Janet Rice (Victoria, Australian Greens) Share this | Link to this | Hansard source

I want to start with a question to the minister about how much the Drought Resilience Funding Plan that's going to be set up under this bill is acknowledging the reality of our climate crisis.

I had a read through the explanatory memorandum and, essentially, we're in a situation where drought is the new reality that we're dealing with because of our climate crisis. Hotter, drier climates are a reality. Minister, you yourself said in your closing statement that we are suffering through years of unrelenting drought. This is the new reality. We have got hotter, drier climates. That means less water. That means any drought fund, any projects, have to deal with the reality of: this is what climate change is imposing upon the Australian environment. And so, clearly, what we need to do is say: 'Right, this is the new reality, and these hotter and drier conditions are going to continue and they're going to get worse. Hopefully, we'll be able to do something about mitigating the climate change and reducing how much worse it gets. But hotter and drier climates are a reality. That means less water—less water across the board, less water for our agriculture and less water for our environment.'

To our Greens' eyes, this means that any money that you're spending, any fund that you're setting up, has got to start with its bottom line acknowledging that reality and then work out what needs to be done to support farming and regional communities to deal with this new reality—supporting them and supporting agricultural businesses to use less water, building resilience and supporting regenerative agriculture. In particular, with this being the new reality, there is less water to go around and agriculture needs to use less water because the environment's got to have some left for it. We've got to have water for our natural ecosystems, for our rivers and streams, for the ecosystem services that we all rely on—the health of our rivers and streams, and healthy wetlands and estuaries.

So, Minister, is this fund actually going to start with the bottom line of the whole underlying philosophy behind this drought plan dealing with the fact that we are in a climate crisis?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

As I indicated in my summing-up speech, this fund, once legislated and established, will generate $100 million of additional investment in initiatives, measures and projects to improve drought resilience and preparedness across impacted rural and regional communities. This comes on top of a whole series of other measures that we've previously announced as a government, $2 billion worth of additional measures to support farmers and regional communities in drought affected areas.

In relation to the way the funding will be allocated under this fund, the governance framework for funding decisions under the Future Drought Fund is robust and transparent, noting particularly the requirements for extensive public consultation in developing the overarching drought resilience funding plan and consideration of independent experts' advice before allocating funds. The funding plan will be informed by advice from the expert consultative committee which will be established by the Future Drought Fund Bill. The committee will also advise whether the proposed design of Future Drought Fund programs are consistent with the funding plan.

The Productivity Commission will conduct an assessment of the effectiveness of each funding plan before it expires, including having regard to economic, social and environmental outcomes. Further, all funding decisions must be consistent with the drought resilience funding plan and informed by advice from the Regional Investment Corporation. Programs to be supported under the plan will require approval through the annual budget processes, and funding for projects will be required to comply with Commonwealth procurement rules. These governance arrangements are consistent with similar arrangements for the Medical Research Future Fund and will help ensure that we achieve the policy outcomes that we are setting out to achieve.

Janet Rice (Victoria, Australian Greens) Share this | Link to this | Hansard source

Minister, you didn't answer my question as to whether acknowledgement that we are in a climate crisis—the new reality of less water and hotter and drier conditions—will fundamentally be the underpinning philosophy this drought fund will be based on. I'm asking this question because the evidence I see in this chamber on a daily basis is that this government does not acknowledge that we're in a climate crisis and, basically, the way of dealing with drought is to try and work out how you can squeeze more water out of already overstressed systems.

Can you give me any assurance at all that the new reality—as the Bureau of Meteorology says and as all of the technical and scientific advice tells us—of this drought fund will be in the context of climates right across the country that are hotter and drier, which means that to deal with our water sustainably we need to use less water?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

I don't agree, the government doesn't agree and, in fact, the Senate doesn't agree with your proposition of what the underpinning philosophy of this Future Drought Fund should be. As you know, your colleague Senator Whish-Wilson moved a second reading amendment that goes to the issue you raised. That was comprehensively rejected by the Senate. It was a very strong vote. Indeed, I believe that everyone other than the Greens political party voted against the proposition that you have now, again, sought to pursue.

The principle underpinning this measure, from the government's point of view and, I believe, from the overwhelming majority of senators' points of view, is that we want to provide additional support to drought affected regional communities in a fiscally sustainable fashion. This will be done by generating a regular and reliable funding stream that can be used to help fund projects that improve drought resilience and preparedness in drought affected communities. This comes on top of other measures the government has already put in place with bipartisan support. I readily acknowledge and concede that point. But the government doesn't agree with the underpinning philosophy that you assert this measure should be, and the Senate doesn't agree with you.

Janet Rice (Victoria, Australian Greens) Share this | Link to this | Hansard source

We've got it clear, at least, that you don't accept that's the underlying philosophy. You don't accept that being in a climate crisis is what needs to underpin any measures that deal with drought. That, then, goes to my first set of amendments, which I wish to move. They are those on sheet 8701, and I seek leave to move all four—(1) to (4)—together.

Leave granted.

I move amendments (1) to (4) on sheet 8701 together:

(1) Page 21 (after line 24), after clause 22, insert:

22A Arrangements etc. are legislative instruments

(1) The following are legislative instruments:

(a) an arrangement made under section 21;

(b) an agreement made under section 22.

(2) Despite regulations made for the purposes of paragraph 44(2) (b) of the Legislation Act 2003, section 42 (disallowance) of that Act applies to an instrument mentioned in subsection (1).

(2) Clause 36E, page 36 (lines 4 to 9), omit subclause (1), substitute:

(1) Before the Drought Minister first makes either an arrangement or a grant under section 21, the Drought Minister must:

(a) request the Committee to advise the Drought Minister about whether the proposed design of the program of arrangements or grants to be made under that section is consistent with the Drought Resilience Funding Plan; and

(b) have regard to any advice that the Committee has given to the Drought Minister under this section in relation to the proposed design.

(3) Clause 36H, page 36 (after line 25), after subclause (1), insert:

(1A) Before the Drought Minister appoints a person as a member of the Committee, the process set out in sections 36HA and 36HB must be satisfied.

(4) Page 37 (after line 15), after clause 36H, insert:

36HA Nominations from the public for appointments of members of the Committee

(1) The Drought Minister must publish a written notice on the Agriculture Department's website requesting members of the public to nominate persons to be appointed as a member of the Committee within a period specified in the notice.

(2) If the Drought Minister receives any nominations within the specified period, the Drought Minister must have regard to those nominations before publishing a notice under section 36HB proposing the appointment of a person as a member of the Committee.

36HB Consultation on proposed appointments of members of the Committee

(1) The Drought Minister must publish a written notice:

(a) stating the person the Drought Minister proposes to appoint as a member of the Committee; and

(b) stating whether the person had been nominated by a member of the public (see section 36HA); and

(c) setting out the reasons the Drought Minister is satisfied the person is suitable to be appointed as a member of the Committee; and

(d) requesting written submissions be made in relation to the proposed appointment within 30 days after the notice's publication.

