Senate debates

Thursday, 18 October 2018

Bills

Government Procurement (Judicial Review) Bill 2017; In Committee

10:36 am

Rex Patrick (SA, Centre Alliance) Share this | | Hansard source

I move amendment (1) on sheet 8521:

(1) Clause 2, page 2 (cell at table item 1, column 2), omit the cell, substitute:

[commencement]

I've got some questions for the minister in relation to the Government Procurement (Judicial Review) Bill 2017. The judicial review bill brings about a right for companies to seek a review of a decision, or perhaps seek an injunction or compensation in respect of a procurement. I've got some questions in relation to the transitional arrangements from when the bill is passed, particularly in circumstances where there are procurements underway. I want to know whether or not the bill will cause an effect on current tenders that are in play—noting that there are requirements, for example, when deciding on whether a procurement ought to be a limited tender, an open tender or a sole source. Those sorts of decisions now have to be documented. If we now kick off with new laws, assuming they end up being passed, what does that do to the current tenders on foot?

10:38 am

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | | Hansard source

My advice is that there are six months before this particular process starts, which we believe will give ample time for those matters on foot to be dealt with.

Rex Patrick (SA, Centre Alliance) Share this | | Hansard source

A company might be aggrieved by a tender process. One of the potential causes of an action may, in fact, be that first decision to go to a limited tender, to an open tender or to a sole source tender of some sort. The potentially aggrieved party may not have access to the decision reasoning and so may be blind as to whether or not they have a case. When the departments are making these decisions and writing their reasons, can you confirm whether those reasons will be made public? Alternatively, will they be accessible under FOI? Alternatively, does it require some sort of prediscovery in a court action to be able to get access to work out whether or not you have a bona fide case to bring in terms of a complaint?

10:39 am

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | | Hansard source

My advice is that the conditions of a limited tender must be made public.

Rex Patrick (SA, Centre Alliance) Share this | | Hansard source

In the past what has happened is that, typically, tenders are made public. It is not always the case with limited tenders, but certainly it is the case with sole tenders because the way in which that is typically done is through AusTender. For example, in relation to the submarine project, the government made a decision to go to DCNS, the Japanese government and, indeed, to the Germans, the French and the Japanese. None of the tendering details appeared on AusTender. You might recall that, for example, I had to extract details of Future Frigate from the government like a dental surgeon by way of FOI. So when you say the documentation is available, I'm not exactly sure whether in fact it is. I'll just ask you to check.

10:41 am

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | | Hansard source

I'm advised that, under item 2.6 of the tender rules, matters of national security are exempt from the requirement for disclosure.

Rex Patrick (SA, Centre Alliance) Share this | | Hansard source

Clearly, some of those tenders are really big tenders. They're for significant value contracts, often ranging into the billions. In fact, one would imagine that the companies that are tendering for those sorts of contracts would have capabilities to bring quite serious actions. What happens in that instance, noting that there is, in some sense, a carve-out here? I'm thinking of circumstances where an Australian company is tendering for a job and an overseas company is tendering for a job. The overseas company wins. The Australian company suspects there's a problem but doesn't have access to this information. How would the Australian company get around that, or would they simply be disadvantaged in those circumstances?

10:42 am

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | | Hansard source

Obviously, we're talking about a specific area of carve-out for a specific reason in terms of national security, and often those carve-outs are part of international agreements. However, voluntarily, the Australian government will provide information where they don't believe that it is contrary to the national interest or national security.

Rex Patrick (SA, Centre Alliance) Share this | | Hansard source

Defence has a whole range of contracts. They might have contracts for fighter jets, but, equally, they have contracts for cleaning services and so forth. Do you say that you distinguish those contracts?

10:43 am

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | | Hansard source

The international rules will distinguish between which types of contracts would sit underneath the exclusions or the carve-out on the basis of national security and those that wouldn't.

Rex Patrick (SA, Centre Alliance) Share this | | Hansard source

I understand that, whilst this legislation is an enabling piece of legislation for the TPP, it is Australian legislation in its own right. So, for an Australian company, there are no impacts from an international treaty perspective. It is simply Australian law. In that context, I don't understand why you mention international treaties. This is Australian legislation litigated in Australian courts with no connection to the TPP, other than it enables that agreement to enter into force.

10:44 am

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | | Hansard source

My apologies. I thought I was responding to your question in relation to the Defence examples that you were raising. If that's not what you were talking about, perhaps you might be a little clearer about what the actual question is, because we were talking about Defence carve-out.

Rex Patrick (SA, Centre Alliance) Share this | | Hansard source

Okay; I'll move on. Currently this bill deals with covered procurements, and those procurements are typically procurements above $80,000. At this point in time it is possible for someone to be given a contract by way of sole source under $80,000. It's not a covered procurement in the context of this bill. But then what happens is, if I get into contract for $79,999 with the Department of Defence—and they can do that quite lawfully just by way of sole source—they can then give me another $200,000 contract on the basis that I am already in contract with them. I'm just wondering how that is handled in the context of someone who perhaps wanted to provide those services and now sees a contract that's got a value of $279,000, which would normally give cause for invoking this legislation. Does it allow them to invoke the legislation or is that a loophole in the arrangements?

