well, at a disadvantage to funds like the Future Fund which weren't required to disclose their investments.

This particular regulation would have required industry superannuation funds, in respect of derivatives, to disclose the precise value and percentage of the holding. That is counterintuitive. It limits the ability of those funds to work within derivative markets and get the best deals on those derivatives. And, in doing so, you are only reducing the returns that come to members of those superannuation funds. That would have been the result. Requiring those funds to list those holdings when other funds wouldn't have had to means they are at a competitive disadvantage, and, ultimately, that lowers the returns from industry superannuation funds to members.

Thankfully, the government has seen sense. Thankfully, the government has backed off on that reform because all those who work in the industry, and even the Financial Services Council, weren't supportive of this reform. This is yet another demonstration of this government's ideological obsession with trying to punish people who are in industry superannuation funds—for no reason other than they can't get over the fact that workers and employers working together, through the management of an industry superannuation fund, do a better job of managing those funds and acting in the best interest of those members than their mates in the financial planning sector that operate the big retail and commercial funds for profit.

The breadth of the proposed exemption in conjunction with the Morrison-Joyce government's appalling track record on scrutiny, transparency and accountability is another issue. The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry demonstrated that even our largest, most trusted banks, with multiple levels of regulation already, had engaged in widespread financial fraud and other criminal conduct at the expense of their clients and their customers. While secrecy has a crucial role to play in commercial operations, the findings of the banking royal commission demonstrated that a degree of transparency and accountability is also important.

The compulsion of this government to throw a cloak of secrecy over the operations of the Future Fund, compared to the operation of industry superannuation funds, was even more concerning, particularly given that it is entirely public money that is being invested by a public authority. The proposed FOI exemption provides blanket secrecy without any need to assess, let alone demonstrate, the commercial need for secrecy in relation to particular information and, therefore, it would have failed to strike the right balance had the government proceeded with that reform to industry superannuation funds.

The second point in the Senate inquiry that is of importance to this House is the removal of the Future Fund Management Agency from the Public Service Act. We recognise that there is some unique work done by staff at the FFMA that is different from most other Australian Public Service entities, and there are examples within other Public Service agencies where staff are employed under separate legislation. But there are existing issues with pay and conditions in the APS due to the Morrison-Joyce government's bargaining policy. As the CPSU has observed, it's a policy which has delivered real wage cuts, wage freezes, pay rise deferrals and caps to wages growth. All of these have impacted the capacity to recruit, to retain and to reward staff. That's what the CPSU has said about this government's wages policy. And, according to the government, they want to import the norms of the financial services industry into the future fund through this proposed change. But just what norms of the industry are they trying to incorporate into the future fund after what's been uncovered in the financial services industry over the course of the last decade, particularly through the banking and financial services royal commission?

Over eight long years, the coalition government has attacked the Public Service, imposing an artificial staffing cap and job cuts resulting in a significant decrease in the capability within the APS and an overreliance on consultants and contractors. We've all seen the ridiculous amounts of taxpayers' money that has been spent by this government on reports, on consultants and on contracting out the role that was previously played by well educated, well informed, experienced public servants who knew how the Public Service worked and, more importantly, ensured that the disbursement of public funds on work performed by the Public Service was done more efficiently and got better outcomes. So a more fundamental change to the way APS is governed is required to improve the conditions and setting for all staff in the APS, not just those that are proposed to move into the FFMA.

The final point I want to make is in respect of maximum disbursements from the Medical Research Future Fund. Legislating for a maximum of $650 million to be annually disbursed to the MRFF represents yet another broken promise from this government. When MRFF was first established and announced in the 2014-15 budget, the budget papers clearly stated a commitment to funding:

The MRFF will provide a sustained funding stream for medical research, with payments from the MRFF expected to reach around $1.0 billion per year from 2022-23.

But a 35 per cent reduction in the funding available for any purpose would have a significant impact, let alone in the field of medical research. Remember when this government came to office? Remember what the former Prime Minister Tony Abbott said in the lead-up to that election? No cuts to education, no cuts to the ABC and SBS, and no cuts to health. No cuts to health—that went out the window in their first budget in 2014. But, again, we see this government cutting funding and commitments made when it comes to health care in Australia, and, in this case, it's the Medical Research Future Fund, which provides a steady stream of income to ensure that researchers have the necessary public backing to do work that ultimately, hopefully—and very successfully in Australia, I might add—results in some of the greatest technological and medical advancements that save lives and improve the lives of many Australians.

You would have thought, after the couple of years that we've just been through with the coronavirus pandemic and just how well medical researchers throughout the world have responded to that pandemic in the development in record times of workable vaccines that have ensured not only lives have been saved but that economies can open up again—businesses can start trading, workers can go back to work and Australians and people throughout the world can resume their normal lives—the last thing that a government would be interested in doing would be cutting funding for medical research into the future. But, as the inquiry heard, it doesn't make sense to cap something and then have a more aggressive investment mandate to return more funds from your investments if you're not going to make the disbursements. The fact the Morrison-Joyce government is now proposing to have a maximum annual disbursement limit that is $350 million less than their initial promise—reiterated in 2017, I might add—represents a betrayal of the medical research community, it represents a broken promise to the Australian people and it represents yet again an opportunity lost for medical advancement in a country that has prided itself on some of the world's most innovative and groundbreaking research in medical science. It's yet another example of a broken promise from a government that is failing to deliver in so many areas. It has become tired and divided. It is no longer acting in the best interests of Australians but making decisions just to get through particular difficult periods. This two-week sitting of parliament is one of those difficult periods for it.

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