Monday, 3 June 2013
The Assistant Treasurer will be aware that I have long taken a strong interest in the Reserve Bank Reserve Fund, so it will not be a surprise to him that today I wish to draw the attention of the Assistant Treasurer to some information that was recently provided in the public sphere as a result of the freedom of information documents that were released.
Firstly, let me remind the Assistant Treasurer that since 2001 the Reserve Bank board has aimed to keep the Reserve Bank reserve funds balance to at least 10 per cent of the assets at risk. This was a level that they deemed appropriate for being able to absorb losses where required. As the Assistant Treasurer would also be aware, over the past two years the balance has fallen well below that target. Now unlike typical banks, the Reserve Bank Act provides no recourse for the Reserve Bank to seek a capital injection from its shareholder, which is of course the government. This means that the bank can only increase its capital by retained earnings.
We heard earlier this year at the Standing Committee on Economics hearing that the Governor of the Reserve Bank conceded that he had provided advice to the Treasurer that a dividend of half a billion dollars should not be paid to the government, but should be instead retained and transferred into the Reserve Bank Reserve Fund, as should all of the profit made by the Reserve Bank. The Governor wrote to the Treasurer on 13 July 2012 advising that the RBA's 2011-12 accounting profit was estimated at around $1.1 billion. The bank sought approval at that time to transfer all of the bank's distributable earnings to the Reserve Bank Reserve Fund. The Treasurer agreed to this initially, in the first advice that was provided. In the 201 annual report, the Reserve Bank Governor said: 'the prudent course will be to apply future earnings to rebuilding'—the Reserve Bank Reserve Fund—'before the resumption of dividend payments.' Advice was provided to the Treasurer by the Treasury and by the Reserve Bank Governor on 6 September 2011, 27 October 2011, 20 April 2012, 3 August 2012 and 24 August 2012. The Treasurer ignored the advice that was provided by both the Treasury and the Reserve Bank Governor.
My question to the Assistant Treasurer is this: does he concede that the Treasurer, in ignoring the explicit advice from the Reserve Bank Governor, has been highly irresponsible? Or are the Reserve Bank Governor and the Treasury wrong?
Of course the Treasurer has always been responsible in all of his actions, and this is a responsible budget—not only a responsible budget that ensures that we are promoting jobs and growth but also a responsible budget that makes the necessary investments in the future. That is of critical importance, because when people look at the strength of the Australia economy compared to other advanced economies, one of the things that they focus in on is the fact that we have been growing. If we want to be able to continue to grow into the future, we need to be investing in education. There is no greater productivity-enhancing agenda than to invest in education. That is one of the aspects of this budget that we are most proud of. Not only have we made space to invest in education but also we have invested in disability care to ensure that all Australians have access to an insurance scheme of the sort that they have not previously had access to when it comes to disability.
In terms of the questions that the member opposite poses, I find it interesting that in the context of a budget where there have been over $40 billion worth of savings, the member opposite has not chosen to ask about any of them. The reason why the member opposite has chosen to not ask about any of them is that this was such an impressive budget—
Opposition members interjecting—
that those opposite have embraced all of the measures contained within it, certainly in relation to the savings measures. And I hear the chortling—and that is something that the members for Casey and Higgins do well; they chortle well—
Mr Fletcher interjecting—
To the member for Bradfield: I have never seen you chortle in all the time I have been observing you.
Mr Fletcher interjecting—
Thank you, Mr Deputy Speaker Symon; I think it is important that we keep the members opposite on a tight leash. I think it is relevant that those opposite have not sought to talk about the savings measures because the Leader of the Opposition said that they were so effective and so impressive that they are seeking to—
Not only have the opposition not entertained questions around savings measures; equally, they have sought to avoid questions around monetary policy and interest rates. It does not surprise me at all that they would avoid these questions. Having run many an election campaign saying that interest rates would always be lower under the Liberal Party—we all remember that, the 2004 campaign in particular—we now find ourselves with interest rates that are lower than they ever were under the Liberal Party and, all of a sudden, they want to tell us that low interest rates are not a good thing; they are a bad thing. I want them to tell that to the families out in the community with mortgages of $300,000 who are paying $5½ thousand a year less in interest repayments as a result of the cuts to interest rates. Those cuts have ensured that benefits have flowed to families right around our community. Those who once proclaimed themselves the party of low interest rates—they even champion them in that silly little pamphlet I was talking about earlier—come forward, now that the interest rates are cut, and talk about how terrible this is because the economy is tanking. Record-low interest rates are now a bad thing.
There are those of us who have memories long enough to know we have heard it all before, and we will continue to make long-term investments in the economy, because, if we want a stronger economy, a smarter nation and a fairer society, these are the sort of things we will need to do. (Time expired)
I want to ask the Assistant Treasurer about something that has been the subject of a bit of commentary lately in technology sector. That is, namely, the expectation almost of some people that multinational corporations with deep pockets can and do minimise their tax liability—but at what cost to domestic taxpayers? I mention two companies, Apple and Google, simply because they are two of the largest technology names around that have been discussed, but it is not exclusively about them. I note there is an issues paper, for which submissions just recently closed, called Implications of the modern global economy for the taxation of multinational enterprises. I will just go to a few things in that paper before I go to my questions. It says:
International tax reform is increasingly on the agenda of G20 Finance Ministers and Leaders.
I note that Australia will be chairing the G20 next year, so it is probably an item that Australia will be taking an interest in on that basis. It also says that there are a 'range of possible policy approaches' in response to the issue—in particular, and I have been seeing this figure a fair bit, the 'double Irish-Dutch sandwich' as one of the mechanisms for minimising tax. The question put in the paper—
We'll get to it. You are looking silly. Shush. One of the questions in the issues paper is:
Should Australia care if tax is avoided in another country?
