John Faulkner (NSW, Australian Labor Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

I table revised explanatory memoranda relating to the Carbon Pollution Reduction Scheme Bill 2009 and the Carbon Pollution Reduction Scheme (Consequential Amendments) Bill 2009 and move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

CAR DEALERSHIP FINANCING GUARANTEE BILL 2009

On 5 December 2008, the Prime Minister and I announced the establishment of a Special Purpose Vehicle (SPV) with the support of leading Australian banks, to provide liquidity to eligible car dealers who had been left without wholesale floor plan financing as a result of the departure of GE Money Motor Solutions and GMAC from the Australian market following the onset of the global financial crisis.

The SPV – otherwise known as ‘OzCar’ – was legally established as a Trust on 2 January 2009.

Under the agreements negotiated with the four major Australian banks, I.e. the ANZ, Commonwealth Bank of Australia, the National Australia Bank and Westpac – the four major banks will provide liquidity to OzCar through the purchase of ‘AAA’ rated OzCar securities.

Most of these OzCar securities will require a Commonwealth Guarantee so that they qualify as ‘AAA’ rated securities thereby allowing the four major banks to purchase them.

Having raised funds through the sale of securities, OzCar will make available funding for 12 months to those dealers who need it and to those who qualify.

It is very pleasing that, since the 5 December announcement that the Prime Minister and I made, most of the former GE and GMAC dealerships have managed to secure alternative wholesale floorplan financing, primarily through the remaining lenders.

This, and the commendable commitment by both GE and GMAC to wind down their loan books in an orderly manner, has meant that it has not yet been necessary for the OzCar SPV to issue securities and lend funds.

There is no doubt that the establishment of the OzCar facility so quickly after GE and GMAC announced their planned exit from the Australian market provided a critical boost to confidence when it was needed most.

This and the work of Treasury and Credit Suisse with GE and GMAC resulted in a much better outcome than what otherwise would have been the case if we had just sat back and done nothing.

As a result of the success of this initiative, the financing task now confronting us is much less than initial expectations.

Last December, it was expected that OzCar would need to finance around $2 billion worth of loans.

That has come down to around $850 million. The final figure will probably be much less.

Commonwealth Guarantee of OzCar Securities

It will soon be necessary to activate the OzCar facility given the exit plans of GMAC and GE.

As I announced last week, the Government has decided to make the OzCar facility available to Ford Credit for the next 12 months so that Ford Credit’s network of almost 200 Ford dealers can continue to access wholesale floorplan finance.

This decision has been necessary in light of the immense pressures the global financial crisis has placed on Ford Credit’s ability to continue to raise the liquidity it needs to support the Ford dealer network and through that network, the manufacturing operations of Ford Australia.

In order to allow for the activation of the OzCar facility, this bill seeks to enact a standing appropriation to support the Commonwealth Guarantee that will apply to around $550 million of the securities issued by the OzCar facility.

The major banks will need the certainty of a Commonwealth Guarantee with legislative backing before they will purchase the necessary volume of OzCar securities.

This Bill is therefore a very important legislative underpinning to the OzCar SPV facility.

Transparency and Accountability Mechanisms

The OzCar SPV is a complex trust facility. To ensure transparency and accountability, the Treasury has published the relevant Trust Deeds and supporting material on the Treasury website – www.treasury.gov.au

Treasury has also entered into a contractual arrangement with Credit Suisse, the OzCar Program Manager, and a range of service providers, on the operation and administration of the OzCar SPV facility.

Treasury will be providing me with regular reports on the operation and performance of the OzCar facility and will prepare quarterly reports on the operation of the SPV that will be made available to the Parliament.

These reports will identify the overall amount of securities issued; the proportion of securities covered by the Commonwealth Guarantee and the overall financial performance of the OzCar SPV.

Moving Forward

The OzCar SPV is designed to advance loans until 30 June 2010. The standing appropriation that this bill puts in place will support any securities issued by the SPV until that date for the term of their maturity, which will not exceed 3 years.

There is no doubt that the next 12 months will be a very challenging time for Australian industry – none more so than for the Australian car industry.

It is critically important that initiatives such as the OzCar facility are put in place not only to provide material support – but also to help provide confidence at a time when confidence is so badly needed.

I urge the parliament to support what to date has been a highly successful initiative – and which should become even more important in the weeks and months ahead.

I commend the bill to the Senate.