10:46 am

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | | Hansard source

I'm advised that you couldn't use this mechanism to bring the matter before the court. You cannot use the mechanism contained in this legislation to bring a matter in relation to something over the amount of $80,000 to court.

10:47 am

Rex Patrick (SA, Centre Alliance) Share this | | Hansard source

Some time ago, by way of a question on notice—I think it might have actually been former Senator Xenophon who asked the question—the department was asked to give examples of where there had been a contract let for under $80,000 and then a subsequent contract awarded to the same company using the fact that the procurement rules allow that to occur without tender. The response from the department was that it would take up so much time. That indicates to me that there are lots and lots of businesses that are working with Defence in those circumstances—that is, a small contract followed by a larger contract—and this is mostly in the small-business space. You're saying that this legislation does not give them a remedy in circumstances where they feel that the procurement decision is flawed?

10:48 am

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | | Hansard source

I'm advised that the circumstance you described is one the agency believes is highly unlikely to exist. There is absolutely no incentive in public sector procurement for the public sector to be breaking down contracts into small amounts to try to avoid a level of scrutiny or legislative assessment. So the advice is that that situation is highly unlikely to ever occur.

10:49 am

Rex Patrick (SA, Centre Alliance) Share this | | Hansard source

Again, I will state that I have an answer from the department that says that it occurs so often that they are unable to provide the answer to the FADT committee. I, in a previous life, worked in this space, and it was very common that you would bring someone on. Whether properly or improperly, you would bring them on as a specialist service under $80,000, and once you were initially employed, quite lawfully, without tender, they simply extended the contract. That is common practice, I put to you.

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | | Hansard source

Certainly there are circumstances where it obviously makes good economic and business sense for contracts to be handed out in a certain and particular way, but the suggestion that this is a mechanism that is used to evade scrutiny, I think, is contested.

10:50 am

Rex Patrick (SA, Centre Alliance) Share this | | Hansard source

Nonetheless—and I understand where you're coming from, Minister—you would appreciate that another company, sitting beside watching and thinking that they have an opportunity to provide the services perhaps at a better price or perhaps with greater knowledge or some quite genuine reason, may disagree with your characterisation and would normally have the choice to seek a remedy and even to test the proposition that you say is not the case. The whole point of this legislation is to give those small companies the right to say, 'I don't think that was done correctly, and I want it examined.'

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | | Hansard source

The rules that the public sector has to operate under for these particular types of contracts are very overt in their statement that they are not allowed to use this rule in order to be able to do anything apart from something that would be in the benefit of the contract on the basis that it's a small-sized tender. So I think we may be arguing at cross purposes to some degree here. Your suggestion, we're saying, is that there is a balance being determined here, on the basis of good business sense, speed and efficiency but with a set of rules around it that overtly say you cannot do this in order to evade any level of scrutiny. So I suppose we can discuss this for some time, but I think we may have to agree to disagree, on the basis that we believe that the rules put in place the kinds of protections that we think are appropriate and relevant for the type of contract that we're talking about. I suppose that's the position of the government in relation to this particular matter.

10:52 am

Rex Patrick (SA, Centre Alliance) Share this | | Hansard source

I'm in agreement. I understand the government takes a strong position that that is not what happens. But I'd ask you to respect the view that other companies who are generally competing with entities where they see this occurring may be concerned about it. It causes a controversy, and this bill is designed to solve those controversies. As you would be well aware, when you have a department that is subject to judicial review, in some sense it tightens it down further and gives much more rigour to the processes. So my concern is that you're carving these out. I'm just wondering—because this does occur commonly—if there's any way in which we could have a situation where this bill could cover those circumstances in some way.

10:53 am

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | | Hansard source

Thank you, Senator. I accept your comments, but we believe this is the appropriate way to do it. The vast bulk of procurement operates under this particular mechanism, and I draw your attention—without belabouring a point—to paragraph 9.5 of the Procurement Rules:

A procurementmust not be divided into separate parts solely for the purpose of avoiding a relevant procurement threshold.

Rex Patrick (SA, Centre Alliance) Share this | | Hansard source

Again I suspect someone may challenge that and claim that they have done that, but I'll leave it at that. The next question I have is: how do these rules interact with services panels? Once again, there's a requirement in here to allow review of contracts that may be awarded by our services panels. Indeed, there might be a circumstance where you have a company that is a participant in a panel and a company that's not a participant—an international company, even—which may cause rise to a controversy in that a company may say that they were not given a fair opportunity. So my first question is: does this bill apply to service panels as they are currently constructed? Indeed, can the fact that someone is not on a service panel give rise to an action under this bill?

