Thursday, 23 June 2011
Questions without Notice
Square Kilometre Array
Senator Bishop, I thank you very much for the question. As a senator from Western Australia, you understands just how important this project is. The Square Kilometre Array is one of the most ambitious projects the international science community has ever attempted. It will be a telescope with the power to look back to the dawn of time. The Australia-New Zealand SKA—
Mr President, the SKA is a device which will look into black holes. It will search out black holes and it may well find a Liberal Party policy there. It is a pity you could not take more notice of these important issues. The SKA bid by Australia and New Zealand is a very strong one.
We should not underestimate the fact that the bid from southern African states is very stiff competition. I am heading off to Canada to present the case to the international radio astronomy community and I trust that the international community will be left in no doubt about our ability to deliver this project.
Honourable senators interjecting—
I hear people over there asking, 'Why are you doing it?'
I understood that this was a project that actually attracted bipartisan support in this parliament. I understood that there were some on the other side that actually understood—and Senator Back is one of those. I understood that this is a project that people knew would be able to help us transform the way we live. This is not just merely a question of being able to produce world-class research. It is a massive infrastructure project that will create the technologies for the future and will help us reshape the way in which we live, whether it be through the provision of off-grid power supplies or whether it be in the provision of supercomputing capacity, which will have massive implications. (Time expired)
This is not an ambition that the government can carry alone. This is a project that will require the great strengths of Australian industry. It will ensure that we are able to develop the capacities of Australian industry to compete in what is a very stiff international business environment. Just last year alone, CSIRO spent over $11 million on the SKA Pathfinder in Western Australia. That included work for the hydro-solar storage and generation plants in Murchison. The contracts we have seen that have been let are very significant.
But they are all dwarfed by the phenomenal demands of the SKA itself. The construction phase demands of this project will involve €1.5 billion from the global community. They will take some 50 years to develop because we will have to maintain the project for that length of time. (Time expired)
Mr President, the SKA is another reminder of the transformational power of ICT. It is the enabling technology of the modern world and lies at the core of our case to the global backers of this project. That is why the NBN was very much at the heart of the project that we are developing. This is a project which will produce opportunities for Australians and for New Zealanders and for the global community as a direct result of the investments in the NBN. We have already seen the Perth-Geraldton fibre-optic link, which is the first building block of the National Broadband Network in Western Australia. This link is not just critical for the SKA; it offers faster and cheaper broadband for 35,000 people along the route. It also lays a very proud claim to being one of the most sophisticated research tools in the world. This month I launch the first of three new supercomputers. (Time expired)
My question is to the Leader for the Government in the Senate, representing the minister for schools and education, Senator Evans. I refer to the slated closure of 20 Tasmanian state schools, which have together received more than $13 million under the Prime Minister's own Building the Education Revolution program. What is the government's intention with respect to recouping this money pursuant to the BER debt recovery guidelines?
I thank Senator Barnett for the question. He is right to bring to my attention the question of the impact of the school closures on BER funding in Tasmania, but I point out to him firstly that in fact the federal government put $327 million into Tasmanian schools, the largest capital injection probably ever, and that investment has been money well spent—money that has benefited every child in Tasmania by providing new facilities for all children in primary schools in Tasmania. So it has been a tremendous investment in Tasmanian schools, it has been tremendously successful and communities are reaping the benefits of that.
It is true that the Tasmanian government have announced that they will consult with the community about closing up to 20 schools, and the Tasmanian Minister for Education and Skills, Nick McKim, did do me the courtesy of ringing me before the budget was handed down to advise me of that. We did discuss that decision's impact in terms of the investment we had made in those schools as part of BER funding. I understand the process of consultation will go on for some weeks before final decisions are made about which schools will close, and my department will continue to monitor and work closely with the Tasmanian government with regard to the affected schools, wherever they may be.
I think the media might also have highlighted today that the Tasmanian government has obtained legal advice that it has no legal compulsion to return the BER money. Can I say that what we are interested in is making sure that the funds go to support education in Tasmania and benefit schoolchildren in Australia. That will remain the government's top priority. The Commonwealth does reserve the right to recoup its expenditure on improving these educational facilities, but those decisions will be made on a case-by-case basis. (Time expired)
Mr President, I ask a supplementary question. Thank you, Minister, particularly for that last comment; I appreciate that. I refer to statements by the Tasmanian Minister for Education and Skills, Mr McKim, in the Tasmanian parliament this morning, where he said, 'Not one dollar will be repaid by the state government to the federal government.' He went on and said that he has spoken to Senator Evans about this issue personally and that 'at no time has he expressed to me that he, his department or his government has a view that we are obliged to repay the funds'. Does the Commonwealth accept that not one dollar of its funds will be returned? (Time expired)
(Western Australia—) (): Mr McKim's statement is consistent with mine that we spoke about these issues. He also advised me that his legal advice was that they had no obligation to repay funds to the Australian government. I understand that. Fundamentally, we invested in their schools and the state education and other funding authorities have responsibility for those schools. That was an investment in the future of Tasmanian students. But I also made it clear to him that we would be taking further advice about our responsibilities and our options and made it clear to him that our primary objective, as I made clear to you, is to make sure that the investment is for the benefit of Tasmanian students and the broader Tasmanian community. We will continue to monitor the developments with an interest in making sure that the facilities that have been established are there for the benefit of Tasmanians. That is our primary interest. We will continue to pursue that interest. (Time expired)
Mr President, I ask a further supplementary question. Clearly, Minister, your advice is contrary to the advice of Mr McKim, including his legal advice. How is it that the government can waste $13 million of BER project funding at state schools slated for closure when not one Tasmanian state school has been connected to the NBN? Isn't this just another twist in the BER education fiasco, which is simply one of many fiascos that this government is pursuing at this time?
I do not know whether Senator Barnett in his last days is prepared to visit the schools of Tasmania and tell them that the Liberal Party does not support the investment in their schools—that you do not support the $327 million that we have put into Tasmanian schools in order to give those kids a better education. You are hypocrites on this issue, because I know you go to school openings. They turn up at the school openings, and they say, 'Oh, this is great,' and they come in here—
Mr President, I do get cross because I am outraged that senators from the opposition, the Liberal and National parties, would regard the investment in our schools as a waste of money. This has been one of the best investments the Commonwealth has ever made. We have invested in school buildings that will provide educational support for children for the next 30 or 40 years, and every school I go to is extremely grateful and tells me about the benefits it will bring. (Time expired)
Honourable senators interjecting—
Thank you, Mr President. My question is to Senator Evans, representing the Minister for Defence. The Department of Defence has announced eight reviews into allegations of abuse and misconduct in the ADF. Of these reviews, one relates to the personal conduct of ADF personnel and another to the process by which incidents and complaints were managed by the ADF. These are the only two reviews run by ADF officials out of the eight. Can the minister advise why these two reviews, unlike the other six, are not being undertaken by independent parties? Does the government acknowledge that some victims of alleged abuse may be reluctant to come forward because of this lack of independence?
I thank Senator Xenophon for the question, and I can give him some information which has been supplied to me by the Minister for Defence's office. In April this year the Minister for Defence announced a series of reviews and initiatives into various aspects of the culture of the ADF. These comprehensive reviews were initiated following the raising of allegations of inappropriate conduct at ADFA on 5 April. The reviews are drawing on a range of expertise both within and external to Defence. In relation to the two reviews mentioned by the senator, the review of the management of incidents and complaints in Defence is being undertaken by the independent Inspector-General of the Australian Defence Force. The review will have specific reference to the treatment of victims, the transparency of processes and the jurisdictional interface between military and civil law, which may lead to untimely decision-making processes. The position of Inspector-General of the Australian Defence Force is appointed by the Minister for Defence under the Defence Act,. That ensures the Inspector-General is independent and free of action with respect to the chain of command in that his or her tenure does not depend on any member of the ADF. So this is an independent position.
The review of conduct is being conducted by Major-General Craig Orme, an experienced senior HR professional within Defence. The review is concerned with systemic issues, not individual cases, and the review team is consulting with external experts with experience and a professional background relating to military culture and organisational performance.
The two reviews of concern that Senator Xenophon has raised are reviews which we think are capable of being delivered independently by the persons I have referred to. We think this is the best course in terms of conducting those reviews. As the senator knows, the other reviews are being conducted by persons from outside the ADF.
Mr President, I ask a supplementary question. In relation to the review being undertaken by DLA Piper on behalf of the ADF to review allegations of sexual and other abuses, what consultation was undertaken as part of this process, including the terms of reference? Were victims or victims' advocates consulted?
I know that Senator Xenophon is very concerned with these issues as are the many senators who have been involved in inquiries relating to these issues inside the ADF. Since the ADFA Skype incident was drawn to public attention a large number of allegations of sexual or other abuse have been made. They are all of serious concern. The minister has announced that these allegations will be dealt with methodically and at arm's length from Defence. The DLA Piper review has commenced. Its role is to determine the most appropriate way for these complaints to be addressed and whether further independent action is required. The process is underway and will report before the end of August. DLA Piper has been consulting with Dr Susan Harris Rimmer, an expert in dealing with issues of sexual abuse, and they will carry out their charter as efficiently and quickly as possible.
Some victims approached me and said they had difficulty in getting access to the terms of reference early on. Can the minister advise when the terms of reference were written, when they were made public and why they were not made available earlier in the process?
I think the formal terms of reference were formally released on Monday, 21 June but the scope of the review was first announced by the minister on 11 April. Further development and refinements were made in consultation with DLA Piper. The essential scope of the review—the allegations of sexual and other abuse—was made public to Defence personnel in early May and more widely through a departmental media release on 21 May and subsequent national advertising of the review. I think senators would have seen those ads in the paper in recent weeks. So, while the essential scope of the review has remained unchanged, issues relevant to the review have been raised and addressed iteratively. So that is the process. The final terms of reference were released on 21 June and are publicly available.
My question is to the Minister for Agriculture, Fisheries and Forestry, Senator Ludwig. Can the minister confirm the report in today's West Australian newspaper that he was scolded by the Indonesian government because he had not consulted with them before the suspension of live cattle exports to Indonesia? Can the minister also confirm that he did not consult with the Western Australian government before making his decision?
There were many opportunities to consult through this process. Clearly that was not taken up by the MLA with their representative members. Right throughout this process the engagement through my department and through the embassy with the Indonesian authorities in relation to the suspension has been ongoing. I did have the opportunity of speaking with the Indonesian Minister for Agriculture, Mr Suswono. The meeting went well. It provided both of us with an opportunity to share views about how we can return this industry as quickly as possible. When you look at the comments the minister himself made, as reported, they provide clear encouragement that we can look to the way this trade can return on a sustainable footing whilst maintaining animal welfare outcomes.
It is important also to consider the other state and territory governments, including Queensland, the Northern Territory and WA. They too are part of the industry working group to resolve this issue as quickly as possible. I have called them together and I have continued to inform the ministers for agriculture in WA, the Northern Territory and Queensland about the suspension and the ongoing way we can return the issue.
Mr President, on a point of order: the question was about whether the minister consulted with the Western Australian minister before making the decision, not after. He should be brought to the question.
With respect to Minister Redman, we do have a highly valued partnership and I have had continual dialogue with him about a range of matters within the portfolio, and subsequent to this particular issue he has been represented on the industry working group through his— (Time expired)
Mr President, I ask a supplementary question. At a time when the government has suspended the $300 million beef trade to Indonesia, why has the government added to the angst within the beef industry by withdrawing the 40 per cent AQIS rebate, as of 1 July 2011, even though the government has failed to deliver the promised cost savings to the industry but has added a new level of bureaucracy instead?
The hide from the opposition in relation to this issue! The 40 per cent subsidy that they now describe was in fact a decision by the opposition, when they were in government, to move to full cost recovery within this industry. You then squibbed on the deal to return the industry to full cost recovery—a decision you made. It might have been stared down; I am not sure exactly what occurred. You then put in place a rebate in respect of this industry.
In government, we moved $124 million to reform the industry to ensure they could receive the efficiencies from the export certification process. That reform, the AEMIS system, has been providing and is due— (Time expired)
Mr President, I ask a further supplementary question. Has the minister asked for the assistance of the foreign minister, Mr Rudd, or the trade minister, Mr Emerson, to help him clean up the mess that he has created and that is getting worse, day by day? If not, why not?
It is timely to be able to put clearly on the record that the Minister for Trade, the Minister for Foreign Affairs and I have been diligently working on this issue to ensure that (a) the live animal export industry is returned as quickly as possible and (b) animal welfare outcomes are upheld.
This is unlike those on the opposition side. On Sky NewsMr Dutton said, 'We would have stopped them going to those abattoirs that have been highlighted,' and later he said: 'We wouldn't have had a full suspension. We would have stopped the cattle from going to those abattoirs where we saw that horrific action.' What he does not say is that without a suspension and an opportunity to reform supply chains, this approach would not have provided animal welfare outcomes at all. Without a suspension or supply chain reform in place, it would have ensured that animals would continue to be mistreated. That is what the opposition have signed up to. (Time expired)
My question is to the Minister for Small Business, Senator Sherry. Can the minister outline to the Senate how the internet is reshaping the way business is being carried out around the world? What is the contribution of e-commerce to gross domestic product and how fast is it growing? How would the Gillard government's National Broadband Network help businesses expand, increase productivity and boost jobs?
Thanks to my colleague Senator Bilyk. My colleague Senator Conroy today made some very important announcements about the future of the NBN. I want to comment on the importance of the NBN to economic growth, particularly for small and medium-sized business. This is a major economic reform. It will help business across Australia, particularly in the regions, to take advantage of the enormous online opportunities.
These opportunities, the National Broadband Network online connection, have been well spelled out in a major new study, released by McKinsey Global, on the impact of the internet on jobs, growth and prosperity in the world's economies. It examined some 13 countries responsible for 70 per cent of the world's economic growth. It found that the internet is a significant job creator. In France, for example, it has resulted in a net addition of 700,000 jobs—that is, 2.4 jobs created for every job lost. In the survey of 480,000 small and medium-sized businesses across 13 countries, 2.6 jobs were created for every one lost.
It also found the internet contributed to 21 per cent of the economic growth in the last five years in advanced economies. All industries benefited from the web, and in fact small to medium-sized enterprises benefited to a disproportionately greater degree. Some 75 per cent of the economic impact was a positive result for small to medium-sized businesses. SMEs with a strong web presence grew more than twice as quickly as those with no or minimal web presence. I quote from the report. (Time expired)
Mr President, I ask a supplementary question. Can the minister outline to the Senate how the Gillard government is helping small businesses go online to take advantage of the enormous growth in e-commerce and internet use.
The Gillard government, particularly my colleague Senator Conroy, is rolling out the NBN because it is a very important economic reform. We intend to roll it out whereas the Liberal-National Party intend to roll it back. I have heard that theme before—the roll-back theme—and we know how successful it is.
My colleague Senator Conroy and I were at the PayPal Driving Business Online program launch last week. It has received great support from small business. In the visit they made to Armidale there were 41 one-on-one consultations with small business, in Coffs Harbour it went similarly well, and I understand Lismore is booked out. The National Party should take note. This is regional Australia wanting more information about web based connection and the internet—a major economic reform that particularly benefits regional Australia. (Time expired)
My President, I ask a further supplementary question. Is the minister aware of any alternative policies to the Gillard government's world-leading NBN? Do these alternative policies pose risks to Australia's long-term prosperity?
The Gillard government has a vision for Australia to become a global digital leader. This is a major economic reform. We are aiming to put Australia in the top five advanced economies by 2020 in the percentage of businesses and not-for-profit organisations using the internet. It drives productivity, it expands customer bases and it creates jobs.
Worldwide, e-commerce is forecast to grow exponentially over the next 20 years. Currently there is $1.4 trillion—
We cannot afford not to, Senator Macdonald. You have to come out of the past. Why does the Liberal-National Party oppose this important modernisation of the Australian economy? The NBN is going to put Australia amongst the leading five economies of the world. We are about rolling it out. All you are about is the negative, about opposition and about rolling it back. That is all you can do. (Time expired)
Mr Deputy President, might I congratulate you on what will be your last take note debate.
That the Senate take note of the answers given by the Minister for Tertiary Education, Skills, Jobs and Workplace Relations (Senator Evans) and the Minister for Agriculture, Fisheries and Forestry to questions without notice asked by opposition senators today.
If you want the classic example of people who can walk the walk, fly the fly, travel around the world and create an absolute debacle in our trade with one of our most important neighbours, it is what the Australian Labor Party has done in regard to the live cattle trade. Not only did they fail to consult with the Western Australian government about one of the major industries in their state, not only did they fail to consult with their own colleagues in the Northern Territory about one of the major industries of the Northern Territory and not only did they fail to consult with Queensland; they also failed to consult with the country that we rely on for so much, including our border protection, the people of Indonesia.
This has been an absolute disaster, and we must note exactly where this is leading. We heard the demonstrators the other day down in Sydney and what they aspire to. What do my colleagues in the Senate aspire to? They aspire to a vegan society. We are about to all become vegans—we are about to transform ourselves from eating meat to being hunters and gatherers on the forest floor living on a diet of beetles and nuts!
Not beetles, yes, only nuts! But this is the absurd position.
And the damage is done. It has been an absolute blanket insult to a whole nation to say to them that we do not differentiate between those who are doing the wrong thing and those who are doing the right thing; we just think they are all doing the wrong thing. The whole nation is doing the wrong thing.
I stated this at the start: I said this would come unstuck. They have not read five steps ahead on this one, and now it is unstuck. And what do we have? We have a foreign minister who can hardly stay home. He almost needs a passport to get back into Australia. Where is he when we really need him, when we actually need him to go to work? He is here now—it is the only time we do not want him here but he is here. He has been away for 71 days. He was guiding the Arab rise and the Arab Spring. He was over there guiding the process in Libya. He was part of what was happening in Syria. He is everywhere but he is nowhere where he is needed. When something is of real importance to our nation, where is he? So help me—he is in the building stacking up numbers for his challenge. This is how disconnected this government has become. Everything is a reflection.
I certainly will. I accept your admonishment, Mr Deputy President. The former Prime Minister—and well may we remember that he is a former Prime Minister, especially today—before he was ceremoniously politically assassinated by his colleagues, who then ensconced a replacement who is polling at 27 per cent, is now the foreign minister and does not seem to want to stay in Australia. When we actually need him to do a job, when he actually has to go out and earn his salary, he has decided to stay home. Where is his ticker when we really need it? Where is his ticker when we need him at something that is just slightly more important than Kate's and Will's wedding? He can make it to Sunrise to talk about Kate's and Will's wedding, but he cannot make it to Indonesia to talk about one of our major exports.
This is causing major dislocation to the Indigenous people, the Indigenous workers of Northern Australia, to the people of the Transport Workers Union, who actually cart the cattle round, and to the people of the abattoirs in Indonesia. I hope that we are not differentiating between their right to work and ours. We have actually decided to leave them out as well. Where is it all going to finish? Indonesians now, if they wish now, can start sourcing their cattle from other places. This will do nothing to help animal husbandry.
And might I remind you that Animals Australia waited; we know that they had the vision for two months. They were quite happy to let the barbarity that they saw in those certain abattoirs continue for two months, until they could get media bang for their buck. We know that even back in January they had pictures and were discussing their plan of attack. Why didn't they do something about it in January? Why did they wait? Because this is about theatre, this is about bang for your buck, this is about transforming Australia to their nirvana—a vegan society. They want us to remove ourselves from the consumption of meat! And what do we have for this? No doubt Indonesia will look quietly across the borders at us and say: 'Australia just does not understand. Australia is completely out of touch.'
Congratulations, Mr Deputy President, on your last question time today. Congratulations also to Senators Trood and Barnett.
Senator Joyce concentrated on the question to Senator Ludwig, and I will touch on that briefly before I go to broader questions in question time today. Cheap quips and suggestions that we are turning into a vegan society aside, perhaps the only serious issues that Senator Joyce sought to address were those around consultation in these difficulties with live exports and Indonesia. But I do not recall the Howard government being particularly strong on consultation. I could think of countless examples of very poor behaviour and conduct. In fact, the very conduct that led the Howard government to going out of office was around its poor consultation—its very poor consultation on the Work Choices legislation, if I recall. That was the very point made the other day by Senator Minchin, I think, in his valedictory remarks.
So, if there is nothing more significant than these issues around his appraisal of poor consultation and the suggestion that Australia is turning into a vegan society, it is very hard to take Senator Joyce's comments seriously. But let me take a moment, since he was taking note of the answers to all of the questions to Senator Evans and Senator Ludwig in question time today, to appraise some of those others. I am glad to see that Senator Abetz is in the chamber at the moment, because apart from the predictable political rhetoric, as indeed Senator Evans highlighted in his response to the first question, Senator Abetz seems to suggest that the Gillard government, by setting priorities, is meant to achieve them within 12 months. We all know that priority issues such as climate change are never going to be achieved within 12 months. It is good to see that this government is attempting to deal with these issues, but suggesting that there should be any resolution within a 12-month period is just laughable.
The other priority issues raised by Senator Abetz were the mining tax and boat arrivals in Australia. I seem to remember that these have been problems for the former government. They are intractable problems, and the closest I have seen in policy terms to any resolution of these problems is indeed with the avenues being explored in the Malaysian solution. The Howard government liked to try and claim that it solved the boat problem. We know they did not. We know the number of boat arrivals that appeared over the term of the Howard government, and we know that that government did not find a satisfactory resolution. But to suggest that this is a problem that the Gillard government should have resolved within 12 months is just laughable.
We went through a range of other areas where the opposition asserted promises had been made and had not been met within 12 months. Well, I am sorry, but my assessment of today's question time, apart from the usual one, which is of tedious repetition by the coalition's questions committee, is: seriously, you are starting to look a pack of Froot Loops. Lemons have become much maligned, and the pack of Froot Loops that get up in question time in this place day in, day out cannot raise serious policy issues. This opposition really does highlight the concerns that have been raised time and time again with the Abbott leadership, which is: it is a policy-free zone. There are cheap rhetoric and questions about stabbings, killings and leadership change, when this very opposition is more vulnerable—far more vulnerable—on that issue than the government: four leaders in four years.
I would like to take this moment to remind the chamber of the last leadership change of the opposition. Climate change was the issue raised by Senator Abetz today. What was the demise of the former opposition leader about? What were the issues around which Mr Turnbull failed to continue as Leader of the Opposition? I seem to recall an enormous backflip. Do I recall an enormous backflip on climate change? I think I do. But then I also recall—and Senator Abetz will recall this too—completely atrocious behaviour in respect to Godwin Grech. To see suggestions and contemplations these days that Mr Turnbull might return as Leader of the Opposition are laughable in that context. (Time expired)
Mr Deputy President, congratulations to you, in the chair for the last time today, and best wishes for your retirement.
I would like to take note of answers and support the motion moved by Senator Joyce, particularly with respect to answers given by Senator Evans on behalf of the government and specifically regarding the question I asked about school closures in Tasmania. The question related to the slated 20 closures of state public schools in Tasmania and the more than $13 million of Building the Education Revolution funding that has been provided and spent in Tasmania on those schools. Of course, if those schools close, that is taxpayers' money gone down the gurgler. For and on behalf of Australian taxpayers, we say that money has been and will be wasted if those schools are closed.
The big question relates to the advice that has been provided by the state Minister for Education and Skills, Mr McKim, a Greens minister in the Labor-Greens coalition government that is now in a rolling crisis in Tasmania and is dudding the Tasmanian economy dreadfully. His advice to the state parliament this morning was, 'Yes, I can guarantee that not one dollar will be repaid by the state government to the federal government.' He went on to say, 'That is because those buildings were part of an investment program designed to stimulate the economy and announced 2½ years ago.' So he is saying that, because it was announced 2½ years ago, not one dollar will be going back to the federal government. He said, 'Those buildings are part of state government schools on state government land, and we will decide how to operate those schools, not the federal government.'
When told, 'Senator Evans has not said what you have just alleged,' Minister McKim said, 'He has not said that we are obliged to repay funds. In fact, I have spoken to Senator Evans about this issue personally and at no time has he expressed to me that he, his department or his government have a view that we are obliged to repay the funds, so let us be very clear about that. He has not expressed those views to me.'
Senator Abetz interjecting—
Senator Abetz has interjected and confirmed that that is the advice that was made in parliament today. Frankly, this is where we have a major division now between the federal minister for education, represented by Senator Evans, the Leader of the Government in the Senate, and the state minister for education. In the answer from Senator Evans today he made it very clear that he was looking into the matter, he would deal with each school on a case-by-case basis. He did not in any way, shape or form agree with the advice of Mr McKim, the minister for education in Tasmania, that not one dollar will be repaid by the state government to the federal government. Clearly there is a division. Clearly they are way apart in their views if the federal government is dealing with these matters on a case-by-case basis.
I must also alert the Senate to the fact that in the last several days since this decision was made we have had the views of federal Labor MPs. What do they say about the school closures? For example, Senator Carol Brown, a Tasmanian Labor senator, together with the Hon. Julie Collins who is a parliamentary secretary, have either criticised or opposed the closures. They support deferral until 2013. Mr Dick Adams, the federal member for Lyons, and Mr Sid Sidebottom again have either opposed or criticised the school closures. You have the federal Labor MPs from Tasmania saying something totally different to the state minister for education. The question is whether Senator Evans, who represents the federal minister for education, supports and agrees with the views of those federal Labor MPs from Tasmania. Clearly you have a crisis and a division between state and federal Labor. Let us make clear what the BER guidelines say:
Where funding of over $75,000 is provided for a school for the construction or purchase of facilities, we have a right to repayment of the calculated portion of the funding where, at any time during the designated use period, the facilities cease to be used principally for the approved purpose, the facilities are sold or otherwise disposed of.
That is what the funding agreement says. That is what they have signed up to. That is what the federal government stands by. The federal minister today confirmed that those are the guidelines and that is clearly contrary to the supposed legal advice obtained by Nick McKim. I have a list of the schools and there are some 20 of them with hundreds of thousands if not over a million dollars spent on them. Clearly there is a major dispute between the two and this is a problem for the federal government.
I add my congratulations to you, Mr Deputy President, for a very memorable career in the Senate and also the work that you have done in terms of Senate reform. You can see it has not always worked. I wish you and your family all the best for the future.
I turn to the issues before us. I think it was quite amazing to have Senator Barnaby Joyce talk about a disconnect in the Labor Party. I have always thought that Senator Joyce was disconnected from reality, but when you talk about a disconnect, how could you come this week to the Senate and ask questions of the government, and not ask a question about the biggest economic change that has been made in this country for years—that is, the NBN. The NBN reached a massive milestone today, signing off with Telstra and the other companies to make sure that we have in this country modern telecommunications facilities. Not a word from Senator Joyce.
What did we hear from Senator Joyce? We heard from Senator Joyce that we are going to turn into a vegan society, that there is some kind of plot by the Left to turn everyone into a vegan. For anyone who has ever been to dinner with me, that would come as quite a surprise. I certainly would not want to live in a vegan society. Nevertheless, I think we have to be aware that when this ban was put on live exports it was done because of the massive response to the Four Corners report in relation to live exports. It was horrible, but I did not hear anyone from the opposition say, 'Let's do a plebiscite of the Australian community to deal with live exports.' I did not hear that being put forward because you cannot run a country based on plebiscites.
