Thursday, 18 March 2010
Reports: Government Responses
I present four government responses to committee reports as listed on today’s Order of Business. In accordance with the usual practice, I seek leave to incorporate the documents in Hansard.
The documents read as follows—
Economics References Committee—Government’s economic stimulus initiatives.
That the Government commission an urgent independent report to be prepared on the fiscal stimulus packages listed in Appendix 3 to include
(a) A cost benefit analysis of all the remaining projects, including the timing implementation for spending on those projects
(b) Recommendations on the feasibility of reducing, postponing or recalibrating the remaining discretionary funding, on a project by project basis.
The Government does not consider it necessary to commission such a report.
The Council of Australian Governments (COAG) agreed in February 2009 that a Coordinator-General would oversee the Nation Building and Jobs package and would be supported by Commonwealth-Coordinators from key agencies, and Coordinators-General in each State and Territory. These governance structures, including regular and detailed reporting at the program and project level, are designed to ensure that projects are effectively rolled out, value for money is achieved, there is sharing of information and best practice and that any problems are quickly identified and addressed. Key programs covered by the COAG agreement with states and territories, including Building the Education Revolution and Social Housing, are reporting monthly.
Commonwealth agencies are relying on long-established processes and, where necessary, enhanced systems to ensure public funds are managed appropriately. A range of audit and compliance strategies have been put in place across programs. The Commonwealth is also working closely with the states and territories to ensure their tendering and procurement processes demonstrate value for money.
The projects announced in the 2009-10 Budget, which form part of the Government’s longer term third phase of the stimulus, reflect advice provided by Infrastructure Australia. Infrastructure Australia made project recommendations to the Government following economic analysis against its publicly available assessment methodology of seven key themes. These recommendations were guided by Infrastructure Australia’s national priority list of key infrastructure needs for Australia.
The fiscal stimulus measures have made an important contribution to this performance.
In year-average terms, the Australian economy grew by 1.4 per cent in 2009. This compares to the IMF estimate of an average contraction of 3.2 per cent for the advanced economies collectively. Without the fiscal stimulus, Treasury estimates that the Australian economy would have contracted for three of the four quarters in 2009 and by 0.7 per cent overall.
The Government notes that Australia was one of only three advanced economies to avoid recession during the global financial crisis. While full year growth data for 2009 is not yet available for all economies, it appears that Australia will prove to be the top ranking advanced economy for 2009.
Compared to the major advanced economies, Australia has the second lowest unemployment rate (behind Japan). Australia’s current unemployment rate of 5.3 per cent compares to double-digit rates reached in the US and European economies during the global recession. Since the collapse of Lehman Brothers in September 2008, while all of the major advanced economies have recorded job losses, Australia has managed to create over 170,000 jobs.
The fiscal stimulus measures have been designed to ensure they do not affect the sustainability of the budget and are withdrawn as the economy recovers. As indicated in the 2009-10 Mid-Year Economic and Fiscal Outlook, the stimulus peaked in the June quarter of 2009 and the gradual phasing down is expected to subtract from growth through 2010. This means that Australia is withdrawing stimulus one year ahead of the timetable recommended by the IMF for advanced economies.
Some aspects of the stimulus have been recalibrated to allow flexibility in managing the demand for individual programs and to ensure an appropriate level of support is provided to the economy. The Government has already announced re-phasing of some key components of the stimulus to ensure that the stimulus provides value for money.
The Government already has a robust reporting and accountability regime that includes: the requirements for all new spending proposals to be scrutinised by the Expenditure Review Committee of Cabinet; for costings to be agreed with the Department of Finance and Deregulation; and all new spending measures to be disclosed in the Budget Papers.
Senator Xenophon’s first recommendation
That the government advise the Committee its plans and timeline for a scale back of economic stimulus measures, with and/or without a coordinated approach by G20 nations. Further, that the Government advise what consultation will occur to prepare a clear and effective exit strategy.
The stimulus measures have been designed to be withdrawn as the economy recovers. As indicated in the 2009-10 Mid-Year Economic and Fiscal Outlook, the stimulus peaked in the June quarter of 2009. The staged withdrawal of stimulus measures, that is already underway, will detract from economic growth in 2010.
The Government has also outlined its strategy for returning the budget to surplus as the economy recovers.