EVIDENCE AMENDMENT (JOURNALISTS’ PRIVILEGE) BILL 2009

This bill implements an important reform to the Commonwealth Evidence Act 1995 by amending the existing privilege provisions which are available to protect confidential communications between journalists and their sources, in appropriate circumstances. It forms part of the Rudd government’s commitment to enhancing open and accountable government. It also delivers on the Rudd government’s election commitment to strengthen protection for journalists’ sources.

This Bill recognises the important role that journalists play in informing the public on matters of public interest and, in my view, appropriately balances that against the public interest in the administration of justice. It does this by inserting an objects clause into the Division to ensure that the court keeps both of these factors firmly in mind when exercising its discretion in the particular case.

In doing so, the Bill improves on the version of the privilege introduced by the former Coalition government in 2007. That was a version I described at the time as a ‘quick fix to a somewhat complex issue’.

While this Bill just deals with journalist shield, the government is also committed to enhancing our mechanisms to allow public interest disclosures and Freedom of Information laws. The government is currently considering the report of the House of Representatives Legal and Constitutional Affairs Committee on whistleblowers and is committed to introducing legislation this term. My colleague the Special Minister of State is looking to release an exposure draft Freedom of Information legislation as soon as practicable. Together with the measures in this Bill, those measures will improve the openness, transparency and accountability of government and the public service.

The value of a well informed community was highlighted by the Commonwealth Ombudsman in its 1994-95 Annual Report, where it stated:

‘Information is the currency that we all require to participate in the life and governance of our society. The greater the access we have to information, the greater will be the responsiveness of our governments to community needs, wants, ideas and creativity….’

Protection of journalists’ sources is one of the basic conditions of press freedom. As recognised by the European Court of Human Rights in 1996, without such protection, sources may be deterred from assisting the press in informing the public on matters of public interest.

The bill strengthens protections for journalists’ sources by changing the way in which a court is able to address communications which have been made to a journalist. The bill will require the court to consider whether a communication was made contrary to law in determining whether to direct that the evidence not be given. The current law has operated too severely in mandating the loss of privilege in these circumstances. Clearly, the court will weigh the competing objects. The greater the gravity of the relevant misconduct, the greater the weight the court will be expected to give that factor.

The bill will also require the court to consider not only any potential harm to the source but also to the journalist if the evidence is given. This gives specific recognition to the fact that journalists can also suffer harm, such as harm to their reputation and their ability to obtain information, if they are required to disclose a source. Where a likelihood of harm has been established to the journalist or the source or both, and the court is satisfied that the nature and extent of this harm outweighs the desirability of the evidence being given, the court must uphold the privilege.

I want to make it very clear that these amendments are not designed to prevent or frustrate legal action being taken against a person who makes an illegal disclosure. Nor are the amendments intended to encourage such disclosures. And I don’t anticipate they will do so. What these amendments do is to clarify the circumstances in which a journalist should be required to provide evidence to a court about the confidential communication or its source.

As I said earlier, the Rudd government is also currently developing whistleblower protections which have the capacity to complement journalist shield laws by providing avenues other than the media for public interest disclosures. The court has the ability under the existing Evidence Act provisions to consider whether the source could have utilised, where available, laws protecting public interest disclosures. Failure by a source to access the protections provided by these laws would be a relevant consideration in the court’s determination of whether the confidential communication between a journalist and source should be privileged.

The bill specifies that the court in exercising its discretion must consider potential prejudice to national security. But the factors that are listed are not weighted one above the other. The amendment will provide greater flexibility for the court by allowing it to determine the weight to be given to a particular risk of prejudice to national security based on the evidence before it. Clearly, again, the greater the risk of prejudice to national security and the greater the gravity of that prejudice, the greater the weight the court would give to this factor.

The bill will extend the application of the new journalists’ privilege beyond proceedings in federal and ACT courts, to all proceedings in any other Australian court for an offence against a law of the Commonwealth. This provision will ensure that the Rudd government’s commitment to enhancing transparency and accountability in the Australian government is effectively implemented by these reforms. In practice, the prosecution of an Australian government official charged with disclosing confidential government information is usually conducted in a state or territory court rather than a federal court. It is in these proceedings that journalists are often called upon to reveal their sources. This amendment will enable the new journalists’ privilege to apply to all prosecutions for Commonwealth offences.

There will be some that will say this bill does not go far enough. They will point to laws in New Zealand and the United Kingdom which contain a presumption in favour of protecting journalist.