(2) The Drought Minister must have regard to any submissions made within those 30 days in determining whether to appoint the person as a member of the Committee.

Given that we haven't got this understanding that we're in a climate crisis and that everything needs to be focused around how we are going to use less water, because that's the new reality that we're going into, it is absolutely critical that we get the accountability measures of this fund right. It's absolutely critical that we make sure that any decisions that the minister is making are based on good science and what is in the overall interests of the community. We are really worried that that's not going to be the case, because you're ignoring the science as it is at the moment. Given you're doing that, the only way we're going to possibly make up for that is to make sure that there is really good accountability, so that decisions that are being made as to what projects get funded and what the drought resilience plan looks like are transparent and accountable.

I acknowledge there were some significant improvements to this bill when it went through the House in the last parliament, due to amendments by Cathy McGowan, in terms of setting up a consultative committee and making sure the minister had regard to what the consultative committee had to say in terms of establishing the drought plan. But we as Greens don't believe these measures go nearly far enough. First of all, we've got to make sure that the consultative committee also gets asked about the individual projects that are going to be funded under this fund. We've got to make sure that the minister must listen to that committee. At the moment the bill doesn't say that the minister needs to listen to the committee. It says that the minister needs to listen to the committee when it comes to the overall plan, but, as for particular projects, the committee can be consulted and the minister can just ignore what those committee members say. We think this is a really big gap in the accountability of exactly when decisions are made as to which decisions get funded.

This is where it really comes to the crunch. You can have this drought plan, but then the projects that get funded in fact could end up being projects that aren't in the context of using less water and helping to make sure that farmers are more resilient. They could end up being projects that actually support the big irrigators, that support corporate agribusiness, projects that are going to end up taking more water out of the environment. Certainly, that's what I hear the Nationals in this chamber saying all the time—that the whole answer to dealing with drought is just to build new dams. Sadly, when you're in a regime and an environment where it's hotter and drier and less water is falling from the sky, building new dams isn't going to help. What it might do is just suck up even more of the water in the upstream areas and leave even less water for farmers downstream and certainly leave less water for the environments that need water. These are some of the issues that we are addressing in these amendments that I have moved.

The other thing that needs to happen is that, once the decision is made with the advice of the committee, and the minister has listened to the advice of the committee and made some decisions on what grants are being issued or what the arrangements are, those arrangements must be legislative instruments that are disallowable, to add that extra level of transparency and accountability. If it's pretty clear that there are suggestions that there are grants being made to projects that are not consistent with us being in a climate crisis, not consistent with a hotter, drier climate, not consistent with ecological sustainability, the parliament would have the oversight to knock them off and say, 'No, they're not appropriate.'

The final area that we want to make sure to address in these accountability measures is about who actually gets to be on this consultative committee. It's all very well to set up a consultative committee and say that it's going to be an expert committee and you're going to seek advice from the expert committee, but as it stands at the moment the minister can just pick and choose who is going to be on the committee. I can very easily see a scenario where that committee is stacked with people who basically supported the government's position.

The processes that we are proposing in our amendments are that, firstly, there should be a process of calling for submissions for members of the committee. There are lots of people with expertise all across the country, who might like to be considered for or nominated to this committee, who I don't think the government are going to necessarily call upon in the first instance. We would like to see those people have the ability to nominate themselves or have someone nominate them, and for the minister then to have regard to those submissions. If there is clear evidence of some really talented, expert people who have got such a strong case as to why they should be on the committee, the minister should have regard to appointing them. Secondly, these amendments say that once the minister has made some decisions and has some proposals as to who should be on the committee, then that also should be publicly advertised. You put the committee membership up, and people can then make submissions on the appropriateness of those committee members.

If we put those accountability measures in place, they would go a long way to make up for the fact that we've currently got a government that's planning this plan without acknowledging the new reality that we're in. I know that the community around the country accepts we're in a climate crisis. Certainly the scientific community accept we're in a climate crisis. I know those people who are working on the issues of drought and water resources accept we're in a climate crisis. With those accountability measures—actually getting that wisdom from the community; making sure that wisdom is taken account of—it would go a long way to improving accountability and transparency, and would make up for the climate denialism that is currently a feature of this government.

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

The government will be opposing these amendments. These amendments would require all funding arrangements, every single funding arrangement, to be a disallowable instrument. It would require the minister for drought to ask the consultative committee about whether programs are consistent with the plan and have regard to that further advice. The minister for drought would also be required to call for public nominations for members of the consultative committee and to publish written notice on proposed members and, further, allow 30 days for the public to make submissions on those proposed members. It is entirely unreasonable and unnecessary to expect a tabling of every single funding arrangement, which would include a number of specific grants under the broader programs within each year's allocation of funding. This would cause significant delay and uncertainty.

I would also refer the Senate to section 27A, on page 24 of the bill, which requires the drought minister to publish each amount paid from the fund as soon as practicable, and also to the extensive 42-day consultation process and consultative committee, whose advice must be sought on the disallowable Drought Resilience Funding Plan. The Drought Resilience Funding Plan itself is a disallowable instrument, and it is based on a substantial consultative process.

The consultative committee also must provide advice on the design of the programs under the fund, and the Senate should also note that the Regional Investment Corporation board, which is subject to the strict provisions within the Public Governance, Performance and Accountability Act, must also provide advice to the minister for drought on funding arrangements. In providing that advice, the Regional Investment Corporation must have regard to whether the minister has complied with the widely consulted Drought Resilience Funding Plan.

The Productivity Commission will review the Drought Resilience Funding Plan every four years, including an assessment of the effectiveness of the plan with regard to economic, social and environmental outcomes, as I've previously indicated. This will be a further test of the consistency of the projects with the Drought Resilience Funding Plan. Within those frameworks, and within those robust transparency and governance arrangements, it must be possible for the government of the day, whoever the government of the day is, to make appropriate decisions on the prioritisation of funding allocations. That is what governments are elected to do by the Australian people.

Regarding the public call for nominations to the consultative committee and associated notice and public objection periods, I would remind the Senate that there are already a number of procedural steps that are required to ensure funds are ready to be dispersed from 1 July next year. There is also strict language in the bill that outlines clear requirements around the selection of consultative committee members. I would specifically direct the attention of senators to clause 36H(3), which provides:

(3) A person must not be appointed as a member of the Committee unless the person has expertise or experience in 2 or more of the following areas:

(a) drought resilience measures;

(b) climate risk;

(c) the agriculture industry;

(d) rural and regional community leadership and resilience;

(e) rural and regional development;

(f) applied research;

(g) agricultural extension;

(h) economics

Further, clause 36H(4) also provides:

(4) In appointing a person as a member of the Committee the Drought Minister must ensure that, as far as practicable, there is a balance of gender, knowledge and skills among members of the Committee.

Again, these are ultimately within that framework of the legislation. These are ultimately then decisions to be made by the elected government of the day.