It is interesting to note yesterday's AustralianI do not normally quote the Australiandidn't Paul Kelly tell us about the lack of political understanding by the coalition in relation to plebiscites? Paul Kelly gave the coalition a lesson in what you need to do in terms of taking leadership positions and governing, not responding to these stunts that the Leader of the Opposition seems to be so good at. You cannot govern the country on stunts; it just does not work. You must be a leader and Tony Abbott, in my view, is devoid of leadership.
The Leader of the Opposition, sorry, is devoid of leadership. He is the Evel Knievel of Australian politics—all show and no substance. What do we have now? We have the Leader of the Opposition going to the AMEC conference in Western Australia where we will get the showman and we will get the clown—we will get Lord Monckton there. We will have the showman and the clown side by side at the AMEC conference. The only thing missing there will be Senator Bernardi to do the lead-in act for them.
We are in a position in this country where we must deal with the real issues for the young generation—the young generation that is watching us now. They expect us and they have a right to have this parliament dealing with the issues that will build a decent society for them in the future. They have a right to have us deal with climate change. The young people of this country have a right to have a decent environment. They have a right to expect us to deal with climate change and to deal with the key issues that will give them a future. All we have is the deniers on the coalition side who say there is no problem. Well, there is a problem and the Labor Party stands up for future generations. The Labor Party stands up for this country and we will continue to do so.
I rise to take note of answers given during today's question time and to talk about a government that does not keep its promises, because it simply cannot. It is not only a weak government; it is a government that is riven by division. This government could not fight its way out of a paper bag, but they sure can fight with themselves—unfortunately demonstrated by none better than Minister Ludwig's answers today on the blanket suspension of the live cattle trade to Indonesia. This is a decision that not only jeopardises an entire industry; it also threatens to trash our diplomatic relationship with one of our nearest neighbours—one of our nearest neighbours that needs our help, not our hindrance. It is an example of an area where this government has been cowed into submission because it is a policy-free zone. It has been cowed into submission by an organised and orchestrated campaign by lobbyists. This is a government that has been caught flat-handed, flat-footed, bereft of ideas and forced into some sort of desperate action that is all pain for no gain. Blanket suspension of live cattle exports to Indonesia is pain for cattle, because cattle are probably still being treated cruelly when slaughtered daily in Indonesia. They may not be Australian cattle but they are cattle and animals nonetheless. A government genuinely concerned about cruelty to animals would not take an approach that seems to say, 'Out of sight is out of mind.' This decision stands to do nothing but damage to our relationship with Indonesia.
Minister Ludwig today tried to say, in answer to Senator Williams, that he had consulted with the Indonesian government. What he failed to commit to was having consulted with the Indonesian government prior to deciding to blanket suspend live cattle trade to Indonesia. He failed to commit to that. Why? Because he did not do it. Had he done it, he should have said so today. Minister Ludwig clearly failed to consult with the Indonesian government before deciding to suspend our live cattle trade with that country. He also failed to explain to Senator Williams why he has not sought the help of his ministerial colleagues, such as former prime minister Kevin Rudd: Kevin-everywhere, except for 'Boganville'.
Minister Ludwig also failed to explain why he has not sought the help of his colleague the Minister for Trade, Dr Emerson. This government is riven by division. Why didn't Minister Ludwig seek the help of his colleague Minister Emerson? It is pretty clear: Minister Ludwig's big dad, big Bill Ludwig, said of Minister Emerson that he is a rat, that he is 'friggin hopeless'—actually, big Bill Ludwig used another word, but that is pretty close to it—that he is not a team player and that he has never done his bit for anyone except his own ambition to be Prime Minister. So why would Minister Ludwig even hope to get any help from Minister Emerson, the man who Minister Ludwig's own father has said is a rat? Had Minister Ludwig gone to his colleague Minister Emerson, he hardly would have got a helping hand. This is a government that is riven by division, a government that is breaking its promises to govern the country because it is a government that cannot govern itself.
Question agreed to.
I seek leave to make a personal explanation.
I thought I had already made my last speech, but I have to rise today because I believe I have been very grievously misrepresented in the media. I refer particularly to an article in today's Australian by the contributing editor, Peter van Onselen. The article is titled 'Senate repainted shades of green'. In the article he refers to some of the departing senators. I quote:
On the Labor side, two senior members of the Right faction are departing: Senators Steve Hutchins and Michael Forshaw, a former NSW party president and parliamentary convener of the Right respectively.
The section I particularly want to refer to is this:
Both men were early movers against Rudd's leadership after they felt he had stopped listening to the caucus.
That is totally untrue. I was never a mover against Kevin's Rudd leadership as Prime Minister. I have never spoken publicly about this, but I am forced to do so now. Everybody on my side and I think many in this parliament know where I stood in regard to that issue. This is not the first time that Peter van Onselen has written something about me that is incorrect. It seems to be an increasing habit. The journalist makes statements in the media without even bothering with the courtesy of ringing the individuals concerned.
On behalf of the Minister for Financial Services and Superannuation, Mr Shorten, I table a ministerial statement on superannuation.
I present 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—
Australian Government Response to the Senate Econom ics References Committee Report
"Foreign Investment by State-owned entities"
Foreign investment has been an important component of Australia's growth in the past and will continue to make a positive contribution to Australia's economic growth and prosperity in the future. This is because Australia's domestic savings are not sufficient to meet the demands of domestic business for investment funds. Foreign capital represents the necessary call on overseas resources that fill this gap. It contributes to our capacity to develop and improve living standards.
Foreign investment also brings additional benefits, including:
While foreign investment enters Australia in a variety of guises, the last few years have seen an increase in investments being made through sovereign wealth funds and state-owned enterprises (SOEs). This has sparked public and media interest.
The Government has investigated whether significant changes were required to Australia's foreign investment regime to appropriately deal with increasing flows of investments from SOEs and sovereign wealth funds. Our assessment was that Australia's existing regime was already well-placed to deal with any national interest concerns arising from such investments.
Nevertheless, the Government recognised that it has a role in assisting SOEs to better understand our foreign investment regime, as well as helping the Australian public understand the Government's approach to foreign investment from sovereign entities.
That is why in February 2008 the Government first published principles that are used when evaluating the national interest implications of foreign government related investments. These were updated and expanded in June 2010 when, as part of the release of the Government's Foreign Investment Policy, the Government explained the national interest considerations for all investment proposals to buy Australian businesses or companies. For foreign governments and related entities, these considerations emphasise independence and commerciality.
The Government appreciates that more work can be done to improve communication of our foreign investment policies. In that regard, we welcome the Senate Economics References Committee report on 'Foreign Investment by State-Owned Entities'.
The Australian Government has carefully considered the recommendations of the Committee's report and we have provided our response below.
Recommendation 1 – The committee recommends that FIRB develop a more effective communication strategy to improve public understanding of the risks and benefits of foreign investment to Australia. This strategy should also provide additional information about how foreign investment decisions are made and provide information about the emergence of sovereign wealth funds and state-owned entities internationally.
The Australian Government agrees with this recommendation.
The Australian Government has asked the Foreign Investment Review Board (FIRB) to review and improve communication of Australia's Foreign Investment Policy. The first task that FIRB undertook was to draft an easy-to-read version of the Foreign Investment Policy for prospective investors. The Government released that new Policy on 30 June 2010.
This new Policy has been made available in other languages including Chinese, Japanese and Bahasa.
The Government has also asked FIRB to engage directly with embassies in Australia – as it has done from time to time – to explain how the Policy is applied. FIRB has also rolled out a new stakeholder awareness program to educate and disseminate information to individuals and organisations affected directly and indirectly by the Government's Foreign Investment Policy.
Recommendation 2 – The committee recommends that the Minister require FIRB to be more assiduous in producing a timely annual report.
The Australian Government agrees with this recommendation and has requested FIRB to prioritise the timely release of its annual report. The Government recognises the importance to the Australian public of releasing information on foreign investment applications and trends.
It has been the usual practice of FIRB to produce its annual report early in the following year. This allows time for all data to be compiled and rigorously checked for accuracy before it is released.
Recommendation 3 – The committee recommends that the government tighten the FATA legislation to deal with complex acquisitions where takeovers of smaller strategic assets may be masked by an application which, in total, does not represent more than 15 per cent, and therefore does not trigger review. The committee would like FIRB to give adequate consideration to the interaction between the various components of an acquisition.
The Government agrees in principle with this recommendation.
Related foreign investors cannot avoid screening by each buying small stakes (below 15 per cent) in an Australian company and using the total investment to wield control. This is because the existing 'associates' provision in the Foreign Acquisitions and Takeovers Act 1975 (the FATA) is already broad enough to ensure such activities are caught by the regime.
However, the Government was concerned that investors could use complex financial instruments to avoid the intended operation of the FATA. For that reason, the Government introduced the ForeignAcquisitions and Takeovers Amendment Act 2010 to remedy this matter.
This Act clarifies that convertible notes and similar instruments will be treated in a similar fashion to shareholdings for the purposes of the foreign investment regime. The Act has retrospective effect from 12 February 2009.
Recommendation 1 – A foreign government shall not use any corporate vehicle which they control to be allowed to purchase any strategic assets within Australia.
Further, for a non-state-owned entity, a related entity test will be applied so that different corporate entities with the same ultimate majority controlling influence represented by equity, debt or other mechanisms will be deemed as the one entity for assessment as to whether it will result in more than 10 per cent of control of any strategic asset market in Australia.
The Australian Government does not support this recommendation.
The Government is committed to a case-by-case examination of all foreign investment proposals. This approach ensures that Australia can maximise investment flows while protecting Australia's national interest.
The Government recognises that sovereign wealth funds and SOEs are increasingly a part of the global financial system. The Government notes that Australia has its own sovereign wealth fund. Reflecting this trend, the Government supports the efforts of the International Monetary Fund and the International Forum of Sovereign Wealth Funds to develop a set of voluntary, best-practice principles to maintain the free flow of cross border investment.
The Government applies a rigorous national interest test to allSOE investments. This is designed to examine whether SOE investments are transparent and commercial in manner and that investment and sales decisions are driven by market forces. Blanket bans on certain types of investment could risk unnecessary job losses and provoke retaliation against Australian investors overseas.
As outlined above, the 'associates' provision in the FATA prevents related foreign investors from avoiding screening by each buying stakes below 15 per cent in an Australian company and using the total investment to wield control.
Recommendation 2 – The Foreign Investment Board will be required to, as a point of consideration in its decision, assess whether Australia has reciprocal rights of investment in the proposer's country.
The Government notes this recommendation.
The Australian Government does not consider it appropriate to penalise foreign investors for the investment policies of their home country government. This would be inconsistent with Australia's international obligations, including with the Organisation for Economic Co-operation and Development (OECD), the World Trade Organization (WTO) and Australia's free trade agreement (FTA) commitments.
The role of the FATA is to provide for screening of incoming investment, it has no role in outwards investment. Assessment of the national interest could include such considerations but in general, reciprocity is not a useful guide to Australia's national interest.
However, the Australian Government will continue to advocate for foreign governments that have restrictive investment policies to liberalise their regimes for the benefit of Australian investors. We do this in a variety of ways, including through FTA negotiations, as FTAs cover a variety of issues including the investment regimes of each negotiating party.
Recommendation 3 – The Government must look to enact effective laws to prevent creeping acquisitions of Australian businesses and assets owned by state-owned entities.
The Government notes this recommendation.
The Australian Government already has laws in place to monitor 'creeping acquisitions' of Australian companies and businesses by foreign investors.
The FATA allows the Government to review any increase in ownership beyond 15 per cent of an Australian company or business valued above $231 million.
For investments by SOEs and other entities with links to foreign governments, the Foreign Investment Policy allows the Government to review any direct investments in Australian companies or businesses regardless of the value of the company or business. This includes investments that increase an existing stake.
Recommendation 4 – The Foreign Investment Review Board needs to provide clear criteria of what the 'national interest' test is and that abbreviated versions of FIRB advice to the Minister be tabled in both houses of Parliament.
Further, that the Government defines what it means by 'community interest' and 'common standards of business behaviour' and subject major investment proposals to rigorous public scrutiny to ensure that they meet genuine common standards of business behaviour.
The Government notes this recommendation.
In June 2010, the Australian Government published its Foreign Investment Policy, which explains the factors we consider when evaluating the national interest.
Specifically, the Government considers national security concerns, competition issues, the impact of the investment on Australia's revenue base and other policies, the impact of the investment on the Australian company, our economy and the broader community and the character of the investor. For foreign governments and their related entities, the Government also looks for evidence of a commercial basis for the investment.
The Government takes seriously the commercial-in-confidence nature of the investment proposals that it receives. It is not appropriate for the Government to release potentially market sensitive information on behalf of investors. This would undermine investor confidence and risk Australia's standing as a desirable investment destination.
The Government will continue, however, to release a statement whenever it determines that a foreign investment proposal raises national interest concerns.
Recommendation 5 – That the human rights records of the country of state-owned entity seeking to invest in Australia be a key factor during consideration by the Foreign Investment Review Board. Similarly, that all foreign non-state-owned entities be subject to consideration of their other investment activities and whether these conflict with Australia's ethical positions.
The Government notes this recommendation.
The Australian Government does not consider it appropriate to hold investors accountable for actions taken by its home country government, except in limited circumstances where Australia maintains formal sanctions against that country.
However, if there is evidence that the investor itself has breached human rights or undertaken other unethical behaviour, such actions will be considered when determining if the investment would be contrary to Australia's national interest. This has always been the case.
Parliamentary Joint Standing Committee on Migration
Negotiating the Maze: Review of arrangements for overseas skills recognition, upgrading and licensing
Government response - June 2011
Please note that since the release of The Joint Standing Committee report, the Department of Immigration and Multicultural Affairs (DIMA) has been renamed the Department of Immigration and Citizenship (DIAC). Where recommendations require input from DIMA, responses have been provided by DIAC. Similarly, the Departments of Employment and Workplace Relations (DEWR) and Education, Science and Training (DEST) are following machinery of government changes now the Department of Education, Employment and Workplace Relations (DEEWR).
Recommendations and Responses
The Committee recommends that, as part of its long term research on migration outcomes, the Department of Immigration and Multicultural Affairs collect enhanced data on migrant utilisation of overseas qualifications and other indicators of the effectiveness of overseas skills recognition processes.
The degree to which migrants utilise their overseas qualifications in the Australian labour market and the speed at which they do so are of critical importance, especially in the context of current skill shortages. The government also agrees that the monitoring of this process should continue and be enhanced.
Information on these issues has been collected by the Department of Immigration and Citizenship (DIAC) through the Longitudinal Surveys of Immigrants to Australia (LSIAs) and more recently the Continuous Survey of Australia’s Migrants (CSAM). These surveys measure the rate at which skilled migration principal applicants who have had their qualifications assessed are finding jobs related to their qualifications. This information is valuable in analysing the effectiveness of the skilled selection and assessment processes.
Response to recommendation 19 provided further, data from CSAM that suggests migrants who go through the skill recognition process have good skilled outcomes.
DIAC will continue to give careful consideration to incorporating other indicators of the effectiveness of overseas skills recognition processes in the CSAM including monitoring the experiences of migrants in negotiating the skill recognition processes. The information gathered in this way would then be used to help assess the effectiveness of the skill recognition processes and to improve them where necessary.
The Committee recommends that the fee charged for assessing Australian qualifications for the purpose of independent overseas student and skilled Australian sponsored visas (subclasses 880, 881 and 882) be waived, where that qualification is sufficient in and of itself to allow the applicant to qualify for their profession or trade.
One of the threshold criteria for the grant of a skilled migration visa is that the applicant has applied for an assessment of their skills for the skilled occupation they nominated in their application by a relevant assessing authority. This is a legislative requirement regardless of whether the applicant has obtained their qualifications in Australia or at an educational institution overseas. While the assessing authorities charge fees for skills assessment on a not-for-profit basis, the fees charged are at the discretion of the individual assessing authorities.
The Department of Education, Employment and Workplace Relations (DEEWR) undertakes to monitor each assessing authority annually, including looking at the fees they charge, the Government does not have a regulatory role in relation to fees charged for skills assessments and cannot direct the assessing authorities to charge differentially for skills assessments.
2 Policy coordination issues
The Committee recommends that the industry outreach officer network collect information on skills recognition barriers from an employer perspective, including feedback on delays, bridging requirements, work experience and other skills issues, and that the Department of Immigration and Multicultural Affairs incorporate this information into further policy development.
DIAC has 13 Industry Outreach Officers (IOOs) working across 19 Industry groups on full time and part time placements.
The IOOs work with peak industry bodies to promote skilled entry mechanisms to employers. The IOOs meet with members and officers of the associations as part of their information delivery program.
The roles of the IOOs include reporting on difficulties that members have with the immigration arrangements. The feedback covers all aspects of the immigration requirements and may include difficulties with qualification assessments. The peak industry bodies and associations are also encouraged to bring these concerns to the Department’s attention directly.
The details of concerns and difficulties are discussed with the relevant assessing bodies or with the appropriate government agency.
The Committee recommends that the Department of Immigration and Multicultural Affairs and other stakeholders use the skills expos to provide clearer and more detailed information on overseas skills recognition processes to users, particularly licensing and registration requirements.
Australia Needs Skills (ANS) expos form part of the overall promotional strategy for skilled migration undertaken by DIAC.
ANS expos are held overseas to facilitate opportunities for potential skilled migrants to meet with Australian employers including state and territory governments, with a focus on sponsorship opportunities.
ANS expos are highly targeted to attract skills in critical shortage. DIAC invites the attendance of relevant assessing authorities (eg Engineers Australia, the Nursing and Midwifery Council of Australia, CPA Australia and Vetassess). These bodies provide invaluable information on the skills recognition process to expo attendees.
DIAC is working in close consultation with state and territory governments to ensure the future expo program continues to be effective in targeting skills in need.
The Committee recommends that the Department of Immigration and Multicultural Affairs establish a mechanism to better capture information from the Migrant Resource Centres on the barriers faced by migrants in seeking skills recognition.
DIAC has a close relationship with a range of settlement service providers, including Integrated Humanitarian Settlement Strategy contractors, Migrant Resource Centres and other settlement grant recipients. DIAC is in regular contact with these service providers to discuss ways of improving the settlement outcomes of newly arrived humanitarian entrants and family stream migrants. DIAC is happy to share any information on the barriers to getting skills recognition with DEEWR and other government agencies involved in assessing skills recognition.
The Committee recommends that the Department of Employment and Workplace Relations (DEWR) work more closely with assessing authorities, industry groups and other stakeholders to ensure the Migration Occupations in Demand List (MODL) reflects, as precisely as possible, occupations and specialisations in demand at any particular time. To facilitate this, DEWR should develop a process to more regularly review the MODL - on a three monthly basis, at a minimum - and improve feedback on its accuracy and currency.
On 8 February 2010, and following a formal review which included extensive stakeholder consultation, the Government announced the immediate revocation of the Migration Occupations in Demand List (MODL).
The Government also announced a review of the General Skilled Migration (GSM) points test to evaluate its effectiveness and ensure it selects migrants with skills the nation needs in the future. The review resulted in the development of a new points test to come into effect from 1 July 2011. The employer-sponsored temporary and permanent migration arrangements continue to provide a framework for meeting skill shortages which cannot be met through domestic employment and training.
The Committee recommends that the Department of Education, Science and Training accelerate the process of expanding and updating the Country Education Profiles and develop a process to periodically review and formally receive feedback on the accuracy and currency of that information.
Country Education Profiles (CEPs) are an online product which are updated regularly as we receive information from other official government sources. The production schedule for new CEPs is determined by analysing factors such as source countries for international students, and stakeholder enquiries. Key internal and external stakeholders involved in international education provide input into the process to assist with determination of the priorities.
In addition to producing CEP updates, Australian Education International (AEI) also offers a free email advice service to educational institutions and professional bodies that subscribe to the CEPs Online.
All CEPs were reviewed prior to being published online in October 2005. In particular, the Lists of Institutions for all CEPs were updated as a priority, as these are critical to the assessment process by third parties.
3 Overseas skills recognition framework
The Committee recommends that the Department of Education, Science and Training implement a change of title for Australian Education International-National Office of Overseas Skills Recognition (AEINOOSR), with it to be referred to in future as Australian Education International (AEI). AEI should continue to perform the full range of functions currently undertaken by AEI-NOOSR.
AEI-NOOSR has a positioning brand within the network of assessment authorities, education institutions and other stakeholders. Changing the name would require extensive consultation and communication and a phased implementation. It may also cause potential confusion with the broader AEI grouping, which undertakes a range of functions far wider than those associated with skilled migration.
The Committee recommends that the Department of Education, Science and Training:
(a) take over the management of the Vocational Education Training and Assessment Services contract from the Department of Immigration and Multicultural Affairs (DIMA);
(b) improve its oversight, coordination and monitoring of assessing authorities;
(c) enhance its liaison and support role of assessing authorities; and
(d) improve its communication flows with assessing authorities, particularly concerning notice of policy changes by DIMA and the Department of Employment and Workplace Relations that may affect assessment processes.
(a) This part of the recommendation has largely been overtaken by events. There have been significant changes in the skilled stream of the migration program since the report was published. This has included substantial changes to the skills assessing regime administered by VETASSESS, which followed detailed discussions with DIAC. DIAC’s formal contract with VETASSESS ceased on 30 June 2006. DIAC and DEEWR continue to cooperate closely in the administration of assessing bodies, including VETASSESS.
After extensive consultations and communications with assessing authorities in 2006, DEEWR implemented the new guidelines for monitoring professional assessing authorities in December 2006.
(b) Underpinning the consultation process was the importance of liaison with and support to assessing authorities. The new monitoring approach has formalised the liaison and support role by including an annual conference and ongoing contact by Departmental officers with assessing authorities.
(c) DEEWR is conscious of the need to keep assessing authorities for which it is responsible well informed about developments in policy that affect assessment processes. To this end, DEEWR has developed a regular newsletter that is sent to assessing authorities every two months. DEEWR also convenes an annual conference to inform assessing authorities of changes in policy impacting on their work. Attendees and presenters include assessing authorities and key Government departments, including DIAC. The new monitoring and support initiatives have been predicated on the need to improve further communication flows with assessing authorities.
(d) Considerable work has taken place to improve communication with assessing authorities. As an example, in the lead up to the change to the Points Test to be implemented from 1 July 2011, DIAC officers have visited or teleconferenced with all assessing authorities and held a conference to discuss the policy changes.
The Committee recommends that the Department of Immigration and Multicultural Affairs regularly update and continually monitor the content of the new Australian Skills Recognition Information website to ensure that it meets the varied needs of the different groups requiring overseas skills recognition, particularly with regard to ensuring the information is user-friendly to people from non-English-speaking backgrounds.
The ASRI website has been designed to be user-friendly for all people including those from non-English-speaking backgrounds. While the majority of users of the website are potential skilled migrants who are required to have good English language skills to be accepted for migration, people with lower English skills are assisted to use the ASRI website through a summary of its purpose and function in seven major community languages – Arabic, Chinese, Dari, Hindi, Indonesian, Korean and Vietnamese. These are the top languages in common across the Skill and Family Streams and the Humanitarian Programme. These translated summaries allow non-English speakers to identify whether the ASRI website could be of use to them and then engage the assistance of an interpreter if necessary to find information relevant to them. It would not be practical to provide translation of all material on the website as the site comprises many thousands of pages of content.
Professional user testing of the ASRI website involved 22 test subjects, specifically including two recently arrived humanitarian migrants from Africa, formerly holding skilled occupations. Both, with some assistance, were able to successfully navigate the website and locate information pertaining to skills recognition for their occupations.
DIAC receives regular feedback from users and stakeholders through the feedback mechanism on the ASRI website. DIAC will continue to monitor user friendliness through normal processes. The vast majority of feedback takes the form of advice of change of contact details for the organisations listed on the website. There has been no feedback at this time relating specifically to the issue of its user friendliness to people from non English speaking backgrounds.
The Committee recommends that the Department of Immigration and Multicultural Affairs add a ‘frequently asked questions’ section to the Australian Skills Recognition Information website.
Accepted in Principle
The vast majority of ASRI feedback emails received are notification of change of contact details for the organisations listed on the website. No direct questions have been posted as feedback regarding skills recognition processes; however, DIAC will continue to monitor and gather feedback data and if the need for a set of FAQs becomes apparent, a ‘frequently asked questions’ section will be added to the website.
The Committee recommends that the Department of Immigration and Multicultural Affairs ensure the Australian Skills Recognition Information website provides an overview of the various organisations involved in administering, monitoring and delivering overseas skills recognition services, both nationally and at the state and territory level, to clarify the governance arrangements and different roles and responsibilities of these bodies. This information should also include links to contact details and relevant performance reporting and accountability documents on skills recognition processes.
The ASRI website already meets this recommendation, citing the pre-migration skills assessment bodies, state and territory licensing and registration authorities, training contacts, and professional associations for all occupations listed
In accordance with the provisions of the Auditor-General Act 1997, I present the following reports of the three reports of the Auditor-General:
No. 54––Financial statement audit––Interim phase of the audit of financial statements of major general government sector agencies for the year ending 30 June 2011.
No. 55––Performance audit––Administering the character requirements of the Migration Act 1958: Department of Immigration and Citizenship.
No. 56––Performance audit––Administering the character requirements of the Citizenship Act 2007: Department of Immigration and Citizenship.
Message from the Governor-General reported informing the Senate of assent to the bill.
The President has received a letter from the Leader of the Opposition in the Senate (Senator Abetz) nominating a senator to be a member of the Council of the National Library of Australia, consequent on the retirement of Senator Trood.
by leave—I move:
That, in accordance with the provisions of the National Library Act 1960, the Senate elect Senator Humphries to be a member of the Council of the National Library of Australia on and from 1 July 2011, for a period of 3 years, consequent on the retirement of Senator Trood.
Question agreed to.
The President has received a letter from the Leader of the Opposition in the Senate (Senator Abetz) nominating Senator Macdonald to serve as a trustee on the Parliamentary Retiring Allowances Trust, consequent on the retirement of Senator Ferguson.
by leave—I move:
That, in accordance with the provisions of the Parliamentary Contributory Superannuation Act 1948, the Senate appoints Senator Macdonald as a trustee to serve on the Parliamentary Retiring Allowances Trust on and from 1 July 2011, consequent on the retirement of Senator Ferguson.
Question agreed to.
I seek leave to move a motion so that a private senator's bill can be considered under a limitation of debate. As I seek leave, Mr Deputy President, I cannot help but pass comment that this might be your last time in the chair presiding over the chamber. Congratulations and fare thee well.
Leave not granted.