But let me say in answer to those critics – this legislation enables an appropriate balance to be struck between the public interest in free press and the public interest in the administration of justice. It provides a guided discretion but leaves the balancing of competing interests and particular facts in each case to the court. As I said in 2007 when the opposition introduced its flawed legislation, judicial discretion in these matters is not something to be afraid of. Indeed, no other profession – not even lawyers – has the benefit of an absolute privilege to protect confidential information.

A broader judicial discretion to maintain confidentiality between a journalist and their source in court proceedings is not just about protecting journalists. The bill aims to benefit the wider community by facilitating the free flow of public interest information in cases where courts find journalists’ privilege should be upheld.

I believe that this bill finds the appropriate balance between the desirability of protecting confidential communications between journalists and their sources and the public interest in ensuring that all relevant evidence is before our courts.

I started this speech by saying that the media has an important role to play in our democracy. Let me finish by saying, Mr Speaker, that this role comes with significant responsibilities; responsibilities of fairness and, most importantly, accuracy. It is not a mere platitude to say that a well informed, well functioning and responsible media is a vital cog in the democratic wheel.

FAMILY ASSISTANCE AND OTHER LEGISLATION AMENDMENT (2008 BUDGET AND OTHER MEASURES) BILL 2009

This bill introduces one measure from the 2008 Budget on family tax benefit and two further non-Budget measures from the Families, Housing, Community Services and Indigenous Affairs portfolio.

The Budget measure is part of the Better Targeting and Delivery of Family Tax Benefit package. The measure will streamline the administration of family tax benefit by removing from 1 July 2009 the option of claiming payments through the tax system.

Only around seven per cent of current family tax benefit customers claim through the Australian Taxation Office. Removing the tax system option for delivery of family tax benefit payments will simplify the system, reduce duplication in delivery of the payments, and improve consistency for claimants.

The choice of payment in fortnightly instalments (including end-of-year top-ups if applicable), or in an annual lump sum, will remain through Centrelink and Medicare. Furthermore, there will be no change in payment rates from this change in delivery arrangements.

Information will still be exchanged between the Australian Taxation Office and Centrelink to ensure entitlements are as accurate as possible. Adjusted taxable income will continue to be used for family tax benefit income testing and end-of-year reconciliation processes. Tax refunds will also continue to be available to offset family tax benefit debts, and vice versa. In most of these administrative respects, the family tax benefit system will continue to work in the way customers are familiar with.

This bill includes an important non-Budget measure foreshadowed by the government in its announcement on 23 October 2008 in response to the recommendations of the Northern Territory Emergency Response Review Board. This measure will ensure people subject to the Northern Territory income management regime have access to the Social Security Appeals Tribunal and Administrative Appeals Tribunal appeal mechanisms afforded to other Australians in relation to their income support and family payments.

Further measures from the same response will be introduced in the 2009 Spring sittings, as announced.

Lastly, the bill makes amendments to implement part of the government’s announced reforms to the Community Development Employment Projects (CDEP) program, which aim to improve employment participation for Indigenous Australians.

The amendments will provide new CDEP participants commencing on or after 1 July 2009 with access to the CDEP program while receiving income support payments, instead of CDEP wages from CDEP providers.

The amendments will mean that new CDEP participants will not receive the CDEP Scheme Participant Supplement as such participants will be able to claim other additional benefits through the income support system. The amendments will allow continuing CDEP participants to receive CDEP wages from CDEP providers, and the CDEP Scheme Participant Supplement, until 30 June 2011, when continuing participants will transfer to income support.

FAMILY ASSISTANCE LEGISLATION AMENDMENT (CHILD CARE) BILL 2009

The Family Assistance Legislation Amendment (Child Care) Bill 2009 marks another step along this government’s unswerving path to accessible, affordable, high-quality child care for Australian children, their parents and carers.

This government has already made an enormous investment in early education and child care—$3.7 billion in new funding between now and 2013—and rightly so.

That’s because this government understands how crucial the early years are in a child’s life and education.

That’s why parents now get a Child Care Tax Rebate of 50 per cent of their out of pocket child care costs rather than 30 per cent.

That’s why parents can now get the rebate paid to them quarterly, to ensure the assistance is there for them, closer to the time they incur their child care expenses.

This government is on a mission to expand the accessibility of child care.

As a government we understand that families’ situations change, particularly in this uncertain time ahead of us.

This is why we are making some technical changes in this bill which will improve the administration and accessibility of child care entitlements.