Glenn Sterle (WA, Australian Labor Party, Shadow Assistant Minister for Road Safety) Share this | Link to this | Hansard source

Minister, I got it very clear that there will be a board, in your words, that will be formed to develop or find funding for initiatives, measures and projects in drought affected areas. I got that. For the purposes of not putting the Senate through too much pain and of getting that money out there quicker, I won't go on with a 15-minute preamble. Could you tell the Senate how many members will be on that committee?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

A chair plus four members.

Glenn Sterle (WA, Australian Labor Party, Shadow Assistant Minister for Road Safety) Share this | Link to this | Hansard source

Thanks, Minister. At this stage may I clarify: will there be any form of funding that will go directly to the affected farmers in paying down any of their debt that has been accrued because of the drought?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

No. That is not the purpose of the fund.

Glenn Sterle (WA, Australian Labor Party, Shadow Assistant Minister for Road Safety) Share this | Link to this | Hansard source

Will there be any financial assistance to those suppliers of regional Australia who also had their businesses greatly affected and had huge debts occur because of effects from the drought?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

As I've previously advised the Senate, the plan will determine where the funding is going. The plan will be developed consistent with this legislation through a very robust process. I don't want to detain the Senate either, but I'm happy to go through that process again on how the funding plan is to be developed.

The governance framework for funding decisions under the Future Drought Fund is indeed robust and transparent, with requirements for extensive public consultation in developing the overarching Drought Resilience Funding Plan and consideration of independent expert advice before allocating funds. The funding plan will be informed by advice from the expert consultative committee. It is a disallowable instrument and will be established by the Future Drought Fund Bill 2019. The committee will also advise whether the proposed design of Future Drought Fund programs is consistent with the funding plan, and the Productivity Commission will conduct an assessment of the effectiveness of each funding plan before it expires, including having regard to the economic, social and environmental outcomes. Further, all funding decisions must be consistent with the Drought Resilience Funding Plan and informed by advice from the Regional Investment Corporation board. Programs to be supported under the plan will require approval through the annual budget processes, and funding for projects will be required to comply with Commonwealth procurement rules.

These government arrangements are entirely consistent with similar arrangements for the Medical Research Future Fund, which operates exceedingly well. There is an independent process. That independent process will put in place a plan, and everything that is allocated in terms of funding under that plan will have to be consistent with it.

Glenn Sterle (WA, Australian Labor Party, Shadow Assistant Minister for Road Safety) Share this | Link to this | Hansard source

Thanks, Minister. Could you inform the Senate of the communities or the shires that have been declared to be in drought and who will be able to access these initiatives that are funded under this bill?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

That is not something that is subject to this legislation. This is legislation to set up a capital fund under the Future Fund, so it is fundamentally Finance portfolio legislation, together with the minister for drought, to establish a funding flow. These issues that you are referring to are matters, obviously, for the agricultural portfolio, which I'm sure they will be prepared to address for you through separate processes.

Glenn Sterle (WA, Australian Labor Party, Shadow Assistant Minister for Road Safety) Share this | Link to this | Hansard source

Minister, I'll go to the Bills Digest. I don't expect you to have it in front of you, but on page 4 it talks about payments into and out of the Future Drought Fund Special Account. Halfway down the page, it starts with:

There are only three purposes for which an amount may be debited from the FDF Special Account …

I can probably pre-empt that you'll point me to Senate estimates as being where I will find the information I'm seeking, but, in relation to where the money can be accessed, dot point 2 says:

It goes on to say that money can be taken out by:

Do we have a figure of what that is?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

The specific figure is something that will be reported on a regular basis. And you're right: in Senate estimates you'll be able to ask that question. The principle is entirely reasonable—the Future Fund, which has great expertise in this area, will be providing services to ensure that a fund that currently has got $3.9 billion in it will grow to $5 billion at the same time as making disbursements of $100 million a year from 1 July 2020 every year to help fund additional drought resilience projects. These arrangements, in terms of the way appropriate admin fees are proportionately allocated to this fund, will be consistent with arrangements that have been in place successfully for some time in relation to other relevant funds, in particular the Medical Research Future Fund.

Glenn Sterle (WA, Australian Labor Party, Shadow Assistant Minister for Road Safety) Share this | Link to this | Hansard source

Minister, for my last one, could you inform the Senate of when the payments will flow to rural and regional Australia? I understand the committee hasn't been formed yet and hasn't met, but is there a set time for when we can expect that money to hit the ground, so to speak, in these affected communities and areas?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

I thank Senator Sterle. Again, this is where it is very important to understand that the government already is, as a matter of course, providing billions and billions of dollars of support to drought affected regional and rural communities. For example, as we speak now, $2 billion has already been allocated to support drought affected areas through additional measures that have been undertaken by our government. The additional funding under this legislation, through the Future Drought Fund, will become available from 1 July 2020, as is made clear in the legislation. There is obviously a body of work to be done should this legislation pass, which we hope it will, to put all the governance arrangements in place and to change the investment mandate and a series of related measures. If this passes, the government will act swiftly. This will mean that we will have a sustainable, reliable, recurring funding stream to boost funding for additional measures to support drought resilience projects by $100 million a year from 1 July 2020, and we will be able to grow this fund to $5 billion over a decade.

Janet Rice (Victoria, Australian Greens) Share this | Link to this | Hansard source

Minister, I want to take you to the section of the bill that talks about the appointment of members to the committee. It says:

(3) A person must not be appointed as a member of the Committee unless the person has expertise or experience in 2 or more of the following areas …

And there are eight areas listed:

(a) drought resilience measures;

(b) climate risk;

(c) the agriculture industry;

(d) rural and regional community leadership and resilience;

(e) rural and regional development;

(f) applied research;

(g) agricultural extension;

(h) economics

So the criteria for being appointed as a member is to have expertise or experience in two or more of these areas. Can you confirm that means we can't guarantee that the committee will, in fact, have expertise across all of those areas?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

Senator Rice read out the same section of the bill that I've previously read out. The legislation is self-explanatory. As it says in very strict language and very clear language, I would have thought, of the clear requirements around the selection of consultative committee members:

A person must not be appointed as a member of the Committee unless the person has expertise or experience in 2 or more of the following areas …

It makes clear that it is two or more, not anything different.

Janet Rice (Victoria, Australian Greens) Share this | Link to this | Hansard source

You haven't answered my question. We've got five members of the committee—the chair and four members—and each has to have expertise in two or more of the 'following areas', but it doesn't say that expertise in all of those areas must be covered by the committee. You could in fact end up not having appointed to this committee scientific experts who are experts in our climate crisis and in climate risk if all five members had expertise in two or more of the other areas. The way this is worded leaves that as a possibility.

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

I completely reject that proposition, and I would refer Senator Rice again to what I have previously indicated to the chamber, in my contribution when I explained why the government would oppose this amendment. That is, clause 36H(4), which I have previously read out, very specifically provides:

In appointing a person as a member of the Committee the Drought Minister must ensure that, as far as practicable, there is a balance of gender, knowledge and skills among members of the Committee.

Let me say that this is business as usual. Government ministers and the government make judgements all the time about the composition of boards and committees, with a view to making sure there is an appropriate balance across a range of indicators, including of course an appropriate balance of knowledge and skills.

