Wednesday, 9 December 2020
Aged Care Amendment (Aged Care Recipient Classification) Bill 2020, Corporations Amendment (Corporate Insolvency Reforms) Bill 2020, Export Market Development Grants Legislation Amendment Bill 2020, Health Insurance Amendment (Compliance Administration) Bill 2020, Immigration (Education) Amendment (Expanding Access to English Tuition) Bill 2020, Treasury Laws Amendment (2020 Measures No. 5) Bill 2020, Treasury Laws Amendment (2020 Measures No. 6) Bill 2020; Second Reading
That these bills be now read a second time.
I seek leave to have the second reading speeches incorporated in Hansard.
The speeches read as follows—
AGED CARE AMENDMENT (AGED CARE RECIPIENT CLASSIFICATION) BILL 2020
SECOND READING SPEECH
This Bill amends the Aged Care Act 1997 to enable a new procedure to classify recipients of residential aged care and some kinds of flexible care from 1 March 2021.
The Bill introduces the option to independently assess the relative care needs of individuals in residential aged care by empowering the Secretary of the Department of Health to assess care recipients using a new assessment tool and assign new classification levels. The Bill also includes consequential amendments to other parts of the Act to enable exercise of the new powers, including that any assessors acting as delegates of the Secretary must hold professional qualifications and complete role-specific training detailed in a legislative instrument under the Act.
A sustainable aged care system needs a reformed funding model. There is broad support – including through the Royal Commission – for a modern case-mix based funding model for residential aged care to replace the outdated Aged Care Funding Instrument.
Currently clinical workers in residential aged care are required to spend their time using the Aged Care Funding Instrument to assess residents, reducing their availability to deliver care.
Reports produced by both independent researchers and the statutory Aged Care Financing Authority have found the Aged Care Funding Instrument provides strong incentives for providers to deliver outdated methods of care – whether or not care recipients may benefit – to produce higher subsidy payments.
The Aged Care Funding Instrument has been found to no longer be fit for purpose and its use has been found to lead to perverse actions by aged care providers, causing perverse outcomes for aged care recipients.
Since the 2016 Budget, the Government has committed to developing and testing a lasting alternative to the Aged Care Funding Instrument.
Between 2017 and 2019 the Government funded the University of Wollongong to perform a research project, the Resource Utilisation and Classification Study. With the involvement of almost 200 residential aged care services, the study empirically measured drivers of the costs of delivering care, and recommended a new resident classification model called the Australian National Aged Care Classification.
Under this new model, it is proposed that assessors acting as delegates of the Secretary perform resident assessments using a new assessment tool, leading to the Secretary assigning new, simpler classification levels that consistently group care recipients with like care needs and like care costs.
All assessors acting as delegates of the Secretary must meet strict professional qualification and additional training criteria, to be detailed in subordinate legislation.
This Bill builds on the successful Australian National Aged Care Classification trial – conducted in 2019 and early 2020 – and will allow a new classification using the Australian National Aged Care Classification tool to be determined for the entire residential aged care population without affecting how subsidy for providers is calculated. This is an essential step in preparing to respond to the findings of the Royal Commission into Aged Care Quality and Safety in a timely manner.
Classification data obtained from these assessments will ensure that individuals, care workers, providers and the government all have the information they need to fully understand the new funding model.
During the information-gathering period the Bill allows, providers will continue to use the existing Aged Care Funding Instrument to assess their residents in parallel with the new procedure established by the Bill.
This Bill enables the next phase of residential aged care funding reform. A phase of preparation that will enable the Government, in the context of a response to the findings of the Royal Commission into Aged Care Quality and Safety, to quickly and seamlessly transition funding from the outdated ACFI. It sets the stage for a more contemporary, efficient, effective and stable funding approach, one that will promote investment in residential aged care refurbishment and expansion, and that will support providers to better deliver the individualised care that each resident needs.