The Government’s medium-term fiscal strategy is to achieve budget surpluses on average, over the economic cycle; to keep taxation as a share of GDP, on average, below the level for 2007-08; and to improve the Government’s net financial worth over the medium term.
The Government will pursue a disciplined fiscal strategy to return the budget balance to surplus by:
- offsetting all new spending decisions taken since the 2009-10 Budget across the forward estimates by finding savings in other parts of the Budget;
- restraining real spending growth to two per cent a year when the economy is projected to return to above trend growth (2011-12); and
- banking increased tax revenue as the economy improves.
The implementation of the Government’s fiscal strategy is expected to result in the budget deficit falling from 4.5 per cent of GDP in 2009-10 to 1.1 per cent of GDP in 2012-13, and returning to surplus by 2015-16.
The Government’s approach to phasing out the stimulus and other support measures is consistent with the position agreed by the G20.
The G20 has played a central role in facilitating a decisive and coordinated response to the financial crisis and subsequent recession involving the introduction of unprecedented fiscal, monetary and financial support measures. As a result of these measures, economic and financial conditions have improved.
At their most recent meeting at St Andrews on 6-7 November 2009, G20 Finance Ministers and Central Bank Governors agreed on the need to avoid premature withdrawal of support measures. At the same time, they also agreed to cooperate on the withdrawal of support measures when recovery is assured, including through information sharing and working together to address any adverse spill-over effects of individual country strategies. At the same time, Ministers and Governors acknowledged that national plans will need to be implemented flexibly, taking full account of variations across countries and regions in the pace of recovery and financial market conditions.
Senator Xenophon’s second recommendation
Further to the Committee’s majority report, that an urgent independent report is conducted, it is recommended that this report include [a] review of the method in which household stimulus incentives are distributed, with a view to assess future options to distribute funds, if needed, via a debit card or voucher system.
The Government does not consider it necessary to commission such a report.
Australia’s stimulus was designed on the principles of best practice fiscal policy of being timely, temporary, and targeted.
On timeliness, the Government responded quickly and decisively to the deterioration in the global outlook, implementing stimulus measures from October 2008. The measures were temporary as they did not lock the Government into higher ongoing expenditure, thereby not affecting the sustainability of the budget and these measures are being withdrawn as the economy recovers. Finally, the stimulus measures were targeted to ensure their effectiveness in boosting demand, in turn supporting jobs and economic activity. The large capital component of the stimulus also addressed long-term needs for economic and social infrastructure.
The first phase of the stimulus was primarily focused on providing immediate support to the economy and a large proportion consisted of direct payments to households. These payments were provided to low and middle-income individuals and households with dependent children. These are most likely to be liquidity constrained households and/or at the stage of their life cycle where they are most likely to spend a sizeable proportion of any cash payment.
There is now considerable evidence that the cash stimulus payments helped support the economy during its weakest phase. For example, in January 2010 retail turnover was 7.5 per cent higher than the pre-stimulus levels of November 2008, having remained largely flat throughout 2008. In addition, consumer confidence remains 43.0 per cent higher than the pre-stimulus levels of October 2008.
STOLEN GENERATION COMPENSATION BILL 2008
The Government is committed to addressing the damaging and negative effects that resulted from the past policies of removing Indigenous children from their families, and it is mindful of the hardships endured in the past by members of the Stolen Generations1, and of how much the consequences of these hardships must still be felt today.
The Government offered the apology on 13 February 2008 in a spirit of respect, acknowledgement and recognition of the past mistreatment of all Indigenous peoples, and particularly the profound grief, suffering and loss inflicted on the Stolen Generations. This is in keeping with relevant elements of the Bringing Them Home report recommendation around reparations.
The Government has indicated on a number of occasions that it will not be providing compensation to members of the Stolen Generations. For this reason the Government has no specific comments to make on the aspects of the Bill relating to compensation for the Stolen Generations.
The Government continues its commitment to the ongoing healing of the Stolen Generations, and to working with them to make sure their voices are heard in the design of policies and programs to improve outcomes for Indigenous Australians.