Janet Rice (Victoria, Australian Greens) Share this | Link to this | Hansard source

Yes, but you could very well end up with a committee that is extremely heavily weighted in areas other than climate risk and drought resilience. From the Greens perspective, it is absolutely imperative—our ongoing drought is affected by and an impact of the climate crisis we're in. It should have been mandatory that there be on the committee expertise in the areas of climate science and climate risk, but it's not mandatory. Yes, it says, 'as far as practicable,' but I can see your ending up with a committee that, because of the people that the government wants to get on it, does not have expert skills in climate risk and so does not have represented on it a knowledge and an understanding of the climate crisis. The way that it's worded it says that there doesn't have to be. It says that as far as practical there has to be a range of skills and that each member has to have two or more areas. That means you could leave out climate risk or you could have somebody who has pretty low skills and just goes along with whatever the government wants to say on climate risk as the only person on the committee who has that expertise in climate risk, if they're there at all. That is what this legislation allows, and it is why we remain deeply concerned, particularly given, as you confirmed, that the government doesn't accept that we're in a climate crisis and that our increasing climate crisis is the underlying reason why droughts are getting worse, are getting longer and are being spread across the country. There isn't the recognition of how essential it is to have that driving the operations of this drought fund.

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

Within the framework of the legislation, it is of course up to the elected government of the day to make judgements on the appropriate balance on the board. I hear that the Greens senator from Victoria is concerned about that. What I would say to the honourable senator is that when the Greens next persuade a majority of Australians and a majority of House of Representatives seats to support their agenda for Australia then they will have the opportunity in government to fill these positions according to their priorities and views, but right now that is not the position they are in, and, as such, that is not a decision they get to make.

Larissa Waters (Queensland, Australian Greens) Share this | Link to this | Hansard source

Minister, did you receive advice from the department that climate expertise should be mandatory on this board?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

These are policy decisions that are made by the government. The government is putting forward what is an entirely sensible approach to the composition of this committee. It's a set of very clear requirements around the selection of consultative committee members. Indeed, expertise in the area of climate risk is one of the areas that are listed there in terms of the expertise that should be considered. That is the appropriate way of framing it.

Larissa Waters (Queensland, Australian Greens) Share this | Link to this | Hansard source

Did the department advise that an understanding of climate risk, given that it's intimately related to the notions of water supply, was in fact a mandatory inclusion for this board?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

The answer is no, and the proposition that there should be a mandatory requirement would be very, very bad governance practice. These are, appropriately, judgements that are made by the elected executive government of the day, whoever that government is.

It is not appropriate and it's not good practice for a legislator to seek to mandate and limit the flexibility of the government in relation to composition of these sorts of boards in the way that you are suggesting. If, as I've indicated before, the Greens want to have that sort of power and authority then they need to persuade a majority of Australians and a majority of House of Representatives seats to support your agenda.

Larissa Waters (Queensland, Australian Greens) Share this | Link to this | Hansard source

With respect, I find what you just said absolutely ridiculous—that it's not logical or not practical for a government to mandate that a scientist be on a board making decisions about distributing water in a climate constrained future. I would ask the minister to reflect on whether he really wants to stand by those comments, that he thinks it's not good practice to have science informing decisions on water allocations, given that we are in a climate crisis.

It doesn't look like the minister is going to rise on that one, so while I'm on my feet: I'm also interested to know whether any advice was received on the quantum of water that's been allocated to fossil fuel companies in these drought declared areas. As my second reading amendment established, it kind of makes a mockery of having a drought fund to help farmers when we've got free, unlimited groundwater going, for example, to Adani, with a 60-year water licence. So I'm interested in whether, if you're going to ignore the climate crisis—well, we think that's patently wrong—you're at least going to get advice on the distribution of water entitlements as they stand at the minute before you decide where to dish this money out to?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

My answer to Senator Waters here is the same as my answer to Senator Rice before in relation to a similar question that she raised. The government does not agree with the premise of the proposition that Senator Waters is putting, and the Senate doesn't agree. Of course, as she indicated, she moved a second reading amendment to the effect of dealing with the issue that she's just raised and the Senate comprehensively rejected her proposition.

The Greens, of course, are entitled to their view. The Greens political party is entitled to its view, but a comprehensive majority of senators does not agree with them.

Larissa Waters (Queensland, Australian Greens) Share this | Link to this | Hansard source

Thank you, Minister, but, with respect, my question was, 'Do you have the information assembled for you, or for the board?'

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

This bill does not deal with the matters that she is seeking to bring in. This is a bill to set up a capital fund to generate a reliable, recurrent funding stream to support additional drought resilience projects across Australia consistent with a funding plan that is to be put in place and consistent with the arrangements that I've spelt out already.

I understand the political points that the Greens are seeking to make here today, but the truth is that neither the government nor a majority of senators agrees with their views.

Larissa Waters (Queensland, Australian Greens) Share this | Link to this | Hansard source

Thank you, Minister. I just find it quite unbelievable that you have a committee set up to administer much-needed drought relief but they don't have to have climate scientists in their ranks and you've paid no attention to the distribution of existing water allocations and the billions of litres of free water that have been overallocated to fossil fuel companies when you're trying to make decisions about the drought. So you'll forgive us for a little bit of cynicism here.

I might point out that this is not our political position; this is actually what the science is saying. So, by all means, take umbrage at our political perspective, but it is incredibly disheartening when this government continues to have such a tin ear to science. These scientists are not political activists; they're not simply seeking more research funding; they are crying out to be heard. And you've got a drought body that doesn't even have to have a climate scientist on it and that hasn't looked at the distribution of water allocations which, in fact, is exacerbating the drought—the very thing that you're purporting to relieve with this funding body. So we remain incredulous at the poor structures that you are establishing and the continued refusal to listen to the science.

I'm afraid I don't have a question. I'm gobsmacked.

David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

The question is that Australian Greens amendments (1) to (4) on sheet 8701 be agreed to.

Janet Rice (Victoria, Australian Greens) Share this | Link to this | Hansard source

by leave—I move amendments (1), (2), (3), (5) and (6) on sheet 8702 together:

(1) Clause 4, page 3 (lines 1 to 4), omit the paragraph beginning "The balance of the Building Australia Fund".

(2) Clause 5, page 5 (lines 4 to 10), omit the definitions of Building Australia Fund and Building Australia Fund Special Account.

(3) Clause 9, page 10 (lines 7 to 10), omit the paragraph beginning "The balance of the Building Australia Fund".

(5) Clause 17, page 16 (line 33), omit "; or", substitute ".".

(6) Clause 17, page 16 (lines 34 to 36), omit subparagraph (f) (iii).

These Greens amendments remove the source of the funding for this drought fund from the Building Australia Fund. We are deeply concerned about the proposition that the money to be used for tackling drought should come from the Building Australia Fund. It makes no sense whatsoever that money that we should be spending on essential transport infrastructure gets ripped out when that's where the money needs to go. We know that it is farcical. We do not need to be ripping money out of transport infrastructure to be able to pay for drought relief. We note that this has been the Labor Party's main objection to this bill, and so I am really looking forward to having the Labor Party supporting these amendments. I'm surprised they didn't move amendments themselves to do this.