And there is quite an interesting discussion there about the double Irish-Dutch sandwich. It says:
… where a tax treaty partner is not exercising its right to tax this is conceptually equivalent to having a tax treaty with a tax haven.
That is a pretty serious thing. The consultation question for this part of the paper is:
Views are sought on the extent to which another country not exercising its right to tax should be a matter of concern to Australia.
There are a number of other items addressed here, but I think we can all agree on a couple of general principles in our corporate tax system—that we want it to be fair, competitive and sustainable.
I know that there are a number of mechanisms that were looked at by previous governments, in closing these sorts of tax loopholes. I know that the Commissioner of Taxation has identified a number of aggressive tax-minimisation flaws, where they are exploited to take advantage of our system, and some of them are addressed in the paper I just referred to. I do believe, and I think the public share this concern, that profit shifting by MNCs is a problem that affects the tax system of all countries. It is not exclusive to Australia, but people are rightly concerned about these multibillion- even trillion-dollar entities that are avoiding—perhaps legitimately, if they are using effective tax loopholes that are already there—or minimising their tax liability.
My question is: what is the government doing to protect Australia's corporate tax base from erosion and profit shifting, in light of not only multinational corporations but also ones that have been in the media and are of particular concern when we talk about some of the largest companies in the world? What are we doing and what are our options? I know that the submissions only recently closed on this discussion paper but it is proposed to have responses detailed very soon, so I would be interested in that aspect.
I thank the member for Greenway for her contribution. I would inform the House that this budget contains $4.2 billion worth of measures to protect the corporate-tax base and to close corporate-tax loopholes. That is a matter that the government has been diligently working towards over a period of time. This is not the first package of measures that we have brought forward. We have previously introduced measures on transfer pricing: the first phase, which has now passed through the parliament; we introduced a bill that contained the second phase of our transfer-pricing reforms; and also changes to part IVA, the general anti-avoidance provisions.
I make the point that on each occasion, when we have brought forward these measures to close down on corporate tax loopholes, those opposite have voted against the measures. It really does beg the question: at a time when we are facing what those opposite would have you believe is a budget emergency, why on earth would we be allowing some of the most profitable companies operating in our economy to take advantage of these loopholes and avoid paying their fair share of tax? It does not make sense. It is not fair. It is not fair to their competitors who do not shift profits and pay their fair share of tax. It is not fair to families, pensioners and small businesses around this country who pay their fair share of tax—and ultimately end up paying a higher share of tax as a result of the lack of contribution of those who should be paying more.
The member referred to the double-Irish-Dutch sandwich. That is one particular arrangement. But there are some complex questions that relate to intangibles and transfer pricing generally that need to be tackled in a multilateral way. What we have done through the budget, in addressing some of these matters in a unilateral way, is tackle debt-lending practices. To be clear on these practices, one particular scenario that was brought to our attention by the Commissioner of Taxation involves a mature company here in Australia that is a subsidiary. Its parent is offshore, on another continent. The offshore parent wants to invest in a target company that is in a third continent and, rather than the parent acquiring shares directly in the target company, they will loan money to the mature Australian operation. The Australian operation will then acquire shares in the third entity and, as a result of that, the dividends coming back to the Australian entity will be tax exempt. Then a deduction will be claimed on the interest expense incurred by the mature Australian operation and the money will be effectively shifted back to the parent company—all along achieving a tax deduction here in Australia but with no tax being paid.
Silence is what we have heard from those opposite when it comes to these practices. I see the member for Casey shifting uncomfortably in his chair, because he was left in the chamber to do the dirty work because the member for North Sydney, who had carriage of that bill for the opposition, was out there blogging. As a consequence of his blogging he could not be in the chamber and the poor old member for Casey had to come in and do the dirty work. He had to get up and vote against these new measures to introduce new reforms for transfer pricing and to tackle general anti-avoidance through tightening up part 4A.
Now the irony of this was that when the member for North Sydney was given the opportunity in his Press Club address to indicate whether or not he felt our existing transfer pricing rules were adequate, he said, 'No, they are not adequate.' They are not adequate, yet the proposals that we have brought forward to strengthen these rules he has voted against. He did not vote against the last lot because he was blogging, but he voted against the first round, and he sent the member for Casey in to do his dirty work on the second round of reforms.
Now, there is still hope for the opposition, because there is always an opportunity with bills that are now before the Senate for the members of the opposition to have a change of heart and to take a tougher line on tax avoidance. I encourage them to do that because I think that is what many people within their communities would expect. (Time expired)
Mr Deputy Speaker Symon, just before I begin my contribution, I have a question to you. The time allotted for this section is from 4.45 to 5.45, and it comprises hearing from the Assistant Treasurer, as we are doing, and from the Minister for Financial Services and Superannuation. It is now approach 25 past five. We have not seen the Minister for Financial Services and Superannuation. I am wondering what recourse you can take or whether, if a minister is so arrogant, they can simply ignore this chamber.
No. You can resume your seat and we will get on with it. It is absolutely unbelievable that the Assistant Treasurer reveals now, after more than 40 minutes of questioning, that he is going to take questions on behalf of the Minister for Financial Services and Superannuation. His name is there on the list along with every other minister's name, and this arrogant minister decides not to turn up. And you compound it by not informing this chamber that you are going to answer questions on his behalf. This is absolutely unbelievable. It shows the public the complete lack of respect for the parliament by both of these ministers.