In congratulating you, I hate to give you so much extra pain for your last session in the chair. But, pursuant to contingent notice of motion standing in the name of the Leader of the Opposition in the Senate, Senator Abetz, I move:
That so much of standing orders be suspended as would prevent me moving a motion to provide for the consideration of a matter—namely, a motion to provide that a private senators' bill be considered under a limitation of debate.
I wish to speak a little bit about the process, and my colleagues Senator Colbeck and Senator Boswell will be speaking about the substance of this motion for the suspension of standing orders. This morning we understood that this bill would be proceeding under difficult time constraints. The bill has not been concluded. Senators were speaking on the bill for lengthy times. We asked in the whips meeting under the private senators' bills arrangements if we could time manage this bill. This was denied. We believe this bill is of considerable importance and we would like to facilitate the passage of this bill through all stages today.
The process that I would like to propose—if the suspension of standing orders is agreed to—is that we take up one hour only of the Senate's time. As you have notified the Senate, Mr Deputy President, Senator Fifield has withdrawn the matter of public importance that was listed for this afternoon in this time slot that we are now speaking in. That motion was withdrawn in consideration of the one hour that would then ensue with this debate. In fact, it may be completed in less than one hour if we can have a time managed debate, which is what we have been seeking from the moment this bill has appeared on the Notice Paper.
Time allotted for private senators' bills is a new thing and in effect this is a trial. You would be aware, as Chair of the Procedure Committee, that we have agreed to some guidelines; however, the guidelines still do not allow for a bill to be completed. This is a bill that the coalition has put forward. We accept that the bill may or may not be passed; that is not the issue. The issue is that we want a bill that is a private senator's bill completed. We want to test the bill on the floor of the chamber. The only way we can do this and effect this bill is by debating this bill today.
I understand from my colleagues that this bill has a time-sensitive aspect—there are some 1 July matters that are impacted by this bill. There are some amendments that Senator Boswell wanted to put forward. We would like to facilitate those amendments going through. Once the bill, in its amended or unamended form, is completed, we would like all stages finished and the bill concluded this afternoon. We are being very generous with our time and our management of this process. We did have an agreement that we would split the time of the private senators' business this morning by allowing, in the two hours and 20 minutes that is allocated, one hour and 10 minutes for Senator Xenophon and one hour and 10 minutes for us. That was an agreement whereby we divided our time, as discussed in our normal whips meetings. This did not eventuate this morning. Senator Xenophon's bill went overtime slightly. There were senators speaking on the bill who, I am sure, had genuine interest, but it was a little bit disproportionate. There were a number of additional Labor senators scheduled to speak compared to the opposition.
Again, we indicated that we would like speakers to be kept to a minimum to enable that bill to progress—allowing sufficient debate—and Senator McLucas in the committee stage did ask some detailed and probing questions which were answered quite well, I think, by Senator Xenophon supported by the Greens. If private senators' business time will not facilitate the carriage of a bill through to its final stages—again, not determining the outcome of the bill but allowing the bill to reach its final stage so that we can vote upon the bill—then we are wasting our time by having private senators' bills debated without a logical conclusion.
The whips meetings have been very congenial in many respects in allowing many matters to take place. We would agree that under private senators' bills arrangements that, if there are more complex matters, we would allow longer debate. We get one shot at this every sitting Thursday, and some of these bills could then roll over into consecutive Thursdays. So it may take several weeks to get a private senator's bill passed through the chamber. They are the issues that we are concerned about in relation to the process, and I would urge all senators to support us in facilitating one hour of debate for this private senator's bill.
The loudness of my voice does not underscore the incredulousness with which I rise to respond to what is an outrageous stunt. I am certain Senator Parry is not behind this; it is Senator Boswell's mad idea, by the look of it.
What it does and what it is intending to do is up-end the Senate on the basis of a private senator's bill when we have before us appropriations and other important bills to be dealt with on the last sitting day before the end of the financial year. Notwithstanding that, it spoils what were very meaningful discussions about how we could have private senators' bills dealt with at a particular time by an arrangement between the parties to ensure that private senators could bring bills forward into this place, have them dealt with sensibly and appropriately during that period and have them brought to a vote, as we saw this morning with the palm oil bill. It was brought to a vote, which then allowed that debate to be had. In the past, it could only happen in general business or, alternatively, through this process. So the government, opposition and other people sought—and I think Senator Bob Brown wants the credit; I do not mind who gets the credit—time to allow private senators' bills to be debated. We have agreed to that, with quite generous time being allowed for that process each week. The next time we come back here, if the opposition, the Greens or the Senate want to debate Senator Boswell's bill they can. If it is not his time slot then he can debate his private senator's bill in the following week.
What Senator Boswell seeks to do, though, is jump the queue and say, 'No, my bill is more important; it is more urgent than government business; it is more urgent than any other private senators' bills.' Why? Because he is a spoiler. That is the only thing I can think of, quite frankly. He wants to spoil the process of having private senators' business dealt with on a Thursday morning, the appropriate time, and allowing parties to come to a concluded view, because it is all about you, Senator Boswell. It is all about you, because you think you take urgency, you take precedence, over everything else—
Thank you, Mr Deputy President, I will. The opposition want to undertake this private senator's bill during this time for that purpose. It is an outrageous suggestion. This government does not agree with it. Senators should not agree with it. Private senators' business should be confined to where it is. In addition, the opposition has effectively said that it would gag and guillotine the debate to allow Senator Boswell's bill to be dealt with. It is effectively saying to the Senate, 'We accept a confined debate,' notwithstanding others may want to make a contribution to the debate. But, no, Senator Boswell will then say: 'I don't want people to speak on this for very long because I want it brought to a vote. I want to have a vote in relation to this bill. I want to cut people off. I want to gag them so that I can have my way.' It is very selfish, in my poor view, to have that opinion. But it does seem that Senator Boswell is saying that to the Senate.
The Senate should reject that view outright. The Senate should not accept that position. It is an outrageous imposition. It is not well thought out. It is not a clever plan. It is simply an outrageous stunt from those on the opposite side, and it should be called as such. Quite frankly, they should withdraw it and not proceed with it.
It is interesting that the government talk about management of legislation through the place, yet today we have indicated that we will give up the hour that the parliament gives us to debate an urgency motion. We have already given the government some other time today—an extra couple of hours—so that they can get their own legislation debated. It is interesting that they bring their appropriations bills on late on the last night of the sitting. This is so that it is unlikely that people will want to speak to the appropriations bill, but that is going to happen tonight.
In relation to this piece of legislation, it is interesting that Senator Ludwig refers consistently to Senator Boswell. I do acknowledge Senator Boswell's passion for this piece of legislation, but it does happen to have my name on it, Senator Ludwig—as you leave the chamber. It is quite a simple mechanism. It is not an unusual mechanism to be seen in legislation. In my experience, it is very, very responsibly used. In fact, one interesting piece of evidence that came to the Senate inquiry was from a former Labor speaker in the Victorian parliament, whose view was quite strongly that this legislation should be supported, because one thing that a disallowance provision does is promote proper consultation. If the government is guilty of anything in the development of its marine protected areas it is its failure to properly consult. This has been abysmal to the extent where it was a major issue at the last election—and perhaps that is why the government does not want this piece of legislation debated. There were attempts through the committee stage to put this bill off to report without there being any opportunity for us to debate it in private members' business. I have to thank Senator Cameron for at least conceding that we could get it reported last week, but there were attempts to push it back beyond this week. It is quite an important piece of legislation. We are talking about impacting on a significant area of Australia's marine environment. Senator Siewert seemed to imply that we were against marine protected areas. Nothing could be further from the truth. In fact, after the evidence to the inquiry presented by the Pew Foundation, and after the glowing description of our efforts in protecting the environment, I was asking Senator Siewert to give me her preferences. Indeed, I had a personal involvement with the south-east marine protected areas. When we undertook a process after the draft maps were released, and the Greens and the media all said that we were going to try to shrink it, we actually delivered 20 per cent more area. We delivered 20 per cent more area than the department put up, but we actually reduced the impact on industry by 90 per cent.
Senator Siewert also talked of science. Some of the science that has been presented in this debate is what genuinely concerns people like Senator Boswell. We had a report provided by the Ecology Centre—used extensively by NGOs to promote the process. The report said that 50 per cent of the south-west zone needed to be locked up, based on the science in this report, to effectively protect marine stocks and ecosystems in the south-west. We then find in the fine print that 50 per cent is an input to the report, not an output to the model. That is the sort of thing that we need the opportunity to be able to investigate and have a look at. It is absolute rubbish.
We do support the process of marine protected areas. We support the process of them being done responsibly and with proper consultation. But we do believe that the parliament should have the opportunity if there are problems with the consultation process and within the system to deal with those problems. To that extent, when I discovered that there was an error and some concerns about the drafting of the legislation, I wrote to the committee before inquiry. I put that on the table before the inquiry so that the committee could actually deal with that. Yet during the inquiry it was very difficult to get the chair to actually focus on it. I think we have been really upfront about this all the way through, and I think it is reasonable that we get the opportunity to debate this properly and have it put to a vote in this chamber.
(Western Australia—Australian Greens Whip) (15:47): The Greens will not be supporting this motion. For a start, regarding this issue about private members' time, we did debate a bill this morning and we got a whole bill through. The Independents were always due to have a slot during this sitting. In fact, as I recollect, it was the previous week that they were due to have a slot on a program—the whole slot. Senator Xenophon was very generous in giving up some of the time for this morning's debate to start the debate on this particular bill.
It is quite obvious why the opposition has brought this debate on at 3.50 pm on the Thursday that we are rising. It is because they know very well what is about to happen in the Senate as of 30 June. So do not pretend anything else; that is exactly why you want to do it. All this talk that it is time dependent on 1 July is nonsense. Admit why it is time dependent. It is not because there are time dependent divisions in the legislation. Be honest: you got the drafting wrong and that is why you had to make amendments. The original drafter of the bill tried to amend the wrong piece of the Environment Protection and Biodiversity Conservation Act and it very rightly got sent off to committee.
Senator Colbeck needs to be fair about what happened in the committee. We all agreed that it should be reported and not pushed out beyond July. We all agreed at that discussion in the committee. As to the comments that Senator Colbeck made in terms of consultation, I think that I went through this pretty clearly this morning when I spoke about the extended period of consultation that had been occurring around the south-east process—during which time the coalition was in government—and the very extensive consultation process that is going on in the south-west areas.
If it sounds like I am backing up the government there, I do not want them to think that we are happy with the plans. We are on the record saying, 'No; we think it needs to improve.' But we do think that there has been a lot of consultation with every stakeholder. As for the backlash during the election, we know very well who was stirring up a whole lot of that. The untruths and misrepresentations of various people's positions that were articulated were outrageous—for example, about the Greens' position on fisheries. There were outlandish statements being made that we want to ban fisheries—which is so far from the truth; it is nonsense. We are the ones who care about the future of fishing because we are the ones who believe we should have adequate marine protected areas so that fisheries can be protected for the long term. In fact, since having that debate this morning, I received an email that once again highlighted the peril that our oceans and our fisheries are in.
To get back to the science, the science continues to highlight the importance of marine protected areas. The fact is that at the moment the act allows a lot of consultation. The management plans are disallowable instruments. In fact, you used that measure yourselves—and I am obviously referring to the coalition—to try to disallow the process for the Coral Sea. So you made use of that process yourselves. It did not get through, but you made use of that process yourselves as a disallowable instrument for the zoning of the management plans. So the ability to have the debate in here quite plainly works.
You want to circumvent the consultation process that happens in the community. When all that process is negotiated you want to then come in and circumvent that and make it a political process so that certain people in the community—and I am not pointing any fingers here—can tell mistruths and half truths about what impact those particular zonings have and say that it will stop fisheries forever and that certain people want to ban fisheries, which is nonsense. That is what will happen if you try to do that with marine protected areas.
Your party felt the process outlined in the EPBC Act was satisfactory at the time. Now, all of a sudden, it is changing, because 11 years down the track those provisions are finally starting to be used to get some conservation outcomes and a proper planning process. This talk about bioregional plans and the planning process delivering uncertainty is nonsense. They deliver certainty because there has been extensive committee consultation and everybody knows where the lines are drawn. That is certainty; it is not uncertainty. What you want to do is further destabilise the process.
Mr Deputy President, I congratulate you, too. I am not going to respond to the Labor Party and the Greens. What I am going to say is that this needs to be debated, because there are four million blue-collar workers who normally vote for Labor. I will read one of the submissions to the committee again. It should be absolutely compulsory reading for everyone in the Labor Party. The Labor Party is getting ripped to pieces. This is just a classic example of why you have to listen to the people, and you do not. The vote is dividing now, at 27 per cent, and the people who want those bioregional zones, in the form that they are, are voting for the Greens. The four million people who fish and normally vote Labor are coming over to us, and that is why we won every seat down the east coast of Australia, in Queensland. You ignore this at your peril and you continue to ignore it.
This bill covers twice the land area of Australia—16 million square kilometres—and it is in the hands of only one person. The minister, Mr Burke, has the power of life and death over fishing, mining, boating and anything that happens in those zones, and he can do what he likes. This bill does not want to ban bioregions—not at all. It is saying: give the parliament a vote; let the parliament have the right of disallowance. It is the same in every declaration, bar this particular one.
We had a number of submissions to the inquiry, something like 31. Out of those 31 there would have been 28 that represented professional fishermen or boat users, such as the Cairns Professional Game Fishing Association and the Haines Group, which provides boats. The boating industry is worried; it is in the doldrums because of all the closures that are going on. I will read from Cameron Talbot's submission. It is an absolute cry in the wilderness from a Labor voter. He said:
that is, the World Wildlife Fund—
and AMCS seem to get access to Ministers and control of what happens. The Department does not consult us or simply ignores what we have to say. I feel that democracy has been lost and further more my faith in the Labour party has gone with it. I along with all labour supporters that I know who also fish, are so disenfranchised with this government that at the next election we will do what I never thought we would and vote LNP. This is the last chance I will give labour, if this falls thru so does my vote—for good. Fishermen (and there are a lot of us) will not forget this if it is swept under the carpet.
Those are the people I am appealing for—the people who are voiceless. Yes, they have consultation: 'Sit down here. We'll tell you what we're going to do, and if you don't like it don't worry about it. But, if you're on the Pew group or if you're on a green group, you get the ear of the minister.' This is what the four million people are saying: 'We want the same rights as Pew. We want the same rights as the World Wildlife Fund. That is what we want and we're not getting it. We voted for the Labor Party, but we're not going to do it anymore.' You are going to be torn to pieces and you should understand this, but you keep walking into the fire.
We had a couple of submissions from recognised scientists who said that drawing lines on maps does not really help the fishing industry. I will read one to the Senate by Steve Oxley from the department. He said:
I think it would be fair to say that, relative to other parts of the marine environment—and bearing in mind that the marine environment is generally not well understood—we have a relative dearth of information about the biodiversity of the Coral Sea …
This will be the next cab off the rank to be declared a zone. The Labor Party have to realise this: how do you go when your vote goes below 27 per cent? (Time expired)
I, too, would like to extend my congratulations to you on your illustrious career in the Senate and on your sterling representation of the people of South Australia over that long period of time and for your excellent chairing when you were President and Deputy President. I would also like to thank you for our many chats on aeroplanes to and from Canberra. I have appreciated that very much. You were first coalition member I ever sat next to on the plane to Canberra, on my first trip. You were very kind to me then. I also remember that you told me on that day that it would not be too long before I would be a government senator, so thank you very much.
The government is opposed to the motion moved by Senator Parry to suspend standing orders. As Senator Parry said, the opposition's intention is to bring back the Environment Protection and Biodiversity Conservation Amendment (Bioregional Plans) Bill, which was on the Notice Paper and, indeed, debated this morning during private senators' bills time, which was the appropriate place for a private senator's bill to be placed and debated. It is not the appropriate time to be debating a private senator's bill now when the Senate is in the last hours of the last day of the last sitting week of June and there is significant government legislation that needs to be debated, including the incredibly important appropriation bills and other time-critical legislation that has to be implemented by 1 July.
But no, we have seen, as Senator Ludwig has quite rightly pointed out, a stunt on the part of the opposition, trying to accommodate one of its members whose only interest, I believe, is to force the Senate into a vote one way or the other on this very important bill so that he can, I presume, issue a press release or something before the media takes off at approximately five o'clock. People listening should be well aware that this is a stunt by the coalition to try to force something to happen with this bill.
Senator Colbeck in his contribution rightly pointed out that this is significant legislation. I admire Senator Colbeck's dedication to this issue. He is usually a very reasoned and thoughtful contributor to debates and was a good participant in the Senate committee. He is right. It is significant legislation and it should be given the dignity of significant legislation and be allowed to be debated in full, and the debate should be able to be contributed to by all senators who want to make a contribution to it.
I am one of those. I participated in the inquiry on this bill and I have been walking around all day with my speech ready to give. But I was prepared to give it in private senators' bills time. Now is not the time for me to be making a speech about this bioregional plans bill—and I know that there are government senators who also wanted to contribute, because we understand how important it is.
We also understand how the people of Australia have been misled by the fear campaign whipped up by those opposite on the basis of their claim that, if this bill is not passed, somehow Armageddon is going to be visited upon the marine industry, on commercial operations that rely on the marine environment and on recreational fishers and other people who use our beautiful marine environment for many and varied purposes.
As Greens whip I should also say that, while the intent of this stunt is painfully obvious to everybody here, it is not correct, as Senator Boswell continually says, that there was some arrangement entered into by the government to ensure that private senators' bills are brought to a vote. There was never an agreement that that would happen. There was an agreement that there should be private senators' bills time, and in fact in that time we have seen a number of government bills brought to the vote including, I clearly remember, a vote on the Defence Force retirement incomes bill. I clearly remember a vote on Senator Nash's social security legislation, and I clearly remember a vote just this morning on Senator Xenophon's palm oil bill. So it is outrageous for the coalition to claim that somehow the government is not allowing private senators' bills to be debated to fulfilment. It has happened and it will continue to happen.
by leave—I give notice that, on the next day of sitting, I shall move:
That the Senate—
(a) notes that after the Tiananmen Square massacre in 1989 the Hawke Labor Government allowed many thousands of Chinese students studying in Australia to stay after their visas had expired; and
(b) calls on the Government to:
(i) provide an extension of student visas on humanitarian grounds to the students of the conflict-ridden countries of Libya, Syria and Bahrain, allowing them to stay in Australia until it is safe to return home, and
(ii) lift the current work restrictions, to allow these students, who have had their assets and bank accounts frozen, an increased ability to work and access basic entitlements in Australia.
Debate resumed on the motion:
That this bill be now read a second time.
I rise to speak on the Family Assistance and Other Legislation Amendment Bill 2011. This bill encompasses 2011-12 budget measures including provisions to freeze the indexation of family assistance income thresholds and family tax benefit part A and B supplements. The bill also makes changes to the way people are assessed for the disability support pension, creating a two-speed, two-track process for DSP applicants. It also brings forward the implementation date for some measures from 1 January 2012 to 3 September 2011. The bill also lowers the maximum age of eligibility for family tax benefit part A, extends the Cape York welfare reform trial and makes technical amendments to the Aboriginal Land Rights (Northern Territory) Act 1976. Schedule 1 of the bill amends the A New Tax System (Family Assistance) Act 1999 to lower the maximum age of eligibility for family tax benefit part A from 24 to 21 on 1 January 2012. This will bring it into alignment with the age a person becomes independent for youth allowance purposes.
The bill will also freeze indexation until 1 July 2013 for the higher income free area—that is, the adjusted taxable income someone may have before their rate of family tax benefit is affected by the income test for FTB part A. This freeze includes both the basic amount of family income of $94,316 and the additional amount for each FTB child after the first $3,796. What this means is that families in which both partners work and earn average incomes of $50,000 to $60,000 each will be affected by the government's measures. Many of the families that will be affected by the FTB freeze in this bill are struggling to make ends meet on a mere $45,000 a year. The rate of indexation for the family tax benefit part B income limit, the baby bonus income limit and the FTB A and B supplements will also be frozen for three years from 1 July 2011.
One disturbing detail about the substance of this bill was uncovered by Samantha Maiden in the News Limited Sunday papers. She disclosed that confidential government emails showed that the Labor government had been planning to freeze indexation well before the last election. Not only had the government been planning to slug Australian families with a carbon tax despite vowing not to; they had been planning to slug ordinary Australian families through this freeze since before the last election.
At the most recent Senate estimates I pursued the issues raised by Ms Maiden. What I discovered was that Minister Macklin's office had sought and received advice on freezing the family benefits in this bill as early as January 2010 and had updated advice as late as one minute before the caretaker provisions commenced. The email that was sent to Minister Macklin's office advised that the department had completed 'a new version of the spreadsheet with updated numbers for the pause supplements option'. As I mentioned, this email advice was received one minute prior to the caretaker period coming into effect.
What this means is that the Australian Labor Party had been planning this hit on Australian families from the first official day of the election campaign, from the first formal day of the caretaker period. The government did not give the Australian people the opportunity to cast a ballot, to give their verdict, on the merits of the particular proposal. This again represents the government being less than straightforward with the Australian public, as was the case with the carbon tax.
We also discovered during Senate estimates that the department is in the process of costing policies from the Greens. I cannot help but wonder whether Senator-elect Rhiannon, before she takes her seat in this place, will, for example, submit her boycott, divestment and sanctions policy for costing and consideration—or, for that matter, whether the Greens policies currently being costed by the government include their policy on reintroducing death duties. I guess time will tell.
Many of the families that will be affected by this freeze are struggling to make ends meet. They will be hit by these changes. Unfortunately, the government is seeking to give the impression that these families are rich families when many, many, many of them are anything but rich. Indeed, over 2.1 million families will lose some support as a result of the real value of the FTB supplement being cut. That is the 'pause supplements option' that appeared in the email that the government received a minute before the caretaker period started before the last election.
Even without the government's proposed carbon tax, electricity prices are already rising. They have risen by an average of 51 per cent across Australia since December 2007. The overall cost of food has increased by 13 per cent and education costs such as school fees have increased by an average of 24 per cent across Australia.
The FTB, parts A and B, the baby bonus, paid parental leave and other measures such as these are designed to support families. Labor should not be using these sorts of measures to search for savings to accommodate what has been an incredibly reckless period of fiscal management by this government.
Schedule 2 of the bill amends the Paid Parental Leave Act 2010 such that a person can only be eligible for parental leave pay if they meet the requirements of section 31, which include satisfying the income test. The PPL income limit before I July 2012 is $150,000 and it is then subject to indexation. This measure will extend the commencement date for indexation of the paid parental leave income limit to 1 July 2014. As I understand it, the aim of this schedule is to maintain some consistency with the pause in indexation for the baby bonus income limit under the Family Assistance Act.
Of particular interest to many in the chamber is schedule 3, which makes some quite significant changes to the way disability support pension applicants are assessed. I should point out firstly that the elements found in this schedule first appeared in the 2010-11 budget under the heading 'Job capacity assessment: more efficient and accurate assessments for disability support pension and employment services.' Under that measure, DSP claimants without sufficient evidence of future work capacity of less than 15 hours per week could be referred to an alternative income support payment. Others may be offered employment assistance through Job Services Australia or Disability Employment Services. That measure was due to come into effect from 1 January 2012.
At the time, the government pointed out that this measure was going to be in alignment with the introduction of the revised impairment tables. They were to come into effect on the same day. Presumably, the government believed that there was a legitimate need for alignment between these two reform measures. I doubt that the alignment between the two measures was part of a government commitment to a policy-making aesthetic; I am sure that there was a reason for having them in alignment. The 2011-12 budget measure Building Australia's Future Workforce, the implementation of more efficient and accurate assessments for disability support pension, brings forward the implementation of the 2010-11 measure from 1 January 2012 to 3 September 2011. This measure was originally in alignment with the new impairment tables, and I would be interested to hear the government's rationale now for the decoupling of those measures.
Schedule 3 introduces a new requirement that if someone has not been assessed as having an impairment of 20 or more points on a single impairment table they must satisfy the secretary that they have actively participated in a program of support. What this will do, as I touched on briefly before, is create a two-track, two-speed assessment process which will have some similarities to reforms in the United Kingdom. One group will go through a more thorough testing of their capacity to work, as a result of these changes, and if they still satisfy the relevant criteria they will go on to the DSP; if not, they will be offered an alternative income support payment like Newstart.
Schedule 4 amends the Social Security (Administration) Act 1999 to enable a proposed 12-month extension of the welfare reform trial in the Cape York area. The Cape York Welfare Reform trial is a partnership between a number of communities on Cape York, the Australian and Queensland governments and the Cape York Institute for Policy and Leadership, which has done so much good work in this area. The intention is to restore local Indigenous authority, to support the local community, to increase individual engagement in the real economy and to reinforce and restore positive social norms.
A key element of the Cape York trial is the Family Responsibilities Commission, established under Queensland government legislation, and the role of local family responsibility commissioners. These commissioners will hold conferences with community members, refer people to support services and, when necessary, arrange income management for people who need it. They will help provide a better social fabric for these communities in need. At present, a person can only be subject to income management under the trial after a decision by the Family Responsibilities Commission made before 1 January 2012. This schedule pushes the date out to 1 January 2013, to enable income management to continue in Cape York for a further 12 months.
Schedule 5 amends the Aboriginal Land Rights (Northern Territory) Act 1976 in order to clarify that the Public Works Committee Act 1969 does not apply to Aboriginal land trusts. Schedule 5 makes some changes that clarify that Aboriginal land trusts are not authorities of the Commonwealth for the purposes of the PWC Act.
I have raised a number of issues relating to this bill, with particular reference to changes to the family tax benefit. This is a matter that the government was clearly examining, anticipating and intending to introduce before the last federal election. Key changes to public policy, such as the freeze and such as the intention to introduce a carbon tax despite telling the Australian people the opposite, go to the democratic deficit in the current government. This government is really starting to put serious pressure on the compact of trust that there should be between an elected government and the voting public. This is yet another deeply disappointing example of that growing trend in this government to say one thing and do another—or to say nothing to hide an intention and then to reveal it after an election.
There are also some significant changes to the disability support pension. I know that I and a number of colleagues on this side, including Senator Boyce, will be very carefully monitoring how these play out in the lives of the Australians who rely on these benefits and who need to go through these processes. Obviously, we all want to do whatever we can to encourage people and support them in moving from payments back into the workforce. The government has spoken of that as well—there has been plenty of rhetoric around that—but we will have to wait and see and examine what the real effect of these particular measures are. I indicate that the coalition will not be opposing this bill.
I say from the outset that the Greens do not support two aspects of this bill, as we articulated in our dissenting report to the inquiry by the Community Affairs Legislation Committee. There are many reasons why we have some concerns with particular aspects of the bill. Not only does it cut costs at the expense of low-income families and people with disabilities but it has been rushed through this place without adequate time for proper consultation or consideration of the detail. I will go into some of those concerns shortly. We are particularly concerned with schedule 2, which is freezing the indexation of the FTB supplements, and schedule 3, on qualification for the disability support pension. On the supplements, freezing of indexation will impact on 629,000 recipients of family tax benefit and income support. It will impact on additional families on low wages and the working poor. But, although I asked for those figures, unfortunately they were not provided. They were provided in terms of those numbers on income support, which was, as I said, 629,000. So it will be impacting on more families that are on a low income.