One of these changes is to allow the final quarterly payment of the Child Care Tax Rebate to be withheld until a carer’s taxable income is determined for that financial year.

This will help reduce the amount of under- and overpayments, and the need for subsequent payments or debt recovery.

Where there is overpayment these amendments will allow the debt to be recovered in a way that will minimise the impact on families.

Sometimes families have to deal with the most difficult of circumstances, when a parent or carer who is entitled to the Child Care Tax Rebate dies.

In these circumstances, changes in this bill will allow for the substitution of the entitlement to the person who is taking over guardianship of the child.

In other cases carers may receive a ‘zero rate’ for the Child Care Benefit.

Again this government understands that people’s situations and income change.

Amendments in this bill will allow those assessed at a ‘zero rate’ of CCB to request a review of their entitlements within two years of the relevant year they received the zero rating.

All of these changes focus on improving the administration of child care and squaring the ledger with parents in a timely manner.

All of them build on changes such as the quarterly Child Care Tax Rebate payment system the government has already implemented.

I mentioned earlier the government’s considerable investment in child care, and we are committed to safeguarding this investment through the proper administration of child care payments and services.

Given the events of last year with the collapse of ABC Learning, we are especially mindful that Australian families need to have the greatest possible certainty around continuity of care.

Last year the Rudd government extended civil penalties to a broad range of child care service obligations.

In this bill we will take compliance a step further by allowing the imposition of civil penalties through regulations.

We will tighten the requirements on operators around when and how they notify their intention to cease operations. A civil penalty will apply where a service fails to meet this requirement.

The bill will also clarify the link between a service and an operator by ensuring that operators are held liable for the obligations imposed on the service they maintain.

We acknowledge of course that the majority of child care providers are doing the right thing when it comes to compliance.

But we want to ensure that those who are negligent are pressed to do the right thing.

Another consequential change is the renaming of the Child Care Tax Rebate which will now be called the Child Care Rebate, as it is paid through the Family Assistance Office, not through the Australian Taxation Office.

To sum it in three words, this bill is about administration, accessibility and accountability—which I suppose you could call our own ‘Triple A’ rating.

With the government’s landmark commitment this week to a Paid Parental Leave scheme I am proud to say that in the future we will be helping deliver children, as we continue to deliver for them in early childhood, from cradle to crèche and beyond.

FINANCIAL SECTOR LEGISLATION AMENDMENT (ENHANCING SUPERVISION AND ENFORCEMENT) BILL 2009

The Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 introduces measures to regulate the non-operating holding companies (NOHCs) of life insurers, and harmonise the injunctions that may be issued in respect of prudentially regulated entities.

This Bill removes a gap in Australia’s prudential regulation framework by ensuring that the Australian Prudential Regulation Authority (APRA) supervises life insurance NOHCs, which can have a significant impact on the conduct and financial health of life insurance companies. This measure is consistent with the Insurance Core Principle ICP17 of the International Association of Insurance Supervisors on Group-wide supervision, which is that ‘[t]he supervisory authority supervises its insurers on a solo and a group-wide basis.’

This Bill also ensures that the injunctions that may be issued under the prudential legislation are effective tools to enforce financial entities’ compliance with prudential requirements.

Non-operating holding companies of life insurers

Schedule 1 of this bill introduces a prudential regulation framework for the NOHCs of life insurers, and brings the prudential supervision of such companies into line with the prudential supervision of the NOHCs of general insurers and authorised deposit-taking institutions.

The prudential requirements that will apply to life insurance NOHCs are consistent with those that apply to life insurers. The scope of the prudential regulation regime introduced by this Schedule is closely modelled on the existing regulation of the NOHCs of general insurers and authorised deposit-taking institutions.

This approach will minimise compliance costs for industry and ensure a smooth transition.

The main elements of the prudential regulation regime for life insurance NOHCs are as follows.

Life insurance NOHCs will be required to be registered under the Life Insurance Act 1995 and be subject to APRA’s supervision. They will be required to comply with prudential standards, reporting obligations, directions issued by APRA and investigations authorised by the Act. APRA will be able to seek the disqualification of persons in specified positions in the body corporate. Registered NOHCs may also be liable to pay a financial institutions levy.