You could have informed this chamber at the start. Were you aware of that at the start, Assistant Treasurer?
I do not want to do that, certainly not when you are in the chair, Deputy Speaker. It is absolutely unbelievable, and it just shows the height of arrogance from both the Assistant Treasurer and the Minister for Financial Services and Superannuation. It is one of two things: the Assistant Treasurer was aware of that at the start and deliberately decided to conceal it from members on this side, or he has got some email while he has been here to say that he has to cover for the Minister for Financial Services and Superannuation, who will be the only minister listed who decides not to turn up. It is not good enough, and time should be provided for the ministers listed. If they do not turn up—if they are so disorganised or if they decide that they simply cannot be bothered—time should be allocated. This is not good enough. It has not happened before. Where ministers have bee unable to turn up at least the minister at the table does the right thing and informs the chamber. This speaks volume not just about the arrogance of these two ministers but about their utter incompetence.
Given that we now know, at 25 past five, that the member for Lindsay is going to take questions on behalf of the Minister for Financial Services and Superannuation, and my colleague the member for Bradfield is here for that purpose, I will end my contribution. If you want to do anything to repair it at least let him get the call.
One of the great things about coming from the part of the world that I do is that it is home to considerable innovation, and the NBN rolling into town is providing an enhancement to that innovation for local businesses. In my movement around the community I see how seriously they take their role in being leaders in employment in our local area. They are particularly interested in making sure that they contribute to the country by paying a fair amount of tax and that they manage their pay-as-you-go responsibilities for their employees in an ethical and powerful way that contributes to the benefit of this country. My local businesses are particularly interested in the advantages that are offered through the most recent budget. There are some very important points I would be interested in hearing about from the minister, particularly small business. In the regions and areas like mine small business is no doubt the greatest employer of local people. It is very important that those businesses continue to grow, because as we grow their capacity in business we grow the number of jobs in our area and, indeed, we continue to grow the taxation for the country and from that the benefits that flow throughout the community. I am very interested in hearing from the minister on those points.
I would also like to ask the minister if he could explain a little more about the tax reform road map and the principles that underpin that. If he could explain it in a way Australians can understand—almost create a metanarrative—so that it is not just about a mechanism or the management of particular types of taxation. It is rather about a vision for Australia, something that creates a holistic framework that accounts for the way whole of the taxation system is structured. I am particularly interested in the minister's response to the challenges that face families as they are looking to manage their jobs in small business and the cost-of-living pressures against their own responsibilities to their families. There has been a significant degree of reform within that framework that I hope the minister might speak to. I am certainly interested in the tax cuts that have been delivered over the first four years to boost incentives for people in my electorate to work hard and received the benefits of that work.
We do hear a lot of conversation in public places about red tape being a major concern. I must say as a small business owner operator—my husband now largely has those responsibilities—the transformation to our business when the GST came in was overwhelming. In fact we had to become tax collectors along with millions of other Australians. I understand red tape, Minister, very well as a result of that experience—in terms of the ongoing management of that and the additional costs to people. Cutting red tape and making changes to make things more efficient for businesses is absolutely vital. I know you have that at the centre of many of your concerns. I would like some comment on that if I may. The thing that seems to be of greatest concern to those in my area is the very significant difference between the plan that is offered by those opposite and the plan and the projects that are in place for superannuation and the tax treatment of low-income earners in particular. In my electorate there are some 23,000 workers who are on $37,000 or less. That is a significant number of the 100,000 people I represent. Spread across the country, it means two-thirds of these workers are women and one-third are men on low incomes. I expect the policy of this side is going to create very different life outcomes not just now but in the future. I would like to hear from the minister about that element of the tax reform that we have been able see in recent times.
I thank the member for Robertson for her questions and note the wide-ranging nature of her contribution. I will try and address as many of the elements of what she has raised there as I can. Obviously, we are very proud of the record that we have when it comes to tax reform. It is often said erroneously that we have not picked up the cudgels when it comes to the Henry reforms, but it is worth noting that more than 40 of the measures proposed by the Henry review have been implemented or are in the process of being implemented.
Of course, when it comes to tax, we think it is important to ensure that, in particular, those large and profitable multinationals that are not paying their fair share of tax are required to pay their fair share. That is why I spoke earlier about the corporate tax integrity package. But equally we think it is important to lower the tax burden on small business. That is why we have put in place the instant asset write-off, which has been a significant development for small businesses. In fact, I see the member for Corangamite here in the chamber. I had the opportunity to visit his electorate with him and to talk to a cafe owner at a beautiful spot down at—
Frontbeach. It was a fantastic—
An honourable member: What was it called?
These are the big questions coming from those opposite! I am glad you have a full hour for this, because when you get down to those sorts of questions as your last line of defence it shows that there is not much of a critique of the budget.
When it comes to small business, we have put in place the instant asset write-off. Those opposite voted against it. It should be a source of shame to them that they voted against a tax break for small business. They say they are the party for small business, but, as the member for Robertson pointed out, they were the party that introduced the GST, with all of the administrative burden that that slugged small business with. In fact, I still get all the letters from small businesses struggling to handle all of the extra red tape and regulation that they were strangled with. I thought they were going to 'unchain people's hearts', but instead they ended up chaining them to a desk to do the paperwork involved in their business activity statements.
Anyway, the No. 1 concern that I hear from small business is actually concern about paperwork, and at the top of that list is the business activity statement. In putting in place the instant asset write-off, we have eliminated the need for some paperwork, because, for those assets below the value of $6½ thousand, there is no need to keep depreciation schedules. You can write it off in the first year. Of course, that delivers a cash flow benefit to the business, but it also eliminates red tape. That is something this government has been working towards.