10:55 am

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | | Hansard source

Yes, it does apply to the panel. Action can be taken by someone in the process of trying to get onto the panel until the panel is operational. However, once the process of the establishment of the panel has been concluded and the panel is operational, at that point a non-panel member's opportunity to take action ceases.

Rex Patrick (SA, Centre Alliance) Share this | | Hansard source

I'm just trying to work out the mechanism, how this works, because there are many instances where someone becomes aware of a contract being awarded post facto—because it might not be the case that the tender is on AusTender. I'm wondering what the process is for a company that believes there's an action to be taken.

You've said clearly to me that tender documents are available on AusTender, except for the circumstances that you've mentioned, and I accept that. But there is a requirement now to document the actual decision to pick a particular type of procurement. You might say, 'I want to have a limited tender because I believe there are only three companies in the world that provide encryption and are trusted by our security agencies,' for example. How does someone who's outside of that—once again, it could be an international company—get access to the decision-making around that call for a limited tender that the department made? Can they do it via FOI, or is it simply made available as part of the tender package? Encryption might be a bad example, because that could be affected by security concerns. Maybe it's a company that has three specialised widgets. There are only three companies that can do that, and a limited tender goes out. But actually there's a fourth company, and they want to see how that decision-making was done.

10:57 am

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | | Hansard source

My understanding is that any company, even if they're outside a limited tender, does have the opportunity to appeal to the department, to put forward their case that they should have been included in that tender. So they do have a remedy with the actual procuring department.

10:58 am

Rex Patrick (SA, Centre Alliance) Share this | | Hansard source

I apologise for not articulating this well. The burden of my question is that, in order to be able to appreciate that they can take an action under these provisions, they may need access to documentation to work that out: 'Actually, we have a bona fide case.' That's typically what happens in such a matter. You FOI a bunch of documents so that you can see what the department has done. Alternatively, you can go to a lawyer and seek prediscovery. Now, in those circumstances, obviously, you're dealing with a court order, and the department may have to capitulate. But is it likely that those sorts of decision documents would fall under one of the exemptions in the FOI Act?

10:59 am

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | | Hansard source

Senator Patrick, without wanting to get into a very long debate with you about the operation of the judicial system and access to various sorts of documentation and the like, obviously, what we have here are rules and boundaries by which one can operate. If we remove all those boundaries and say it's a free-for-all—I'm not quite sure what you're trying to get to here, talking about a potential example or a hypothetical example of something happening. Do you have a specific example you wish to draw attention to, or is this just a legal argument for legal argument's sake?

Rex Patrick (SA, Centre Alliance) Share this | | Hansard source

It's a genuine question. I'm the director of company A; Senator Storer is the director of company B. I am awarded a limited tender contract. Senator Storer feels aggrieved by that because he thought there was something to offer. In order to bring an action, he has to show that the department has in some way breached the Commonwealth procurement rules. He can't do that by simply saying, 'I feel this is unfair.' He needs access to documents that might show that they didn't consider something relevant or they've not properly gone to market to find companies that provide the sorts of services that both my company and Senator Storer's company provide. The point is that you can't actually commence an action unless you've got access to the decision-making and the process by which the department made the decision. Is it wholly and solely that Senator Storer has to guess and pay lawyers to get discovery? Will he be able to get access to that freely because it's on the web somewhere or, alternatively, via FOI?

11:01 am

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | | Hansard source

You have probably a greater understanding of the FOI Act than many of us in here, but there is obviously a balance between the procurement rules that exist around how we operate with procurement and making sure that the rules are applied in such a way that would mitigate against this kind of thing happening in the first place. Obviously, if a government agency decides to go for a limited tender, they would do so in the belief that they have been able to clearly define who was available or who within that marketplace it was appropriate to seek that tender from. The rules state that there must never be any intention to exclude somebody who otherwise might have been an appropriate source for that particular procurement.

In terms of FOI and the access to particular pieces of information and the like, there are obviously rules around commercial in confidence and the commercial documentation. To go back to your previous discussions in relation to Defence et cetera, there will be a series of other things that sit around decisions about what information might or might not be available in a particular process. I think, if you put those two side by side, there is a level of safety mechanism in place that would suggest that, first of all, it's highly unlikely that this situation would occur in the first place, and, if it did, it would have to be determined on the merit of the particular action on the basis of whether the information being sought was something that was actually going to prejudice another party to this particular contract because of the commercial nature of the information that was being sought.

11:03 am

Rex Patrick (SA, Centre Alliance) Share this | | Hansard source

I'll move on now to a slightly different topic. One of the remedies a company can seek is an injunction on the Commonwealth to pause the activity. For example, when a preferred tenderer has been selected and the government is negotiating a contract with that preferred tenderer, if a second or a third party perhaps comes along and says, 'I wish to seek an injunction,' that could create all sorts of problems for the Commonwealth in its procurement process. The government department may actually be slowed down by injunctions from the courts. The act actually allows for a public interest certificate to be issued—in some sense, trying to make sure that that doesn't happen. I'm just trying to understand how that mechanism would work. What is considered to be in the public interest? Who determines that? How does that certificate process work?

