Senate debates

Thursday, 25 September 2014


Infrastructure Australia Amendment (Cost Benefit Analysis and Other Measures) Bill 2014, Tax and Superannuation Laws Amendment (2014 Measures No. 5) Bill 2014; Second Reading

12:27 pm

Photo of Mitch FifieldMitch Fifield (Victoria, Liberal Party, Assistant Minister for Social Services) Share this | | Hansard source

I move:

That these bills be now read a second time.

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

Leave granted.

The speeches read as follows—


The Australian Government is committed to building the infrastructure of the 21st Century, to ensuring this nation has the productive infrastructure it needs to meet the challenges ahead.

The 2014-15 Budget laid out a historic $50 billion infrastructure plan to deliver vital transport infrastructure right across our cities, regional centres and rural communities. This commitment is part of the Government's economic action strategy to build a strong, prosperous economy, boost productivity and create thousands of new jobs.

Building better road and rail infrastructure will make it easier for freight to move around our cities and to our rural and regional centres. Infrastructure investment helps cut fuel costs and reduces travel times so we can spend more time in productive activities or with our loved ones.

The Government is not just getting on with infrastructure delivery; we are also determined to reform the way decisions are made to prioritise new infrastructure projects. Therefore we are acting to reform.

The Government's election commitment was for a strong independent, transparent and expert advisory body able to forge productive relationships with industry, states and territories and to deliver quality independent advice on infrastructure proposals.

We have delivered on that promise and on 1 September the new governance arrangements for Infrastructure Australia (IA) officially commenced.

On 1 September I also announced the new Board of IA under Mr Mark Birrell.

IA will now be able to better demonstrate transparency and rigour in its prioritisation of projects and its advice to Government.

IA is getting on with the key priorities this government has tasked it with:

        Let's be clear. IA is already assessing projects which involve Commonwealth funding of at least $100 million and will make public the details of their evaluations. This was the Government's election commitment and this is what we are delivering without the trigger being specified in legislation.

        With the previous amendments provided for in the Infrastructure Australia Amendment Bill 2013, the Government had provided for this to be specified through a disallowable legislative instrument. However, the Bill as amended by the Senate no longer provided for such an instrument. We therefore made an undertaking during debate on the Land Transport Infrastructure Amendment Bill 2014 to ensure that the $100 million threshold would figure in this Act.

        This Bill will amend the Infrastructure Australia Act 2008 (IA Act) to clarify the legislative and administrative arrangements for Infrastructure Australia. It will also rectify the currently incorrect placement of provisions pertaining to cost benefit analyses of infrastructure proposals in the Infrastructure Australia Act 2008. This will ensure that cost benefit analyses inform the evaluation of proposals under the IA Act.

        The Bill will amend the Act to include in the functions provision the requirement that Infrastructure Australia undertake evaluations of proposals that involve Commonwealth funding of at least $100 million. This figure is to be established as a benchmark based on 2014 dollars and indexed at least every five years to ensure this figure maintains relativity into future years.

        Australia's future growth will be significantly influenced by our capacity to deliver more appropriate, efficient and effective infrastructure and transport. Investment in nationally significant infrastructure is central to growing Australia's productivity and improving the living standards of Australians now and in the future.

        To maximise productivity improvement through investment, funding must flow to projects that yield the highest benefits. Therefore, it is critical to base project selection on rigorous analysis and sound planning to avoid wasteful investment. The Government recognises that Australia needs improved planning – coordinated across jurisdictions – to underpin investment and regulatory reforms.

        We are, therefore, focussed on long term planning based on robust, evidence based findings through a greater understanding of the critical issues facing Australia's infrastructure and land transport system.

        Notwithstanding the significant reforms the Government has made to Infrastructure Australia, it remains an advisory body, a key advisory body with an independent view. It will not be the decision-maker in terms of funding allocation. That responsibility will remain with governments.

        The Bill currently before Parliament builds on the IA reforms and corrects anomalies which arose from amendments made to the Bill during the parliamentary debate so as to enable the organisation to operate effectively now the new organisational structure has commenced.

        The key elements of this Bill are to:

                During debate on the previous amendments to the Infrastructure Australia Act in June this year the member for Grayndler Mr Albanese indicated his support for the amendments we are now bringing.

                He said:

                ' I put on the record here that if the minister wanted to have a minor amendment bill or what have you to fix up that little bit, if he thought it was important, there would be support from the opposition. ' *

                I thank Mr Albanese for his support in bringing forward these amendments to further strengthen Infrastructure Australia.

                As these amendments only relate to clarification or are of an administrative nature by rectifying an anomaly there are no regulatory or financial impacts on business and the non-for-profit sectors. There is no net impact on the Government Budget flowing from the changes in this Bill.

                The Government is committed to broadening the current infrastructure reform agenda in collaboration with jurisdictions and industry to improve productivity and drive economic growth.

                *Hansard Thursday 26 June at page 39.

                The reform to Infrastructure Australia is a key component of this broader reform package and is critical in better enabling it to deliver quality independent advice. The Government will consider this advice when selecting priority projects, which is important to improving productivity.

                The Government will remain focussed on delivering critical infrastructure, ensuring we are getting value-for-money for our investments and will be dedicated to embracing and increasing innovation in project delivery.