You might ask the question: why on earth would an opposition that say that they support small business want to come into office and rip away a tax concession for small business and in the process load them up with more red tape and more paperwork? It is a good question, and I have not heard a decent answer to it. Of course, those opposite have been parading themselves around as the party of lower taxes. The tax-to-GDP ratio is 21.5 per cent of GDP at the moment; it was 23.7 per cent of GDP when they left office, when the member for Higgins was working for the Treasurer. Indeed, I should make the point about those corporate tax loopholes that many of them were put in place with the consolidation regime and the thin capitalisation regime that were put in place by her boss when he was around. We are now left to clean it up and to try and tidy these arrangements up to make sure that these companies are paying their fair share.
But the opposition came into the parliament and they voted against the tax break for small business. They now say they are going to repeal it. At the same time they say, 'We're for lower taxes,' but they have a proposal for a monster tax for business: a paid parental leave tax. I know that both members opposite have been very quiet on this issue, because down in their heart of hearts they do not agree with this. They know it is an unfair impost on employers, and, if they look into their iPads and look down into their books to avoid making eye contact because of the shame that they are presently feeling about this horrendous policy—
An honourable member interjecting—
At least the member for Mitchell—he does not speak up much, but, when he does, he crystallises the thought of many on the back bench on that side. So much for the modest members, so modest that they have been missing in action on this vital policy debate, missing in action when it comes to this $20 billion tax that business will be— (Time expired)
I would like to ask the Minister Representing the minister for Minister for Financial Services and Superannuation—as we are now told that he is—some questions about the Trio fraud in which $176 million was defrauded from over 6,000 investors, including a significant number of my constituents. In fact, my constituents who invested in the ARP Growth Fund—together with others from elsewhere in Australia who invested in that fund—lost, on average, $700,000. Only one local foot soldier, Mr Shawn Richard, has been jailed in this regrettable episode. The international mastermind is widely believed to be Mr Jack Flader, and there are others involved but it seems they have not been pursued by the Australian regulatory authorities.
A parliamentary committee investigation and report made a series of unanimous recommendations, I am pleased to say, including that there ought to be an investigation into likely criminal activity in association with the Trio matter. In responding recently to this report the minister released, amongst other things, a review conducted by Treasury, which put a whitewash over what had happened. The Treasury review says that ASIC took regulatory reaction in relation to Trio capital within a short period of time but, similarly, once sufficient evidence was available, APRA acted quickly to freeze Trio capital assets.
APRA carried out four prudential reviews of Trio between 2005 and 2009. None of those reviews led it to taking any action, a point which APRA officials conceded to me in questioning, when they appeared before the Corporations and Financial Services Committee. The Treasury's report concludes: 'A key finding of this review is that APRA and ASIC carried out their roles and responsibilities appropriately.' Isn't that splendid? That is very good news for all those Australians who lost their retirement savings in the collapse of Trio.
In that regard, I have the following questions: (1) Why did it take you from May 2012, when the parliamentary committee reported, to March 2013 before you provided a response? (2) Why did you describe my constituents and others who invested via self-managed superannuation funds as 'swimming outside the flags' when they were, in fact, investing via product-disclosure statements in managed investment scheme disclosure statements that had been lodged with ASIC, and do you stand by that characterisation? (3) Do you agree with the glowing assessment given by Treasury of the performance of APRA and ASIC, who managed to notice that absolutely nothing was going wrong, for six years, in the period between an existing small, reputable funds manager being taken over by an international criminal syndicate and the whistle finally being blown not by the regulators but by an alert industry participant, who happened to have such sufficient connections within the bureaucracy that he was able finally to get some attention on this matter? (4) Are you satisfied that continuing efforts are being made by ASIC, APRA, the Australian Federal Police and other agencies to investigate the Trio fraud, consistent with the unanimous recommendations of the parliamentary committee? (5) Are you comfortable that we have a situation in which sophisticated international criminals evidently are able to target the retirement savings of Australians and do so with impunity, and if you are not comfortable with it, what are you doing about it?
Mr Deputy Speaker, on a point of order—
Thank you. I rise to ask the minister why it is important to lift superannuation savings of ordinary Australians from nine to 12 per cent. I represent an electorate where many people invest in superannuation through their industry superannuation arrangements and I know within my community that people very much—
Thank you. I know from my electorate when I get out and streetstall, doorknock and talk to my constituency that Australians very much support having their own superannuation that is in place to provide a quality of life when they get to retirement. I also know that the government, which of course I am a member of, has very substantial plans with respect to superannuation, particularly lifting super savings from nine to 12 per cent. When I get out and talk to my constituency, they inform me that they like the approach that the government has adopted, particularly because most Australians like to have really strong superannuation laws in place, laws that they can feel comfortable about and confident in that if they invest in superannuation that the government will support them through very strong legislation.
I also note the government has put in place the MySuper arrangements to ensure that superannuation costs are kept to an absolute minimum, because Australians want to see the money that they invest in superannuation actually going to their retirements, not going towards excessive fees and charges to superannuation schemes, funds in the private sector and the like.