11:05 am

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | | Hansard source

I'm advised that the guidelines around providing guidance in terms of the development of the public interest certificate are currently with the Attorney-General and the Department of Finance to develop the details around that particular instrument.

Rex Patrick (SA, Centre Alliance) Share this | | Hansard source

Will those be made public?

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | | Hansard source

Yes.

Rex Patrick (SA, Centre Alliance) Share this | | Hansard source

To close off on this line of questioning—I do have some more questions—I'm wondering about circumstances where you have a project that a department is running that may involve multiple different contract streams because each contributor to the project has different skills and different services they can provide. Let's say you have five elements of a project. On element No. 5 an action is invoked and an injunction is placed on that contract, on that particular procurement. The other four are underway and may be reliant on No. 5 in some way. Is it the intention that, in those circumstances, the Commonwealth will compensate the other four companies, who will end up being delayed in the execution of their contracted obligations and, in fact, in some sense would end up being penalised for something completely outside of their control? How does the Commonwealth intend to handle that?

11:07 am

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | | Hansard source

I'm advised that contract management issues are not covered by this bill.

Photo of Tim StorerTim Storer (SA, Independent) Share this | | Hansard source

I want to reflect on this bill in terms of the amendments that are being put regarding the TPP-11 and in terms of the process of the passing of notice of motion this morning. In terms of that process, I think it's disappointing that there will be a cut-off of debate of this bill, and of the following bill, at 11.45. This does not accord with the discussion that happened regarding the personal income tax legislation in May. There was a lot of grievance held by the Labor Party with regard to that gag motion on that day, and I didn't get to speak on my amendment on that day as well.

I am a supporter of measures that increase opportunities for trade and commerce between Australia and the rest of the world, but I have significant concerns regarding the economic benefit of the legislation that was passed yesterday in terms of the lack of independent modelling of it and the likelihood of an overall positive outcome of Australia's involvement in that agreement. There are significant concerns regarding the ISDS and I see that they're reflected in the amendments that certainly will be put at 11.45 in regard to this bill itself.

The ISDS has significant issues that have been eloquently discussed by speakers here yesterday and the previous days. I am very concerned about the lack of independent analysis of the potential impacts on the Australian labour market of the removal of labour market testing for temporary migrant workers from those TPP-11 countries. I will certainly be looking very carefully at the amendments to be made regarding this bill and then the overall economic situation that Australia is in. That's important in terms of other legislation that will be looked at in this place.

As I mentioned yesterday, even former Treasurer Peter Costello has noted the concern regarding the government debt. He noted that overall net debt was so high that he thought he would be dead before it was paid off. Yet with regard to the intention to bring forward the company tax cuts for companies with a turnover of $50 million, the Treasurer has revealed that there will be no savings to match the estimated cost of $3.2 billion over the forward estimates. At least the Labor Party have announced that it would help meet this cost by delaying the implementation of its Australian investment guarantee legislation.

The last time this discussion of company tax was before the Senate, I opposed it based on the best evidence to date, which found that the corporate tax cuts already in place have had little impact on wages and a small effect on jobs and investment. I found this out from the AlphaBeta Advisors review of the 2014 tax cuts for companies of under $2 million. They found that there was a marginal increase in employment versus the increase for firms above that threshold, where there was a limited increase in wages and there was a slight increase in investment. It seems to me, in regard to Australia's desire for economic growth, jobs and wages, that there would alternative, wiser initiatives that could be done—for example, an instant access tax write-off, an expansion of R&D concessions that were limited in the last budget or spending more on infrastructure, which the ministers have indicated creates a significant increase in GDP and a longstanding benefit.

There are also issues, in terms of analysis by Deloitte Access Economics, regarding a significant increase to Newstart and related payments that would deliver a prosperity dividend of $4 billion to the Australian economy, as well as having a very tightly targeted fairness impact, with the overwhelming bulk of the relevant increase in disposable incomes going to Australia's lowest-income families. I think that legislation, such as that which will be dealt with, is piecemeal and narrow. We should be looking at a more broad-based tax reform. We had the Henry review with its seven principle feature reforms pass 10 years ago, yet we're only dealing with one of those principle features and we have the architecture in place for it.

With regard to this bill, I will certainly be looking very carefully at the amendments and also the other bills in terms of what is in the best interests of Australia's overall economic situation and for the people and the taxpayers who we serve.

Photo of Glenn SterleGlenn Sterle (WA, Australian Labor Party, Shadow Minister for Infrastructure) Share this | | Hansard source

Just before I do pass on the call, I wish to deal with Senator Patrick's amendment that is in front of us. Hence, that's why I call Senator Hanson. Senator Hanson, did you wish to ask questions around this amendment?