                The Government is committed to building the infrastructure of the 21st Century and these reforms to Infrastructure Australia are a further step in the achievement of this goal.


                Today I introduce a Bill to amend the Income Tax Assessment Act 1997 to implement a range of changes to Australia's tax laws.

                The Government's Economic Action Strategy is not about undoing our strong safety net—it is about making it sustainable.

                This Government's Economic Action Strategy is about setting up a stronger and more sustainable economy, which starts off with a stronger Budget.

                We have already delivered on our promise to abolish the Carbon Tax and its associated savings will be passed onto households and businesses.

                That means the average cost of living across all households will be around $550 lower than it would otherwise have been this year.

                This Bill represents another chapter in the Government's Economic Action Strategy.

                We inherited from Labor an unsustainable budget position.

                The measures in this Bill will return around $1.4 billion to the Budget over the forward estimates.

                Schedule 1: Abolish the Mature Age Worker Tax Offset

                The Mature Age Worker Tax Offset, which merely reduces the amount of tax that might be payable for those who are already working by up to $500, simply does not work.

                It doesn't work because it does not help older Australians enter the workforce.

                It does not help reduce labour market disadvantage.

                Many older Australians don't need to be encouraged to enter the workforce. They want to work. We need them to work.

                That's why this Government is introducing a new wage subsidy for older job seekers called the Restart programme.

                From 1 July 2014, an incentive of up to $10,000 will be available to employers who hire an older job seeker.

                That means that job seekers aged 50 years or over and in receipt of income support for a minimum of six months can get back into work without some of the hurdles they might otherwise encounter due to age.

                The Mature Age Worker Tax Offset achieved little and abolishing it will save the taxpayer $760 million over the forward estimates period.

                Full details of this measure are contained in the explanatory memorandum.

                Schedule 2: Abolish the Seafarer Tax Offset

                The Seafarer Tax Offset is a refundable tax offset.

                It is provided to companies for salaries, wages and allowances paid to Australian resident seafarers employed to undertake overseas voyages on certified vessels.

                Australian companies are eligible for the Seafarer Tax Offset if they employ seafarers on overseas voyages for at least 91 days in the income year.

                The current regulatory regime for shipping imposes a cost on shippers and their customers. Because it is a part of current shipping regulation, the Seafarer Tax Offset effectively imposes a cost on all Australian taxpayers.

                The Seafarer Tax Offset's primary goal was to increase the employment of Australian seafarers. In fact the seafarer tax offset was claimed by fewer than 20 shipping companies in respect of around just 250 employees.

                With low take-up of all the tax concessions offered by the previous government's Stronger Shipping package, the Seafarer Tax has not achieved its goal.

                Abolishing this offset is expected to save the Government $12 million over four years.

                And that's another step towards repairing the budget.

                Full details of the measure are contained in the explanatory memorandum.

                Schedule 3: Reducing the tax offset under the Research and Development Tax Incentive

                We are also reducing the tax offset available under the Research and Development Tax Incentive.

                The rates will be reduced by 1.5 percentage points from 1 July 2014.

                These changes are in line with the Government's commitment to cutting the company tax rate by 1.5 percentage points from 1 July 2015—which is the same amount as the reduction in the R&D offset rates.

                Changing the offset will neither affect the eligibility of companies for the R&D tax incentive, nor the way companies claim the incentive.

                Nor will the changes affect the administration of the R&D tax incentive more generally.

                The R&D tax incentive will continue to provide generous, easy to access support for thousands of eligible companies in all sectors of the Australian economy.

                If this measure were not enacted, the cut to the company tax rate would entail an increase in the benefit provided by the R&D tax incentive relative to the normal treatment of business expenses.

                The gain to revenue and savings from this measure will be around $620 million over the forward estimates.

                Full details of the measure are contained in the explanatory memorandum.

                Australians are generous, choosing to donate over $2 billion every year to charity.

                Donations made to organisations with DGR status are income tax deductible to the donor, so DGR status helps listed organisations attract public support for their activities.

                Three organisations are being added to the DGR list.

                Australian Schools Plus supports schools that face disadvantage to improve education outcomes.

                The second DGR to be specifically listed is the East African Fund, which runs the School of St Jude in Tanzania.

                Another organisation to be listed as a DGR is the Minderoo Foundation Trust, which supports three programmes: the Walk Free Foundation; GenerationOne; and Hope for Children Australia.

                Full details of the changes to the DGR list are contained in the explanatory memorandum.


                The measures in this Bill are responsible. They represent another instalment in our Economic Action Strategy towards a stronger, better and more compassionate Australia.

                This Bill might seem like a small chapter in this story – but it's a significant element in reducing our debt.

                As a Government we recognise that we cannot continue borrowing $1 billion every month to pay the interest on Labor's debt.

                The measures in this Bill will return around $1.4 billion to the Budget over the forward estimates.

                These measures represent a careful and measured approach to re-prioritising government revenue.

                This Government will continue to make the right decisions to position Australia for future opportunities and challenges.

                I commend the Bill to the House.

                Ordered that further consideration of these bills be adjourned to 27 October 2014, in accordance with standing order 111.

                Ordered that the bills be listed on the Notice Paper as separate orders of the day.