My question is: what are the alternative approaches that may have been raised or suggested in the course of the budget debate, whether it be our budgets or by the Leader of the Opposition's budget reply. Australians want to have very strong superannuation arrangements, and I ask the minister if he could shed further light on some of the plans and processes coming out of the budget around having really strong superannuation so that Australian workers can have dignity when they get to retirement. I think that is a reasonable question and I am deeply disappointed by the tone that the coalition has taken to this debate— (Time expired)
I thank both the member for Bradfield and the member for Corangamite for their contributions. I thank the member for Bradfield and I know that he has had an ongoing interest in. I make the point that the questions that he asks go to a range of considerations, some of which relate to the prosecution and enforcement activities of some of our key regulators. They not just matters of interest to government but also are matters that can be scrutinised through other parliamentary committees. I know that the member does take advantage of those opportunities to press the respective regulators about their approaches to these matters. I would like to make the point that the government continues to remain sympathetic to those who have lost money as part of this process. It has been a regrettable situation, obviously—and that would perhaps be an understatement in relation to the Trio collapse. We have listened very carefully to the victims, and as a result of that listening we have also been acting, not only in terms of approaches to compensation but also in relation to regulatory reform that is required. In this budget, just to reinforce this point, an additional $15.1 million has been made available to the Australian Securities and Investments Commission. We recognise the complex nature of investigations of the nature involved here; these are not simple or straightforward matters, but there is a degree of independence and autonomy that our regulators are afforded in order to ensure that our laws are pursued in a robust fashion but also in a fashion that can be said to be above the day-to-day politics of whatever might be occurring for any particular government. So I encourage the member to continue doing what he has done in the past, and that is to raise these matters with the respective regulators. I know that that is a matter which he has certainly been very active in pursuing in the past.
In relation to the member for Corangamite, I thank him for his question, because he points to the strong record of this government in relation to superannuation but also to the horrifying prospect of what we might face if there were to be a change of government. This government—Labor—created superannuation, and at the time the Leader of the Opposition said it was the biggest con job ever foisted on the Australian people. I know he has had a change of heart on a whole range of things in recent times; in fact, I saw an article that he wrote in the paper recently where he was sort of airbrushing out some things that he had said in his most recent tome, which is the Battlelines book. But when it comes to superannuation, nothing has changed. In the same way as when the coalition came into office in 1996—and the member for Mayo will remember this well—after making repeated commitments about how they would proceed with the Keating government's commitments to increase compulsory superannuation, they got in and they chopped it off and they halted it where it was. The member for Mayo might want to contribute to the debate by advising the House of how many increases in compulsory superannuation there were throughout the 11½ years of the Howard government. In fact, to save him the trouble, I will answer the question and make the point that there were none. The coalition have always opposed increases in superannuation. For all the rhetoric that we have heard in recent times about the coalition's concern about the government raiding superannuation, the member for Mayo might like to point out whether or not the reforms that we have proposed will be abandoned if the opposition were to get into office.
Mr Briggs interjecting—
No, no, the reforms in relation to—
In the same way as the coalition did not go ahead with the increases in superannuation in 1996, this so-called deferral by two years is an abandonment. We know that that is what will happen. The coalition will find some excuse in the same way as they found excuses in 1996—because when it comes to the Liberal party, there is always an excuse for why it would take away the opportunity for hard-working Australians—(Time expired)
Proposed expenditure agreed to.
Proposed expenditure, $4,025,894,000
I rise to speak on this consideration of detail stage in relation to the Human Services portfolio. I begin my questions, Parliamentary Secretary, by giving a short preamble to them.
This is obviously an extremely important arm of government. It includes agencies such as Centrelink, Medicare, Child Support Agency, Commonwealth Rehabilitation Service Australia and Australian Hearing. It is expected to make over $157 billion worth of payments in the next financial year that this budget concerns itself with. In that respect, it is an extremely important agency of government to Australians who rely on receiving their pension, Newstart allowances and Medicare rebates. Whatever the payment relates to, it is very important that this agency be managed properly and not cause too much inconvenience for people if they have interaction with the government payment system.
The former government was committed to some reform and I note the current government has introduced some additional reform in this area to ensure that payments are more effective and more efficient in their delivery. Times have changed since the Commonwealth government first involved itself in making payments. Technologies have changed quite substantially and we now have a range of ways, particularly electronically, of making payments. There will be efficiencies in the future where we can improve the way we make payments and ensure that the Australian taxpayer is not paying more than they need to make. In that sense, this is a very important area.
It is for this reason I was concerned this morning to see that the latest minister Senator McLucas, has not yet received her charter letter. I note she is the sixth minister in six years in this portfolio—we have had four since Prime Minister Gillard came to office. I would have thought that for a minister to not yet have her riding instructions for a portfolio that makes payments worth $157 billion in this budget is a pretty substantial issue.
Parliamentary Secretary, can you confirm that each of the previous ministers received a charter letter and can you advise when the Prime Minister will be delivering the charter letter to the current minister, and will it be any time soon, given that we are 102 days away from an election and a shorter period, some 80 days, away from entering the caretaker period? Is this just another example of a government that is in chaos and has no idea what one hand of government is doing compared with the other?
It is not always that I agree with the member of Mayo, but I do agree with him about the Department of Human Services. The department touches the lives of nearly every Australian, one way or another. One of the great strengths of the department, as the member talked mentioned, is the fact that it has great flexibility to deal with all manner of situations—from distribution of family tax benefits, to child support and to crisis management. The member for Mayo raised what the department does, which I will talk about, and I will deal with the charter issue in a minute.
One of the great achievements of the Department of Human Services is its capacity to make about $144.7 billion in payments in a year. The shadow parliamentary secretary, the member for Mayo, talked about the amount that is in this year's budget. In last year's, it is extraordinary for a department to have had the capacity to make $3.2 billion in payments for child support or family tax benefit payments. The parliament takes 56 million calls from people and sends out about 145 million letters every year.