On the 22 November 2009 the Australian Government announced its support for the establishment of a new national representative body for Aboriginal and Torres Strait Islander peoples to be known as the National Congress of Australia’s First Peoples, and committed $29.2 million to the setting up and initial operation of the body up until December 2013. The decision follows consideration by the Government of the report Our Future in Our Hands from the Aboriginal and Torres Strait Islander Social Justice Commissioner, Tom Calma, and an Indigenous Steering Committee and presented to the Government in August 2009. The model set out in the report resulted from twelve months of extensive community consultation across Australia including a national workshop of 100 Indigenous leaders and was based on the feedback from all of those consultations. The establishment of this body underpins the Government’s commitment to resetting the relationship with Indigenous peoples. It provides a voice for Indigenous peoples, the opportunity for partnership and the genuine engagement necessary if there is to be progress in closing the gap in life outcomes and opportunity.
The Government recognises that the Stolen Generations are in need of critical services to help trace and reconnect their families. In 2007-08, the Government committed an additional $15.7 million to important initiatives such as Link Up family reunion services and Bringing Them Home counsellors for Stolen Generation survivors.
On 13 February 2009, the first anniversary of the motion of Apology to Australia’s Indigenous Peoples, the Government announced a further expansion to the Link Up program with additional Link Up caseworkers and more administrative support to help more members of the Stolen Generations trace, locate and reunite with their families. This was provided for in the 2009-10 Budget with an additional $13.8 million over four years. This additional investment will allow for up to 140 ‘Return to Country’ and institutional reunions.
The Government also recognises the critical need for healing services to overcome the trauma of removal, the impact of colonisation and the associated intergenerational effects. The 2009-10 Budget provided $26.6 million over four years for the establishment of a Healing Foundation to address trauma and healing in the wider Indigenous community, with a focus on the Stolen Generations. This initiative addresses a major recommendation of the Bringing Them Home report concerning healing and rehabilitation, and will help individuals, families and communities to move forward.
The Foundation has been established to support practical and innovative healing services, as well as training and research. It will work towards stopping the cycle of trauma and grief in Indigenous communities, particularly affecting the Stolen Generations and their families. The Foundation’s inaugural Board has been appointed and held its first meeting on 14 December 2009. The Foundation is expected to become fully operational in early 2010.
The Government’s national priorities for Australia, including the National Framework for Protecting Australia’s Children endorsed on 30 April 2009 by the Council of Australian Governments, and giving children the best start in life through early childhood and parenting programs, reflect a number of the measures recommended in the Bringing Them Home report.
The Government is working on an ongoing basis with Stolen Generations organisations and members at the grassroots level.
Since coming to office the Government has set a national priority to close the gap between Indigenous and non-Indigenous Australians. Australian Governments have agreed to a number of ambitious targets for Closing the Gap. By improving outcomes for all Indigenous people, members of the Stolen Generations will also benefit. Healing in particular underpins the Closing the Gap work.
Through a range of initiatives the Government has responded, and continues to respond to, the Bringing Them Home report. The Government recognises that members of the Stolen Generations have particular needs. For this reason, the Government has allocated additional funds in the 2009-10 Budget to address the specific healing and family reunion needs of Stolen Generations members, supported by dedicated consultative mechanisms which ensure respectful participation in the implementation of those measures.
1 The Australian Government uses the plural when referring to the Stolen Generations to emphasise that the practice of removing children from their families, which began in the early nineteenth century and continued until the 1970s, affects more than one generation.
RESPONSE TO RECOMMENDATIONS
This section provides the Government response to each of the Committee recommendations.
The committee recommends that the Bill not proceed in its current form. (3.129)
Supported. The Government has stated that it will not be providing compensation to members of the Stolen Generations.
The committee recommends that the Federal Government’s Stolen Generations Working Group (comprised of Stolen Generations’ representatives from the National Sorry Day Committee and the Stolen Generations Alliance) be charged with the responsibility of monitoring the implementation of the recommendations of the Bringing Them Home report, and providing advice to government on the implementation of outstanding recommendations of that report by the end of 2008. (3.130)
Noted. The Government is mindful of the importance of engaging with the Stolen Generations in ways that will meet their needs. In mid 2008, members of the Stolen Generations’ Working Group came to a mutual agreement that future engagement would be through separate processes outside the group.
In accordance with this request, the Department of Families, Housing, Community Services and Indigenous Affairs (the Department) now meets regularly with the Stolen Generations’ Alliance (SGA) Executive. The Department has corresponded and met with the National Sorry Day Committee (NSDC) to propose regular meetings, similar to those undertaken by SGA. The NSDC is still considering this proposal. The Stolen Generations Working Group no longer meets.