CORPORATIONS AMENDMENT (CORPORATE INSOLVENCY REFORMS) BILL 2020
SECOND READING SPEECH
This bill implements the most significant reforms to Australia's insolvency framework in almost 30 years and is part of the government's economic recovery plan to keep businesses in business and Australians in jobs.
The changes will help more Australian small businesses to restructure and increase their chance to survive the economic impact of the coronavirus.
These reforms form part of the government's JobMaker plan to ensure Australia emerges from the pandemic with a stronger, more resilient and more competitive economy. As the economy continues to recover, it will be critical that distressed businesses have the necessary flexibility to either restructure or to wind down their operations in an orderly manner.
The package of reforms features three key elements.
Firstly, a new formal debt restructuring process for small businesses to provide a faster and less complex mechanism for financially distressed but viable firms to restructure their existing debts, increasing the chance of them surviving and contributing to economic and jobs growth. Unlike the current voluntary administration regime the new process adopts a 'debtor in possession' model where the small business owner will remain in control of their business, while a debt restructuring plan is developed and voted on by creditors. The plan will be developed by the business owner in conjunction with an independent small business restructuring practitioner.
Safeguards are included to prevent the process from being used to facilitate corporate misconduct such as illegal phoenix activity. They include a bar on the same company or directors using the process more than once within a prescribed period and the provision of a broad power for the insolvency practitioner to stop the process. Additional mechanisms are also included as part of the restructuring process to ensure that creditor interests are represented and protected.
The second part of the package is a new, simplified liquidation pathway for small businesses to allow faster and lower-cost liquidation, increasing returns for creditors and employees. Unfortunately, due to the impact of the coronavirus not every business will survive. Often in liquidation the costs of the liquidation can consume all or almost all of the remaining value of a company, leaving little return for creditors. The simplified liquidation process will retain the general framework of the existing liquidation process, with modifications to reduce time and cost.
Thirdly, the bill introduces complementary measures to ensure the insolvency sector can respond effectively both in the short and long term to increased demand and to the needs of small business.
The new insolvency processes will come into effect from 1 January 2021. This coincides with the ending of the government's temporary measures to support businesses to get through the coronavirus outbreak. The temporary measures had a positive impact on allowing businesses to survive, with around a 50 per cent decrease in the number of companies that have gone into external administration over the period from April to August 2020 (inclusive) compared to the same period the previous year.
For businesses wanting to access the new restructuring process, a temporary mechanism will be put in place allowing a company to announce its intention to access the restructuring process. Upon this announcement the company will have access to the existing temporary insolvency relief for up to three months while it arranges to access the new process.
Together, these measures will reform our insolvency system to reduce access costs for small business, reduce the time they spend during insolvency processes, ensure greater economic dynamism, and ultimately help more small businesses to survive.
The Legislative and Governance Forum on Corporations was consulted in relation to the bill and has approved it, as required under the Corporations Agreement 2002.
Full details of the measure are contained in the explanatory memorandum.
EXPORT MARKET DEVELOPMENT GRANTS LEGISLATION AMENDMENT BILL 2020
SECOND READING SPEECH
Every Australian has been affected by COVID-19 – some tragically more so than others. The OECD tells us that we are in the midst of the biggest global downturn since the Great Depression. We have weathered the storm better than most countries, and that has not been an accident. Economically, we have shown great resilience, aided by our quick introduction of programs like JobKeeper and our record levels of economic support. During this period, our export sector has been a source of strength, consistent with our long history of being an open, trading nation.
Exports makes an important contribution to the Australian economy. Thirty years ago, Australian exporters represented 12 per cent of Australia's GDP. By 2018-19, that share had nearly doubled to over 22 per cent, contributing $419 billion of Australia's $1.9 trillion economy. The Liberal National Government has implemented an ambitious trade agenda, resulting in more than 53,000 (including 46,000 SMEs) goods exporting businesses in 2017-18, up 18.5 per cent since 2013-14 and more jobs, with one in five Australians employed in trade-related employment. Australian household incomes are estimated to be an average of around $8,500 higher as a result of opening up new markets through trade.