11:13 am

Photo of Pauline HansonPauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | | Hansard source

Yes, just one or two questions—that's all. I just want clarification on it. The law at the moment is that multinationals who don't get the tender cannot challenge it in the court system—is that correct?

11:14 am

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | | Hansard source

I am advised that, like any other business, they can challenge that through the courts.

Photo of Pauline HansonPauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | | Hansard source

If that is the case, then why this bill? You need to actually explain to me, because my understanding is that, at the moment, multinationals who don't get a tender cannot actually go for a review in the judicial system.

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | | Hansard source

The primary legislation gives Australian businesses access to trade agreements overseas and, similarly, international companies will have reciprocal access to trade agreements into Australia.

11:15 am

Photo of Pauline HansonPauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | | Hansard source

Minister, you know that is not the question I have asked. I have asked you directly: if multinationals do not get a tender, can they challenge that in our court system at the moment?

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | | Hansard source

My understanding is that, under the current system, any company has recourse to challenge under the Australian court system. However, what this bill seeks to do is provide greater protections and greater assistance to small businesses to make sure that they have the kind of access and remedy that would be appropriate.

11:16 am

Photo of Pauline HansonPauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | | Hansard source

Then I'd like you to answer the question. If you have a local government, a state government or even a federal government that offers a tender in which only Australian companies or Australian workers are wanted to fill those jobs, can a multinational company challenge that tender under your new bill, which you want to pass here? Can they challenge that in the court system, because they are not an Australian company?

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | | Hansard source

I'm advised that under these rules you cannot overturn a contract once it has been let. So the answer is no.

Photo of Pauline HansonPauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | | Hansard source

So you're saying that a contract can't be overturned. What I'm saying is: if a local, state or federal government says, 'We want only Australian companies to provide the services to us; we want to do those jobs with Australian workers,' can multinationals challenge that? If they put in a tender, can they then challenge governments by saying: 'We have been discriminated against. We have been unfairly treated. We are now going to challenge you under this new legislation in the judicial court system'? At the moment, I understand they can't.

11:17 am

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | | Hansard source

Senator, my understanding is that, as it currently stands, any company can challenge that decision. What this legislation seeks to do is change the process by which that can occur to provide greater protections for small businesses. So the answer to your question is, yes, it can occur. It currently can occur.

11:18 am

Photo of Pauline HansonPauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | | Hansard source

In other words, under the process whereby they're protected at the moment, you're going to allow them an avenue to take it to the judicial system and so the judicial system can actually override it. If they override it, can the judicial system then require compensation to be paid?

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | | Hansard source

I'll try and see if I can be clear in my answer, because I think maybe we're a bit at cross-purposes. There is a system in place which allows a certain recourse from any company, no matter who they are, within our court system in relation to a pre-contract letting situation. Nothing changes in terms of once a contract has been let; it is not able to be challenged. What we're seeking to do by this legislation is increase the level of protection, particularly around small businesses, so that in the situation where they may be seeking remedy because they believe that they've been wronged or where they're challenging the decision pre the letting of the contract, they will have access to do that in such a way that probably gives greater advantage to them. This bill does not seek to actually change what you're talking about. You're talking about the legal rights of businesses within the contractual system that operates within Australia and around the world. That is not what this bill is seeking to change.

11:19 am

Photo of Pauline HansonPauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | | Hansard source

But what you're saying is that this will open it up under the TPP, because this is enabling legislation for the TPP. Therefore, it is going to allow multinationals to challenge it in the court system. You're going to open up the court system now to multinationals to challenge it and, possibly, even challenge for compensation to be paid for by the taxpayers.

11:20 am

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | | Hansard source

The very basis of a trade arrangement that you enter into with another country is to enhance the economic benefit to both of the countries by allowing freer access to the other country's economy to trade with it. Equally, Australian companies will be afforded the same access and the same privilege in the countries that we are seeking to trade with. Overall, obviously, the Australian government is of the view that we've seen such extraordinary success for the farmers, whom I know you're very much supporting, as am I, from the trading agreements that we've put in place and the benefits that are delivered from that. The government has made a clear assessment, through a series of appropriate tools and modelling, that the benefit to Australia of these free trade agreements and everything that goes with them is in the national interest. So, in anything that you're prosecuting, if you suggest that there is any change on this side of the equation within Australia, the benefits are delivered to our businesses who are seeking to trade and send our goods to their countries.

Australia is an exporting nation. We're not ever going to get rich selling to ourselves. It is tremendously important that governments put in place the market mechanisms by which we can enable our farmers and our businesses to trade with the rest of the world. Part of that arrangement is allowing our friendly partners to have access to our marketplace to provide the goods and services that the Australian public often demands. I don't mean to sit here giving you a lecture on free trade. Obviously, you've got your opinion, but the fact of the matter is that the Australian government believes that these free trade arrangements are in the best interests of Australian producers, Australian businesses and the Australian public.