Although it sounds, in theory, like not indexing the supplement only amounts to a few dollars a week, it becomes particularly important for those families that are living on low incomes—as I said, not just those on income support but also those on low incomes. These families often use the supplements for large-sum expenses, such as appliance repair, bonds, moving house and car registration. ACOSS pointed that during at the limited inquiry that we had.
I am also concerned about the cumulative impact of this particular measure and other budget measures which the Senate is yet to consider—for example, the changes to the parenting payment for those parents that were grandfathered onto parenting payment (single) under the Welfare to Work measures. One of the measures the government announced in the budget was to change the age of dependants at which parents transfer out of parenting payment (single) and on to Newstart from 16 to 12. That will drop their income $56 a week. If you factor in this measure as well, you start to have an impact on families.
I asked the government on two occasions, first at estimates and then at the inquiry to this bill: what are the calculations for the cumulative impact of all these budget measures on Australian families, in particular low-income families and those on income support? As yet, I have not received that piece of information. In fact, I was quite shocked that the government had not done that calculation. I asked what the overall impact of all the different measures the government wants to implement through the budget measures is, and they could not tell me. So we are extremely concerned about the impact on low-income families of that particular measure. Of course, if you receive FTB A and FTB B you will cop a double impact through these measures. So we do not support that particular measure, and I have several amendments, one of which is to take that particular schedule out of the bill altogether and, if that does not succeed, to try and make sure that the lowest income families are quarantined from this measure. I will talk about that more in committee.
However, our greatest concerns are around schedule 3, which is around changing the process for qualification for the disability support pension. This requires people with disabilities to prove their incapacity to work by participating in training or work related activities, the new definition of that program of support before they are eligible for DIP. We believe this is deeply problematic for a number of reasons. For a start, the method of determining serious disability is an issue. To be determined to have a severe disability is essential for exemption from the lengthy program of support requirement. It is far too narrow. To be judged to have a severe impairment a person must—and I am taking this on my understanding of the ME—be assigned an impairment rating of 20 points or more under a single, and this is very important, impairment table. This means that a person with co-occurring disorders may not be classified—I say 'may' because they may have multiply occurring disorders where one of them is above 20 points on one table. If that is not the circumstance and they have co-occurring disorders they will not be classified as having a severe impairment unless one or both of the disorders rates above 20 under a single table. As Frank Quinlan, the CEO of the Mental Health Council said in his evidence to the committee:
Several Australian and international studies have shown that people with disabilities such as mental disorders and substance abuse disorders will usually have co-occurring disorders, and a person with co-occurring disorders is likely to have greatly exacerbated negative impacts. A person with two or more moderate level disorders occurring across the tables when combined could result in a total equivalent of a severe impairment, when you combine substance, mental and physical disorders. The current amendment does not allow for cumulative totals across the tables and therefore does not take account of co-occurring disorders.
What this means is that people suffering from a co-occurring disorder will most likely be placed on Newstart and could be unable to meet the requirement for participation in a program of support. It is unclear what would happen to people in this situation. The legislation does not give any discretion to assessors when qualifying people to go straight onto DSP other than if they meet the requirement for serious impairment that I just outlined. The legislation does not give any discretion to assessors when qualifying people to go straight onto DSP other than if they meet the requirement for serious impairment that I just outlined.
We are also concerned about the fact that the legislation does not take into account or give adequate consideration to the episodic nature of some disabilities, such as mental illness and substance abuse disorders. Episodic symptoms can often be misinterpreted as noncompliance. If a person is assessed when they are functioning at a healthy or high level, they will not be deemed to be severely impaired. It is unclear what will happen if they later down the line become unwell and are not able to participate in a program of support. According to the evidence given at the hearing, there was no information provided about the right to appeal or to be reassessed.
During the hearing, FaHCSIA appeared to misunderstand my concerns and simply repeated that not all new DSP applicants will have to achieve 20 points under one table, but rather that the 20-points clause ensures that people with a severe disability are not referred to services where it is unlikely that there will be any benefit. I must say that I knew that already, and that is the problem. It is clear that if the only qualifying factor for severe disabilities is 20 points under one table and there is no discretion to assess this, many people could be placed on a program who would not be able to derive any benefit from it. In fact, it will have even greater negative impact on those people.
The department, in the inquiry, went on to outline other ways individuals might be exempt from the program of support, including participation in employment services or an inability to work for more than 15 hours a week. It is encouraging that the department considers these factors, but they do not provide much reassurance without this being in the legislation. Finally, it has been very difficult to fully evaluate concerns relating to severe impairment when not only are there are revised impairment tables not completed yet, but the process of current review has not been made public. The speed with which this bill is being pushed through indicates the bringing forward of the start date is clearly only a cost-saving measure designed to cut $49 million out of the budget and makes little sense when the very tables designed to be used in implementing the measure have not yet been completed.
We are also concerned that there is a great deal of ambiguity in this legislation around what the maximum amount of time is that a person could wait before being reassessed for disability support. At the inquiry, DEEWR gave evidence that the longest programs could probably go for 18 months. Considering the impact of these measures on people with disabilities, 'probably' is not acceptable. There is no time limit in the legislation, and the length of participation would appear to be at the discretion of the government. It is also unclear what exactly the program of support contains. Some information was provided by FaCHSIA at the inquiry, but no detailed information is in the legislation. Such measures, which have such massive potential impact on vulnerable people, need to be subject to parliamentary review and public scrutiny. They should not be at ministerial discretion.
Essentially, this bill unnecessarily subjects people with disabilities to financial hardship for an extended, undefined period of time. At the inquiry I tried to get some concrete numbers on how many people this measure would impact and then, specifically, on how many would eventually end up on DSP after initially being rejected—because, basically, everybody is going to be rejected when they apply, other than those who meet the criteria that I have already outlined about a severe impairment and 20 points on one table. During the hearing the department stated that 3,000 of the 6,000 people rejected between September 2011 and January 2012 would eventually end up on DSP. This equates to over half the applicants who should be on DSP ending up on Newstart.
I am sorry, but I cannot work out how that helps those people. It will not help; it will actually probably make them feel even worse, because for 18 months or whatever period of time they will have failed in a participation program—but the government will have managed to save 128 bucks a week for 18 months for 3,400 people. That is what it is about: people who should be on DSP from the beginning who will just sit on Newstart with worse taper rates—and I will come back to the taper rates. The government have acknowledged that taper rates are a barrier to people getting work on DSP. They have made moves to fix that and I congratulate them on that, but they have not fixed it for people with disabilities who are on Newstart.
Figures provided later by the department differed and, despite my trying to find out some more detail, it still was not clear. I could not find where the 6,000 or the 3,400 comes from, because the subsequent figures that we were given in answer to a question on notice was, I think, around 2,900 people who would then go onto DSP in 2011-12. But at the hearings they said there would be 3,400 just in the first period. So I found that a little bit confusing and it has not been cleared up. Perhaps it could be cleared up during the committee process. However, even those figures that we were given subsequently showed that by 2014 over a third of the yearly applicants would eventually end up on DSP. Again, this is a savings measure.
These findings are not surprising, considering the impact of other punitive measures. Six months after the first DSP applicants were put onto Newstart as part of the Welfare to Work reforms, less than one-fifth of them were off income support and in paid employment. We believe it is unacceptable for the government to continue down this punitive path when its effectiveness has not been proven. You are setting people up to fail, and it is not the way you encourage people into work. We believe that these figures indicate that this is essentially a cost saving exercise at the expense of those people with a disability.
Considering that at least one-third of the applicants will eventually be placed on DSP, it seems as if the legislation is setting people up to fail. Eighteen months of trying and not succeeding in training or work related activity could be extremely damaging to already vulnerable people, and we believe it is unnecessarily cruel. People with disability who are placed on Newstart will suffer significant financial hardship as a result of this, as ACOSS made comment on in its submission.
Since the alternative payment, Newstart allowance, is at least $128 per week less than the pension, the bill would deprive the majority of applicants—those with low employment prospects who still have an ongoing need for income support—of additional income to help them meet basic living expenses. At $237 per week for a single adult, the Newstart allowance is inadequate to pay for the essentials of life. Given that most people with a disability face additional costs—for example, transport and medication—and will occur additional costs such as travel costs when participating in a program of support, it is likely that many applicants would struggle financially until such time as they either secure employment or are granted a pension. People placed on Newstart instead of DSP are subject to a double disadvantage. Not only do they receive $128 a week less but also they are subject to the higher taper rates. This barrier to work is ironic considering the government's aim to encourage people with disabilities to engage in the workforce. It is interesting to note, as I said earlier, that this is one of the barriers that has been addressed by the government by lowering the taper rate for those on DSP. Now we have this bill which puts more people on lower payments and higher taper rates. I am really unclear as to how they think they are going to meet the aim of encouraging more people with a disability into work.
Another area of ambiguity in this bill is the role of the job service providers. It was unclear during the inquiry how the providers would be required to contribute to the ongoing DSP qualification assessment process and how and when they would provide information as to whether people were not coping in the process. There will be an increased workload for the providers. Mr Baker from the NDS articulated to the Senate inquiry concern about the fact that the rates paid to people delivering disability employment services had fallen from 4,108 in 2003-04 to 3,621 in 2008-09. I am aware that those budget figures have changed again, but he was saying that he was extremely concerned about whether they would be able to cope with the extra workload and provide quality support. It is unclear how and when reassessment for DSP will take place, and I have ongoing concerns about the assessment process. There is ambiguity about how long a person will have to be on the program of support, what criteria will be used, if and when people will be reassessed to go on DSP and what role the job service providers will play in that decision.
Finally, I greatly object to the way in which this bill has been rushed through this place. It is clearly designed to save $49.7 million at the cost of people with disabilities. There has been inadequate time for community organisations to get involved in this legislation, to express their opinion and for them to consult low-income families and people with disabilities. We are greatly concerned about this. This is a substantial change for people with disabilities, and we are deeply concerned that it is being rushed through in this manner. It is unclear how the government will be ready to roll this out in a matter of months, particularly when you consider the issue of the impairment tables. We do not believe that this schedule should proceed.
As I articulated earlier, I have some amendments that I have circulated. We believe that the bill should be divided and that schedule 2 item 2, which is the indexation of FBT supplements, should be removed from the bill. Given the way that this process has been rushed through, I believe there would be room to amend schedule 3 to make it more acceptable and to genuinely help people on DSP. This is going to have massive unintended consequences for those living with disabilities. You have rushed this through. It is going to unnecessarily impact on those living with a disability. It will not help them. It will hinder them purely to save $128 a week from somebody who should have been on DSP and is placed on Newstart. There are more creative ways of helping people find work than this.
I foreshadow that I will move a motion to adjourn these proceedings to allow a motion to deal with sitting hours this evening. I have advised everybody in the chamber, the parties and the Independents. I move:
That the debate be now adjourned.
Ordered that the resumption of the debate be made an order of the day for a later hour.
I seek leave to move a motion to vary the hours of meeting and routine of business for today.
I do not suspect we will need this amount of time, but this allows sufficient time for these important bills to be debated. I move the motion in the terms circulated in the chamber:
That the order of the Senate agreed to on 11 May 2011 relating to the hours of meeting and routine of business, be amended to provide that:
On Thursday, 23 June 2011––
(a) the hours of meeting shall be 9.30 am to 6.30 pm, and 7.30 pm to adjournment;
(b) the order of consideration of government business orders of the day for the remainder of today be as follows:
No. 1 Family Assistance and Other Legislation Amendment Bill 2011
No. 2 Tax Laws Amendment (2011 Measures No. 5) Bill 2011
No. 6 Remuneration and Other Legislation Amendment Bill 2011
No. 5 Appropriation (Parliamentary Departments) Bill (No. 1) 2011-2012
Appropriation Bill (No. 1) 2011-2012
Appropriation Bill (No. 2) 2011-2012;
(c) consideration of general business and consideration of committee reports, government responses and Auditor-General's reports under standing order 62(1) and (2) shall not be proceeded with;
(d) divisions may take place after 4.30 pm;
(e) the question for the adjournment of the Senate shall be proposed after the Senate has finally considered the bills listed in paragraph (b); and
(f) if the Senate is sitting at 10 pm, the sitting of the Senate be suspended till 9.30 am on Friday, 24 June 2011.
Question agreed to.
Debate resumed on the motion:
That this bill be now read a second time.
We are looking at yet another example of this government's complete inability to manage any sort of legislative program. It is incredible that they cannot seem to get anything organised when it involves timing. What is particularly serious in regard to this particular piece of legislation is the very severe vulnerability of the people that it affects. As Senator Fifield pointed out, we will not be opposing this legislation—it is a government budget measure—but we will be watching very carefully. It is a small example of how poorly this legislation has been thought through, developed and put into parliament that the government's own members of the Community Affairs Committee which had a speed-read—you could not call it an inquiry—of the bill recommend that '… an Advisory Group engaging community organisations be established to work with government on the implementation of the DSP changes.' What a great shame that they could not quite manage to set up an advisory group to look at implementation of DSP changes before they put this legislation through, before they ended up with so many ridiculous and possibly very serious unintended consequences which will come from this legislation. Every one of the seven submitters to our inquiry on this legislation made the point that it had been rushed through, that there was no time to put together a real submission, and raised questions about what was proposed. In fact, some demonstrated a misunderstanding of what was proposed—not because they do not have expertise in the field but because of the complete lack of information from the government on the point. We even had the very bizarre situation of Minister Macklin writing to a witness, after the inquiry—the speed read—had finished, to try to correct some of the information. This is the information that should be in regulations. It is information that should be available to people. We went through some of the most ridiculous inquiries, and all we have ended up with is, 'Take it on faith from me,' says Minister Macklin about a number of issues that are very, very concerning to a lot of people in this area.
One of the smaller areas of effect is the 25,000 sole parents with children aged between 12 and 15 who will now lose up to $56 a week for each child due to the changes. Can we think about these people. Firstly, they have been grandfathered since 2006. They are sole parents. There is a requirement on them already that they seek to work for up to 15 hours a week. They have all been in this situation since at least 2006. Let us think about why these 25,000 parents might not yet be employed for up to 15 hours a week. I do not think it is going to be because they have not tried to get a job. Could it be because there are not jobs available to suit their skills? Could it be because they have a disability or a dependant with a disability? Could it be because of a chronic illness? We have a system that has encouraged these sole parents into work. They are supposed to be working up to 15 hours a week; they are not. So what does this government do? They do not go out and try to find out why; they just change the rules for people who have been grandfathered. Fifty-six dollars a week is a significant amount of money for those sole parents. Every OECD survey and every other survey sees sole parents with young children as the most impoverished people in our communities, and yet this happens without any investigation whatsoever.
We also have the cuts of $43 a week for young unemployed people aged 21. I must admit that I have to agree with Senator Siewert that so many of these measures just seem to be a 'Quick, what's a way to save some money.' From July, these young people would lose access to Newstart and stay on youth allowance for a year after their 21st birthday. They are anticipating that over four years they will save $184 million with this, but it is a cut of $43 a week for young unemployed people living independently of their parents. It is just bizarre that yet again we have another very vulnerable group who have been targeted by this government to achieve some savings. The learn or earn requirements certainly are something that we would espouse. It is something that has been espoused and has been applied, but the sudden change in age and the sudden requirement that this move up: what is it designed to do? Send young unemployed young people who are not at university back home? Gee, that is great, if they have got a home to go to. Did we think about some of the reasons why this group in particular might be people who are not living at home? There have got to be other issues here, as there are in the area of the sole parents who have had a requirement to work since 2006 and yet have still not made it.
Then we come to the most bizarre measure of all, and that is the requirements regarding the disability support pension. I would like the government to seriously consider whether they can delay the introduction of this measure until they have had a look at the impacts of it and any potential benefits. Senator Siewert talked a little about the figures on how much this is going to save the government and that it seems quite strange. They seem to be not only quite strange but also quite cruel. The government talks about encouraging people into work by providing programs of support, but let us look at the way this scheme has been engineered to work. You apply for a disability support pension. According to various figures, between 6,000 and 18,000 people a year who apply will be told, 'No, you cannot have disability support pension. Give us evidence about your capacity to work.' The way to get the disability support pension, of course, is to fail in having a capacity to work. This is a fantastic way to talk about creating dignity for people by giving them jobs. Instead of setting up a system that allows people to work to the best of their ability and receive a disability support pension depending on the level of work that they can achieve and their costs, what we have here is the appalling and disgusting situation of people being set up to fail. You apply for the disability support pension. You get knocked back. You are encouraged to undertake a program of support—whatever the heck that is, because no definition has yet been provided, although some ideas about what it might be were given to us during the speedy inquiry. You undertake this program of support. If you fail the program of support, then you can reapply for the disability support pension. And that is exactly what the figures that the department has given us are supposed to demonstrate: that they are expecting a high failure rate on capacity to work.
As I understand it—as Senator Siewert said earlier, we have seen several lots of figures—the government is expecting that between September this year, the new early start date, and January 2012 there will be 6,000 people rejected for the disability support pension. But, over the subsequent 12 months, 3,400 of those 6,000 will end up being eligible for the disability support pension. More than half of them will have gone through the little hoops and jumped into whatever program of support they have been told to go to. And then they will be told, 'Sorry, you don't have a capacity to work. You can reapply for a disability support pension.' All this does is save the government $128 a week.
One presumes that this more than 50 per cent case is based on the current impairment tables which will be used between September and 1 January, when the new impairment tables, which no-one has yet seen, will come into force—another brilliant move on the part of this government. What allegedly will happen in 2011-12 is that nearly 15,000 people will be initially rejected, and almost 3,000 of those will end up on DSP. And these figures continue to go up. But what is particularly worrying is that in 2013-14 and 2014-15 we will end up with 7,500 people eventually going onto DSP, despite the fact that around 18,000 people will have applied. So in the last two years of this estimates period, one-third of the people who apply and are rejected the first time will get the little badge the second time—after they have failed programs of support—according to the figures that we have been given. As I said, I am appalled that such a program could have been engineered in this way, to set people up for failure.
As Senator Siewert also mentioned, there is the extremely worrying issue that there are no time frames whatsoever within this. We are told that the longest job building capacity program goes for 18 months. I think the suggestion was that that is some sort of an end figure to put on it. But these figures suggest people are coming on and off within 12-month periods. We are told there are 13-week courses. There is nothing here that would suggest that you could not be sent from one program of support to another program of support and to another program of support by the government. If we have people rushing around on wheels, why not put them on several wheels and see what happens?
The coalition absolutely supports the principle of assisting everyone to work to their abilities—to have a job and to be supported into that job. But this piece of legislation—which has been brought forward, which is being rushed through, of which there is no detail and which appears to have been engineered simply to save money and hurt vulnerable people at the same time—is not worthy of anybody who would call themselves a government in this country.
I am disgusted by it and I very much join Senator Fifield in making the point that we, along with every organisation that assists people on income support and people with disabilities in this country, will be watching this like hawks. The unintended consequences of it could be horrific. We will be there. I hope we do not get the chance to say, 'I told you so,' but I am less than confident that that will not be the case.
I thank senators for their comments. I thank coalition senators and coalition members of the other place for their support for this bill.
The bill introduces a number of 2011-12 budget measures and one non-budget amendment. This legislation was passed by the House of Representatives yesterday—and again I thank the opposition for their support. The government is a strong supporter of the family payment system and has added to the system since coming to government: through the 50 per cent childcare rebate; Australia's first national paid parental leave scheme; the education tax refund, which in this budget includes school uniforms from 1 July; and, in this year's budget, substantial increases to family payments for families with older teenagers in secondary education. The government also believes in a sustainable and targeted family payment system that will continue to support Australian families for many years to come.
This bill delivers a number of measures to help make the family payment system more sustainable for the long term. The first measure lowers the maximum child age of eligibility for family tax benefit part A from 24 to 21 from 1 July 2012. This change will bring family tax benefit part A into line with the reduction in the youth allowance age of independence from 1 July 2012. This will ensure that the family payment system continues to support families while the dependent children are in study or training, while recognising that young people aged 22 and over are considered independent. The second measure builds on reforms announced in the 2009-10 budget that better targeted the family payment system to focus on low- and middle-income families. In the 2009-10 budget, indexation on the upper income limits for family tax benefit parts A and B and the baby bonus was paused. This bill will extend indexation pauses on higher income limits for some family assistance payments for a further two years. In addition, indexation of the paid parental leave income limit will not commence until 1 July 2014.
Under the third measure, indexation of family tax benefit end of year supplements will also be paused for three years, from 1 July 2011. This will keep the end of year supplements at their current level for the next three entitlement years. The current supplement amounts are $726.35 per child for family tax benefit part A and $354.05 per family for family tax benefit part B.
The bill also introduces a 2010-11 budget measure which reforms assessments for the disability support pension. It has been brought forward as part of the 2011-12 budget to start on 3 September 2011 rather than 1 January 2012. The new assessment procedure for the disability support pension will help people with disabilities return to the workforce, wherever possible, by focusing on their ability rather than their disability. The new assessment procedure will require most people to have tested their future work capacity by participating in training or work related activities in order to be qualified for the disability support pension. This requirement will not apply to people with a severe impairment. People with a severe disability or illness who are clearly unable to work will be fast-tracked so that they receive financial support more quickly and will not need to have participated in a program of support.
The final 2011-12 budget measure contained in this bill is an amendment that enables the extension of the income management element of the Cape York welfare reform trial and is a partnership between the communities of Aurukun, Coen, Hope Vale and Mossman Gorge, the Australian government, the Queensland government and the Cape York Institute for Policy and Leadership. The Queensland government is currently leading a process of consultation with Cape York communities in relation to a proposed extension of the trial for an additional year, to 1 January 2013. In the 2011-12 budget, the Australian government provided $16.1 million for this extension.
While these consultations take place, the government is moving to put in place the amendments required to Commonwealth legislation to enable any extension of the trial. It is important to proceed with these enabling legislative changes so that any extension of the trial is not delayed and the four Cape York communities are not adversely affected. Changes to Queensland government legislation would also be required in order for the trial to be extended.
This bill also includes a minor non-budget measure which clarifies that the Public Works Committee Act 1969 does not apply to Aboriginal land trusts established in the Northern Territory under the Aboriginal Land Rights (Northern Territory) Act 1976. Land trusts were never intended to be Commonwealth authorities to which the Public Works Committee Act applies, and this amendment puts that position beyond doubt.
Question agreed to.
Bill read a second time.
Bill—by leave—taken as a whole.
I move Greens amendment (1) on sheet 7104:
(1) Clause 2, page 2 (table item 4), omit the table item.
This amendment proposes to remove changes to the disability support pension. As I articulated in my second reading contribution, the Greens have great concerns with the changes. We believe they will have very significant unintended consequences and that they should be excluded. More time needs to be put into developing a much more sensitive approach to helping people with a disability. I could be generous and give the government credit for thinking this is the way in which you help people with a disability. In that case, I urge them to reconsider their amendments, because they will have very significant unintended consequences.
But I think what the government is about here is saving money. I do not believe this is the way to do it. Research clearly shows that punitive approaches do not work. The government has recognised that there are barriers to people with disabilities finding work, and it has made significant changes in addressing taper rates and introducing disability brokers. These are good steps. On the one hand the government is making positive moves in addressing barriers to employment for someone living with a disability. But these amendments are not a good step. The government has not worked out the detail. It is rushing them through in order to save nearly $50 million. I do not think these measures are appropriate. Even if the government brought them in at the end of the year, I do not think they are the way to go. This is a particularly bad time and this is a particularly bad way of doing things.
The government are rushing these changes through. They have not completed the impairment table. They do not know—and they admitted this; I had a bit of a to and fro with the department over this—what role the providers will have. They are still making it up, quite frankly, as they go along. They should withdraw these measures. They should at least start them when they said they were going to—although, as I said, I do not agree with the changes; but at least a delay would maybe blunt some of the most dramatic of their potentially unintended consequences.
I want to indicate that the opposition will not be supporting the Greens amendment. As I indicated in my remarks and as Senator Boyce did in hers, we will nevertheless be watching very closely how this particular measure works in practice. It is something that I am sure we will be examining closely at Senate estimates.
I thank Senator Siewert for accepting that our intent is to try to ensure that Australians can access employment. This is about trying to ensure that people with a disability get the support they need to get a job.
I would also add, Senator Siewert, that the government welcomes the Senate committee's recommendation to establish an advisory committee of community organisations to consult on the implementation of the measure. The government will move on this very quickly to ensure it is established and it will also involve the employment service providers.
I would also note, as a former employment participation minister, that we have done a great deal to expand our disability employment service, including the uncapping. So a great deal of work has been going on at the employment end as well to ensure that the disability employment service meets the needs of job seekers. Also, the Job Service Australia model has been expanded and improved in terms of stream 3 and stream 4 regarding outcome payments.
That the amendment (Senator Siewert's) be agreed to.
The committee divided. [17:20]
The Greens oppose schedule 3 in the following terms:
(4) Schedule 3, page 6 (line 1) to page 8 (line 31), Schedule TO BE OPPOSED.
The TEMPORARY CHAIRMAN: The question is that schedule 3 stand as printed.
Question agreed to.
The Greens oppose schedule 2 in the following terms:
(2) Schedule 2, item 2, page 5 (lines 9 to 15), item TO BE OPPOSED.
This relates to the freezing of the indexation of family tax benefit A and B. As I articulated in my speech during the second reading debate, we do not believe this is a good measure in that it focuses disproportionately on the members of our community on the lowest income, both those on low wages and those on income support. I acknowledge that the more well off Australians will not really notice it, but low-income families will notice it because every single penny counts for people on a low income. As I said in my speech, this money is often used to meet the lump-sum expenses that people have been accumulating through the year or when they need to replace a piece of equipment, pay bonds and things like that. I commend the amendment to the Senate.
I indicate that the opposition will not be supporting the Greens amendment. While we have great sympathy with the intent and objective of the Greens amendment, the opposition has to deal with the budget situation as it is. The government have put the budget into deficit. They have done so with great consistency. They have racked up three budget deficits and I am sure they are on track for a fourth. They are nothing if not consistent. We have to recognise the fiscal situation that the government has placed the nation in. For that reason, it is with great reluctance that we adopt this course of action.
We also have to reject the amendment by the Greens. I start by rejecting everything that Senator Fifield said in relation to our economic management. We could debate that all day, Senator Fifield, and I note you constantly forget about the global financial crisis, but we will leave that for another day.
This measure delivers savings to the budget of $803.2 million over the forward estimates and is part of the government's reforms to make the family payment system sustainable into the future. I talked about a number of measures that the government has already taken. As a result of the change, the forgone increases in 2011-12 would be: for family tax benefit part A, $18 per child for the year, which is equivalent to 35c a week; and, for family tax benefit part B, $11 per child for the year, which is equivalent to 21c a week. The fortnightly family payments that families rely on week to week will continue to be indexed.