The Department is also engaging with members of the Stolen Generations at the grassroots level through meetings with local groups and individuals not represented by the two national organisations. The needs of the Stolen Generations in general and in relation to the Bringing the Home report recommendations are raised at these meetings.
The committee recommends that the Federal Government’s ‘closing the gap’ initiative be extended to establish a National Indigenous Healing Fund to provide health, housing, ageing, funding for funerals, and other family support services for members of the Stolen Generations as a matter of priority. The committee recommends that the National Indigenous Healing Fund be incorporated within the ‘closing the gap’ initiative as an additional and discrete element of focus and funding. (3.131)
On 26 May 2008, the Prime Minister announced that a forum of experts would be convened to map ways forward for healing among Australia’s Indigenous peoples, in particular the Stolen Generations. The Indigenous Healing Forum held on 16 and 17 September 2008 looked at the real impacts of trauma on individuals, families and communities, including children, and best practice models for recovery.
In order to get a range of views on Indigenous healing and its potential applications, a very broad representation from the government, community and other sectors as well as members of the Stolen Generations were invited to attend and contribute to the discussion.
The National Indigenous Healing Fund concept proposed by the Committee differs to the views expressed at the Forum and, indeed, in conversations with experts and members of the Stolen Generations themselves.
The Government recognises the critical need for healing services to overcome the trauma of removal, the impact of colonisation and the associated intergenerational effects. The 2009-10 Budget provided $26.6 million over four years for the establishment of a Healing Foundation to address trauma and healing in the wider Indigenous community, with a focus on the Stolen Generations. This initiative addresses a major recommendation of the Bringing Them Home report concerning healing and rehabilitation, and will help individuals, families and communities to move forward.
Ms May O’Brien from Western Australian and Mr Gregory Phillips from Victoria were appointed to lead the Aboriginal and Torres Strait Islander Healing Foundation Development Team of nine Indigenous members. The members of the Development Team included persons with strong expertise in healing programs, knowledge of Stolen Generations issues and knowledge around establishing a Foundation. Several members of the Development Team identify as Stolen Generations.
The team undertook consultations with key organisations and individuals as well as conducting community workshops across Australia to listen to community ideas for the Aboriginal and Torres Strait Islander Healing Foundation.
Following the consultations, a report was presented to the Government on the consultations, including recommendations for the establishment and remit of the Aboriginal and Torres Strait Islander Healing Foundation. The report was launched on 24 September 2009.
An Interim Board was appointed from the Development Team to organise incorporation and selection of Board members. The Aboriginal and Torres Strait Islander Healing Foundation was incorporated on 30 October 2009. The Inaugural Board was appointed in late 2009 and held its first meeting on 14 December 2009. Current membership is:
Chair: Ms Florence Onus
Deputy Chair: Debra Hocking
Secretary: Judy Atkinson
Treasurer: Noeleen Lopes
Members: Graham Gee, Toni Janke-Demmery
Three further Board members are expected to be appointed early in 2010. With the finalisation of appointments to the Board, the Foundation will become fully operational in the first half of 2010.
The committee recommends that the terms and conditions of the National Indigenous Healing Fund be determined through the Council of Australian Governments (COAG), and that its processes and practical application be decided after consultation with the Stolen Generations Working Group (comprising of stolen generation representatives from the National Sorry Day Committee and the Stolen Generations Alliance). (3.132)
Noted. The Government will consult with members of the Stolen Generations in formulating any policy and program delivery frameworks in this area.
With respect to the Aboriginal and Torres Strait Islander Healing Foundation, Stolen Generations were represented on the team developing proposals and consultations have included key Stolen Generations organisations as well as grassroots members.
Two key office bearers on the Healing Foundation’s Inaugural Board are Stolen Generations members, Chairperson, Ms Florence Onus and Deputy Chair, Ms Debra Hocking.
The Foundation has been established to provide practical and innovative healing services, as well as training and research and aims to stop the cycle of trauma and grief in Indigenous communities, particularly affecting the Stolen Generations and their families.
Joint Standing Committee on Foreign Affairs, Defence and Trade
Inquiry into Australia’s Relationship with ASEAN
The Committee recommends that the Department of Foreign Affairs and Trade develop a single method of costing non-tariff barriers, to assist Australian FTA negotiators to identify, evaluate and target barriers to trade.