11:22 am

Photo of Sarah Hanson-YoungSarah Hanson-Young (SA, Australian Greens) Share this | | Hansard source

I've just got a couple of questions to the minister. I've just heard the minister speak about the need for these trade arrangements because they are in the best interests of Australian business. I'd just like to ask, while we've got the minister and some advisers here, whether it is in the best interests of Australia's trade for Australia to be moving our embassy in Israel to Jerusalem and whether there have been any concerns raised directly with the government, as reported, from countries in our region, like Indonesia and Malaysia, in relation to the impact on our trading arrangements because of this decision to move Australia's embassy to Jerusalem. I've asked the question of the minister and I would like an answer.

Photo of Glenn SterleGlenn Sterle (WA, Australian Labor Party, Shadow Minister for Infrastructure) Share this | | Hansard source

I will give the minister an opportunity. Minister? Are there any further questions?

11:23 am

Rex Patrick (SA, Centre Alliance) Share this | | Hansard source

Just directly in relation to the bill that we're dealing with, the jurisdiction in which you would raise an application in this instance would be the Federal Circuit Court. The Federal Circuit Court is, in actual fact, having some difficulties, certainly in terms of family law matters and migration matters in the general division. Has the government looked at the resourcing that might be required in respect of this legislation? Are you anticipating that additional resources will be required in the Federal Circuit Court?

11:24 am

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | | Hansard source

I'm advised that the Federal Circuit Court has been given additional resources specifically for this.

Photo of Sarah Hanson-YoungSarah Hanson-Young (SA, Australian Greens) Share this | | Hansard source

Chair, I just want to go back to my line of questioning. I'd like to know whether the minister is refusing to answer the question or whether she just does not know. I've asked a question about whether trading concerns have been raised with Australia, with the government or with any officials from Indonesia or Malaysia, as reported.

The TEMPORARY CHAIR: Minister?

It's obvious that the minister is refusing to answer the question. We have the ambassador for Israel in Barnaby Joyce's office right now. That's what's been reported. The ambassador for Israel is in Barnaby Joyce's office. Is that because there are concerns about the impact of our trading relationships with countries that are opposed to moving our embassy to Jerusalem, or is it that Mr Joyce is actually getting the support outside this parliament—

Photo of Pauline HansonPauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | | Hansard source

A point of order: the question from Senator Hanson-Young has got nothing to do with the amendment before this chamber. It's got nothing to do with whether the embassy is going to Jerusalem or not. That is not what is before this chamber. With limited time, I suggest we go back to the bill before us and ask questions on that.

The TEMPORARY CHAIR: There is no point of order.

Photo of Sarah Hanson-YoungSarah Hanson-Young (SA, Australian Greens) Share this | | Hansard source

Could the minister please explain what the ambassador for Israel is doing in Mr Joyce's office? Is it because he's soon to become the Deputy PM?

The TEMPORARY CHAIR: Senator Hanson-Young, I will make a ruling there: that is not relevant to the amendment in front of the Senate at the moment. I give the call to Senator Patrick.

11:26 am

Rex Patrick (SA, Centre Alliance) Share this | | Hansard source

Minister, thank you for your last answer in relation to the courts. Could you provide, perhaps on notice, details of the additional resources that have been allocated?

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | | Hansard source

I'm advised that $2.9 million has been made available in additional funding.

Rex Patrick (SA, Centre Alliance) Share this | | Hansard source

I will point out that I'm disturbed about the previous answer, where you talked about the five companies, with one company being dragged into the courts and the other four ending up being affected. I think that's something the government ought to consider very carefully, because a lot of those companies will be small businesses unable to bear the cost of simply running project teams on for lengthy periods while a court matter is dealt with.

I want to go to the intersection between the judicial review of a procurement and its interaction with ISDS. I note that ISDS provisions are only available to foreign companies here in Australia, as Assistant Minister Reynolds told me yesterday. If an international company makes an application under this bill and it is litigated, and they are unsuccessful, does that waive their right to then raise an ISDS claim against the government that might be closely related to the matter that has been determined in the court?

11:29 am

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | | Hansard source

I've been advised that, for the ISDS provisions to be invoked, the procurement needs to be considered to be an investment, and the majority of procurements would not be seen to be an investment. And the investments are those investments that are covered and specified within the treaty. So your issue in terms of the waiving of the right to access ISDS is perhaps not relevant in this case.

Rex Patrick (SA, Centre Alliance) Share this | | Hansard source

In legalese: it's not so much a waiving but it might not give rise to an action in ISDS as opposed to waiving any particular right. It's unlikely that there would be circumstances that would give rise to an application.

11:30 am

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | | Hansard source

Senator, unless I'm misunderstanding your question, I think we might be talking about two different things. The action we're talking about in terms of a procurement damage could probably not occur under the investment. A capital procurement has a different set of remedies than an investment under the ISDS provisions. Am I misunderstanding what you're asking me?