The member for Mayo talked about the achievements and capabilities of the department, and I think he is correct when he talks about those. For example, one of the things that the member for Mayo probably would not be happy about was the capacity of the Department of Human Services to make the clean energy advance payments of over $1.3 billion to more than six million Australian families, pensioners and other recipients. The member for Mayo's side of politics actually voted against those payments and opposed those payments every step of the way, whereas Australians received those payments through the Department of Human Services to assist them with their cost-of-living pressures and to assist them to meet the challenge in participating in our pricing of carbon—a policy which has proved significantly effective in the reduction of carbon pollution in the atmosphere, on the latest figures.
The member for Mayo is correct that the department is using smarter and faster tools in the 21st century. New ways to deal with Australians' online services are particularly important. He actually mentioned that in his question. There are about 3.8 million Australians currently registered for Centrelink online services, and he raised that point in his question and his comments. About 2.7 million are registered for Medicare online services, and there are about 143,000 registered for child support online services, so that is particularly important. I am glad he raised that in his comments, because that is a particularly important point to make.
The department is also using a number of particularly important things—and the member for Mayo raised that in his questions to us—introducing four new Express Plus smartphone applications. They are aimed at students, job seekers, families and seniors, enabling them to complete many of their most common transactions quickly and easily. I thank him for his dorothy dixer, because it was particularly helpful in relation to that. These apps have been well received. There have been over 563,000 downloads and over 11 million transactions already via the apps. This includes a lot of older Australians. One of the things that I have been so pleased about is the way that older Australians have embraced the seniors app, having completed about 11,000 downloads and about 51,000 transactions.
The member raised issues in relation to a charter, and I noticed that he got very excited about that today in a press release he sent off. I think the responsibilities of the Minister of Human Services are very clear. The member for Mayo talked about the department that the minister has responsibilities for and what it actually does. I think most people know, when they deal with the department, about the range of services and are pleased with the range of services that are there. She is getting on with the job of making sure that Australians get access to the kinds of payments that the member for Mayo mentioned—ensuring that Australians get access to those payments they need to meet their cost-of-living pressures.
I think the member for Mayo and the shadow minister should stop playing politics in relation to this and come clean about their plans to take away jobs, like Campbell Newman and the LNP in Queensland. They should come clean. What public servants in the Department of Human Services do they intend to sack if they get onto the treasury bench? Let us not forget that we have somewhere between 12,000 and 20,000 jobs in the gun if the shadow parliamentary secretary loses the 'shadow' before his name. (Time expired)
It is a pleasure to be able to ask some questions of the Parliamentary Secretary for Health and Ageing and Parliamentary Secretary to the Attorney-General this evening. At the outset I should like to congratulate him on his elevation to the roles. I know that he has obviously been a very committed local member, and I think he will do extremely well. Indeed, he is doing extremely well in the roles.
The questions I would like to inquire about this evening relate to the circumstances of older Australians. I note that the parliamentary secretary has made reference to some of the initiatives already being rolled out for the benefit of senior Australians right across the country, and I am particularly interested in my electorate. I should note for the benefit of members here this evening that there are some 17,600 pensioners and around 1,400 self-funded retirees in the electorate of La Trobe who are already benefiting from a boost to their incomes through pension increases, through tax cuts and through the seniors supplement, so there are very practical ways in which this government is delivering financial support to senior Australians right across the country and certainly in my electorate.
I know that this government has been focused across a range of portfolios—not just Human Services but a range of portfolios—in delivering not only financial independence but actual independence in terms of the choices for retirement living and access to modern communications through the NBN and Broadband for Seniors. All of these things are part of a holistic package of measures which are aimed at ensuring that senior Australians—and with an ageing population, we certainly need to pay increasing regard to the demographic of senior Australians—continue to have a very good quality of life; the kind of quality of life that they deserve; the kind of financial support that they deserve; and the capacity to continue to have a very productive and active life into their senior years.
In my electorate I have been able to speak to many representatives and organisations such as the Emerald U3A—the University of the Third Age—which is all about ensuring that senior Australians continue to take up the opportunities for education that are available to them and continue to be active in our community. I had the opportunity to be with one of our ministers talking about the historic pension increases that this government has delivered and the additional financial support that has been given to senior Australians and self-funded retirees with the Commonwealth healthcare card through the packages of measures that we have advanced over the last five years.
I have also had the opportunity to hear firsthand from pensioners and other seniors in my own electorate through the Knox U3A, as we discussed things like retirement options and aged-care options. It is certainly of interest to them that this government continues to provide such support financially and through other means to that group. Accordingly, this evening I am very pleased to be able to ask the parliamentary secretary to provide a bit more information about the means by which the government—particularly through the Department of Human Services—is supporting older Australians to live a better and smarter in a stronger and fairer future.
I thank the member for her question in relation to older Australians. We know that each year over one million older Australians receive aged-care services and by 2050 over 3.5 million Australians are expected to receive aged-care services each year. The Department of Human Services is well and truly involved in that process. This government has actually been a reformist government in the area of aged care. Our Living Longer Living Better package is a $3.7 billion package over five years, and I am pleased to say that legislation introduced into the House is going to make a big difference. The Department of Human Services is involved in that process.
I will talk about the Living Longer Living Better package and what the budget actually does for older Australians. But, in terms of the department's involvement, the Department of Human Services received $322,000 over two years from 2012-13 to implement the changes. That is an important assistance to the department. This package of reforms is about making sure that people have greater control and choice over the aged-care services they need. The single aged-care gateway will be important. The emphasis on home-care packages and a recalibration of aged care towards that bias is important. The funding towards dementia is really important as well. The number of Australians with dementia is forecast to grow from 269,000 to almost a million by 2050. At present 1,500 Australians are diagnosed with dementia every week. The budget provides some significant assistance in that regard by rolling out that package across the country.