In negotiating Free Trade Agreements, the Department of Foreign Affairs and Trade seeks to affirm World Trade Organization (WTO) obligations relating to non-tariff measures and, where appropriate, to eliminate the application of non-tariff measures that operate to restrict market access or impose undue costs on exporters.
Non-tariff barriers to trade take a variety of forms and have varying impacts on trade. The range of non-tariff measures applied by Australia’s FTA negotiating partners, and the impact of these measures on Australia’s trade with them, varies considerably. The nature of such measures and their impact on Australian market access interests are always identified as part of Australia’s stance in negotiating FTAs.
However, determining a single “cost” of these measures would not be practicable, or necessarily meaningful, given the variety of different types of non-tariff measures. The variety of measures means that a range of analytical tools are needed to analyse their effects. While some measures (e.g. quantitative import barriers) may be susceptible to conversion to “tariff equivalent” measures, which can then be subject to reduction like normal tariffs, this approach is not appropriate for other measures (e.g. quarantine measures or technical regulations) which are best addressed through disciplines governing their application. The following examples illustrate the variety of measures that could potentially be major non-tariff barriers:
- quantitative limits – or tariff rate quotas - on the volume of imports of agricultural products. Such measures are required to be applied in accordance with WTO commitments.
- import licensing - which may be administered on either an automatic basis (e.g. for statistical purposes) or non-automatic basis (e.g. for the administration of tariff rate quotas).
- fees and charges associated with importation (or exportation) which are required under the WTO to be limited to the approximate cost of services rendered and not to represent an indirect protection of domestic products or taxation of imports (or exports) for fiscal purposes.
- restrictions on imports for specific purposes, e.g. bans or quantitative limits on imports of alcohol products for religious reasons, or on imports of particular types of weapons for public safety reasons.
- other non-tariff measures that may have an impact on Australian market access interests can include standards and sanitary and phytosanitary measures – which are also subject to WTO rights and obligations.
A range of research and academic work has been done on measuring non-tariff barriers and assessing their effects, and Australian negotiators take this work into account in trade negotiations, including FTAs. This work has proved valuable mainly as a research and analytical tool to inform negotiations.
The Committee recommends that the Department of Foreign Affairs and Trade reports annually to the Parliament on the impacts of individual free trade agreements.
The Department of Foreign Affairs and Trade (DFAT) reports regularly to the Minister for Trade on the impacts of individual free trade agreements.
The Department also regularly provides publicly-available assessments of the trade and investment relationship with partner countries including those with which Australia has negotiated FTAs. Examples of these analyses include articles on Australia’s trade relations with FTA partners Thailand and the United States, available on the DFAT website. In addition, information, statistics and resources on Australia’s trade partners, including FTA partners, is also available from the DFAT website and the Australian Bureau of Statistics
While liberalised market access provided for by FTAs can be very significant in influencing exporters’ commercial decisions, a number of other factors also impact on international trade flows, such as fluctuations in exchange rates, the health of the international economy and variations in economic growth in different countries over time. It would not be possible to attribute differences in annual trade outcomes solely to the effects of FTAs. Assessments of FTA impacts need to be both qualitative and quantitative and should be on a medium to long-term basis as many of the impacts of a trade agreement take a number of years to be realised (e.g. through new investment decisions).
For the above reasons, the Government does not consider that annual reports by DFAT would be of value.
It should also be noted that the Minister for Trade reports to the Parliament at the commencement of an FTA negotiation. This includes an assessment of the expected impacts of the FTA. The Minister for Trade also provides the Parliament with regular updates on bilateral, regional and multilateral trade negotiations with significant developments through Statements to the Parliament.
The Committee recommends that when Parliamentary delegations visit South East Asian countries with which Australia has a free trade agreement, the Department of Foreign Affairs and Trade facilitate meetings with Asian policy makers to monitor progress with these treaties.
The Government considers that outgoing Parliamentary delegation visits are important to projecting Australian interests and to understanding the policy directions being adopted by foreign trade partners. The Department of Foreign Affairs and Trade (DFAT), through its network of overseas posts, provides advice and other assistance to Parliamentary delegations, including the facilitation of meetings. Arranging programmes and itineraries for Parliamentary delegations is a key responsibility of DFAT, and it will continue to make every effort to arrange meetings with Asian policy makers in accordance with the requests made to it by the Parliament of Australia prior to each proposed visit.
The Committee recommends that the Department of Foreign Affairs and Trade should ensure that future free trade agreements cont