We've got a situation where you don't need to rip money out of transport infrastructure in order to fund drought works. There are plenty of other places the government could get money from. The government could get money from consolidated revenue. Of course, we have given the very sensible suggestion that maybe we should be getting the money for tackling drought from the big fossil fuel companies that are doing their best to worsen the drought. In particular, my second reading amendment to this bill proposes we use this as an opportunity to fix up the most rorted tax that operates in Australia—in fact, doesn't operate in Australia—the petroleum resource rent tax, which has failed to bring in any money out of digging up the oil and gas. Basically we are giving our oil and gas away to the huge fossil fuel companies. Our suggestion was: how about let's at least take a very small amount, 10 per cent, of their profits, a flat floor, so that at least 10 per cent of the profits of the oil and gas companies in their mining and export of oil and gas could actually fund the works that are needed to tackle the consequences of the mining of that oil and gas, to tackle dealing with drought as a result of our climate crisis?

The Greens have done the numbers, and they show that if you just had that as a 10 per cent floor, a 10 per cent Commonwealth royalty, it would raise $4.9 billion over the next two years. The government would have its fund funded in two years and, of course, the royalties could keep on building so that, by the end of a decade, there would be a decent amount of money that could be invested in the works that are going to be needed to deal with the ongoing drought and the consequences of climate change, because they are going to cost a lot.

We have governments that don't want to do anything to mitigate climate change. We know the costs of those droughts, the costs of not having enough water, the costs of sea level rise are going to keep on rising and rising and rising. So here's an opportunity to actually acknowledge that and here's an opportunity to then say, 'Well, if you're getting the money from that source, you don't need to get it from the Building Australia Fund.'

I've heard the government's argument: 'The Building Australia Fund hasn't been drawn upon in the last five years, so therefore you don't need the money.' That's because the government hasn't wanted to take the money from the Building Australia Fund because there are some conditions attached to the moneys in that fund. They have got to be spent on projects that have the tick from Infrastructure Australia, so there actually has to be some accountability. Where is the government saying, 'We are spending $100m on infrastructure'? There is plenty of money being spent on the government's own pet projects that serve their own vested interests rather than having the accountability that is required by having projects that have been through a proper assessment as per Infrastructure Australia.

I think this is a very sensible suite of amendments. We don't need to take the money away from the much-needed transport infrastructure in our cities and our regions when we could get the money from a much more appropriate source. So I really do look forward to getting the support right across the chamber, particularly from the Labor Party. I mean, they didn't vote with us on the very sensible accountability measures that we just voted on. I'm disappointed that that was the case—but not surprised—because they were measures that would have put in place a few more checks and balances as to how this money is to be spent. They are the sorts of things I would have thought Labor would have been very supportive of and supported the Greens on to make sure that this drought fund doesn't end up being just a slush fund for the National Party. But, no, for their own reasons, the Labor Party decided they weren't going to support those very sensible amendments and voted against them. I really hope that that's not the case with this set of amendments.

As I said, these are amendments that the Labor Party should have moved themselves, given their professed concern about taking money out of our transport infrastructure. I think it is a very sensible suite of amendments that would mean that we wouldn't need to fund drought by ripping money out of essential transport infrastructure. We could fund it, instead, by getting royalties from oil and gas companies.

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

The government opposes these amendments. But, in opposing, let me just say: I'm getting increasingly confused by what the Greens stand for. I mean, the other day we had former Greens leader Bob Brown fighting against renewable wind energy, having previously opposed renewable hydro energy, and now we've got Senator Rice from the Greens political party fighting for more money for roads. I mean, what happened to the Greens? If you keep going, you might end up coming to our side and voting for income tax cuts at some point in the future! The truth is that the government has significantly boosted federal funding for infrastructure, just in the last budget, from $75 billion to $100 billion. So our pipeline of infrastructure investment over the medium term has increased by $25 billion—just in our last budget.

For the reasons that we indicated during the second reading summing up, we don't support these amendments. In relation to the issue of the PRRT and the royalties that Senator Rice raised, she knows that the Senate has already voted overwhelmingly to reject that proposition—and it is not really captured in this amendment anyway.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Senator Cormann, the Greens initiated the Senate inquiry into the PRRT nearly three years ago. It was chaired by previous Labor senator Chris Ketter and championed by previous Labor senator Sam Dastyari. The inquiry went for about 15 months, and we took substantial evidence on what was wrong with the PRRT. In fact, on the last day of our hearings in Perth, the Callaghan review, which was the government's own review into the PRRT, was literally released the minute our hearing opened in Perth. Of course, we hadn't had time to scrutinise it, nor had many of our witnesses—

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

On a point of order: this is a bill to deal with the establishment of the Future Drought Fund. Nothing in this bill, in any way, shape or form, is connected to the PRRT or any Senate inquiries in the past related to the PRRT. His contribution is completely irrelevant and out of order.

The CHAIR: I do remind all senators, and Senator Whish-Wilson, that questions or comments need to be relevant to the bill, so I'll listen to your contribution, Senator Whish-Wilson.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I know you will listen to my contribution. I'll make it very clear that I have a second reading amendment exactly on this subject. This goes directly to how we should be funding any future spend on drought in our rural and regional communities in Australia.

The Greens put forward a simple proposition that polluters should pay and that big fossil fuel companies—big oil and gas companies—should pay. These are the same companies that want to chase profits, feed more greed and go offshore in the Great Australian Bight and open up new areas for oil and gas at a time we desperately need to transition to clean energy. These are the same companies that pay little tax in this country. It is a very, very good idea, which I absolutely think will pass the pub test in any rural and regional part of this country, that the big polluters should actually be paying for the droughts that they are helping to create. So it is directly relevant to the discussion here today.

If I can go back to the final hearing we had in Perth, we had there some of the biggest fossil fuel companies, some of the biggest polluters on the planet, some of whom, such as Chevron, pay no corporate income tax or PRRT tax. The minute we opened our inquiry in Perth, the government released its Callaghan review, which was its flaccid attempt to change the PRRT. They know—and, Senator Cormann, you know—that that petroleum resource rent tax regime has not delivered for the Australian people. It was set up at a time way before the development of oil and gas and the value-added processing we have seen with massive projects like Gorgon off the North West Shelf. It is not fit for purpose. It is nearly 35 years old. You knew it needed to be changed, and you implemented a review which essentially recommended that the government change it, and what have you done? You've fiddled around the edges. You've changed some of the compounding rates around companies being able to take tax deductions on exploration expenditure and on operating expenditure. You've fiddled around with some of those compounding rates, but, nevertheless, the amount of money that has been dodged by some of the biggest and wealthiest oil and gas companies—some of the dirtiest polluters on the planet, as Senator Di Natale outlined today—was nearly $350 billion.

The CHAIR: Senator Whish-Wilson, further on the point of order, I am struggling here. I'm looking at your second reading amendment which you referred me to, which talks about the Bureau of Meteorology.