Senator Siewert raised concerns about very low income families. I can advise the Senate that the impact on the maximum rate for a low-income single parent with two young children who receives both family tax benefit part A and part B will be $47 for the year 2011-12. As I previously noted, fortnightly family tax benefit payments will continue to rise with normal indexation. For this family, the total family tax benefit part A and B will increase by $12.32 a fortnight, or $321.20 a year, on 1 July 2011. That means that this family will still receive at least around $321 more in their family payments next year, depending on the age of their children. The increase could be higher.
The TEMPORARY CHAIRMAN: The question is that schedule 2 stand as printed.
Question agreed to.
I move Greens amendment (3) on sheet 7104:
(3) Schedule 2, item 2, page 5 (line 15) after “1 July 2013”, add “except in relation to a FTB recipient who is receiving a social security pension, a social security benefit, service pension or income support supplement”.
Senator Fifield, this one will not cost as much, so can I persuade you? As I said earlier, this particular measure will impact hardest. I make my point again: every cent counts for low-income families. This measure specifically exempts the freezing of the indexation in relation to FTB recipients who are in receipt of a social security pension, a social security benefit, a service pension or an income support supplement. In other words, it exempts those on a very low income.
Before the government use the argument that this will be hard to implement because of administration, I remind the government that they introduced the measure that we debated just yesterday on child health checks that require FTB supplement payments to be linked to a health check. So there will be a system in place that traces those particular people. You could use the same system to make sure you do not freeze indexation of the supplement for people on income support or those on a very low income, because that will ensure that they get the indexation to help them a little more. I commend the amendment to the Senate.
Senator Siewert's points are very well made, but if we had been in government we would have a different fiscal starting point today. We would have managed the budget in the previous years very differently. This government seems to have the worst luck of any government I have known. Every year there is always some bad luck. I do not accept the government's justification for why the budget is in the state that it is in, but nevertheless we have to accept the current state of the budget as a reality to be dealt with. Again, reluctantly, we indicate that we will not be supporting the Greens amendment.
This amendment would add significantly to the complexity of the system and would have substantial cost implications. The proposed amendment would have the effect of creating two supplement payment amounts: one for those on income support and another for those not on income support. I am advised that Senator Siewert raised this proposal along these lines during the inquiry hearings into the bill last week and Centrelink advised that there would obviously be a level of complexity with trying to make that differentiation because the limits would be currently applied across all. We would have to consider that and then advise the department, if that were the policy angle taken, and my initial reaction would be that that would be pretty tricky. Although a significant proportion of families receiving FTB are on income support, there are also many low-income families who do not receive income support. This amendment would therefore create inequities between low-income families receiving income support and those not in the income support system.
I cannot let that one go. I was actually making those arguments around the child health checks just yesterday. I was making the point that you are applying those requirements for the bill that we dealt with yesterday, the further election commitments bill. The child health checks were being linked to those on income support and not other families—but all Australian families—and particularly other groups of families. So you can do it for that bill but you cannot do it for this one?
There is a difference here. This is with regard to a payment. Again, we do also have Centrelink comments concerning the complexity, and that is what we are basing this on.
Bill agreed to.
Bill reported without amendment; report adopted.
That this bill be now read a third time.
Question agreed to.
Bill read a third time.
I seek leave to move a motion relating to the hours of meeting today.
That the Senate continue to sit between 6.30 pm and 7.30 pm.
Question agreed to.
Debate resumed on the motion:
That this bill be now read a second time.
It is my great pleasure to be speaking to this Tax Laws Amendment 2011 (Measures No. 5) Bill 2011 on behalf of the coalition and to say at the outset that we will not be opposing this bill. We will seek to move a second reading amendment which has been circulated in the chamber and which I understand the government has agreed to support.
I will make some comments upfront. This is a government which has completely mismanaged our public finances. This is a government which has inherited a very strong fiscal position and a budget which was $22 billion in surplus. This is a government which inherited a net asset position of $70 billion and which has taken us to a position where we had a $55 billion deficit last year and a $50 billion deficit this year, and where we are on track to go to a net debt position of $107 billion over the current forward estimates. This is a government which is borrowing $135 million a day just to fund its day-to-day expenses. It is a government which will pay $26 billion just to pay the interest on the debt that it is accumulating over the current forward estimates. It is a government that has completely lost control of our public finances, which is why it always has to look around for another tax grab, for another way to raise more money.
The budget in May was no different. Senator Wong, the finance minister, said the day before the budget that it was a typical Labor budget. It was a high-spending, high-taxing budget with more debt, more deficit and of course it was sprinkled with some ideologically driven attacks on those Australians that aspire to improve their station in life.
This bill includes a number of revenue measures, and I just want to make the point here that when the Treasurer delivered the budget on budget night he talked about the tough decisions that had been made and how the government had made $22 billion of savings. The government knew very well that, when he talked about $22 billion of savings, in the media the next day it would be sold as $22 billion worth of spending cuts. Sure enough, the media played along with the government. The front page of the Financial Review, even, had a big headline stating there was $22 billion worth of spending cuts. Of course, the biggest single spending cut, so-called, was the $1.7 billion flat tax. In this bill there are a number of other tax and revenue measures which are part of the $22 billion of so-called savings.
There are a number of measures in this bill that are not controversial and that the coalition supports. There are in schedule 1 some changes to trust laws regarding income averaging and farm management deposits. There are some changes in relation to trust income streaming in schedule 2; some changes to the National Rental Affordability Scheme in schedule 3; and, of course, the two significant revenue measures, which relate to the phasing out of the dependent spouse tax offset and the changes to the car fringe benefits tax rule.
Turning to the schedule 5 changes for a moment, the changes that the government is proposing in this legislation are changes to the current statutory formula method for determining the taxable value of car fringe benefits by replacing the current statutory rates with a single rate of 20 per cent, which would apply regardless of the distance travelled. This measure increases government revenue by about $961.9 million over the forward estimates, so it is a sizable increase in revenue as a result of this measure. These changes were announced in the 2011-12 budget, as I have mentioned. It will mean that those who drive less than 15,000 kilometres a year will now pay less fringe benefits tax; those who drive between 15,000 and 25,000 kilometres a year will pay about the same; and those who drive more than 25,000 kilometres will pay more fringe benefits tax. This measure will have a negative impact on those Australians who rely on their motor vehicle to earn their income and have to travel long distances, including tradespeople, salespeople, couriers, primary producers and small business people—the sorts of people that Labor always targets when it is in government to pay the price for the consequences of its mismanagement of our finances.
The official figures also show that there are 570,000 cars operating under the existing statutory formula and, according to evidence given at Senate estimates, of the users of those 570,000 cars some 60 per cent will be worse off, about 15 per cent will be better off and 25 per cent will experience business as usual. But 60 per cent of the users of the 570,000 cars operating under the existing statutory formula will be worse off. So those figures mean that 342,000 individual Australians will be worse off as a direct result of these changes which the government is making to the FBT rules for cars.
The people most affected by this measure, of course, will be those Australians and small businesses that are located in outer metropolitan and rural areas, because they need to drive longer distances. So this is yet another Labor Party tax grab which will punish people who live and work in outer metropolitan and rural areas through no fault of their own. It is just one more example of a government that just does not understand the cost of living pressures on Australian families and is not prepared to assist Australian families to deal with these pressures.
There is also the change, of course, in relation to the phasing out of the dependent spouse tax offset. It will mean that the dependent spouse tax offset will no longer be available for spouses of 40 years old or younger. Over time it will mean the rebate will be phased out as fewer and fewer people are left claiming it. These changes, as I am advised, do not affect dependent spouses who are invalids or permanently unable to work or those currently eligible for the rebate because of geographic isolation or other location issues. The rebate was never available to those claiming family tax benefit part B or if the income test for family tax benefit part B was exceeded. This schedule is expected to increase government revenue by $755 million over the forward estimates.
What we have here is a government that has been very bad in managing our public finances. We have had waste and mismanagement right across government. We have a government that has taken a strong and sound fiscal position and turned it into a position where we are now looking at record levels of government net debt, where we had the biggest deficit in the history of the Commonwealth last year, where we are going to have the second biggest deficit in the history of the Commonwealth this year and where we are going to have a significant deficit of about $22.3 billion next year, a deterioration of about $10 billion just compared to the figures that we were given seven or eight months ago in the Mid-Year Economic and Fiscal Outlook for the 2010-11 budget. Of course, we are supposed to believe that the following year, miraculously, on the back of the mining tax, the budget is going to experience a significant turnaround.
The coalition will not be opposing this legislation, not because we are happy with what the government is doing or because we support it but because, in the circumstances, it would be irresponsible to add to the fiscal pressure that this government has created. However, people across Australia need to understand that they are paying the price for Labor's mismanagement of our budget. People across Australia, whether Australians with private health insurance who are about to lose their private health insurance rebate or people that are caught up in the measures in this legislation here today, are paying the price—and Labor wants them to pay the price—for Labor's mismanagement of the budget.
As I flagged, the coalition does intend to move a second reading amendment, and I now move the coalition's second reading amendment to the Tax Laws Amendment (2011 Measures No. 5) Bill 2011:
At the end of the motion, add:
and the Economics References Committee is to undertake a review of the operation of the amendments made by Part 1 of Schedule 5 of the bill 12 months after the commencement of that Part and report to the Senate on that review no later than 12 months after commencing the review.
With those few remarks, I conclude the contribution on behalf of the coalition.
I rise today to support the Tax Laws Amendment (2011 Measures No. 5) Bill 2011 and to say how extremely pleased I am that at last the perverse incentive which was in the tax system and encouraged people to drive their cars more in order to qualify for a tax concession is gone. This is something I have been campaigning for since I got into the Senate. It was identified in the Senate inquiry that I instigated on Australia's future oil supply and alternative fuels. It is absolutely ridiculous that in an age of peak oil—and we have reached peak oil—we should have embedded in the tax system a fossil fuel subsidy that encourages people, effectively, to waste oil in a world where we are going to see upward pressure on oil prices and real dislocation in oil economies around the world as there is a recognition that cheap, accessible oil has run out. We are going to see increasing dislocation in the food production system, particularly, and also in transport in cities.
So the first thing is that we should be looking at all fossil fuel subsidies and getting rid of the lot of them across government. If you are serious about addressing climate change and greenhouse gas emissions and if you are serious about preparing for peak oil then you would instigate a plan for the whole country: a plan to get off fossil fuels and to move to a transport system that is not dependent on imported oil. President Obama has recognised that and moved rapidly in the United States, realising the vulnerability of the United States's economy to its exposure to imported oil. That is why he spent billions in their recent stimulus package to try to encourage the use of biofuels in the United States in order to get off their dependence on imported oil. The problem, of course, with the disproportionate influence of biofuels is that it has led to distortions in agricultural production, and that will happen here in Australia unless we get some good rules around biofuels and focus on second- and third-generation fuels.
But what we are going to see rapidly is the electrification of the transport fleet. The passenger vehicle fleet will become electrified, and the challenge for government is to think about a transport plan for Australia in the age of peak oil and climate change—a transformational plan to get more public transport, more rail for freight and a very fast train for passenger commuting. We need more of those throughout the country. This I see as a beginning.
When I negotiated the luxury car tax changes through the Senate in the last period of government, that was the first time that we had a shift. Instead of just taxing luxury we were taxing vehicle fuel inefficiency. What we said then is that we should be looking at the efficiency of the vehicle and driving people to more efficient vehicles, and that should be the way that we consider taxing wasteful resource use. That was the first. As part of that arrangement I got an agreement from the government that the Treasurer, Mr Swan, would write to the Henry tax review and ask about this whole issue of moving the excise system into looking at efficiency and carbon embedded energy in fuel, in particular the fringe benefits tax concession on motor vehicles. I was very pleased, then, when the Henry tax review came out and recommended getting rid of this subsidy.
Senator Brown, as Leader of the Australian Greens, asked for a costing from Treasury on reform arrangements for the fringe benefits tax of motor vehicles in November last year. We got that costing back, and of course what we see is that it is a substantial saving to the budget. It improves the underlying cash balance by $953.9 million over the forward estimates. So for people who say that, with the Greens taking the balance of power, they might be concerned about fiscal responsibility: the Greens are extremely fiscally responsible, and for everything we want to spend money on we are prepared to find savings measures. I can inform the government at this point that every time they bring in a measure to get rid of a fossil fuel subsidy it will not only improve the bottom line in the balance sheet over the coming years; it will be great for the environment. It will reduce fossil fuels.
Just today I noticed, in looking at the Auditor-General's report into the fuel tax credits—I have to say that they are very firmly in my sights, having now got rid of the fringe benefits tax concession for motor vehicles rort, as I would call it, and saving more than $1 billion over the forward estimates—where we can now have megasavings is in the fuel tax credits scheme. What you have there is about 1,500 mining companies getting $1.7 billion per annum in fuel tax credits at a time when they are making profits they could never have dreamt of. They are making extraordinary record profits and, frankly, they were allowed to get away with their ridiculous advertising campaign and reduce the tax take with the mining tax concession that they achieved without people realising that we are $1.7 billion worse off in this country every year because 1,500 mining companies get that fuel tax credit. I make the point of it being 1,500 companies because in the research and development spend in this country—and I have just supported and negotiated with the government a change to the research and development measures—we currently have less than 100 companies in Australia getting more than 60 per cent of the R&D spending in Australia. Here comes another major subsidy: 100 companies getting 60 per cent of the R&D funding and, of those 100 companies, 37 are miners. So the mining companies are hogging the research and development budget and hogging the fuel tax credit scenario while, at the same time, out there sponsoring the tour of a climate sceptic in Australia and putting ridiculous amounts of money into advertising budgets to undermine the national interest.
I want to inform the government as I stand here tonight, having had a substantial success in getting rid of one of the most blatant fossil fuel subsidies and perverse outcomes in this year's budget, that we are coming to do the government a great big favour and free up billions of dollars. We estimate there are something like $8 billion worth of fossil fuel subsidies given out every year, and they include everything from exploration subsidies to tax concessions and goodness knows what. We are here ready and willing to help on that bottom line, to get in there and not only make a better outcome for Australia in terms of greenhouse gas emissions but accelerate the day when we plan for a low and then a zero carbon economy based on a magnificent transition to public transport, to electrification of the vehicle fleet, to getting more rail in this country, to getting freight off the roads and back onto the rail. This could be a very exciting future for Australia in the transport sector, rather than having the focus, as we always have, on road transport, on more highways, on more flyovers, on more dual carriageways et cetera. What are we going to do on those dual carriageways when oil hits $200 a barrel and we are still making cars in this country that are fuel guzzlers?
I also want to say that it is a terrible policy for a country to have its free trade agreement with Saudi Arabia on the basis that we sell them six- and eight-cylinder cars to roar around the desert and use up more oil. What a thing to be proud of! Whereas on the other foot we have got China moving for very high vehicle fuel efficiency standards, setting an objective of increasing its global market share of the electrified transport fleet, and setting up fuel efficiency standards for motor vehicles that mean that no car produced in Australia would meet Chinese standards today. That is because China wanted to build itself a global position so that the Europeans have got global market share for luxury vehicles and the Chinese are building massive market share for the mainstream passenger vehicle of the future. Where is Australia? Stuck at the bottom, with poor vehicle fuel efficiency standards and a trade agreement with Saudi Arabia to send our six- and eight-cylinder vehicles there. What a disgrace.
We want to see mandatory vehicle fuel efficiency standards in this country that get us to a point where we are manufacturing vehicles which are competitive. If you want a strategy to make sure we have no vehicle industry in Australia, the best strategy is to do what we currently do, and that is to have such low standards that we produce mediocre cars in terms of efficiency so that, as the oil crisis proceeds, Australian consumers will want to buy imported cars and not locally produced cars. The only market for locally produced cars will be governments, again propping up cars that just do not cut it, and putting them into government car fleets. This is ridiculous. Again, we will be stuck with a massive subsidy to the car industry to produce cars that nobody wants to buy. That is not a strategy for efficiency or jobs. If you want to keep jobs in the car industry in Australia, we should be making highly efficient vehicles for the Australian market. That is why I will continue to campaign for very high, mandatory vehicle fuel efficiency standards.
At the same time we need to shift the excise system in Australia so that it truly reflects the energy content, the carbon content, of the fuel: the most expensive fuels would be the worst in terms of greenhouse gas emissions, right through to electric vehicles which would not be paying any fuel excise. If a government was truly thinking of a national transport plan for the future it would be looking at setting the fuel excise to cover all of those in specific terms. That process has been started, but it is by no means finished. We need to accelerate the review of that excise and at the same time negotiate with the states on a road use charge; otherwise we are going to reach a point where people will be driving electric vehicles generating energy from their own rooftops in order to have plug-in electrics and they will not be paying anything for the roads they use. The government will then be in a crisis in terms of its revenue take. So now is the time to be thinking about how we are going to think about the future. Already here in Canberra we have people installing electric recharging stations. In China there will be 10 million of these electric charging stations across that huge nation. They know where the future is in vehicles, and it is in electrification.
This is a first step. It is a really good step. It is a step we have been campaigning for and it gives me great satisfaction, having campaigned for this since I got here in 2005, to be standing here in 2011 and seeing a government deliver a reform that was laughed at five years ago. When we recommended it in the oil inquiry report that time ago, people said it was ridiculous. Now we are actually doing it. We need to have as a philosophical view that we should be encouraging people to drive less and, when they do drive, to drive more efficiently. This is the first step in saying: we want people to drive less.
We want to end the March 'rally' in Australia where people would stand in offices, put the car keys on the table and say, 'If anyone's going to the coast this weekend or needs to go to Queensland, take my car, drive it there, because I need to get the tax concession for vehicle use.' Getting rid of this means people who genuinely need to drive long distances will still have their logbooks, will still be able to demonstrate that and will have it recognised, but we will not have this perverse incentive that requires people to drive round and round and anywhere they need to go in order to get themselves up to a level where they qualify for a tax concession. So I could not be happier. And I know the tax office will be delighted to know that, as we come into the balance of power, the Greens stand ready and willing to produce billions for you in getting rid of tax concessions, getting rid of fossil fuel subsidies. We are the most economically rational when it comes to fossil fuel subsidies.
It is true, Senator Macdonald, that the irony of all this is that the most economically rational people in this place in an age of climate change and oil depletion are the Greens. We are going to stand here and help this government meet its bottom line by saving itself up to $8 billion. Those of you from the tax office that are listening: we are here ready to go on this. As you will have seen when you did the costing for us on getting rid of this, the Greens have made a substantial contribution to this year's budget by, as I said, improving the underlying cash balance by $953.9 million over the forward estimates.
Those senators who worked with me back in 2006 on the inquiry into Australia's future oil supply and alternative transport fuels, which looked at Australia's exposure to imported foreign oil, can feel vindicated today because one of the recommendations of that inquiry has finally made it into law in this country and it will start to be a driver of change.
The G20 has asked every nation to identify its fossil fuel subsidies and to engage in a process of getting rid of them. It is lamentable that Australia identified, through the Treasury, 17 fossil fuel subsidies that we could get rid of but then the government redefined what a fossil fuel subsidy is so that, by the time we got to the G20, we had no fossil fuel subsidies in Australia at all. Well, we agree with the Treasury. There are 17 fossil fuel subsidies that are pretty evident and we are coming to remove them to improve the bottom line, to work with anyone who will work with us to get rid of them because we need to be incentivising the future. We need to get to the low-carbon economy.
We need to focus on energy security. Anyone who wants to maintain a dependence on imported foreign oil is, frankly, risking the energy security of Australia into the future. This has now become a much bigger issue than just the price of petrol. This is about securing our future energy. Everybody recognises that most of the oil left in the world is now owned by countries, not companies. Those countries are going to be exercising their geopolitical weight as the world gets more and more desperate for dwindling resources. It is going to come to a choice of which is more expensive: do you go out and try and find more oil in deeper water with greater risks—and we saw with Montara and the oil well in the Gulf of Mexico what happens when you get into deep water and deep drilling—or do you go the other route and say, 'Let's get off oil and go to efficiency and electrification, and not take those risks'? That is the choice we have to make. The Greens have made that choice. Let's forget all the featherbedding for exploration. Let us get into incentivising efficiency, transformation, new technology, innovation and real competitiveness. We are on the side of efficiency and competitiveness. I really congratulate the government for actually doing this at last. I hope we can accelerate the rate of change, because there are 16 other fossil fuel subsidies. We are ready to legislate them and so improve the bottom line.
I also rise to speak briefly on the Tax Laws Amendment (2011 Measures No. 5) Bill 2011, mostly on schedule 3, after first acknowledging the huge amount of time and energy that Senator Milne has put into pursuing this particular perverse incentive in our tax system. By the end of that very long road, it was really difficult to find anybody who would speak in favour of it, so it is good that the government has taken this opportunity to finally just kick it over. There are many others there.
Schedule 3 of this bill relates to the National Rental Affordability Scheme, NRAS, which was designed to stimulate the construction and supply of affordable rental dwellings. It is a good initiative. It is not a homelessness initiative as such but is designed to increase the supply of affordable housing for key workers and low- to middle-income earners, and to encourage investment on a large scale, an institutional scale—that is, to get investors back into the business of funding affordable housing rather than the kinds of property investments which investors, large and small, have been making over the last couple of decades.
The measure that we are debating this evening will provide certainty to investors participating collectively in the NRAS. Schedule 3 of this bill amends the Income Tax Assessment Act 1997 to provide a legislative solution to allow NRAS consortia to receive their full entitlement to the NRAS incentive. These incentives were designed to be received tax-free by participants in the scheme, and this bill extends this to joint-venture operations, as we thought the government had originally intended.
The introduction of this bill has been a long time coming. It is a great relief for NRAS investors and for the sector at large. The issue has been in play since late 2009 when the ATO made an interpretation that prohibited investors from receiving the NRAS tax offset if they leased their properties to an NRAS entitled entity for sublease to eligible tenants. Treasurer Swan responded in January of last year with an administrative solution that resolved the tax issues for joint ventures until regulatory and legislative amendments could be introduced later that year to effect a permanent fix. Investors and people wanting to get into the sector to help provide affordable housing have been waiting until this evening for that instrument and for that permanent fix to come about.
We have been very concerned to learn of several instances where projects were in jeopardy of falling over—and we know of one instance where an investor did in fact withdraw—because investors and financiers felt that, in the absence of legislation or further government assurances, the Australian Taxation Office might not grant NRAS joint-venture investors the full offset benefit on their incentives.
There are two examples that I will briefly to touch on tonight to demonstrate the effect of these delays: one from right here in Canberra and one from a bit further afield in Queensland. Canberra, we know, is now one of the most stretched housing markets in Australia. Rental houses here are the most expensive of any capital city after Darwin with a median price of $500 a week for a house and $425 a week for a unit. CHC is a not-for-profit development company that delivers affordable properties for both sale and rent to the ACT community. CHC Affordable Housing Canberra has a number of NRAS properties, so they were involved in the scheme. They have developed 95 per cent of their allocations—that is, they are tenanted—and have another 34 incentives in progress in a new Canberra greenfield suburb. In the suburb of Holt, they have two NRAS developments: one with 24 units and a smaller one with eight. In both cases they own the properties and will retain them, and they are able to rent them at less than 80 per cent of market rent that is required for NRAS—they are actually renting them at just under 75 per cent of market rent. That is the scheme operating as the government intended. That was what it was designed to do.
One of the larger projects was Edge, a 104-unit development that combined both rental and owner-occupied options and included lower cost affordable homeownership properties. Seventy-six of these were to be NRAS dwellings but the legal structure was not in place at the time to provide the assurance that the NRAS incentive in this joint venture would actually get passed on to them. Without that proper structure in place it was deemed too difficult administratively and too expensive to pursue a private ruling from the ATO to provide the assurances to the investors that they were needing. Instead, 67 incentives were transferred to another project and the units were sold to investors for rental in the private market. This bill, which we are very happy to support tonight, will prevent that from happening again. We believe and understand that CHC Affordable Housing will revisit the model now that that certainty is in place in future projects.
In Queensland the very tight housing market was made disastrously worse when the floods affected three-quarters of the state, at least 70 towns and over 200,000 people. One large development project in Queensland, which has been pending, specifically awaiting the passage of this legislation, I understand will now go ahead. It is a project to build 186 units, and 45 of them will be NRAS properties. It is worth $84 million. So far, half of the NRAS residences have been sold off the plan on the condition that this legislation gets up. So we are very pleased tonight to support this legislation, which provides the necessary assurances to finalise that project.
For investors in these examples in Canberra and Queensland this bill cannot come soon enough. After a two-year wait we are all very relieved to finally have the certainty. We also welcome the government's assurances that the benefits of the tax offset will be retrospective.
There are a number of other changes that could be made to the way that NRAS is implemented that would further promote the scheme, including streamlining the application and assessment process. The last time I raised this issue in budget estimates the people processing the incentives through the government's approval process were basically being swamped. Although the scheme has been criticised for moving too slowly, at the moment the people doing the assessment work cannot keep up. This is certainly one thing we think could be improved. There are huge delays between the time of application and announcement.
You cannot obviously talk about providing certainty and ending the delays that NRAS applicants are facing without talking about the bigger picture, so what of NRAS beyond the 50,000 target? The Australian Greens are strong supporters of NRAS. We would like to see a commitment to a second round of 50,000 incentives past 2015, when the first 50,000 incentives allocation will be completed, because that really will provide certainty to the big institutional investors that you can get into affordable housing markets in Australia, that the return stacks up, that that can be banked on and that we will finally be increasing supply.
We know that is only a tiny part of the affordable housing picture in Australia. Senator Milne just spoke eloquently about the perverse incentives in the tax system, and that is true in housing more so than any other sector. That is something we will be pursuing later this year.
This is not the first time that the ATO has held the affordable housing sector hostage over its interpretation of what it deems to be acceptable NRAS activities. We had a long and anxious wait for the last three years on the issue of whether the provision of affordable housing through NRAS was deemed to be a charitable purpose. To me the threat by the ATO that charities could have their charitable status revoked if they were in the business of providing affordable housing through this scheme was quite perverse, and yet it has been so since 2009. People are basically participating now on the basis of goodwill. The day after the federal budget was released we finally saw the ruling come out that the provision of a rental dwelling under NRAS is deemed by legislation to be a charitable purpose. Finally people were given that certainty.
On the issue of confusing messages coming from the government, you will recall that out of left field—we certainly did not see it coming—the government's flood reconstruction package for Queensland basically swiped a third of the final funding for the National Rental Affordability Scheme. The affordable housing sector and their allies, from superannuation funds right through to people running community housing organisations, really should be congratulated for their very swift action. We were very pleased to support them and to lead the charge on giving the department time to process the applications that were already afoot and then restoring that funding after 2014. We are very proud that we achieved the goal of at least restoring the original program funding.
We want to see this continue. I remind government senators here tonight that the government's original intention was to treat NRAS as though it were a 10-year project and to double the target to 100,000 if the scheme were successful. I suspect by this time next year there will not be any further argument about whether the scheme is successful. It will be more: what happens when the 10-year scheme comes to an end? Will there be more incentives? What will happen to affordable housing when the incentives no longer apply?