There are other areas in which we are making a difference in aged care. One of the initiatives in support of aged care is the idea of supporting seniors who downsize their homes. This is a $112.4 million pilot program to assist age pensioners and other pensioners over pension age who want to downsize their home. It is common for people as they get older to not want a three-, four- or five-bedroom home and to want to downsize because their physical capacity to maintain that home wanes as they get older, particularly in retirement years. This is good initiative which we think will make a difference. What this particular benefit means in the budget is that for pensioners of pension age, who have lived in their home for more than 25 years and want to downsize to a lesser home or benefit, this is probably the transition before they go into what we used to call high care in a residential aged-care facility. Pensioners will be able to put at least 80 per cent of the excess proceeds from the sale of their former home up to a cap of $200,000 into a special account and have it exempt from the pensioner income and assets test. It is expected that about 30,000 Australians will benefit from this trial by receiving a higher pension than would otherwise be the case if the excess sale proceeds were means tested. Of course, the Department of Human Services would take that into consideration.
The member for La Trobe is right when she talks about the federal Labor government's commitment to pensions. Since 2009, and she mentioned this in her question, the maximum rate of pension has gone up by $207 a fortnight for singles and $236 a fortnight for couples combined because of this federal Labor government. I cannot say that those opposite have always supported pension rises. They have on occasions in fairness to them, but on other occasions they have not. One of the other ways that I think we are helping seniors is keeping them connected. I am sure the member has the Broadband for Seniors program in her electorate, as I do in mine. The budget has provided funds here and this is assisted through the department. The 2013-14 budget delivers the Keeping Senior Connected an extra $9.9 million over four years for new technology and training grants for Broadband for Seniors kiosks. These kiosks have been particularly helpful—and you can find them in libraries, aged-care facilities and council chambers. There is even one at the University of Queensland, which is hosting SeniorNet in my electorate. There are about 2,000 internet kiosks for seniors around the country. I am pleased to say that older Australians have made use of that technology. (Time expired)
I go back to the original line of questioning that I was pursuing in relation to the small matter of a charter letter or what is better known as a job description from the Prime Minister to the minister. I was not suggesting to correct the parliamentary secretary that it was somehow Senator McLucas' fault that she had not received her own charter letter. She might draft it for herself and send it to herself, but really it does need to come from the Prime Minister. That has been the tradition of the Westminster system. However, the Deputy Speaker will be aware that, when Senator McLucas took this portfolio, things were a little chaotic on the government side, and we wonder whether part of that chaos and dysfunction was the oversight of a charter letter not being sent. We remember the time in March when we had the minister for immigration resign, the minister for resources resign, the minister for regional development resign, the parliamentary secretary for Pacific islands, who is with us in the chamber, resign. Quite a few people resigned and one of those ministers who resigned was Minister Senator Kim Carr. We understand that Senator Carr had received a charter letter; Senator McLucas has not received a charter letter. Through the chair, Parliamentary Secretary, it does seem that you thought it was a laughing matter or an irrelevancy that the minister would just know what her responsibilities were and would know what pieces of legislation she was responsible for. The purpose of the charter letter is for the Prime Minister to explain to the minister: 'These are the areas that you have responsibility for.' It is a very significant document in a ministry. I ask the Parliamentary Secretary through you, Deputy Speaker: can he assure the House that the Minister for Human Services is aware of the responsibilities that the Prime Minister has given to her in her capacity as the Minister for Human Services? If so, how is she aware of them if she does not have her charter letter? Another point that the parliamentary secretary may answer is: have you received from your Cabinet minister you charter letter?
The process used to be in a normal working, functioning government was that a junior minister, as the Minister for Human Services is, or an outer ministry minister, would receive a letter from the Prime Minister. In this case, that has not occurred for whatever reasons. We suspect the chaos and dysfunction of the Gillard government is the reason in this case.
In the formally normal sort of the government, where the adults are in charge, the cabinet minister would send the parliamentary secretary a charter letter too. I am not sure if that was the case with the parliamentary secretary for Pacific Islands or not, but in a normal functioning government that was the case. In a functioning government after September 14, we suspect that will be the case again.
I say to the parliamentary secretary with the five minutes he has got left to answer this question: Parliamentary Secretary, is the Minister for Human Services likely to receive some correspondence from the Prime Minister at any stage in this term of government just to outline what she is responsible for with $157 billion worth of payments to make; and indeed have you received a letter from your cabinet minister advising you what your responsibilities are too?
I am happy to answer the question in relation to: does the minister know what her ministerial responsibilities are? I would think that the member for Mayo—I wonder what his job was at one stage. I think he worked for a number of cabinet ministers. I think he actually worked for the Prime Minister at some stage—that is right. He was actually aware of his responsibilities, and wasn't he the architect and author of Work Choices? I have a feeling he might have been at one stage.
The minister is very well aware. I mentioned the shadow parliamentary secretary's previous roles, because I am sure at some stage he would have seen something like a brief of their portfolio responsibilities that would have been delivered to his office. I am sure when he was working—I think it was for Alexander Downer, the former foreign minister—
He was working for a number of ministers in the Howard government, and I think he was in IR. He would have received a number of ministerial briefs. He would have received a number of incoming parliamentary secretary or ministerial briefs which would have set out clearly the responsibilities. If you think that the minister, an experienced senator who has been in the Senate for such a long time, does not understand her portfolio responsibilities, then you are kidding yourself, member for Mayo. Of course someone as experienced a politician as Senator McLucas, the Minister for Human Services, knows very well her responsibilities.