It was Senator Rice's amendment. My apologies, Chair.

The CHAIR: I beg your pardon. Continue on, but we will look at Senator Rice's amendment. Thank you.

Perhaps I could ask Hansard to change my earlier contribution.

The CHAIR: They will, because they've heard your explanation.

Nevertheless, while we're on it, let's talk about my second reading amendment, because that was acknowledging that climate change is contributing to the biggest and worst drought since temperature records began in this country, which is happening right now. We acknowledge the suffering that rural communities are currently going through. We want acknowledged in this chamber and by this government that climate change is the driver of this record drought and the record misery that our rural communities are going through, and we want a government that actually acts on the underlying causes of that climate change.

If I could get back to Senator Rice's second reading amendment, which is on how we pay for this, it's a critical part of the bill. How we appropriate in legislation and new laws to spend billions of dollars of taxpayers' money on a critical area like mitigating the effects of drought and adapting rural and regional areas to drought is essentially at the heart of this bill. We've raised concerns about giving that money to the National Party when they've so completely rorted and stuffed up a number of public programs in rural and regional areas, and we've raised concerns about how that's going to be funded. It's a simple principle that polluters should pay. These big oil and gas companies pay nothing in tax at the moment. It is not fair. It would pass no pub test in this country.

This is a very good amendment that I recommend to senators and to this chamber: that we actually fix the PRRT and take this opportunity now to put a floor on the tax rate that means polluters have to pay money now—not indefinitely defer it into the future but pay Australians now, pay farmers who are suffering now and pay for the pollution that they are creating and the climate catastrophe that they have helped create.

Janet Rice (Victoria, Australian Greens) Share this | Link to this | Hansard source

I know we can't ask, but, given that we've got this proposal to remove the Building Australia Fund as the source of the funds for this drought fund, and given the Labor Party's position on it, I'm surprised that we're not hearing from the Labor Party as to whether they support or do not support this Greens amendment.

Richard Di Natale (Victoria, Australian Greens) Share this | Link to this | Hansard source

It's pretty clear what's going on here. What we've got is a bill from a government that's prepared to establish a slush fund for the National Party so that it can continue to hand out money to its big corporate irrigator mates to do nothing about the underlying problem of drought and nothing about dangerous climate change, and we've got the Labor Party, who are giving the government everything that it wants. What on earth is going on here? You lost an election, and you're on track to lose the next one if you keep giving this mob everything that it wants. Take a stand and show a bit of courage, for goodness sake.

You said, in your opposition to this bill, that you were concerned that money was coming out of infrastructure, and that was the right concern. You were absolutely spot on that you've got a government prepared to rip money out of public infrastructure and funnel it into what is a National Party rort—another one. We saw what they did with the Murray-Darling Basin. They basically decided that they were going to rip off taxpayers, they were going to reward some of their biggest corporate donors and they were going to refuse to deal with the substantial issues when it came to drought and its impact on the Murray-Darling Basin.

You've said you don't support money being ripped out of infrastructure. You also said in the last chamber—and you were absolutely right in the lower house—that, unless you've got a plan to deal with climate change, you've got no plan to deal with drought. Again: spot on. Senator Whish-Wilson moved an amendment that you supported in the lower house, which it appears you've now rejected here. And now, when it comes to funding for infrastructure, you're going to roll over again.

See, it doesn't matter what you say; it matters what you do. You vote with the government, despite criticising them for a bill that you know is going to do nothing to fix the issue of climate change, which is fuelling drought; a bill that you know is going to put more power in the hands of a minister who's shown himself to be completely incapable of allocating funding on the basis of what's required rather than rewarding donors and mates. You roll over; you capitulate; you give in again. You did it on the foreign fighters legislation. You're doing it now on this drought legislation. Before the election, you refused to support this bill. Now, after the election, you're going to support it without even passing an amendment that you yourself support.

People right around the country are asking themselves, 'What the hell does the Labor Party stand for anymore?' People around the country are saying: 'We need an opposition to stand up to these guys. We need an opposition that's prepared to say: "We don't agree with you. This is why. We're going to go out and fight for our position."' You don't beat the conservatives by becoming a conservative. It's one thing to say you don't support what they're doing; it's another thing altogether to vote for what they're doing, and that's what you're doing right now. We're seeing this play out over and over and over again. 'We don't support the government's legislation on this drought bill. We don't support it, because they've got no plan to deal with climate change, they're ripping money out of infrastructure, they're putting too much money in the minister's hands.' Then vote against it! Vote against it! You don't support action on foreign fighters, because it ignores the recommendations of the Parliamentary Joint Committee on Intelligence and Security. A bipartisan committee—that we don't like, because it's a closed shop—makes a set of bipartisan recommendations and is ignored by Peter Dutton, so you go out publicly and say, 'We don't like it.' But what do you do? You vote for it. Take a stand. Show some courage. You lost an election. This wasn't a takeover of the Labor Party; you lost an election.

Here we've got a sensible amendment from Senator Janet Rice that says, 'If you want to fund drought, you make sure you don't rip money out of infrastructure funding.' We had a sensible amendment that said, 'If the minister's going to fund a range of projects, they should at least be advised by a group of experts with knowledge and expertise in this field.' You voted against that. And now it looks like you're about to vote against all of the things that you said were wrong with this bill. The Australian people right now are asking, 'What does the Labor Party stand for?' We want someone to take it up to this mob, and, if you won't, we will.

The CHAIR: The question is that the amendments (1) to (3), (5) and (6) on sheet 8702 be agreed to.

Sue Lines (WA, Deputy-President) Share this | Link to this | Hansard source

The question is that clauses 11, 12 and 64 stand as printed.

Janet Rice (Victoria, Australian Greens) Share this | Link to this | Hansard source

I advise the Senate that the amendments on sheet 8707 were consequential to those on sheet 8702, and I withdraw them. I seek leave to move on Greens amendments (1) to (5) on sheet 8704 together.

Leave granted.

I move amendments (1) to (5) on sheet 8704 together:

(1) Clause 5, page 8 (after line 25), after the definition of person, insert:

prohibited financial asset: a financial asset is a prohibited financial asset if the financial asset includes an interest in a body corporate that produces fossil fuels.

(2) Clause 39, page 41 (line 23), at the end of subclause (1), add "that are not prohibited financial assets".

(3) Clause 41, page 43 (line 30) to page 44 (line 6), omit subclause (7), substitute:

(7) A direction under subsection (1) is a legislative instrument.

(8) Despite regulations made for the purposes of paragraphs 44(2) (b) and 54(2) (b) of the Legislation Act 2003, section 42 (disallowance) and Part 4 of Chapter 3 (sunsetting) of that Act apply to a direction under subsection (1).

(4) Heading to clause 54, page 50 (line 25), at the end of the heading, add "etc.".

(5) Clause 54, page 50 (line 31), at the end of subclause (1), add:

; or (c) an asset held by the Board as an investment of the Future Drought Fund is, or has become, a prohibited financial asset.