However, the number of Australian businesses that export – either goods or services – is relatively small. According to the Australian Bureau of Statistics, around 2 per cent of the 2.2 million businesses in Australia are goods exporters. Australian Small and Medium Enterprises (SMEs) only comprise 14 per cent of exporters in contrast to the G7 average of 25 per cent. However, exporters contribute more than non-exporters to jobs and productivity, on average employing more staff, paying higher wages and achieving higher labour productivity compared to non-exporters. This is because Australian exporters compete with companies around the world and are driven to be innovative, use the most modern technology and management practices.
Cutting red tape and growing jobs through increasing exports is more important now than ever. The Morrison Government wants to assist SME exporters to recover from the effects of COVID-19 – and grow the number of SME exporters – by providing better targeted, direct financial assistance in a more simplified and streamlined way. This will help grow and diversify Australia's export markets, while also improving Government service delivery and reducing regulatory imposts on businesses. We want to ensure taxpayer funding is used in the most effective and efficient way possible with the greatest impact.
The Export Market Development Grants (EMDG) scheme is the key Government financial assistance program to help aspiring and current exporters increase their marketing and promotional activities in international markets. Since it started in 1975, the EMDG scheme has supported over 50,000 SME exporters to enter and grow export markets for their goods, services, intellectual property and know-how. Last year alone, over 4,000 SMEs accessed the scheme, employing almost 69,000 Australians and generating exports worth $3.7 billion.
On 10 September 2020, the Government released the independent Review of Financial Assistance to SME exporters. The Review was undertaken by Anna Fisher, a wine exporter and past EMDG recipient. Ms Fisher was asked to examine the most effective and efficient way to deliver financial assistance to Australian SME exporters to encourage additional export development and promotion activities. Specifically, the Review considered whether EMDG in its current form was the most effective and efficient way to generate additional export activity among the SME cohort. The Review undertook broad consultations to seek the views of exporters – aspiring, new and established – individuals, industry associations, EMDG consultants, and other interested parties.
The Review found that the financial assistance provided by the EMDG scheme is valued by SME exporters. The scheme helps offset the high cost of export promotion, accelerates internationalisation and encourages exporters to diversify. However, the Review also found that EMDG's administration needed to be streamlined, simplified and better targeted.
The Review made ten recommendations, all accepted in-principle by the Government, including:
o SMEs that are export-ready and will be doing business overseas for the first time; and
o Exporters who are either expanding in their current markets or entering new markets.
This Bill, the Export Market Development Grants Legislation Amendment Bill 2020, implements the Review's recommendations.
The Review noted simplification could be achieved by amending the Export Market Development Grants Act 1997 to provide a legislative framework that incorporates the key EMDG principles, with operational detail provided under the Rules – a disallowable instrument – and with administrative details in the guidelines.
The Review found the principles of the EMDG scheme remained relevant and valued by exporters. Those core EMDG principles are retained in this Bill which:
The Review found the current EMDG scheme, which reimburses exporters, provides no certainty about the level of Government support prior to exporters' expenditure on promotional activities. Currently, some exporters wait up to two years to receive reimbursements, with the level of funding unknown until after completion of their promotional activities. This is unacceptable.
This Bill will create upfront certainty for exporters about the level of Government support. The Bill changes EMDG from a reimbursement scheme to one which will see eligible SMEs entering upfront grant agreements that provide them with funding certainty over multiple years.
The Review also recommended that EMDG recipients be export-ready to ensure the greatest impact and obtain the most value from the Government's support. The Bill removes the export performance test and the requirement that recipients have a prospect of success. This is replaced with the requirement that recipients be either ready to export or have already exported their products. It is not the business of the Australian government to be picking winners.