11:31 am

Rex Patrick (SA, Centre Alliance) Share this | | Hansard source

I think you might have actually answered my question. If I understand you correctly, they can perhaps litigate a procurement matter under this bill. It's unlikely that they would be able to litigate a similar action under ISDS because the ISDS doesn't generally cover procurements. Is that correct?

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | | Hansard source

That is correct. That's what I was saying.

Photo of Don FarrellDon Farrell (SA, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | | Hansard source

I wish to put the Labor Party's position in respect of this amendment on the record. As the Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill has passed, the amendment outlined on sheet 8521, which is an attempt to delay the implementation of this bill, is mostly redundant. Changing the date from the proclamation to the same time as the other bill receives royal assent will create uncertainty for businesses. Labor will not support this.

11:32 am

Photo of Richard Di NataleRichard Di Natale (Victoria, Australian Greens) Share this | | Hansard source

I would like to put on the record the Australian Greens position on this amendment. We will support the amendment. However, our position on the Treasury Laws Amendment (Lower Taxes for Small and Medium Businesses) Bill, which has been made clear by my colleague Senator Sarah Hanson-Young, is that is we won't support this legislation because it is, again, a further measure to implement an unfair trade deal that hands over far too much power to large corporations and removes power from governments to protect the environment and public health.

I also want to take this opportunity to put on the record that we are now 10 minutes away from the guillotine being adopted without any opportunity to debate a further bill that would rip $3 billion out of essential public services and give a huge tax cut to business. We didn't have the opportunity to even give a second reading speech to put our objections formally on the record because the Liberal Party, with the support of the Labor Party, have prevented us from doing that in a remarkable act, an attack on democracy in this chamber. You do not have the guts or the decency to allow the crossbench to articulate our opposition and, indeed, to interrogate a bill that would hand over $3 billion to businesses.

Let's keep this very, very simple. We talk about the opportunity cost of a spending decision, which is the lost opportunity to do something with the money you're spending and how much that's worth. Let's actually talk about the opportunity cost of the legislation that we're being prevented from debating. Here's what this bill, which you won't allow us to debate in this chamber and are seeking to ram through without any scrutiny, does. It brings forward a tax cut worth $3 billion over the forward estimates. But here's what it doesn't do. Earlier this month, we got news from the IPCC that we're on track to lose 90 per cent of all coral reefs on the planet in the next 20 years. People come from all around the world to see the Great Barrier Reef, because you can't see anything like it anywhere else. It's worth billions to the economy. It's worth over 60,000 jobs a year, and it could be dead, could be gone, in 20 years.

What does the Great Barrier Reef get out of a tax cut? Absolutely nothing. Nine in 10 public schools are on track to never get the funding they need in order to educate students from right across the country, many of them from disadvantaged backgrounds, living with a disability or living in remote and regional communities. Those students won't get the bare minimum of funding they need; nine out of 10 of them will not get the minimum standard that we've agreed. No school ever got funded out of a tax cut. We've got 100,000 people in Australia, including 18,000 kids, who are homeless. No homeless shelter was ever built out of a tax cut. At least five women have been killed by their current or former partners since the beginning of the month. According to White Ribbon, one woman is killed by her current or former partner on average every week in Australia. Let's not beat around the bush. This is as much an economic issue as it is one of justice. Women, particularly younger women with kids, who don't have anything in savings, who aren't working or who are relying on income from an abusive partner, are being let down by economic inequality. They're crying out for our support, they're being killed every week, they're asking for help, and what are we doing? We're giving $3 billion in tax cuts. You don't open family crisis shelters with a tax cut.

Indigenous children today are twice as likely to die before their fourth birthday than non-Indigenous children. Indigenous men make up less than two per cent of the overall population and 25 per cent of the prison population. It's a national disgrace. It's an indictment on this place. It should embarrass everybody. It should shake us into action. Yet we're missing four out of our seven Closing the Gap targets. Do we think they're going to be met with this tax cut? Or do we think it's going to be harder to close the gap because of this tax cut? Well, we know the answer to that question. That's just a fraction of the opportunity cost involved in handing over this tax cut. It's not just the budget cost of bringing forward a tax reduction. It's the human cost of what we're forced to do and the things we can't afford to pay for, to invest in, because of the decision of this chamber, and you don't have the guts to ensure that it gets the scrutiny it deserves.

We are one of the wealthiest countries in the world. We are at the wealthiest point in human history. We've got the resources and the means to guarantee that all Australians get an opportunity to lead a rich and fulfilling life. Instead of doing that, you're here facilitating the passage of legislation to hand over more power to corporations—to take the power from governments to ensure that they can protect their citizens and protect their environment. And you're now, without debate, about to give $3 billion to companies who don't need it. A company with a turnover of $50 million is not a small business.