It is interesting the fixation and obsession with a letter; nothing about the $157 billion he referred to in relation to the money that goes into the pay packets into the accounts of Australians—no questions about that; questions only about one piece of paper. He asked me the question: does Senator McLucas know about her responsibilities? Of course she does. She knows, and he should stop playing politics about this, because Senator McLucas is getting on with her role as Minister for Human Services.
I think it is important that we focus on what those roles are. I mentioned before in relation to—and he raised a question about her responsibilities; I am happy to talk about them. It is about administering a department that provides assistance to Australians each and every day.
The shadow parliamentary secretary mentioned the things they do: supporting over four million Centrelink and Medicare child support program customers is important in Australian government services online in a year. He wanted to know about her responsibilities. It is about doing that: administering a department that does that. It is about administering a department that manages some two million online transactions from Centrelink every week—that is what her responsibilities are: administrating a department that does that. It is about new services. He mentioned before in one of his questions the kind of technologies that are applying. The new service myGov became operational on 26 May 2013, enabling people to set up their own unique user account to subscribe to various services across the portfolio—that is what her role is: administering that department that does those sorts of things. And she knows very well her responsibilities in that regard.
There is also the work that is being done in relation to crisis management. If you had been around the country, member for Mayo, you would have seen where there are fires, floods and cyclones. You would have seen people in dark green T-shirts with Centrelink writing across it. And they would be administering things like disaster income recovery payments, payments that help people in their crisis, people whose homes have been flooded or burnt down. That is what the department does. And the minister is administering the type of department that provides that disaster relief.
And it has not been an easy year. You would think that the member for Mayo would realise that 2013 has been a tough year across Australia. You would think that he might ask questions in relation to what the department does in relation to disaster management. But, no, he is fixated with one particular letter. The member for Mayo should think clearly in relation to that. He should be focusing on helping families. That is what the department does and that is what the minister does; helps families through the department but there are no questions about that whatsoever.
While this debate has been going on, I have opened the very first page of a google search for what is going on with family and Department of Human Services. You see all these faces on this webpage looking out, and the titles of the things that are looked after by Department of Human Services are things that are substantive. I think this is the point that the parliamentary secretary has been making. The question that is asked at the top of the website is: 'How can we help you?' That is a question that we ask every single day.
The obsession with process that we have seen in the type of question we have received from those on the opposite side reveals that they see what happens in this place so much as a play thing for point scoring. The substantive nature of what the department does is extremely significant; it matters to families; to separated parents; to job seekers; to older Australians; to migrants; refugees; visitors; students and trainees; to people with disabilities; to people who are concerned with issues about their health and what care and assistance they can get from family services; for carers; and for people in rural and remote Australia.
I know that I share with the parliamentary secretary that sense of being in a regional area. For us, the Department of Human Services is no small thing. It is a critical part of enabling our community. The Department of Human Services organised the Peninsula Link Day, which was an incredible innovation about how we can get efficient connections going on between programs and across our community; that is part of what has been going on in my regional area.
People are interested in family tax and the benefits that they can receive. People are interested in getting the support they need when they are in crisis—and crisis management is delivered by Department of Human Services. People are interested in looking after their children and the important delivery of child support.
So for the parliamentary secretary I have two questions. Firstly, what is the government doing to improve its capacity to support the current and changing needs of these Australians that I have been speaking about? And what are they doing to ensure that it continues to support and deliver government programs efficiently and effectively And, if there is time, I would also like the parliamentary secretary to tell us what the government is doing to better meet call demand and improve the telephony systems—and not only the idea of the electronic medium and the new apps he has commented on this afternoon—because people still do make phone calls.
I note that the coalition did not ask one question about the Department of Human services. They fixated on one document; not a question at all that relates to the department that deals with probably more Australians each and every day than any other department. It goes to show how little they think of Australian families, individuals, pensioners and seniors.
I thank the member for her question. The department is spending about $16.2 million over two years to develop a business case for an upgrade or replacement of the income security integration system known as ISIS. She raised that issue in relation to improving capacity to support current and changing needs of Australians. That is important because the ISIS upgrade or replacement is crucial to supporting the social welfare system we have in this country. You have to have a decent system in place; otherwise those payments that I referred to earlier in my answers cannot be made. ISIS is a major IT system for Centrelink programs. The business case will inform a future decision about upgrading or replacing the system, and it is important that we do that. I will be brief in relation to this issue, because I know another member needs to speak quickly about another issue. We put enormous trust in this department, and Australians do as well. We need to enhance the capacity and capabilities of this department, because this is crucial. We need to have those systems in place so that Australians can have confidence that those payments will get into their accounts.
The member also asked questions in relation to older technologies. One of the things that are important is the need for a call centre. I mentioned before the number of phone calls that go to the department. It is enormous—tens and tens of millions, as I said before. So we are providing $30 million to help the department reduce the call waiting times, which of course has been a problem in the past. None of us like to wait on the phone, and we are trying to reduce the waiting times that people sometimes experience. There is funding of $10 million in the 2012-13 budget and $20 million in the 2013-14 budget, and that will allow the department to put in additional call centre staff.
I mentioned before the number of calls that take place: 44 million Centrelink-related calls in 2011-12—about 160,000 calls a day. So those public servants who answer those phone calls are important. It is sad to see that those opposite want to sack public servants—the kind of people that will answer those phone calls from Australians across the country. It is sad to see that those opposite cannot even bring themselves to ask one question, and it is interesting to note that the shadow minister did not ask a question of me at all tonight.
Proposed expenditure agreed to.