The Review found the Government should continue to fund export-focused industry bodies or alliances formed on behalf of members, and that support should be expanded to include facilitating education and training of members to help them become export-ready. The Bill expands eligible activities to include training, to implement this recommendation.
The Review also found the EMDG scheme administration was too complex. We need to cut red tape and make it easier for SME exporters to apply. Accordingly, this Bill modernizes and streamlines the administration of EMDG. Currently, the bulk of EMDG's administrative requirements are contained within the Act. While the Bill contains EMDG's core principles, it removes the detailed requirements on administrative matters, such as how to apply for grants and what information will need to be provided to support the application. These matters will be managed through administrative guidelines. The Bill also removes the separate approval process for industry bodies and requirements about when expenses are incurred. Like any grant program, funding will now be agreed for activities prior to expenditure.
Like the previous Act, the Bill also contains rule-making powers for the Minister, to establish the operational details for the program through the Rules, a disallowable instrument. The Rules will set the under $20 million turnover threshold for eligible SMEs and the tiers of EMDG support – for SMEs new-to-export and expanding exporters, as recommended by the Review. While the Bill establishes EMDG as being for Australian exporters and for products that are substantially Australian, it is the Rules that will elaborate on matters like the definition of eligible products and eligible expenses, and deal with technical details such as the effect of foreign investment in an SME, and disqualifying convictions for eligible persons.
The world moves at a faster pace than when the EMDG scheme started in 1975, and the new legislative structure will also allow the Government to respond more quickly to rapidly changing markets and business practices, and to unforeseen disruptions like COVID-19.
In streamlining EMDG administration, the Bill focuses on the relationship, created through a grant agreement, between the Commonwealth and the EMDG recipient. The Bill therefore removes the ability to compel third parties to provide information in support of the applicant. It also removes provisions related to other third parties, such as associates and consultants.
Mirroring Commonwealth grant agreements, the Bill allows adjustments to be made to grant agreements should the amount appropriated for the EMDG program be reduced.
Reforming EMDG will result in systems and administrative changes. To meet the cost of these reforms, the Bill temporarily lifts the cap on EMDG administration expenses from 5 percent to 7.5 percent for financial year 2020-21 and to 7 percent for financial year 2021-22, before returning to its previous cap of 5 percent for administration costs.
In implementing the Review's recommendations, the Government is confident this Bill will create a framework for a reoriented EMDG program that is simplified and streamlined to deliver financial assistance to SME exporters in the most effective and efficient way, and in a way which will have the greatest impact. These reforms will both assist current SME exporters to recover from the effects of COVID-19 and grow the number of SME exporters, contributing to Australia's economic recovery and future economic growth and prosperity.
HEALTH INSURANCE AMENDMENT (COMPLIANCE ADMINISTRATION) BILL 2020
SECOND READING SPEECH
The Bill makes minor but necessary changes to the Health Insurance Act 1973 to make clearer current arrangements for recovery of Medicare payments owed to the Commonwealth.
The Bill corrects a possible misunderstanding about the operation of the Act. Medicare benefits are recoverable if incorrect information provided in connection with a claim leads to an overpayment, even if the information was not intentionally incorrect.
The Bill will also provide Government the flexibility to adapt to changes in the way Medicare claims might be made in the future. It is worth recalling that the provisions for recovery of amounts overpaid were first enacted more than three decades ago, that is—in digital technology timeframes, at least—eons ago.
Technological advances in Medicare claiming may be easily accommodated because of the stipulation that it is the giving of information, regardless of its form, rather than the making of a statement that will be the basis for a claim for Medicare payment.
Critically, these amendments will help protect the integrity and financial viability of the Medicare program that each year provides for hundreds of millions of services through billions of dollars in benefits. In 2018–19, for example, there were 424 million Medicare services with benefits totalling 24 billion dollars.