We have enjoyed tracking the inception of NRAS and advocating for its success, including ways to improve it. We certainly will not give up on an announcement for another 50,000 incentives, as former housing minister Ms Plibersek promised when she introduced the scheme. We look forward to working with the government on the ways that NRAS can be used to fill the desperate gap in the three key areas where we believe the scheme currently falls short. These are obviously housing for our students, housing for our key workers in boom towns and housing for our ageing population. There is a long way to go in the housing affordability agenda, but I congratulate the government for at least bringing this scheme forward and for committing to its continuation.
I want to address a few remarks on the Tax Laws Amendment (2011 Measures No. 5) Bill 2011 and to support the amendment moved by my colleague Senator Cormann in relation to a review of the operation of the fringe benefits tax elements of the bill. I do want to talk about the fringe benefits tax on motor vehicles, but before I do that I want to highlight to those listening to this debate that Senator Milne proudly said to the Australian Taxation Office: 'You want more taxes. You've come to the right people.' You can imagine what sort of a hiding the Australian public and the Australian taxpayers are in for when the Greens are out there effectively inviting the Labor Party to tax more and more and are telling the tax office that they have a friend in the Greens.
The cost of living pressures on ordinary Australians at the moment are becoming unbearable. If the carbon tax does come in—and I still hope and pray that sanity will prevail and it will not be imposed upon the Australian public—it will add to the cost of living pressures. It does not mean much for people in this chamber—public servants, all of whom are on pretty good incomes—but for those who are struggling in Australia the carbon tax and all of these additional taxes, such as the flood levy tax, are all extra burdens increasing the cost of living, restricting their enjoyment of life and making it a lot harder for many families just to provide the basic necessities of life. Here we have a Labor-Greens alliance—a coalition of Labor and the Greens—running the government and proudly boasting that they are there to increase taxes.
I am looking forward to getting a copy of the Hansard of Senator Milne's address—and I will make sure it is distributed—where she proudly boasts to the ATO: 'Want more taxes? You've got the right people there.' The Labor Party has a propensity for taxing, they cannot help themselves. That is because they are such bad financial managers. Their debt blows out all the time on stupid programs like the pink batts program. They basically cannot handle money. There is the old adage: where money is concerned you cannot trust Labor. Now they have the Greens in an even more relevant position than they are today inviting the Labor Party to go ahead and increase the taxation burden on ordinary Australians.
I noted with some amusement Senator Milne telling us that in China there were going to be 10 million electric charging stations. One wonders what is going to power those electric charging stations. If they are like the ones that we use for the little vehicles that run around this parliament house, you plug them into the wall and your electricity charges these vehicles, which I assume is the sort of thing Senator Milne is talking about—10 million new electric charging stations. Where does the electricity come from? In China in particular it comes from more and more coal-fired power stations that are being built every day. There are a couple of windmills, sure, and a few solar panels but China is increasing its energy from coal-fired power stations, many of them of course using coal from central Queensland, the state that I and you, Madam Acting Deputy President Boyce, represent in this chamber. Again the Greens are a bit confused in the messages they give at times.
The thing I really did want to talk briefly on tonight was the increases that will impact upon those people, tradesmen, salesmen, couriers, primary producers and small business people, who use their vehicles for more than 25,000 kilometres every year. If you live in Hobart like Senator Milne does, Perth like Senator Ludlum does, Melbourne or Brisbane like opposition speakers do, sure, you can cut down the usage of your car and that is good for everything—good for emissions, good for pollution, good for looking at alternatives—but if you live in country Australia, particularly if you live in Northern and remote Australia, you really do not have much alternative. If you live in Laura, where I was the other day for the Indigenous dance festival, and you want an electrician, that electrician has to come from Cooktown, I think 170-odd kilometres away, or from Mareeba, 250 kilometres away. If your motor vehicle breaks down and you have to get a mechanic out to fix it, the tradesmen coming out to do that of necessity has to drive long distances. So this bill is going to add costs not just to people in the cities, who might use their vehicles but have an alternative, but to people in remote Australia, Northern Australia and in rural Australia generally—the farmers, who do not have an option.
The Labor Party and the Greens have no interest in those sorts of people and that is why you get this sort of legislation. I understand the Senate Economics Legislation Committee in a rather quick inquiry had a look at the bill. This whole legislation has been framed in such a way as to make it impossible for the coalition to oppose it, particularly at five minutes to midnight on practically the last sitting day of the financial year, when these things are always rushed through. As Senator Cormann has mentioned, we will be supporting this bill, but Senator Cormann's amendment is very appropriate and it arises from the Senate committee—that is, the amendment requires the Economics References Committee to undertake a review of the operation of the amendments made by the bill 12 months after commencement and report on them so that we can actually see the impact.
But I can tell you now that the impact is going to mean that people living in rural, regional and remote Australia are going to pay more. Does the Labor Party care about that? No. They get few votes out there. Following the carbon tax they will get no votes out there. Following the fiasco of the live cattle ban I warn any Labor Party politician not to go into Cape York, the Gulf country, the Northern Territory or the north of Western Australia because they will be literally lynched by people involved in the live cattle trade. People in those areas have found their livelihoods have disappeared overnight. The Labor Party are not interested in that, as I say, they get few votes there and the few that they did get, they will not get now. They just look after the capital city people and this sort of thing is not too bad for them, because there are alternatives. But there are no alternatives for tradesmen or professional people wanting to get assistance, as I say, using the example again in Laura when they have to get their tradesmen from 200 or 300 kilometres away. I despair for those people who do live in rural and regional Australia. These sorts of fringe benefits tax concessions did try and bring a bit of justice and equity. They tried to level the playing field, so to speak, so that Australians living in those more remote areas had some opportunity to get ahead.
These people need a champion. They are not big numerically and therefore are not of interest to the Labor Party in the political system. You, Madam Deputy President Boyce, I know are aware of this. You understand the issues, but I cannot believe that the Labor Party people can be so insensitive, so ignorant or so uncaring when it comes to the additional burdens that country people—people living in remote Australia—have to carry. The bill that is being put through and that meets commitments made in this year's budget will make it more and more difficult for those of us who live in the country removed from the major capital cities to get the basic services of life. I hope that one day the Labor Party will understand this and bring a bit of equity, fairness and justice into the way they tax Australians.
First, I would like to thank those senators who made a constructive contribution to this debate. The amendments in schedule 1 of this bill allow trust beneficiaries to continue to use the primary production averaging and farm management deposits provisions in a trust-loss year. The amendments broadly restore the position that existed before the High Court decision in Bamford v Commissioner of Taxation, which necessitated the commissioner withdrawing a public ruling that in certain circumstances the beneficiary could be eligible for the primary production averaging and farm management deposits rules in a trust-loss year. The amendments secure continuity for taxpayers because they apply from the 2010-11 income year, and the commissioner's ruling applies up to and including the 2009-10 income year.
The amendments in schedule 2 of this bill ensure that, where permitted by the trust deed, the streaming of capital gains and franked distributions, including any attached franking credits, of a trust to specified beneficiaries can be effective for tax purposes. The amendments also introduce specific anti-avoidance rules to address the inappropriate use of exempt entities to shelter the taxable income of a trust. These amendments will provide more certainty for the trustees and beneficiaries of trusts that stream capital gains and franked distributions, including any attached franking credits. The government is committed to a broader review of the taxation of trust income. It is important to simplify and rewrite the rules, which will give more certainty to the users of trusts, particularly small businesses and farmers.
Schedule 3 of the bill amends the provisions in the taxation law related to the National Rental Affordability Scheme tax offset provisions. The amendments simplify the operation of NRAS for participants by introducing the concept of an NRAS consortium which allows a broader range of arrangements to participate in NRAS. The amendments provide some additional flexibility to NRAS participants in how the incentive is shared between members of the NRAS consortium. The amendments do this by establishing an election to allow approved participants to relinquish their entitlements to an NRAS tax offset in favour of other members of their NRAS consortium. The amendments also address minor technical issues that have arisen from the interaction of the tax law and the National Rental Affordability Scheme Act 2008 and also ensure that certain payments provided under NRAS indirectly, such as through the NRAS consortium, are treated as non-assessable non-exempt income.
Schedule 4 of this bill implements an important measure to help encourage more Australians into paid employment by removing the disincentive for younger dependent spouses without children to remain out of the workforce. From 1 July 2011, taxpayers with a dependent spouse born on or after 1 July 1971 will no longer be eligible for the dependent spouse tax offset. This means that the offset will be gradually phased out as the population ages. Dependent spouses aged 40 or over will not be affected by this measure, nor will dependent spouses with children or taxpayers whose dependent spouse is a carer, an invalid or permanently unable to work. Taxpayers eligible for the zone, overseas forces and overseas civilian tax offsets are also not affected by this measure.
Schedule 5 amends the tax laws to reform the current statutory formula method for determining the taxable value of car fringe benefits by removing the current incentive for people to drive salary sacrificed and employer provided vehicles further to increase their tax concession. Under the current statutory formula method the calculated fringe benefit from a salary sacrificed car decreases as the distance travelled by the vehicle increases. People can therefore increase their taxation concession by driving their vehicle further. This reform will replace the current statutory rates with a single rate of 20 per cent that applies regardless of the distance travelled. This reform implements another recommendation of the Australia's Future Tax System review. This reform will apply to new contracts entered into after the budget announcement of 10 May this year and will be phased in over four years. This bill deserves the support of the parliament, and I commend the bill to the Senate.
Question agreed to.
Original question, as amended, agreed to.
Bill read a second time.
That this bill be now read a third time.
Question agreed to.
Bill read a third time.
That intervening business be postponed till after consideration of government business order of the day no. 5 (Appropriation (Parliamentary Departments) Bill (No. 1) 2011-2012, and related bills).
Question agreed to.
Debate resumed on the motion:
That this bill be now read a second time.
The coalition will, of course, not oppose these bills. However, let me just make a number of observations on behalf of the opposition. Budget time is always the time to take stock of how the government has been performing. When it comes to the management of public finances, this government has performed very badly indeed. This government inherited a very strong budget position back in 2007 when Kevin Rudd first became Prime Minister. The budget was $22 billion in the positive and we had $70 billion worth of net government assets. But last year we had a budget that was $55 billion in the red and this year we have a budget that is $50 billion in the red—and it is going to be $22.3 billion in the red next year. We are now on track for $107 billion worth of net government debt—the highest ever.
You have got to remember that back in 1996 the then Howard government inherited $96 billion worth of Labor Party debt. Through hard work, good government and sound financial management the Howard government was able to pay off that debt, return the budget to surplus and deliver tax cuts. But what we have had under this government is wasteful spending, more taxes and record levels of debt and deficit. In fact, this year we will have the second-highest deficit on record, after we had the highest deficit on record last year.
The people of Australia have to pay the price for this bad financial management. The people of Australia have to pay the price through the proposals in this budget by the Labor Party to abolish the private health insurance rebate for hundreds of thousands of Australians and reduce the private health insurance rebate for hundreds of thousands of Australians through means testing. People across Australia will pay the price for this government's reckless spending and mismanagement of our public finances.
Under the appropriation bills that we are asked to support here tonight, this Labor government will pay $26 billion over the next four years just to pay the interest on the debt that they have accumulated over the last four years. It is just extraordinary. Back in 2007 the government was paying $0 in interest on net government debt. Today, the government is paying $26 billion just on the interest to service the debt that they have accumulated since they came into government in 2007.
We have had four Labor budgets and they have been four successive deficit budgets. This Labor government has not delivered a single surplus budget. In fact, Labor has not delivered a surplus budget since 1989-89. We have had nine successive deficit budgets from the Labor Party.
Minister Wong has made it into the chamber. She keeps lecturing us about what she perceives to be our record in relation to fiscal management. I say to Minster Wong that people across Australia well understand that it is always the coalition that has had to fix up the fiscal mess that Labor governments have created in Australia again and again and again. That is what happened last time—we had to come in and fix up the mess—and that is what will happen next time. The longer Labor stay in government the greater the mess they are making—and the more people across Australia have to pay the price for Labor's fiscal mismanagement.
In relation to Appropriation Bill (No. 2) the government is seeking an increase in its gross debt ceiling from $200 billion to $250 billion. It is important to pause to reflect on this. It is just over two years ago that the government asked for the debt ceiling to be more than doubled—to $200 billion—and now the parliament is being asked to increase the gross debt ceiling by another $50 billion. And the parliament will have to agree with that because by the end of June, according to the budget papers, according to the face value indicated that is being used for this, gross debt will already be at $192 billion.
The day before the budget, Senator Wong went out into the media and said that this year's budget will be a typical Labor budget. And she was right. It was a typical Labor budget. It was a high-spending, high-taxing Labor budget with more debt and more deficit, and it was sprinkled with a whole series of ideological attacks on Australians who have aspirations to get ahead. This is what Labor governments do when they get the chance. They spend beyond their means and then have to find some targets and some people across Australia that can pay the bill. Invariably, the people whom Labor wants to pay the bill for their reckless spending and incapacity to manage public finances are those who are working hard to make a contribution and to get ahead, and are a key part of driving the economic prosperity of Australia. This government is currently borrowing $135 million a day just to fund its day-to-day expenses. In the week after the budget, the Minister for Finance and Deregulation tried to make a virtue of the fact that it had been able to keep spending growth, in real terms, below two per cent. What she did not mention—and what was excluded from the graphs in the budget papers—was that over the last two years spending in real terms had gone up by 17 per cent. It has been the highest increase in spending, in real terms, since the Whitlam government: 17 per cent. If you start off from an inflated base, of course it is easier to keep your spending growth limited to below two per cent.
What Labor has done in this budget is establish what was described as crisis level stimulus spending as the new base. We had two years where the government was dishing out the money—it was spending money on pink batts and school halls and sending out cheques to people—and that inflated level of spending, spending at record levels, has become the new base. The government somehow wants us to think that it is being disciplined and doing a great job just because it is able to bring spending growth from that inflated base to below two per cent. That is not an achievement. It would be extraordinary if the government were not able to keep it below two per cent.
Incidentally, I have been asking some questions on notice in relation to this and they have been on notice for nearly 100 days. For more than three months there has been a question on notice to the Treasurer asking him how much of the fiscal stimulus spending for this year and next year remains uncommitted. I have not had an answer. For more than three months the Treasurer has failed to answer a question about how much of the fiscal stimulus spending has not been either spent or committed.
This is the one-year anniversary of the ascension of Prime Minister Gillard to the prime ministership. It was today, a year ago, that we all watched the new Prime Minister, Julia Gillard, tell us that she was going to fix the mining tax, fix the climate change mess that she had inherited from her predecessor and fix the border protection fiasco she had inherited from her predecessor. It is a bit like groundhog day, because if you look at the debates we have been having today, last week and the week before that—in fact, if you look at the debates we have been having every single week over the last 12 months—there has been no moving forward at all. The Prime Minister was going to move forward, but I think we are just stepping on the same step every day. It is like every day we wake up and it starts again.
We talk about the broken promise on the carbon tax, because the Prime Minister promised not to have a carbon tax and now we are going to have one. We talk about the mining tax mess. The more scrutiny that is applied to it the more obvious it becomes that it is a complete mess. It is a mining tax which came out of a flawed process, an exclusive, secretive negotiation with the three biggest mining companies, which of course is not a sound foundation on which to develop a tax policy. Then we have the border protection fiasco. The Prime Minister told us about the East Timor solution 12 months ago. That was going to be the big fix. Remember the East Timor solution? What has happened to that? Now we are talking about the Malaysian solution. That is not going anywhere either.
This is a government that has completely lost control of all aspects of government. It is a government that has lost control of the financial management situation. It is a government that has lost control wherever you look. Look at live cattle exports. Why would you impose a blanket ban on live cattle exports if you were concerned about some rogue operators doing the wrong thing? Why wouldn't you target those rogue operators and allow all the other abattoirs in Indonesia and other places that are complying with appropriate standards to continue operating? This is a government that does not seem to care about the flow-on consequences for real people across Australia—real people across Australia who are getting hurt. This government, being driven by the Greens in this chamber into one corner after another, does not seem to care when real people across Australia are getting hurt by its reckless and ill-considered approach to government.
These bills include Appropriation Bill (No. 1) 2011-12, which is the primary budget bill to appropriate funds from the Consolidated Revenue Fund and for the ordinary annual services of government and related purposes. It includes a total appropriation of $72.85 billion. We also have Appropriation Bill (No. 2), which includes the request to parliament to increase the government's gross debt ceiling from $200 billion to $250 billion. It is intriguing. The government is also asking the parliament to remove the requirement for it to provide a statement of reasons as to why it has to further increase gross debt before it goes ahead with it.
I would like the minister, in her second reading reply, to explain why the government is not prepared to comply with the transparency and scrutiny requirements that are currently in the legislation. Why does the government want to remove the particular requirement to table a statement of reasons in both houses of parliament? This is a government led by a Prime Minister who promised us back in August 2010 that this was going to be a new era of openness and transparency—that the government was going to let the sunshine in. Wherever you look, you find that this is a secretive government which is trying to reduce the capacity of the parliament to scrutinise its activities. It is a government that, rather than letting the sunshine in, closes the curtains wherever it can. Of course, secretive government makes for bad government. It is our job in this chamber to ensure that people across Australia can benefit from the best government possible, and this government seems to be a lost cause when it comes to that.
We also have to remember that this budget does not include the carbon tax. Even though we are told the carbon tax is going to start on 1 July 2012, the carbon tax is not included in the budget. Why is that? The government says, 'Oh, well; we don't know yet what we're going to do.' But the mining tax, which is supposed to start on the same day, 1 July 2012, has been in the budget for 12 months. Why do you think that is—why do you think the mining tax has been in the budget for the last 12 months and the carbon tax has not been? The reason is that the mining tax, which was developed through a deeply flawed process with no consultation and no engagement with state and territory governments—even though the mining tax in its original iteration was supposed to replace state and territory royalties—is supposed to generate significant revenue to help the government create the illusion of an early surplus.
It talks about all the associated budget measures, which the government says will be part of its reform agenda. They do not start to come into effect until a bit later, and the cost of the related measures will only really play out during the years beyond the forward estimates. But, of course, the mining tax revenue is in this budget. The mining tax revenue is what is required to help the government make its claim of an early surplus. But the carbon tax would raise $11.5 billion worth of revenue if the government stuck to similar parameters as were on the table in the context of the Carbon Pollution Reduction Scheme.
Now the minister will say, 'We don't know yet; we haven't made decisions yet,' but we were told that the Carbon Pollution Reduction Scheme parameters were the benchmark from which they started their discussions. I suspect it will be very difficult for the Greens to vote in favour of a carbon tax which imposes a lower carbon price than the Carbon Pollution Reduction Scheme. Why did they not vote for the Carbon Pollution Reduction Scheme if they are now be prepared to vote for a price on carbon than is lower than what was in that legislation?
The point here is that this appropriations bill, this budget, is actually inaccurate; it is wrong. From 2012-13 onwards the information is wrong, because we have the wrong revenue figures, the wrong expenditure figures, the wrong employment data and the wrong economic growth forecasts, because all of that is going to change once we know what the government's plans are in relation to the carbon tax—the carbon tax the Prime Minister promised before the election would not be introduced.
This budget is essentially a lie, because the carbon tax is not included, and neither is the National Broadband Network expenditure. The government said: 'Well, that's an investment; we are going to make a return on it. Trust us; we're a Labor government. We're going to put $50 billion of taxpayers' money on the table and we're going to make some money for government. We're going to be running things again. We have to get back into the telecommunications business and we're going to make some money for you, so we can take it off the budget. We don't have to be accountable for what we are doing with this; we're just going to hide it. We're not going to allow you to scrutinise it as part of the budget process. Trust us: we're going to make some money out of it.'
Labor plans to borrow $18.2 billion for the NBN over the forward estimates. The potential for waste here is frightening. But they say, 'Oh, no, we will manage it very wisely; we will manage it very carefully.' Remember the pink batts? Remember the school halls? As I said earlier, people across Australia know that it takes a coalition government to bring the public finances back in order. It seems that the Labor government knows that too, because when they wanted to put a package together toward the reconstruction effort in Queensland, what did they do? They went to John Fahey, a former coalition finance minister, to make sure that there was going to proper scrutiny and proper processes. Labor does not trust itself to manage public finances properly, so how can the Australian people trust them?
Obviously the coalition will not be opposing the appropriations bills, but we do have very severe concerns about where this government is taking the country, given the record levels of debt and deficit that they have accumulated in just four years.
I rise tonight to speak with a sense of excitement. I cannot wait for tomorrow. It is like all your birthdays coming at once. It is 'Assassination Day' tomorrow, and I just cannot wait. My invitation obviously is still in the mail; I have not quite got it, but I think most Australians—
Of course, and thank you, Madam Acting Deputy President. Senator Moore, wait and see the connection, but you have been in the parliament long enough to know that on appropriations any subject is a matter for discussion. But I do want to confine my remarks to money matters, as you will see. I had spoken for a full 23 seconds before the Labor Party took a point of order. It shows that the Labor Party are certainly very sensitive about the great celebrations tomorrow of 'Assassination Day'. And why shouldn't they be? The most rueful political assassination in the history of this parliament occurred one year ago tomorrow.
The parties, I am sure, in the Labor Party particularly, will be interesting to be at. I suspect that 'Assassination Day' tomorrow will be a day to cement the plans for the next assassination, and we know with the Labor Party down at 27 per cent in the opinion polls that, being as ruthless as they are, being only interested in power for power's sake, that the Labor Party will be plotting now to get rid of Ms Gillard and install the next one on the revolving roundabout in the shades of New South Wales.
One of the problems with Ms Gillard, as it was with Mr Rudd, as it is with Labor anywhere, is the inability to manage money. I want to continue mentioning that, because some of my colleagues here were not around in 1996, when the government changed from the last Labor government to the Liberal government. We were told that there was to be a surplus in that year on the current account. When we got into government, of course, we found there was a $10 billion deficit. Not only did it show bad financial management, but it showed an inability to tell the truth and an action by the Labor government to do everything possible to keep the truth from the people of Australia—shades of, I might say, 'There shall be no carbon tax under a government I lead'. A promise to the Labor Party means absolutely nothing. Telling untruths when it comes to financial matters is part of their DNA.
Not only was that bad enough, but when the new government came in we found that in fact there was a $96 billion debt owed by the Australian people which it then took the next Howard-Costello government almost nine years to pay off—and we did pay it off. It took a lot of constraint. A lot of the programs we would have liked to have funded we could not fund, but we understood the importance of paying off debt and getting surpluses. Of course, in our last several budgets we had annual surpluses, and those surpluses were put aside in the moneybox, so to speak. When we were defeated at the election, we handed to the incoming government a surplus of $60 billion, set aside for a rainy day. That, of course, was spent in less than two years, and we now find ourselves in a situation where Commonwealth net debt levels will rise from $82 billion this year to $107 billion next year, largely to fund the budget deficit and helping to drive up the liabilities incurred for Australia under this Labor government from $200 billion to $227 billion.
While Labor Party people—or some of them—are out celebrating tonight, we are debating a bill that, at five minutes to midnight before the end of the financial year, has this provision in it to allow the debt liabilities to increase beyond what they are now to allow the Labor Party to continue borrowing. I am sure not many Australians would be aware of that. Our current debt, $227 billion, is going to increase. Under the rules and regulations for the governance of Australia there is a limit on what they can borrow, but this bill today will allow the Labor Party to increase the amount of their borrowing beyond what it is at the present time.
David Murray, the former Future Fund boss and former chief executive officer of the Commonwealth Bank, sounded a warning the other day about European and US governments and their sovereign debt crises. He urged governments to heed the lessons of Europe and the US as growing state and federal borrowing pushes their financial liabilities past half a trillion dollars in the new financial year. The net debt levels in the states—all of them Labor states until very recently and, of course, the financial mess that all of the states are in is a result of decades of Labor government—have risen from $102 billion this year to $135 billion next year. This will put their net financial liabilities at a record $285 billion. If you add to that the $227 billion that the Commonwealth has then you understand why people like Mr Murray are sounding warnings. Mr Murray said that these huge debt levels could force private sector to compete for funds as the resource sector booms. Of course, we know what happens when there is competition for money.
The lesson from Europe and the US is that high public indebtedness can lead to significant structural difficulty. The debt crisis in Europe has forced governments to cut public services and pensions, while the US is struggling to raise the $14.3 trillion debt ceiling it has—they want to try and increase that; they are not having much success in Congress—to avoid the United States, would you believe, from defaulting on its debt. We are not quite to that stage, but leave a Labor government here for another few years and we will be. Labor Party people who are oh so concerned, so they say, about the poorer people and the working people should have a look at what is happening in Europe after years of socialist and left-wing governments. They are now cutting pensions in Greece. They are cutting services because the government simply cannot pay for it any longer. That is what is happening and what will happen in Australia if Labor continues to govern in this country.
We have already seen how taxes just keep coming. The carbon tax, the mining tax, the flood levy; on and on it goes. Labor is addicted to debt; it is in their DNA. But they have to understand that you just cannot keep borrowing. You cannot do it in your own household and the country is the same. Someone has to pay back the debt, someone has to pay the interest and someone has to keep borrowing the money to pay the interest so that Australia can keep up the basic services.
That is where I despair. The Labor government has been one continuous episode of mismanagement and waste. We know about the pink batts and we know about the school halls. How much have we spent on the climate change debate in the last term of government, ending up in that failed Copenhagen conference that became a laughing stock? The whole Copenhagen climate change thing was so mismanaged by Australia. Just the sheer money, as well as the carbon footprint that others have written about, of going through the routine under the last Labor government's failed approach to climate change. It goes on and on.
I am concerned at the increase in the liabilities from the federal government. Again, I am concerned that in typical form this Labor government is bringing in—sneaking in—at five minutes to midnight before the end of the financial year this bill to further increase the ability to borrow, at a time, as I say, when people are out celebrating the assassination a year ago.
I know the news media tomorrow will be all talk about 'Assassination Day'—the one a year ago. There will be a lot of commentary about the 'Assassination Day' coming up. We know from discussions with our Labor Party friends that the situation is getting to an extent where something will happen. When the next assassination happens I think even the Labor Party will have to go to an election, so Labor friends are telling us to look towards September or October: get a new leader, try to get the carbon tax off the agenda, try to get the illegal boat people off the agenda and try to get people to forget about the mining tax so that we can go to an election this year.
It is just becoming untenable. As you heard from the previous debate, the Greens are out there boasting about what they have done to increase taxes yet again, and saying to the Labor Party and the Taxation Office, 'You want more money? You want more taxes? We're here to help.' I cannot believe that, but I suppose those of us who have followed the Greens for a while at least appreciate their honesty, unlike the Labor Party. At least the Greens are open about it: 'We want to increase taxes, we want to make it more difficult for families in Australia to exist. We want to put more and more pressure on the cost of living.' That is something, of course, that we in the coalition do not want to do.