This is another opportunity for the Senate to support some very sensible amendments that draw the link and make the connection between the climate crisis that we are now in and tackling drought. They connect tackling drought with tackling the climate crisis. Not tackling the climate crisis is just like putting a bandaid on a bullet wound. We've got to do both at once. Perhaps the Labor Party, who profess that they want to do something about climate change, might like to vote with us on this one?

Murray Watt (Queensland, Australian Labor Party, Shadow Minister for Northern Australia) Share this | Link to this | Hansard source

The Greens are talking about Labor again?

The CHAIR: Order! Senator Watt, it is disorderly to call out, particularly when you are not in your own seat.

Janet Rice (Victoria, Australian Greens) Share this | Link to this | Hansard source

What is the point of Labor, one might ask, when for the whole debate on this bill they were saying that they were opposed to this bill because it withdrew funds from the Building Australia Fund? Yet we just had a vote where the Labor Party could have supported us but voted against our amendment that would have stopped ripping money out of the Building Australia Fund.

Labor had every opportunity to vote with the Greens. In fact, the numbers in this Senate mean that if Labor had voted with the Greens we would have had the potential to actually change the legislation, to have achieved something. We would've had the potential to make sure that this drought fund didn't rip money out of infrastructure. The numbers very well could have been there in this Senate, because the fact that it was ripping money out of transport infrastructure was a very important aspect of this bill; it was what Labor had been rabbiting on about for the last fortnight. They had the opportunity to join with us to actually change what was in the legislation—to achieve results and actually improve the legislation. That is what we do in the Senate: we consider legislation and we move amendments to it. And we could've successfully moved that amendment—but no.

For whatever reason, Labor have decided that they're cuddling up to the government, not being an opposition; they're rolling over and having their tummies tickled. It is just so distressing! I mean, there are the numbers in this Senate to achieve good things. The government does not have the control of this Senate. There was the opportunity here to improve this bill, and Labor squibbed it.

But here we go: I'm presenting you with another opportunity. I'm presenting it to the government as well. But, then again, given that the government don't accept that we're in a climate crisis—they're in total climate denial—sadly, I'm not expecting them to support it. This goes to the fact that we're setting up a fund that's going to have $5 billion in it. This fund is going to be invested. What's critically important is that this fund is not investing in fossil fuels—the very things that are causing our climate crisis. We know why we're in a climate crisis. It's because we continue to burn coal and gas and oil. And, to tackle our climate crisis, we need to be rapidly reducing the coal and gas and oil that we are burning.

One way—a powerful way—that governments have of sending a message to say that we want to be rapidly reducing the amount of coal and gas and oil we burn is to not invest in them and to say: 'We, as a government, accept the reality of climate change. We accept that we need to be getting out of the mining and burning of coal and gas and oil. Therefore, we're not going to invest in them.' Given that this is a drought fund and given that the reason we are in severe drought is because of our climate crisis, I would've thought that was a very prudent thing to do.

It is the height of cynicism, the height of hypocrisy, to have a fund that's dealing with drought while at the same time saying: 'Let the climate crisis rip. Let's just keep on keeping on with the burning of coal and gas and oil.' We can't do that. It is absolutely abrogating our responsibility to future generations to create a safe climate for our children and grandchildren and to actually have a healthy environment that we can all feel positive about and can be working towards. It's an abrogation of that responsibility to continue to invest in the very thing that is causing our climate crisis and the very thing that is causing the droughts that, as the minister said in his opening statement, are with us and just ongoing. Yes, they are. It's because of climate change. Yes, we've always had droughts in this country, but the droughts are getting worse; they are getting longer; they are getting more intense. The Bureau of Meteorology, our experts on our climate, have said that the drought that we are currently experiencing is the worst in Australia's history and it is affected by climate change. It is only the worst because of the impacts of climate change.

It is up to all of us here to be doing something about that. These amendments are a very significant way of doing something about that—of actually making sure that the drought fund that is going to be repairing the impacts of climate change is not, at the same time, investing in the very things that are causing it. These amendments on sheet 8704 would mean that the drought fund would not invest in coal and gas and oil. Furthermore, that would then be included in the investment mandate for this fund, and furthermore these amendments say that this fund should again be a disallowable instrument, to make sure that the investment mandate is as it should be—that it is taking the reality of our climate catastrophe into account. These aren't extreme measures; they aren't unthought of. They're the sort of things that governments all around the world are doing. It's good governance in this age of our climate crisis. These are the very things that good governments do. If they are serious about tackling climate change then they need to be serious, and we need to be serious, about not investing in the very things that are causing it.

The CHAIR: The question is that amendments (1) to (5) on sheet 8704 be agreed to.

Janet Rice (Victoria, Australian Greens) Share this | Link to this | Hansard source

I will start by noting the outcome of that division, where it was just the Greens who voted in support of our proposal that the drought fund should divest itself from coal, gas and oil and from those companies that are the cause of climate change. I will reflect on what that means. It means that the Senate has just voted to say that it is perfectly okay for the drought fund to invest in Glencore, in Santos, in Woodside Petroleum and in the Adani Group. It means, basically, that it's perfectly okay for the drought fund to invest in the companies that are profiting from the very causes of our climate crisis, that are profiting from the ongoing use of coal, gas and oil and from the ongoing burning, mining and export of coal, gas and oil. They are the very things that are contributing to our climate crisis, that are causing our climate crisis.

That's actually in complete opposition to what BHP have come out with. They've said: 'This is serious. This is a climate emergency.' BHP are divesting out of coal because they recognise that it's not a going thing into the future, that the world needs to change, that if we are to have a future we've got to wean ourselves off fossil fuels, that we've got to stop our over-reliance on them and that we've got to stop our fossil fuel dependency. Yet, despite the science saying that and despite companies like BHP saying that, this Senate does not accept that reality. This Senate is in denial. This Senate is not taking the future of Australia, Australians and our future generations seriously. It is vesting in them such a damaged future, and I find that appalling. I move amendment (1) on sheet 8703:

(1) Page 22 (after line 29), after clause 25, insert:

25A Consistency with the Water Act 2007

(1) Before making an arrangement or a grant under section 21 that affects Basin water resources (within the meaning of the Water Act 2007), the Drought Minister must request the Murray-Darling Basin Authority provide written advice as to whether the arrangement or grant is consistent with the objects of the Water Act 2007.

(2) The Authority must provide the written advice requested by the Drought Minister as soon as reasonably practicable after receiving the request.

(3) The Drought Minister may make the arrangement or grant if the Authority advises the arrangement or grant is consistent with the objects of the Water Act 2007.

(4) The Drought Minister must cause the publication of the Authority's advice on the Agriculture Department's website as soon as reasonably practicable after receiving the advice.

This amendment to the Future Drought Fund Bill requires the drought plan to be consistent with the Water Act and, particularly, the Murray-Darling Basin Plan. I note that in the bill there is a requirement for the drought plan to be consistent with Regional Investment Corporation activities. I think it is highly appropriate—in fact, much more important—that any projects funded under this fund and the plan that will come out of this legislation are consistent with the Water Act and, particularly, the Murray-Darling Basin Authority plan.