The vast majority of practitioners do the right thing—only a small proportion of Medicare services are claimed incorrectly, but given the quantum of money involved, they comprise significant recoverable amounts nonetheless. These amendments will ensure that the Commonwealth may continue to recover overpayments and continue to protect Australia's universal health care system.
The Medicare program gives Australians access to world-class and affordable health care by providing benefits or rebates for around 6,000 services, each with its own item number, listed on the Medicare Benefits Schedule. The Schedule's services are specified in regulations, which require that practitioners fulfil the criteria described in items before Medicare benefits are payable.
Subsection 129AC(1) of the Health Insurance Act 1973 enables the Commonwealth to recover amounts overpaid for incorrectly claimed Medicare benefits or payments where a false or misleading statement has led to a payment that should not have been made.
The amendments to subsection 129AC(1) will clarify for practitioners its intended operation. That is, that the Commonwealth can seek to recover Medicare benefits and payments because of false or misleading information provided in relation to a claim, whether or not the information was intentionally incorrect.
Under the amendments, it is immaterial whether the false or misleading information is given:
This will ensure recoveries are possible where claims have been made through digital claiming channels. Currently, no amounts can be recovered from a person under subsection 129AC(1) unless the Commonwealth has given the person a clear, written explanation of its decision to recover the amount. This Bill retains these protections, ensuring that anyone who may be found to have received recoverable amounts has the opportunity to understand the reason for the decision and to submit evidence, and the right to a formal review under legislation.
These changes do not impose additional requirements upon practitioners. Practitioners are currently responsible for ensuring that all claims they make are accurate and correct. This will not alter, and, critically, no patients will be affected by these amendments. The Bill retains the provision that overpayments are recovered from the person who was responsible for the false or misleading information, even if the Medicare benefit was paid to the patient, or another third party.
The amendments will apply retrospectively, to ensure that any incorrect claims or payments made prior to the passage of this Bill may be recovered.
The amendments do not change the lawful basis for which Medicare benefits or payments are payable, and as such do not affect a person's existing rights.
SECOND READING SPEECH
The Immigration (Education) Amendment (Expanding Access to English Tuition) Bill 2020 will amend the Immigration (Education) Act 1971, to provide greater access to free English language tuition for migrants to Australia.
Without English, it is harder to get a job, harder to integrate into a person's local community, and harder to participate in Australia's democracy.
Only 13 per cent of those with no English skills are in work compared to 62 per cent of those who speak English well.
Migrants with no English skills are also more vulnerable to fall victim to foreign interference and misinformation, and will likely find it harder to seek help if they are a victim of family violence or exploitation.
English language is also vital to our social cohesion – if we can't communicate at school, or work, or in social settings, how can we fully connect as a nation?
Census data shows that the number of people in Australia who do not speak English well or at all has risen.
In 2006, about 560,000 residents did not speak English well or at all. By 2016, at the last Census, it was 820,000.
Following that trend, there is now likely now close to a million people living in Australia who do not speak English well or at all – about half of those are working age.
It is in their interest and in the interest of all Australians that we reverse this trend. We must do better.
This bill is designed to support migrants to increase their English language proficiency. It contains four key measures, which I will discuss in greater detail.
The first measure is to remove the current 510 hour limit on free English tuition that a migrant is entitled to under the Adult Migrant English Program (the AMEP).
Learning a new language is complex and takes time. The number of hours of tuition required by each individual varies based on many factors, including age, prior education and the linguistic distance of their first language from English. Research shows that 510 hours is not a realistic timeframe for most migrants to reach even a functional level of English. This amendment will ensure that migrants participating in the AMEP have the opportunity to continue to undertake free English tuition until they reach a vocational level of proficiency in English.
The second measure is to extend the upper limit for eligibility to access the AMEP from functional English to vocational English.