This is a massive transfer of wealth. At a time when economic inequality in this country is getting worse, at a time when our environment has never been more precarious, here we are with the Liberal Party and the Labor Party joining together to continue with this crap that we've been fed for more than three decades. Trickle-down economics doesn't work. Invest in people. What's good for big business isn't automatically good for people. You've presided over an economic system where big companies write their own policies. We've got the business industry writing this tax policy for you. We've got the coal industry writing energy policy. We've got media companies writing our media laws. And here we are with the duopoly, Liberal and Labor, joining together to prevent any debate so that the Australian community can understand what is being done in their name. The foundations of a decent society are not built through this war, this escalation, this auction on tax cuts—my tax cut is bigger than your tax cut; billions of dollars handed over to companies that don't need it.

There are so many other things that we can do for small business. There's the instant asset write-off. Again, the Greens led the charge on that, but we don't believe that taking revenue away from Newstart, from our schools and from our hospitals is the pathway to a more decent or, indeed, a more prosperous society. We're a party that believes in the public good. We believe in public ownership. We believe in investing in our essential services which are the foundations of a decent society. We believe in protecting the environment—clean air, clean water, clean energy and clean politics. And, today, what we're seeing is dirty politics, with the duopoly ganging up again, preventing meaningful debate on an issue that the Australian community have a right to hear about.

So let me just say in closing that we oppose the Trans-Pacific Partnership and we're appalled that the Labor Party would back in a Liberal Party that wants to do the bidding of its big corporate mates. We oppose these huge tax cuts that are going to businesses that don't need them, that are going to big businesses with a turnover of $50 million. What we support is investing that money in our schools, in our hospitals, in ensuring that people don't need to live beneath the poverty line, in supporting women who are living through domestic violence at the hands of an abusive partner and in ensuring that people who are sleeping rough can get a roof over their heads. It's not the government or the budget that are paying for this tax cut; it's those people who are being left behind who are paying for this tax cut.

11:41 am

Photo of Pauline HansonPauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | | Hansard source

I just want to put on the record that One Nation will not be supporting the Government Procurement (Judicial Review) Bill 2017. The fact is that it is enabling the TPP-11 trade agreement, which we do oppose. The fact is that I have grave concerns that, with this change, it can be challenged in the court system by multinationals. I don't believe it's in the best interest of Australian businesses. There is talk about trade deals and that we've got the same arrangement overseas. I then challenge them to answer why the New Zealand Prime Minister had a side letter to omit the ISDS clause with some countries.

There's nothing here with the other bill. I'm sorry to say that it didn't happen in this chamber that we had the opportunity to talk on the taxation bill, the Treasury Laws Amendment (Lower Taxes for Small and Medium Businesses) Bill. It was One Nation that negotiated with the government and the crossbenchers to get it up from a $10 million turnover to a $50 million turnover, which we supported. The Labor Party have backflipped on this and this is why they don't want the debate in the chamber. It's because the Labor Party only wanted it at a $2 million turnover. They were not supporting small or medium-sized businesses at all. So it is a flip-flop. It is a backflip by the Labor Party. They accuse me of flip-flopping. I'll tell you what—this is the biggest flip-flop from the Labor Party on taxation.

As I said at the time when we supported it, I question why it was so far down the track. If it's such a good deal for small and medium-sized businesses, why is it taking so long to actually introduce the bill? So I'm pleased to see that it is being introduced. I would personally have liked to see some help in the payroll tax of all the states to increase the threshold. I believe that would have created more employment than the corporate tax cuts. I had a meeting and a discussion with international CEOs of big companies, huge companies, from around the world. They said they weren't interested in corporate tax cuts. They were more interested in dealing with industrial relations, plus also payroll tax, which is more important to them and would have created more employment than this corporate tax cut. So it's a shame that it couldn't be debated at all.

Also, under this bill, I don't believe that you, the government, are addressing the multinationals that are not paying their taxes in this country. We have over 700 companies in Australia that are not paying their taxes here. You've opened up the TPP agreement now, so we're going to see more companies here in Australia. You're encouraging them to come and invest here, but you are not fighting for them to pay their taxes in Australia. I believe that is a crying shame.

11:44 am

Photo of Glenn SterleGlenn Sterle (WA, Australian Labor Party, Shadow Minister for Infrastructure) Share this | | Hansard source

It being 11.45, the time allotted for the consideration of the Government Procurement (Judicial Review) Bill 2017 and the Treasury Laws Amendment (Lower Taxes for Small and Medium Businesses) Bill 2018 has expired. I will first put the question in respect of the Government Procurement (Judicial Review) Bill 2017. The question is that amendment (1) on sheet 8521, moved by Centre Alliance, be agreed to.

Question negatived.

The TEMPORARY CHAIR: The question now is that the amendments on sheets 8534 and 8535, circulated by the Australian Greens, be agreed to.

Question negatived.

The TEMPORARY CHAIR: The question is that amendments (1) to (4) on sheet 8524, circulated by Centre Alliance, be agreed to.