For the reasons Senator Cormann indicated, we will not be opposing this but we will continue to highlight the financial excesses of this government and their simple inability to deal with money.
Tonight I cannot help myself: I must speak on this issue. This is an issue that has disturbed me for quite some time with this current government. It has disturbed me to such an extent that I lost my finance portfolio. But at the time, I said the outrageous thing that our debt was starting to get out of control. I also made comments that the position of America with their debt was becoming untenable. I have received some sort of succour now that those same comments are reported and repeated by David Murray, Noel Ferguson and John Roskam. There have been articles written on it—too late for me, but not too late for Australia.
I think we should really flag exactly what is going on here. Debt does not lie. Debt is the absolute key performance indicator of how you are going financially. You can have all the beautiful stories you like—all the wondrous stories that I used to see as an accountant and in my five years in banking—about how things are actually going. But you just say to them, 'What do you owe the bank? Are you paying off your debts? Are you getting further into trouble?' Because debt does not lie: you cannot get around it. It is there, on your bank statement. You can give wonderful stories about net debt and this debt and that debt but it is your gross figure, easily pronounced on your bank statement.
The gross figure for our nation comes from a thing called the Commonwealth Inscribed Stock Act. That is where it comes from. Australian government securities outstanding: easily found at the Australian Office of Financial Management website. Currently it is $187 billion. Actually, in the last week they paid a little bit of it back, but that is just because it is the interim period between the roll of bills and it will blow right back out to where it was at $196 billion. The reason we are in here tonight, and the reason they sneaked in this extension of debt is because if we did not extend this debt the government would close down. It would all finish; the cheques would bounce and we would have no money. They said as much in Senate estimates, where they clearly said, 'Oh, that would be so irresponsible not to extend the debt limit,' because if you did not extend the debt limit the place would just come to a conclusion.
So we are extending the debt limit; we are extending the overdraft to try to keep the place running. But we are not paying the money back. There is always the promise of paying the money back but they never actually deliver on their promise of paying the money back. I remember reading back in 2009 that the Treasurer, Wayne Maxwell Swan, was going to give us a temporary increase in the limit—from $75 billion, up by $125 billion to $200 billion. It was temporary, he said, because China was going to fall backwards. It was basically going to go into recession, along with India. Neither China nor India missed a beat. They charged ahead. Not only did they charge ahead but our debt charged ahead and went from a temporary increase to a permanent increase. The premise of the Treasurer's wish for an extension was not there, but the debt certainly was. You could see where it was. If you could see a source and application of funds statement—'Where is the money?', that is what they always ask—you would see that it is in ceiling insulation for the rats and the mice to sleep on at night. It is in school halls. It was in that manic $22.8 billion they sent out in $900 cheques. I would like to remind the Senate that I voted against each one.
Where has this led us? We have a gun held to our head to basically take this debt ceiling out and, at the same time as that debt ceiling is going out, we have all the other fiascos around this nation—all caused by the Australian Labor Party. We have Queensland heading towards a net debt position of about $85 billion in 2014-15. We have New South Wales heading to a net debt position of $71 billion. We have Victoria heading towards a net debt position of $47 billion. With all these structural dislocations the debt adds up. Then we have this other fiasco: NBN, the next budget nightmare. We are going to borrow $27 billion and then another $10 billion on top of that and then, magically, we are going to make money. We will magically find the rest of the money to get us out to a $56 billion spend. I can tell you one thing: the Treasurer will not find the money; he will be borrowing that money as well—or shutting it down. That debt also gets added in, and on and on it goes.
David Murray clearly stated the other day in the paper that we have to really watch ourselves. I seem to remember saying something very similar myself a couple of years ago. He mentioned half a trillion. Isn't this marvellous? Under this crowd, we have got ourselves into the trillion club. We can actually start talking about our debt as a portion of a trillion.
What is happening to private enterprise? Money is being sucked out of the economy. On the news tonight we hear that the people in Sydney, the businesses, just do not have the cash. It is not there. We hear it in Brisbane. We even hear it in small regional towns, such as Dalby, that the money is not there—because he is sucking the money out of the economy. Is it just the view held here that the debt is out of control? No. I have got a paper from Dr Ken Rogoff, from the Harvard Centre for Economic Policy Research. He has got no barrow to push. I do not know him; I have never met him. What does Dr Ken Rogoff say? He talks about the cumulative increase in real public debt since 2007—surprise, surprise, that is when the Labor Party got voted in. Let us go through them. The worst was Iceland; that stands to reason. The next was Ireland, the next one—not Spain, not the US, not the UK, not Greece, not Portugal, not Chile, not Mexico—is Australia. Congratulations! You are No. 3. You have done an incredible job. Since you have been here, you have brought about the third-biggest cumulative increase in real public debt since 2007. Well done! He is a genius, our Treasurer. What an omnipotent light! What an orb of financial wonder! The debt has got to be paid back. There are real people who really want their money back. The Chinese really want their money back. The people we owe the most money to are the Chinese government. What a wonderful position we have got our nation into. They want their money back. The people in the Middle East and the superannuation funds of Japan—they all want their money back. We have to roll this money. We have to reapply with our begging bowl and say, 'Please give us the money.'
We say, 'It's all right, because we have got a mineral based economy and it's bullish and we are sucking in funds because we are a commodity-based economy.' Well may that be the case, but I hope it stays that way, because if it does not you are going to be a beggar with a bowl in the international money market trying to prop up your budget. You did it to us. The Labor Party did this to us.
The Australian people have got to realise what happens when this comes unstuck. What happens when it comes unstuck? What happens to us is exactly what happens everywhere else. There is a complete constriction on the availability of funds for public expenditure. There is a complete restriction on the capacity to meet your Pharmaceutical Benefits Scheme requirements. So the pensioner, when they go to the chemist and ask for the script, believing it will be subsidised by the government, will find out that, because of the stuff-up that the Labor Party has created, the money is just not there. So they will have to pay the full price, the actual price. Instead of the $4 script it will be the $400 script. Instead of the $200 cancer treatment it will be the $20,000 cancer treatment. You will have to pay the real price. Access to free and public hospitals: if the money is not there, you cannot afford them. Close them down or make people pay. That will certainly fix up the waiting queues in public hospitals, because they will not be public anymore, because you will have to pay, because we will not have the money. The Defence Force: you will be able to see your ships all the time. You will be able to get a marvellous sense of pride, because our fleet will always be in port, because it will not be able to afford to go to sea. Pensions: forget about pension rises; forget about pensions altogether. This is what happens when you get out of control.
As I have said to so many clients, when they start going out of control, when you see this course of action—this addiction to debt—and you ask them, 'Does your son or daughter have a caravan?' They ask, 'Why?' You say, 'Because that is where you are going to live, unless you get it under control.' The Labor Party can smirk, but I do not want you to smirk; I want you to show me how you can pay the money back. I want you to prove to the Australian people that you can pay debt back, because you have a commodity based economy and you have got debt in boom times. God help us when you have to pay it back when times are not so good. If you cannot make your two ends meet now, what hope have you got in the future? I would love to make the Labor Party sweat on this. I really would. I would really like to ring a bell for the Australian people about exactly what you are doing and where it is all going, so they could understand the sort of strife we are getting ourselves into. But apparently that is irresponsible—and I understand that. But the Australian people have to understand that under this crowd—with all their stories, like they are going to cool the planet; they are going to build a new, multibillion dollar telephone network; they are going to do this; they are going to do that—you always have to go to the article of truth. The key performance indicator for any government or organisation is whether your debt is going up or down. Do you have the capacity to pay your bills as and when they fall due? I might remind the Australian people that the way we pay out interest bill in this nation is that we just borrow more money. Capitalise your interests. In accounting terms it is called 'economic palliative care'. But we do it. We just naively stumble along, with this group of people who have no hope. There is no hope and no competence. We lay this at the feet of Wayne Maxwell Swan, of Julia Gillard, of Kevin Rudd and of whomever they pick next—Stephen Smith. But the unfortunate thing is that the people who end up paying all this back, the people who have to suffer for their stupidity, are the Australian people.
I thank all senators for their contributions to this debate. I will briefly—given the hour—respond to a few issues. Obviously, senators would be aware that these are the appropriation bills and they form the core of this, the fourth, Labor budget, a budget that builds a more productive workforce, including a $3 billion training package. This budget delivers a plan for better schools, hospitals and health care, including a significant spend on mental health services and regional health services. It will also ensure that we remain on track to get in the black by 2012-13.
There have been a number of comments made about debt, and I just want to respond briefly to them. I would make the point that this is a budget that returns to surplus by 2012-13, with the budget growing both in size and as a share of GDP by 2014-15. This does represent the fastest fiscal consolidation since at least the 1960s, around 3.8 per cent over two years. This has been achieved despite significant revenue weakness from the legacy effects of the global financial crisis, an event which had an extraordinarily significant effect on the global economy and particularly on many developed economies but which the opposition appears to forget.
In terms of real spending growth, Senator Cormann made an assertion about two per cent. The two per cent cap is part of one of our fiscal rules. We have actually done better than that over the forward estimate periods. The average across the forward estimates averages one per cent per year, which is the lowest average real growth in expenditure over a similar period since the 1980s. And, of course, that is compared with real spending growth in excess of two per cent for most of the period the coalition were in government—an average growth of 3.7 per cent. The budget achieves savings of $22 billion in addition to the $83.6 billion identified in the last three Labor budgets. It delivers a net improvement to the bottom line of $5.2 billion across the forward estimates.
In many ways the following two facts are most important. Government spending as a share of the economy falls. So, for those on the other side who like to speak about the importance of small government, it is a Labor government that is actually delivering a reduction in government spending as a share of the economy to 23.5 per cent of GDP by 2014-15. And, in case people suggest that is just because it is at a higher level because of the GFC, I would make the point that that is actually less than the average of the 10 years preceding the global financial crisis.
A number of comments were made about net debt. Australia's net debt is forecast to peak at 7.2 per cent of GDP in 2011-12. This compares to an average net debt position of around 90 per cent of GDP in 2016 for most major advanced economies. Our peak net debt position is less than one-tenth that of comparable economies.
Senator Cormann made some comments about the government seeking to hide the debt cap. I think that is somewhat disingenuous, given that it is in the legislation before the parliament and being debated. The senator also made some comments about the carbon price. We previously discussed that at length in estimates and in other fora. I would again make the point that the government have said very clearly: we will account for the carbon price in the usual way, after the package has been finalised—just as former Prime Minister Howard accounted for the GST well after he first announced it.
Senator Macdonald stated that someone has to pay back the debt. We agree, which is why we have put forward a budget with savings measures. I would make the point that in fact it is the coalition blocking a range of savings measures in this parliament that have an impact on the budget bottom line. If they are keen on a surplus, they need to demonstrate that by voting the right way.
I do welcome the comments that were made in the other place in recent times, including comments made by Mr Andrews yesterday:
We have said that, if we are going to oppose measures which the government puts forward and that opposition will lead to a cost to the budget, we will identify where the savings are going to be made in the budget in order to compensate for that loss to the budget.
If that is the new coalition position, I welcome it, because it is a new position and it is not the position that they have previously held. In fact, as I indicated prior to this debate, if the coalition's position in terms of their voting record and their $10.6 billion black hole were included, the coalition would in fact be in deficit in every year of the forward estimates—not the party of surpluses but the party of deficits.
Senator Joyce made some comments. I am not sure if they are able to be responded to. He did make a point about debt and I thought he might like to be reminded of what Moody's ratings agency said after the budget:
Moody's notes that Australia's government debt remains among the lowest of all Aaa-rated governments.
Goldman Sachs in their report state:
In order to avoid further interest rate rises it—
proposes a Budget that represents the biggest fiscal contraction since 1970 when comparable data commenced.
… … …
The Budget makes a genuine attempt to keep its commitment to return the Budget to surplus.
CBA Economics Update of 10 May 2011 states:
… the Budget is dominated by savings measures—new spending is limited and any significant revenue initiatives are largely deferred to the Tax Forum …
… … …
The Budget meets all the requirements of the government’s medium-term fiscal strategy and it adheres to the exit strategy from the GFC-stimulus period.
On that basis, I commend the bills to the chamber.
Question agreed to.
Bills read a second time.
That these bills be now read a third time.
Question agreed to.
Bills read a third time.
Debate resumed on the motion:
That this bill be now read a second time.
I rise to speak on the Remuneration and Other Legislation Amendment Bill 2011. This bill contains measures that extend and reinforce the authority and independence of the Remuneration Tribunal. When the Remuneration Tribunal was established in 1973 it had the sole authority to determine the base remuneration of parliamentarians. However, the Remuneration and Allowances Act 1990 removed this authority. This bill will restore that.
One of the key impacts of this bill will be that the determinations of the Remuneration Tribunal will no longer be subject to tabling or disallowance motions by members of parliament. Indeed, members of parliament will play no role in determination of remuneration. The coalition believes that an independent tribunal that is free from the political process is best placed to make determinations about members of parliament. An independent tribunal is an important measure to ensure that the public can have confidence in the process by which the remuneration of their elected representatives is determined. The process must be transparent and free from political connotations, and this bill will help the tribunal achieve that objective.
This bill will also extend the Remuneration Tribunal's authority to determine the remuneration of the Secretary of the Department of the Prime Minister and Cabinet and the Secretary of the Treasury. Furthermore, the president of the tribunal will also, with the secretaries of those two departments and the Public Service Commissioner, decide upon the remuneration of other departmental secretaries. Additionally, it will also be the responsibility of the Remuneration Tribunal under this bill to determine a classification structure for departmental secretaries. These deliberations regarding the remuneration of departmental secretaries would also no longer be subject to disallowance motions by the parliament. The Remuneration Tribunal will be allowed to operate in a framework that allows it the independence to determine the most appropriate level of remuneration for members of parliament and senior departmental secretaries.
Another provision contained in this bill will require the tribunal to publicise its decisions and to provide reasons for each decision. This is an important accountability mechanism and should go some way to ensuring that the public can have faith in the remuneration system for their elected federal representatives. This bill was referred to the Senate Finance and Public Administration Legislation Committee for inquiry and report. The inquiry has been completed and the committee supported the measures contained in the bill. The report stated:
In relation to the removal of the provision for disallowance of Tribunal determinations relating to parliamentary entitlements, the committee notes this decision will reinforce the independence of the Remuneration Tribunal and ensure the integrity of the process to determine the remuneration of parliamentarians. The committee supports the view that this is an important mechanism to remove opportunities for political intervention.
The reforms contained in this bill are based on the recommendations of the Committee for the Review of Parliamentary Entitlements, also known as the Belcher review, whose findings were made public earlier this year. That review did present a compelling case for reform.
The bill has the support of the coalition and we will not be opposing the amendments circulated by the government.
I thank Senator Fifield for his contribution. The problems with the current parliamentary entitlements framework have been clearly documented. The Australian National Audit Office in its 2009-10 report Administration of parliamentarians' entitlements by the Department of Finance and Deregulation noted that the entitlements framework is difficult to understand and manage for both parliamentarians and the Department of Finance and Deregulation. The report of the Committee for the Review of Parliamentary Entitlements, known as the Belcher review, established in response to the ANAO's report, similarly notes:
… existing arrangements are an extraordinarily complex plethora of entitlements containing myriad ambiguities.
The administration, clarification and streamlining of parliamentary entitlements is an ongoing and important task. The government will continue to seek to improve and make more transparent both the framework and the service delivery in this area. It is important work because it is critical to the enabling of members and senators in how we do our work representing our constituents in our system of representative democracy.
Parliamentarians that are supported by an effective, efficient and transparent system of remuneration and entitlements will do their jobs better. This bill is an important initiative in the reform of that framework. The bill will restore the power of the independent Remuneration Tribunal to determine the base salary of parliamentarians. It will allow the tribunal to determine the remuneration and other terms and conditions of departmental secretaries and the remuneration and recreational leave entitlements of other officers established under the Public Service Act 1999. In restoring the tribunal's power to determine the base salary of parliamentarians, the bill will implement the cornerstone recommendation in the report of the Committee for the Review of Parliamentary Entitlements. It will restore the power to set parliamentary base salaries to the independent Remuneration Tribunal, beyond the reach of any potential political interference. The committee made a range of recommendations around parliamentary entitlements. The government has agreed to the cornerstone recommendation of the review. This bill implements this recommendation and, by doing so, will provide more transparency and, importantly, independence in the determination of parliamentarians' base salary. As I have indicated, the government has agreed to the first recommendation of the report and is implementing it in this bill. The remaining recommendations of the report have been referred to the Remuneration Tribunal, which will provide advice to the government in due course.
Parliamentarians have been remunerated for their service to the Commonwealth parliament since Federation. Pay was initially set by the Constitution and then by the parliament itself, under the auspices of the Constitution. With the enactment of the Remuneration Tribunal Act in 1973, the Remuneration Tribunal became responsible for setting parliamentarians' base salary. However, the tribunal's authority to determine parliamentarians' base salary was removed by the Remuneration and Allowances Act 1990. The bill restores the Remuneration Tribunal’s role of conclusively determining parliamentary base salary. This change will enable parliamentary base salary to be determined in its own right, rather than by the current arrangement, where it is set by reference to a figure determined for another purpose and a matter for decision by the government of the day.
The current situation has resulted in outcomes on parliamentarians' salaries being determined by political considerations, to the detriment of considered and informed decision making on appropriate remuneration. The government notes that Remuneration Tribunal determinations on parliamentarians' remuneration were disallowed or varied by legislation in 1975, 1979, 1981, 1982, 1986 and 1990, prior to the passage of the Remuneration and Allowances Act 1990. Since this enactment, parliamentary base salaries have been determined by the executive arm of government. The pre-1990 situation, where determinations were subject to regular disallowance, was also unsatisfactory. It was also inconsistent with the independent nature of the tribunal. Accordingly, the government has decided that, in addition to the restoration of the Remuneration Tribunal's power to determine parliamentarians' base salaries, the tribunal's determinations of parliamentary remuneration will, in future, not be disallowable. This will reinforce the independence of the tribunal and ensure the integrity of the scheme for determining the remuneration of parliamentarians by removing, to the greatest extent possible, opportunities for intervention in the implementation of the tribunal's determinations by the beneficiaries of those determinations.
The Remuneration Tribunal will continue to determine the additional salaries of parliamentary office holders, such as the President of the Senate and the Speaker of the House of Representatives, and provide advice to the government on the additional salaries of ministers and members of the executive. To ensure openness and transparency of the Remuneration Tribunal's decision making, the tribunal will be required to make its decisions public and publish reasons for them.
The bill also contains amendments to the Remuneration Tribunal Act 1973 and consequential amendments to the Public Service Act 1999 to make the Remuneration Tribunal responsible for determining a classification structure for departmental secretaries and related matters, which may include pay points and guidelines on the operation of the structure. Those amendments implement the government's 2007 election commitment to make the Remuneration Tribunal responsible for determining the remuneration of departmental secretaries and other public office holders under the Public Service Act 1999.
The Remuneration Tribunal will also be responsible for determining the classification to which each office of departmental secretary will be assigned and for determining the full range of departmental secretaries' terms and conditions. The Remuneration Tribunal would determine the amount of remuneration that is to be paid to the Secretary of the Department of the Prime Minister and Cabinet and the Secretary of the Treasury. The Secretary of the Department of the Prime Minister and Cabinet would, in consultation with the president of the tribunal and the Public Service Commissioner, assign all other departmental secretaries to an amount of remuneration consistent with the classification structure determined by the Remuneration Tribunal. As is the case currently with determinations made by the Prime Minister, the Remuneration Tribunal's determinations of the remuneration and other conditions of departmental secretaries would not be subject to disallowance.
Consistent with these changes and the 2007 election commitment referred to above, the bill will also give the Remuneration Tribunal responsibility for determining the remuneration and recreation leave entitlements of the Public Service Commissioner, the Merit Protection Commissioner and the heads of executive agencies created under the Public Service Act.
The Belcher review of parliamentary entitlements, which I referred to previously, also recommended that the government take preventative measures to ensure that any future folding-in of allowances did not provide a windfall retirement benefit to members of the scheme established under the Parliamentary Contributory Superannuation Act 1948. The government will be moving an amendment to the bill to implement these measures. The measures contained in this bill restore independence and transparency to the remuneration of parliamentarians, departmental secretaries and the other office holders I have mentioned. As I said earlier, a system that sees parliamentarians supported by an efficient, effective and transparent system of remuneration and entitlements, removed from political interference, will allow public servants to do their job better. The measures in this bill are an important step towards that goal.
Question agreed to.
Bill read a second time.
Bill—by leave—taken as a whole.
I table a supplementary explanatory memorandum relating to the government amendments to be moved to this bill. The memorandum was circulated in the chamber earlier today.
I did not get an opportunity to make a brief contribution in relation to the second reading debate, and I apologise for that, but I would like to raise a couple of issues with the minister. I am grateful for the discussions that I have had in general terms with the Special Minister of State's office in relation to these issues broadly. I just want to clarify a few things. Firstly, schedule 2 contains amendments in relation to the salaries of parliamentarians and implements the recommendation of the committee for a review of parliamentary entitlements—the Belcher review—which proposed to restore the ability of the tribunal to determine parliamentary base salary, require the tribunal to publish reasons for its decisions in relation to parliamentary remuneration and remove parliament's ability to disallow parliamentary remuneration determinations made by the tribunal. I note that my colleague Senator Bob Brown, in his minority report for the Australian Greens, along with Senator Siewert, has a different view in relation to the last aspect.
My concern is about transparency and accountability in the process. That relates to the extent to which there can be appropriate public input into the process to ensure some openness so that, if politicians are seeking a pay rise or a change in their conditions, there must be some transparency in the process, in the same way, I guess, that Fair Work Australia may work. To what extent can the Remuneration Tribunal in its current form have a process that is seen to be more inclusive and transparent with respect to the setting of parliamentarians' pay? Is that something that is covered within the scope of the current powers of the tribunal, in addition to the proposed amendments?
I am not sure whether you were in the chamber when I gave my speech earlier, but I did say that the changes that are outlined in the bill also refer to the Remuneration Tribunal having to publish their decisions and also reasons for the decisions that they make. In terms of transparency, this is a big step in the right direction and certainly one of the intentions of the other bill.
I appreciate the minister's response. I understand that there is greater transparency than before, which is welcome, but, in the framework that is being proposed for greater transparency, does the government consider that it would mean that the tribunal could open up its hearings and, for instance, call for public submissions to look at comparative pay and conditions in other sectors of the economy, ask for comments from parliamentarians as to the nature of the work they do, and ask for comments from other interest groups before deciding what the appropriate level of remuneration would be? Is that something that could be done within what is being proposed, which is in addition to the current framework? In other words, is there scope for the tribunal to have that additional level of public and community input?
My understanding is that the tribunal would take submissions from any interested member. In the new bill, they would be required to print the reasons for any decision making. In terms of any of their processes, that would be a matter for the tribunal to make themselves. The tribunal, as I have said and as Senator Fifield has said and everyone has noted, are independent in terms of their decision making, but they are also independent in terms of their processes.
I appreciate the frankness of the minister's answer. Does that mean that the tribunal does have the power, given its independence, to, for instance, decide that the mechanism by which it calls for submissions is a public one and it could seek submissions quite broadly—from the community, from parliamentarians, from interest groups and from the general public? Also, does it have the capacity, should it so wish, to hold public hearings in relation to its process of making a determination?
I know this is a difficult issue because you do not want to be seen as interfering with the independence of the tribunal, in terms of the final decisions they make. Maybe this is a question I could put to the opposition as well, and I presume that Senator Fifield is hanging onto my every word. If the tribunal had a process whereby they did have public hearings into their determinations, is that something that the government would be comfortable with, regarding the way the tribunal operates? It is a similar issue to that of the opposition—if there were an additional level of openness.
I again note that the tribunal is an independent body in terms of its processes. It is a decision that it must make itself. I am sure that the tribunal will be paying close attention to your comments tonight and we will certainly pass them on.
I am not sure what Senator Fifield's view is on this. I think we all acknowledge that the tribunal's decision making must be independent, but would that independence be in any way compromised if there were a requirement, for instance—and it will not be debated on this occasion—for the tribunal to hold public hearings and consider a broad range of evidence before reaching a decision, without in any way influencing what that ultimate decision may be? Is that something that the government would consider as in any way interfering with the independence of the tribunal?
Again, the tribunal is independent. In terms of their processes and how they see submissions and the extent of their work, that is really a matter for them to determine. But we take on board your comments and I am sure that the tribunal will note your concerns.
I am grateful to Senator Arbib for his forthright answers in relation to this. I just want to leave it at this: I will write to the tribunal and ask them whether they will seek to open up the process—and I believe it ought to be—and to have a much more public process in the determinations. I do welcome what the government is proposing for a publication of reasons. That is of course welcome. I think it would be fair to say that, if you open up the process, that does not impede or compromise independence as a tribunal and it may well be that this matter will be revisited. I will leave it at that and I look forward to corresponding with the tribunal to see what they say about opening up their process so that it is seen as much more transparent than many in the community believe is currently the case.
The Australian Greens do not support the legislation. While we do support the restoration of the ability of the tribunal to determine the base salaries of parliamentarians, we do not support the removal of the ability of parliament by disallowance to override the Remuneration Tribunal. Members will recollect that as we went into the global downturn, the last Prime Minister, Kevin Rudd, withheld a recommendation by the Remuneration Tribunal to increase parliamentary salaries.
It draws interjections straight off from the coalition. But I do not know of any determination by the tribunal that parliament has interfered with to increase. What this legislation is about is the government and the opposition supporting a recommendation which takes away not only the right but also the responsibility of parliament to curb a grant of extra payments to parliamentarians at a time when the rest of the community is not getting them. That will come down the line again. Sure, it is good that we have an independent tribunal looking at parliamentary salaries and entitlements, but it is beyond common sense that we remove from parliament the right and responsibility written into the Constitution that we determine ultimately the salaries of parliamentarians. This is a cosy and convenient piece of legislation to say that the Remuneration Tribunal should keep parliamentarians' salaries increasing above the level of salaries and income for the rest of Australians, because that is the trajectory, but please shield us from the responsibility of keeping that in check. This is just an easy way for MPs to say, 'We do not want controversy as we get increases which are out of kilter with the average worker in this country.' I for one, and on behalf of my colleagues, am prepared to take on that responsibility. We have always had it and we should retain it.
What is next? Is the next thing going to be a further recommendation going through the Remuneration Tribunal that our electoral allowances be rolled into the salaries so that we no longer have an obligation, at least an implicit obligation, to spend money on our electorates and have it go instead straight into our pockets?
Further to Senator Brown's contribution, I would be grateful if the minister could clarify. As I understand it, the amendments do give the power to the tribunal to roll parts of a parliamentarian's salary package, in terms of the electoral allowance, into a salary package. Is that the case? Is there the potential for the tribunal to do so?
That is my understanding. As I understand it, it means that for those members of parliament elected prior to 2004, who are in a different superannuation scheme from those elected post 2004, it means therefore that there is that ability to roll various allowances including a travel allowance into the remuneration package by virtue of these amendments. I think that was one of the issues that Senator Brown was concerned about.