I wouldn't have thought this would be controversial. Yes, we've all got our various views about how effective the Murray-Darling Basin Authority is and how effective the Murray-Darling Basin Plan should be, but it is the plan that we have for the management of water across our agricultural regions, across all of the incredibly important agricultural areas in eastern Australia. It should be straightforward to make sure that any plans that come out of this drought fund are consistent with that and to make sure that, if there is any uncertainty in legislation as to which one should have primacy, it should be the plans of the Murray-Darling Basin Authority. This is good planning. Water is a scarce resource. In terms of the Murray-Darling, it's the Murray-Darling Basin Plan that sets out how water gets allocated, and anything impacting upon that should be consistent with the operations of the Murray-Darling Basin Plan.

Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

In relation to what Senator Rice has just mentioned about fossil fuel companies and about how mining in Australia is having a detrimental effect on the drought throughout Australia, I'd like to ask the minister if there is any evidence of that. Has any research been done to actually say that the fossil fuels mined in Australia have caused, and are causing, the drought in Australia, which is affecting our Australian farmers?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

I'm not aware of any such research. Obviously, Australia has experienced droughts for ever and ever. That is just a function of the country we live in, and that's why we've got to come up with ever better measures to deal with the drought. Before the Senate we have an important measure to help support regional communities with projects to further improve their drought resilience and preparedness.

Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

Also in relation to comments from Senator Rice with regard to the Murray-Darling Basin Plan and the Water Act, can the minister give me any evidence or assure me that it will actually help those drought affected people, including up at Longreach, where people have been in drought for eight years? In relation to what Senator Rice has put in her amendment in relation to the Murray-Darling Basin Plan, is there any evidence that it will have any impact on drought affected areas throughout Queensland?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

I thank Senator Hanson for that question. The amendment that Senator Rice has moved and which we are opposing would make things worse for the farmers that you're concerned about, Senator Hanson. That is because it would impose a further requirement to first seek written advice from the Murray Darling Basin Authority around funding arrangements, which would unreasonably add further delay to the disbursement of funding to support projects to support them.

The drought minister, of course, has already the ability to seek further advice under clause 28(4) if and when that is required and appropriate. The decision-maker, which is the minister, already has to abide by the Water Act when making a decision. So the amendment is superfluous and adds unnecessary red tape. The additional red tape would mean that those drought affected farmers around Australia who could benefit from the additional support from this fund would have to wait longer for that support.

Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

The Greens have made a claim today that this whole fund has been set up as a slush fund for the National Party to fund their corporations and their big mates. Can the government give me assurance about where this money will be spent—where the $100 million a year that we put into the fund will be going—and of the accountability of this fund? I don't think the Australian people would be very happy if it was a slush fund for the National Party. The people of Australia have the right to know exactly where the money is going and who it will benefit and help.

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

I thank Senator Hanson for that question. I can 100 per cent reassure Senator Hanson and the Senate that this is not a slush fund for the National Party. This is a very important capital fund that will help generate a reliable, secure, sustainable funding stream which will see an additional $100 million every year go into projects to improve drought resilience and preparedness in rural and regional communities impacted by the drought.

I have previously put on the record the very stringent governance measures that are in place to protect the integrity of the decision-making process. The governance framework for funding decisions under the Future Drought Fund is robust and transparent. In particular, it involves requirements for extensive public consultation in developing the overarching Drought Resilience Funding Plan and consideration of independent expert advice before allocating funds. Indeed, the Future Drought Fund programs will have published guidelines, where appropriate, to ensure all applicants are treated equitably and selected based on merit. Grant programs would be developed in accordance with the Commonwealth Grants Rules and Guidelines 2017. Future Drought Fund procurements will be accountable and transparent in accordance with the Commonwealth Procurement Rules 2018. There is an extensive governance framework in place that will help ensure all of the decisions that are made to allocate funding are based on merit.

Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

We know that there is no time limit on drought. Drought has affected Australia for over 100 years and will continue to do so unless we can put in the resources that are needed. Is there a time limit on this bill and, if so, what is it?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

That's a very good question. No, there is no time limit, but obviously I would expect that after the fund has been in place for a period there will be a review into its effectiveness and further judgements can be made about the future at that point. This capital fund will start with $3.9 billion invested. It is expected, based on the investment mandate that the Treasurer and I will issue, that the capital in the fund will grow to $5 billion within the decade, while at the same time disbursing an additional $100 million every year from 1 July 2020 to fund investment in projects to help drought-proof and improve the drought resilience and preparedness of rural and regional communities.

Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

What is of concern to a lot of Australians is that we set up these administrative bodies and see a lot of the money intended to go to those people that need it is caught up in administrative cost and a waste of taxpayers' dollars. What assurance can you give that the majority, if not all, of the money will be going to those needy farmers and people to help them?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

I thank Senator Hanson. One hundred per cent of the $100 million will go directly to them. But, of course, there will be appropriate provision for administrative costs in terms of the administration of the capital funds, which is consistent with what applies to the Medical Research Future Fund and other funds. The Future Fund is a very efficient organisation with a very low administration cost ratio, and we expect that to continue into the future.

Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

Minister, I am aware that this bill is for resilience and for helping those on the land to actually put in place better usage of water. But will the government be looking beyond this to put in dams, water projects and infrastructure projects in the foreseeable future that will help our farmers?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

The answer to that question from Senator Hanson is yes. This is only one part of an overall approach. The government does have a commitment to a substantial infrastructure program, including investment in dams where that can be part of an overall approach to help drought-proof Australia. This is one component of a broader policy approach and a commitment from the government to support drought affected areas across Australia.

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

I was just wondering if the minister could rule out whether Mr Joyce would have any role or be consulted or get his mitts on any of this money at any point.

Concetta Fierravanti-Wells (NSW, Liberal Party) Share this | Link to this | Hansard source

I'm not sure that 'mitts' is an appropriate word.

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

It is obviously an entirely inappropriate question. I have extensively explained to the Senate what the government's arrangements are, how the board will be appointed, how it will be composed and who will make the decisions, and I think it's very clear to the Senate how that all operates.

Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

I feel offended on behalf of Barnaby Joyce. The member of the lower house is not here to defend himself against the comment that Senator Sarah Hanson-Young made, and I would like it withdrawn.

The TEMPORARY CHAIR: The question is that the amendment moved by Senator Rice be agreed to.

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

Referring to my speech on the second reading, I move Centre Alliance amendment (1) on sheet 8717 relating to the constitution of the advisory committee:

(1) Clause 36H, page 37 (lines 12 to 15), omit subclause (4), substitute:

(4) In appointing a person as a member of the Committee, the Drought Minister must ensure, as far as practicable, the following:

(a) there is a balance of gender, knowledge and skills among members of the Committee;

(b) the membership of the Committee represents a balance of different regions across Australia affected, or that could be affected, by drought.

Question agreed to.

Bills, as amended, agreed to.

Bills reported with amendments; report adopted.