Where appropriate, prudential standards and reporting obligations will also apply to the subsidiaries of NOHCs and life insurers. Again, this is in line with the treatment of the subsidiaries of general insurers, ADIs and their holding companies. APRA is expected to consult with industry before determining or amending prudential standards. The auditors of NOHCs and the subsidiaries of NOHCs and life insurers will also have obligations to report significant prudential breaches to APRA.

International experience has demonstrated the interconnection between companies in a corporate conglomerate, including between prudentially regulated entities and unregulated entities. This measure will strengthen the prudential regulation of life insurance conglomerates in line with the regulation of other financial conglomerates.

Injunctions in prudential legislation

Schedule 2 of the Bill introduces measures to harmonise court injunction powers across prudential legislation (namely, the Banking Act 1959, Insurance Act 1973, Life Insurance Act 1995 and Superannuation Industry (Supervision) Act 1993 (SIS Act)). The harmonised provisions will enable APRA to seek a comprehensive and consistent set of injunctions in appropriate circumstances.

The amendments will give APRA flexibility to respond to a range of circumstances relating to the financial health of an entity in a timely and appropriate way.

APRA will be able to seek an injunction where a person engages, or proposes to engage, in contravention of the prudential Acts, fails to comply with a requirement of these Acts, fails to comply with a direction issued by APRA or breaches a condition on the authorisation or registration of a prudentially regulated entity. The Federal Court of Australia may issue restraining, performance, consent and interim injunctions.

Under the SIS Act, affected persons such as superannuation beneficiaries retain their existing ability to seek an injunction.

The amendments to the SIS Act will apply to the conduct of superannuation trustees that offer first home saver accounts. This is because the First Home Saver Accounts Act 2008 applies relevant provisions of the SIS Act to superannuation trustees that provide first home saver accounts.

Conclusion

The government is bringing these measures forward because they remove a gap in the prudential regulation framework for the life insurance industry and enhance APRA’s ability to use injunctions to respond to emerging prudential concerns in a timely and appropriate way.

Full details of the amendments are contained in the explanatory memorandum. I commend the Bill to the House.

FUEL QUALITY STANDARDS AMENDMENT BILL 2009

The Fuel Quality Standards Act 2000 is designed to regulate the quality of fuel supplied in Australia to reduce harmful emissions from vehicles, facilitate the adoption of better engine and emission control technology, and allow the more effective operation of engines. The Act also ensures that information on fuels is provided for consumers, where necessary.

The Fuel Quality Standards Amendment Bill 2009 will amend the Act to implement recommendations from the first statutory review of the Act and to address a number of issues that have arisen from the practical application of the Act and its subordinate legislation. The Act provides that an independent review of its operation be undertaken every five years. The first review reported in April 2005.

The bill will improve the efficiency and effectiveness of the Act. In particular, these amendments are needed to improve the development and enforcement of fuel standards which in turn benefit the public and the environment through cleaner fuels and reduced vehicle emissions.

The Act currently allows for approval for the variation of fuel standards and imposition of conditions to the approval. However, such conditions must relate to the supply of fuel. The bill will broaden the scope for imposing conditions so that, for example, the adverse impacts of the supply of sub-standard fuel could be offset. This means that a company that supplied petrol with a higher benzene content under an approval could be required to fund an air quality monitoring program that monitored benzene levels in the atmosphere in the region where the fuel was to be supplied.

The bill also includes a streamlined process for certain variations of approvals. If the variation is of a minor nature, or only adds regulated persons to an approval, the Minister need only notify, rather than consult, the Fuel Standards Consultative Committee. The bill also provides for the Secretary to be able to initiate a variation to an approval, for example, to correct an error in an approval. In each case a notice of the variation would still need to be published in the Gazette.

The bill will also establish a process for granting an emergency approval to avoid a potential fuel supply shortfall in exceptional circumstances. An emergency approval will be able to be granted for a maximum period of 14 days with the Fuel Standards Consultative Committee only notified of the decision, rather than needing to be consulted before a decision can be made. The bill will also allow for the period of an emergency approval to be extended but only after consultation with the committee.

The bill will allow delegation of powers to grant approvals to the secretary or an SES officer, except in relation to emergency approvals which will only be delegated to the secretary. This will allow the more routine approvals, such as those relating to racing fuels, to be handled by the department. It will also provide some flexibility for the department in those situations where an emergency approval is required to address a potential fuel supply.

The bill will also allow consideration of the circumstances in which fuel is supplied as one of the matters that constitute a fuel standard. This provision will allow the inclusion or exclusion of certain end uses, where appropriate, from the application of fuel standards and