Yes, Senator, that is correct. But the stated intention of the government at the moment is to remove the possibility of unintended benefit being accrued by members of the 1948 scheme.
I understand that. For the three people that might be listening to this on News Radio, what it means is that people cannot get an additional benefit by virtue of salary being increased by the rolling in of some of these allowances. I think that is the idea, and that of course is the right thing to do. The issue is that this does not mean that there will be changes post 1 July; it means that the changes may occur should the tribunal so decide at some subsequent stage. Is that right?
I am sorry if I misled the Senate, then. It might be five! This is a significant change. In my time as a member of the Legislative Council of the South Australian parliament, I think that on one or two occasions the local tribunal had a questionnaire: 'What did you spend your electoral allowance on?' I recollect that I was very happy to fill that out, and I think I probably spent more than the electoral allowance on various activities, but at the moment there is no obligation to do so. Does the government have a view on—
Yes, that is right. So does the government have a view as to the accountability of current electoral allowances, for instance, or whether it would be simpler to have it rolled into one? Similarly, for the international travel allowance for members of parliament after they have completed one term, is there any policy view or are you suggesting that this is a matter that the tribunal will deal with in due course?
Again, these are matters that really should be dealt with by the tribunal themselves. What we are talking about tonight is independence and transparency. In terms of those sorts of deliberations, they are matters that the tribunal should come to under their own investigation. Of course, Senator, you are very welcome to provide a submission to the tribunal outlining your position, and I am sure that your comments tonight will be noted.
Yes, of course, but there will not be any parliamentary responsibility for the outcome. For example, $30,000 or $40,000 of electorate allowance is going to go straight to salaries under this trajectory that we are seeing in this parliament now. MPs can currently spend their electorate allowance on themselves if they want to, but the at least implicit obligation is going to be removed. We all know what that means: it is going to mean that in the electorates where there will not be an electorate allowance there will be less money going to the electorates. There are people who spend more than their electorate allowance on their electorates at the moment, and there are some who spend almost nothing of that electorate allowance on their electorates, but what this does is validate the second component of that: it validates that money being transferred into MPs' packages with no strings attached, not even an inherent obligation to spend the money on the electorates.
I know what will happen next: there will be legislation coming into this parliament a couple of years down the line to restore electorate allowances on top of the new salaries. That is something for the majority in this house and the other house to do if they wish. I believe that this legislation removing our responsibility and, indeed, the debates that have regularly occurred about MPs' salary increases are a shedding of our own responsibility to the electorate to be moderate in our assessment of our own worth. We are paid well and we do have good allowances compared to other parliaments around the world, but we have a responsibility, after an independent tribunal makes recommendations, to ensure, for example, that that is in keeping with what other people, who have voted us into the parliament, are getting.
I will not labour this point. I support the new measures of accountability of the tribunal—that it should publish its reasons and that it should be able to assess base salaries—but really the crucial point of this legislation is ridding ourselves as parliamentarians of the need from time to time to get up and contribute to a debate about how much we are worth, how much we should be paid and how closely that is related to the value of other workers in our community. I reiterate that the Constitution puts that obligation on us very early, and it is one that we should be keeping, not trying to shed off our shoulders through this piece of legislation.
I note the comments made by Senator Brown, and I also note that this does not stop politicians from being involved in the debate. Of course, politicians and members of parliament can make submissions to the tribunal, and also they can make public statements at any time about what they believe is appropriate, but in the end what we are attempting to do as a parliament is to ensure that the independence and transparency are there for the deliberations of the tribunal. At the same time, parliament still retains the right to amend the legislation at any time. The right is obviously there and is something that could be considered in future.
I have never in my recollection—I might be wrong—had the tribunal ask my opinion. I have sent submissions to the tribunal, and I almost always found they got little reception. Maybe it should be this way. It is an obscure tribunal that is out there somewhere, divorced from any close working relationship with MPs. Maybe that is a good thing. But, Senator—through you, Chair—on your suggestion that we send submissions to the tribunal, I found that a process that has not been very rewarding in the past. Maybe after this legislation it will improve.
This is a question both to Senator Fifield and to the minister. Given the proposed new powers of the tribunal—which from my point of view, in terms of their accountability provisions, are obviously welcome—what is the position of the government and the opposition in relation to making submissions to the tribunal with respect to the new powers it will have to roll in components of a member of parliament's entitlements into the overall salary package?
For instance, could Senator Fifield indicate the approach the coalition will take in its dealings with the tribunal in relation to these matters. Presumably, there will be some submissions, one way or the other, as to the tribunal's new powers and in terms of its deliberations.
This is an unusual practice. I guess it is good practice for when we assume a position on the other side of the chamber! I do not have that knowledge, but I will happily convey your request to our shadow.
I have answered the question in terms of politicians and parliamentarians making submissions. That is obviously something that is available, and everyone is encouraged to do that if they see fit. I seek leave to move amendments (1) to (7) together.
(1) Schedule 2 , item 1 , page 14 (lines 14 and 15) , omit paragraph (d) of the definition of parliamentary allowance in subsection 4(1), substitute: (d) parliamentary base salary (within the meaning of the Remuneration Tribunal Act 1973 ), less any portion determined under subsection 7(1A) of that Act.
(2) Schedule 2 , item 6 , page 15 (lines 24 and 25) , omit paragraph (b) of the definition of parliamentary allowance in section 3, substitute: (b) parliamentary base salary (within the meaning of the Remuneration Tribunal Act 1973 ).
(3) Schedule 2 , item 14 , page 16 (lines 20 to 23) , omit the definition of parliamentary allowance in clause 1A of Schedule 3, substitute:
parliamentary allowance means parliamentary base salary (within the meaning of the Remuneration Tribunal Act 1973 ).
(4) Schedule 2 , page 17 (after line 2) , before item 17 , insert:
16A Subsection 3(1)
parliamentary base salary means so much of the allowances determined under subsection 7(1) as: (a) represents the annual allowance payable for the purposes of section 48 of the Constitution; and (b) is identified in the determination as base salary.
(5) Schedule 2 , page 17 (after line 4) , after item 17 , insert:
17A After subsection 7(1)
Insert:(1A) The Tribunal may determine that a portion of parliamentary base salary is not parliamentary allowance for the purposes of the Parliamentary Contributory Superannuation Act 1948 .
(6) Schedule 2 , item 19 , page 17 (line 14) , after " subsection (1) ", insert " , (1A) ".
(7) Schedule 2 , item 20, page 17 (line 25) , after " subsection 7(1) ", insert " , (1A) ".
I move these amendments because it has become clear that, under the bill as drafted, any additional salary determined by the Remuneration Tribunal would become part of a member or senator's parliamentary allowance. As senators and members would know, their parliamentary allowance is effectively their salary for superannuation purposes. Without the amendments current and former parliamentarians who are members of the Parliamentary Contributory Superannuation Scheme, established under the Parliamentary Contributory Superannuation Act 1948, could also receive increased superannuation benefits if the tribunal decides to incorporate any allowances into their parliamentary allowance. This would occur as, under the scheme, the benefits of former parliamentarians and eligible dependants are linked to the salaries of current parliamentarians.
As a consequence, each increase in the salary payable to current parliamentarians increases the superannuation income of members of the PCSS who are no longer in the parliament. This benefit would also flow to PCSS who subsequently leave the parliament. The amendments provide the tribunal with the authority to determine that a portion of parliamentary base salary is not 'parliamentary allowance' for the purposes of the 1948 act. Accordingly, a person covered by the 1948 act would not be entitled to receive superannuation benefits based on those amounts. The intention of the amendments is to ensure that the independent Remuneration Tribunal, should it be granted responsibility for determining parliamentarians base salaries, will be able to exercise that responsibility without creating unintended benefits for members of the 1948 act scheme. These amendments are consistent with a recommendation in the report of the review of parliamentary entitlements and further demonstrate the government's commitment to an efficient, effective and transparent system of remuneration and entitlements for parliamentarians.
Question agreed to.
Bill, as amended, agreed to.
Bill reported with amendments; report adopted.
That this bill be now read a third time.
I would like to make a short contribution in relation to the third reading vote. I acknowledge the minister's openness in the answers he has given me. I have had some frustrations in my dealings with the Remuneration Tribunal. Again, this is not a criticism, but I believe there is scope to further improve this once we see how the tribunal deals with its new powers. I foreshadow that I will be moving amendments to ensure that the processes of the tribunal are more open and transparent—I will firstly correspond with the tribunal but, if the response is not satisfactory from my point of view, I will do so. I think the more transparent it is, the greater the confidence the Australia people will have in the process by which politicians' pay is set. I acknowledge how hard every one of my colleagues in the chamber works, but I think it is important that there is a much better process in terms of openness and transparency. That may be the case with the tribunal's new powers. If the tribunal's response is not satisfactory, I will be moving a bill to amend this further. But I look forward to having further discussions with the opposition and, indeed, the government in relation to the openness of the process for setting the remuneration of members of parliament.
by leave—I move:
That senators be discharged from and appointed to committees with effect from 1 July 2011, in accordance with the list circulated in the chamber.
The list read as follows—
Australian Commission for Law Enforcement Integrity––Joint Statutory Committee––
Australia's Food Processing Sector—Select Committee––
Senators Sterle, Stephens and Urquhart
Australia's Immigration Detention Network––Joint Select Committee––
Senators Crossin and Sterle
Participating members: Senators Edwards, Fawcett and McKenzie
Community Affairs Legislation Committee––
Participating members: Senators Boyce, Edwards, Fawcett, Gallacher, Singh, Thistlethwaite and Urquhart
Community Affairs References Committee —
Participating members: Senators Coonan, Edwards, Fawcett, Gallacher, Singh, Thistlethwaite and Urquhart
Corporations and Financial Services—Joint Statutory Committee––
Cyber Safety—Joint Select Committee––
Appointed––Senators Bilyk and Parry
Economics Legislation Committee––
Senators Bishop and Urquhart
Participating members: Senators Edwards, Fawcett, Gallacher, McKenzie, Pratt, Singh and Thistlethwaite
Economics References Committee––
Senators Bishop, Cameron and Williams
Participating members: Senators Edwards, Fawcett, Gallacher, McKenzie, Pratt, Singh, Thistlethwaite and Urquhart
Education, Employment and Workplace Relations Legislation Committee––
Participating members: Senators Edwards, Fawcett, Gallacher, McKenzie, Singh and Urquhart
Education, Employment and Workplace Relations References Committee––
Appointed––Participating members: Senators Edwards, Fawcett, Gallacher, McKenzie, Singh, Thistlethwaite and Urquhart
Electoral Matters––Joint Standing Committee––
[for the purposes of the committee ' s inquiry into the funding of political parties and election campaigns]
Participating members: Senators Edwards, Fawcett and McKenzie
Environment and Communications Legislation Committee––
Senators Gallacher, McKenzie and Singh
Participating members: Senators Edwards, Fawcett, McEwen, Thistlethwaite and Urquhart
Environment and Communications References Committee––
Senators Gallacher, McKenzie and Singh
Participating members: Senators Cameron, Edwards, Fawcett, Thistlethwaite and Urquhart
Finance and Public Administration Legislation Committee––
Participating members: Senators Edwards, Fawcett, Fifield, Gallacher, McKenzie, Singh, Thistlethwaite and Urquhart
Finance and Public Administration References Committee––
Discharged––Senators Faulkner and Fifield
Senators McEwen and Ryan
Participating members: Senators Edwards, Faulkner, Fawcett, Fifield, Gallacher, McKenzie, Singh, Thistlethwaite and Urquhart
Foreign Affairs, Defence and Trade Legislation Committee––
Senators Fawcett, McEwen and Stephens
Participating members: Senators Edwards, Gallacher, McKenzie, Singh, Thistlethwaite and Urquhart
Foreign Affairs, Defence and Trade References Committee––
Senators Edwards, Fawcett and Stephens
Participating members: Senators Gallacher, McKenzie, Singh, Thistlethwaite and Urquhart
Foreign Affairs, Defence and Trade—Joint Standing Committee––
Appointed––Senators Fawcett, McEwen, Parry and Stephens
Gambling Reform––Joint Select Committee––
Appointed––Participating members: Senators Edwards, Fawcett and McKenzie
Intelligence and Security––Joint Statutory Committee––
Appointed––Senator Bishop, pursuant to the Intelligence Services Act 2001
Law Enforcement—Joint Statutory Committee––
Legal and Constitutional Affairs Legislation Committee––
Senators Boyce and Humphries
Participating members: Senators Edwards, Fawcett, Gallacher, McKenzie, Parry, Singh, Thistlethwaite and Urquhart
Legal and Constitutional Affairs References Committee––
Senators Boyce and Humphries
Participating members: Senators Edwards, Fawcett, Gallacher, McKenzie, Singh, Thistlethwaite and Urquhart
Migration—Joint Standing Committee––
Discharged––Senators Boyce and McEwen
Appointed––Senators Cash and Singh
National Broadband Network––Joint Standing Committee––
Appointed––Participating members: Senators Edwards, Fawcett and McKenzie
Parliamentary Library—Joint Standing Committee––
Appointed––Senators Humphries, Marshall, McKenzie and Singh
Discharged––Senators Bilyk and Cameron
Appointed––Senators Brandis, Gallacher and Urquhart
Public Accounts and Audit—Joint Statutory Committee––
Public Works—Joint Statutory Committee —
Appointed––Senators Gallacher and Urquhart
Reform of the Australian Federation—Select Committee––
Appointed––Participating members: Senators Edwards, Fawcett, Gallacher, McKenzie, Singh, Thistlethwaite and Urquhart
Regulations and Ordinances—Standing Committee––
Discharged––Senators Carol Brown and Stephens
Appointed––Senators Furner and Urquhart
Rural Affairs and Transport Legislation Committee––
Senators Gallacher and Urquhart
Participating members: Senators Edwards, Fawcett, McKenzie, Singh and Thistlethwaite
Rural Affairs and Transport References Committee––
Participating members: Senators Fawcett, Gallacher, McKenzie, Singh, Thistlethwaite and Urquhart
Scrutiny of Bills—Standing Committee––
Discharged––Senators Coonan and Pratt
Appointed––Senators Carol Brown, Edwards and Fifield
Scrutiny of New Taxes—Select Committee —
Participating members: Senators Edwards, Fawcett, Gallacher, McKenzie, Singh and Urquhart
Senators' Interests—Standing Committee––
Appointed––Senators Marshall and Stephens
Treaties—Joint Standing Committee––
Appointed––Senators Coonan, Singh, Thistlethwaite and Urquhart.
Question agreed to.
The Rural Affairs and Transport References Committee has been charged with the responsibility of inquiring into certain matters relating to live exports and the situation with live exports into the Indonesian market. I have been a member of the committee and its predecessors for some time but will not be part of that inquiry. I want to take this, my last, opportunity to make some comments about the circumstances which the Australian industry now faces and which will no doubt be the subject of examination by the committee, and perhaps others, in the coming months.
I looked at the LiveCorp website recently and at some of the media releases on that website. I noted that LiveCorp has appointed Mr Cameron McDonald as Animal Welfare Manager, effective from May 2010, based in Jakarta. There are also repeated reports on the website of LiveCorp since that time about the importance of animal welfare and the talk of encouraging better practices and the use of stunning in the process for slaughter of those animals.
I also had a look at the Meat & Livestock Australia website, which does not contain any particular information, that I could find, about their role in Indonesia other than statistics about the proportion of Australian meat which finds its way into the Indonesian market. I do note that Meat & Livestock Australia is funded by and represents red meat producers in Australia and, if one is to believe its website, has a duty of care to Australian farmers, particularly to helping them meet community and consumer expectations with regard to their industry.
I do not think it is questionable at all that those bodies know, and have known for some time, about the importance of the live export trade to Indonesia and the importance of the animal welfare outcomes in relation to that trade and the animal welfare movement's concerns and activism about that very trade, as with the trade in other parts of the country.
This country has seen some very tawdry events in relation to live exports. In 1990-91 the live sheep trade to Saudi Arabia was ended. It did not resume until the year 2000. In 2003, a vessel known as the MV Cormo Express was left without a destination for its cargo of live sheep because of disease on board the ship, and there were no arrangements to offload that cargo anywhere. Those animals were in effective purgatory while a destination was found. In 2006, the live sheep trade to Egypt was banned until 2008—for almost three years. So neither the MLA nor LiveCorp could have been under any illusion that, if there were concerns about the trade into Indonesia, that trade would be anything other than in jeopardy. There was no reason for them to conclude that the trade could continue if there was evidence of significant animal welfare concern in that market.
Given the circumstances of the placement of a LiveCorp officer in Indonesia in May of last year, all the events about animal welfare activism in the trade and a detailed knowledge about the market in Indonesia, why would they have been surprised by the findings that we saw so recently in the Four Corners report? It is particularly curious when one looks at the report of the agriculture FAO, which is publicly available and which details the circumstances of meat processing in Indonesia as well as in many other places. I found this on the internet. In talking about the number of facilities, for example, it says that Indonesia tops the list of the number of slaughter facilities, with 800 officially registered slaughterhouses. The report makes particular remarks about the country of Indonesia. It says:
The former centralized government initiated the construction of a high-capacity central abattoir in Jakarta, capable of slaughtering up to 2 000 head of cattle per night in two lines, using electric stunning (locally acceptable for Halal standards) and other modern equipment. The shift to a market economy and decentralization led to the opening of many small, private slaughter facilities with poor hygienic standards but which attracted the majority of livestock due to the lower cost. Although offering much better hygienic standards, the central abattoir in Jakarta now operates only at 10 percent of its capacity. Some municipalities (Bogor and Yogyakarta) recently built good medium-sized abattoirs with line slaughter for cattle. Both have not gone operational as yet because of disputes with the local butcher communities who prefer to continue slaughtering in the traditional way.
This is FAO, a responsible and reputable organisation. It goes on in the report to say:
The free-market economy stimulated the mushrooming of many small private slaughter facilities, mostly with obsolete technical and hygienic equipment or practically none at all.
These small slaughterhouses operate more cheaply than the large abattoirs primarily because of that lack of expenditure on maintenance, hygiene measures and energy. Thus, the butchers or meat dealers are charged less and have won over a large portion of the business from the established facilities.
That is quite knowable for LiveCorp and MLA, for quite some time. So how could those organisations turn a blind eye to what was taking place in Indonesia, a market which last year took three-quarters of a million live cattle from Australia? Clearly, it is fundamentally important to cattle producers in Northern Australia and there is not one reasonable sized processing facility in the line between Geraldton and Townsville.
How could those organisations, with regard to their constituencies, not have taken action, and how can they now expect the Australian public and certainly the farming community to forgive them for their neglect of their responsibility? As I said, live exports have been closed off for years to particular markets where there has been exposure of unacceptable animal welfare circumstances. They know that.
The Australian public is not prepared to accept those sorts of circumstances, and both sides of this parliament have known that for some time. The bodies charged with the responsibility of representing the live export industry, LiveCorp, and meat producers in Australia, MLA, ought to be condemned by their membership. If the opposition in this place takes a reasoned and responsible position on this matter they will ensure that those bodies bear the opprobrium that they should bear in relation to this matter because it is those bodies who are primarily responsible for the livelihoods of Australian farmers, particularly in Northern Australia, who may for some time lose markets in Indonesia because of the unacceptable practices which have been developing for some time in that market and clearly have gone without any reasonable interruption. If you have a reasonable interruption, if you have an industry with 800 processing facilities, many operating at very basic standards, there can be no guarantee of reasonable animal welfare standards.
You only have to look at the FAO report, which is available on the web, and see pictures of what takes place in all sorts of places in South-East Asia to know that those processes are unacceptable. To see that combined with the report on Four Corners and the Animals Australia footage I think is a depiction that we have been receiving a misrepresentation from the industry representatives about what has really been going on in Indonesia. They ought to be condemned. We need to get the matter fixed. It will take action from government and some regulation to do it but we should not forget who is responsible for letting the situation get out of hand.
Senate adjourned at 20:18
The following documents were tabled by the Clerk:
[Legislative instruments are identified by a Federal Register of Legislative Instruments (FRLI) number. An explanatory statement is tabled with an instrument unless otherwise indicated by an asterisk.]
Aged Care Act—
Aged Care (Residential Care Subsidy – Adjusted Subsidy Reduction) Determination 2011 (No. 1) [F2011L01152].
Aged Care (Residential Care Subsidy – Amount of Enteral Feeding Supplement) Determination 2011 (No. 1) [F2011L01159].
Aged Care (Residential Care Subsidy – Multi-Purpose Services) Determination 2011 (No. 1) [F2011L01160].
Appropriation Act (No. 1) 2010-2011—Advance to the Finance Minister—No. 4 of 2010-2011 [F2011L01128].
Banking Exemption No. 1 of 2011 [F2011L01146].
Banking (Foreign Exchange) Regulations—
Direction relating to foreign currency transactions and to Libya; variation of exemptions – amendment to the annexes, dated 16 June 2011 [F2011L01111].
Direction relating to foreign currency transactions and to Syria, dated 16 June 2011 [F2011L01115].
Variations of exemptions, dated 16 June 2011—
Civil Aviation Act—Civil Aviation Safety Regulations—Airworthiness Directives—
AD/DHC-1/22 Amdt 4—Tailplane Structure [F2011L01129].
AD/DHC-1/25 Amdt 3—Wing Flaps [F2011L01132].
AD/DHC-1/28 Amdt 10—Undercarriage Mounting Casting [F2011L01119].
AD/DHC-1/31 Amdt 3—Fin Rear Spar [F2011L01126].
AD/DHC-1/39 Amdt 1—Flap Operating System Latch Plate [F2011L01125].
Corporations Act—ASIC Class Order [CO 11/557] [F2011L01141].
Customs Act—Tariff Concession Orders—
Fuel Tax Act—Road User Charge Determination (No. 1) 2011 [F2011L01164].
Health Insurance Act—
Health Insurance (Gippsland and South Eastern New South Wales Mobile MRI Service) Amendment Determination 2011 [F2011L01155].
Instrument No. RPB 1 of 2011—Declaration of Relevant Professional Bodies [F2011L01116].
Migration Act—Migration Regulations—Instruments IMMI—
11/007—Payment of visa application charges and fees in foreign currencies [F2011L01110].
11/041—Specification of income threshold and annual earnings [F2011L01137].
11/042—Level of salary and exemptions to the English language requirement for Subclass 457 (Business (Long Stay)) Visas [F2011L01131].
National Health Act—Continence Aids Payment Scheme Variation 2011 (No. 3) [F2011L01162].
National Rental Affordability Scheme Act—Select Legislative Instrument 2011 No. 95—National Rental Affordability Scheme Amendment Regulations 2011 (No. 1) [F2011L01124].
Private Health Insurance Act—Private Health Insurance (Benefit Requirements) Amendment Rules 2011 (No. 3) [F2011L01145].
Return to Order
I present correspondence from the Minister for Small Business (Senator Sherry) relating to an order of the production of documents concerning mining tax.
The following answers to questions were circulated:
asked the Minister for Finance and Deregulation, upon notice, on 4 April 2011:
With reference to travel undertaken by departmental staff: can a list be provided by the department itemising all air travel completed across each department of the Australian Government; if not, where are such costs itemised annually.
The answer to the honourable senator's question is as follows:
For the period 1 July 2010 to 31 March 2011, 557,771 airline bookings have been made at the whole of government level (Financial Management and Accountability Act 1997 (FMA Act) Agencies and the participating Commonwealth Authorities and Companies Act 1997 (CAC Act) bodies). Itemising all air travel across each Australian Government agency would be a large and unreasonable volume of information to collate.
The new travel arrangements, which came into effect on 1 July 2010, are delivering on their intended objectives by reducing costs and improving competition in the industry.
An analysis of 30 most travelled domestic routes for the March Quarter (representing about 74 per cent of domestic travel) shows that on average savings of approximately 30 per cent were achieved on cost of airfares, using 2007-08 data as the baseline.
The savings are based on the reduction in unit cost prices achieved though the whole of government contract tender process.
asked the Minister representing the Minister for Health and Ageing, upon notice, on 5 May 2011:
With reference to the Audit and Fraud Control Branch and the department's current review of the Australian Radiation Protection and Nuclear Safety Agency (ARPANSA):
(1) What are the terms of reference for this review.
(2) Who is leading and serving on the panel.
(3) With whom has the panel conducted interviews.
(4) At what locations has the panel conducted inspections.
(5) When did the review commence and when will it be completed.
(6) Will the review report be made public.
The Minister for Health and Ageing has provided the following answer to the honourable senator's question:
There is no formal review being undertaken of ARPANSA.
At the request of ARPANSA's CEO, the Audit and Fraud Control Branch (AFCB) of the Department of Health and Ageing (the Department) is undertaking an initial investigation into ARPANSA's handling of the Yttrium 90 and Molybdenum 99 incidents at the radiopharmaceutical site at ANSTO, with specific regard to those matters relating to impartiality.
AFCB will also provide advice to ARPANSA on whether any further investigation is warranted and if so, how such an investigation could be undertaken.
(2) There is no panel. Mr Colin Cronin, Assistant Secretary, AFCB of the Department is carrying out the investigation, with assistance as required from Departmental lawyers.
(3) Discussions have been held with current and former staff of ARPANSA and Mr David Reid.
(4) No inspections have been conducted.
(5) The investigatory work commenced on 31 March 2011 and is expected to be completed by the end of May 2011.
(6) Advice from AFCB will be provided directly to ARPANSA.
asked the Minister representing the Attorney-General, upon notice, on 24 May 2011:
Has the department undertaken any building works at its offices on National Circuit, Canberra, in the past year; if so: can a detailed list be provided of these works, together with their individual cost.
In response to the Senator Abetz's question 668,
The Attorney-General has provided the following answer to the honourable senator's question:
The following information is provided for the 2010-11 financial year (current to 24 May):
The Attorney-General's Department (AGD) undertook fitout changes to 3-5 National Circuit, Barton to accommodate a Departmental restructure. The cost of these fitout changes was $146,057.09.
The building owner of 3-5 National Circuit (ISPT) and AGD are sharing the cost of constructing an outdoor cover area for staff. This permanent structure is required to address potential OH&S issues (protection from the sun and rain) so that AGD can utilise the outdoor space for training, meetings and functions. Prior to its construction, staff could not utilise the area due to the extreme hot or cold conditions, reflection of light from the pavement and exposure to the elements. Expenditure for this project to 24 May 2011 is $542,190.90 of which the AGD component is $340,863.64. ISPT is responsible for any remaining expenditure (not expected to exceed $25,000).
Various minor fitout works were completed within the premises at 3-5 National Circuit at a total cost of $62,956.24. No single item exceeded $8,000.
AGD has committed to lease 8,000sqm of office space in a new building being constructed at 4 National Circuit, Barton. Expenditure to 24 May 2011 on this project is $3m against a total fitout budget of $18m. The project was approved through the Public Works Committee on 24 February 2011. Through this project AGD will achieve cost savings from:
All costs provided above are GST exclusive.