The AMEP currently provides free English tuition for migrants up to the level of functional English. This is lower than the level of English required by most employers, and for entry to most TAFE courses. By raising the upper limit to vocational English, the Government will be ensuring that migrants have the opportunity to study English for longer and reach a higher level of proficiency. This will enhance migrants' prospects for further education and future employment, as well as support their full participation in the Australian community.
The third measure is to remove the time limits on enrolment, commencement and completion of English tuition for certain visa holders.
This amendment will remove disincentives to participation in English language studies, by allowing certain visa holders with low levels of English proficiency who are in, or have already entered Australia, the opportunity to re-engage in language learning. This recognises that migrants often have a number of competing settlement priorities when they first arrive in Australia, including work, accommodation and family commitments. This amendment will provide a strong message regarding the importance of learning the national language, and the level of support that the Government is committed to provide to do this.
Finally, the fourth measure is to provide the discretion for English courses to be delivered to people who are outside Australia and who have applied for or been granted a permanent visa, or a specified temporary visa.
Currently, this discretion only applies to people outside Australia who have applied for a permanent visa. It does not include people who have been granted a permanent visa, or persons who have applied for or been granted a temporary visa.
This amendment will ensure that tuition options can be developed in the future for the delivery of English courses to people who are overseas, including after their visas have been granted, in preparation for their migration to Australia.
In conclusion, this bill makes a number of important amendments that will better support migrants in their efforts to learn English, and contribute to enhanced social cohesion within the Australian community.
I commend the bill to the chamber.
TREASURY LAWS AMENDMENT (2020 MEASURES NO. 5) BILL 2020
SECOND READING SPEECH
This Bill builds on the Government's broader support to Australian businesses and taxpayers and also implements an important diplomatic commitment to New Zealand.
Schedule 1 to the Bill amends the Income Tax Assessment Act1997 to introduce a new legislative instrument making power into the income tax laws to make eligible State and Territory Coronavirus business grants free from income tax. As announced by the Prime Minister on 18 September 2020, this tax treatment will be extended to the Victorian Government's Coronavirus business grants announced on 13 September 2020.
Other States and Territories will be able to apply for the same tax treatment where they have grant programs focussed on supporting small and medium businesses facing similarly exceptional circumstances.
Schedule 2 to the Bill will improve the operation of the Trans-Tasman Retirement Savings Portability arrangement established between Australia and New Zealand by allowing the ATO to transfer the unclaimed super of New Zealand residents directly to KiwiSaver funds.
This is a significant improvement to how the scheme operates for New Zealanders that have superannuation in Australia. Prior to this amendment, New Zealanders with unclaimed super were unable to receive their superannuation directly from the ATO. Instead, they were required to open an Australian superannuation account before requesting their super be transferred to their KiwiSaver account in New Zealand. Now, New Zealanders will be able to apply directly to the ATO and have their fund transferred to their retirement savings account without further administrative burden.
This change also removes a source of unnecessary cost from the Australian superannuation system by taking the burden off Australian superfunds to play the intermediary role in transferring these funds to New Zealand.
Schedule 3 to the Bill amends the Income Tax Assessment Act 1997 to include Neighbourhood Watch Australasia Limited on the list of deductible gift recipients. Deductible Gift Recipient status allows members of the public to receive income tax deductions for the donations they make to this organisation
Full details of the measure are contained in the Explanatory Memorandum.
TREASURY LAWS AMENDMENT (2020 MEASURES NO. 6) BILL 2020
SECOND READING SPEECH
This Bill makes a number of technical amendments to clarify the operation of a number of laws and provide greater flexibility for Australians accessing the existing full expensing, backing business investment and consumer data right regimes. It also removes support for charitable institutions who fail to take reasonable steps to participate in the National Redress Scheme for Institutional Child Sexual Abuse.
Schedule 1 to the Bill introduces an alternative test for accessing the temporary full expensing measure. This alternative test will allow eligible businesses who have less than $5 billion in statutory and ordinary income (excluding non-assessable non-exempt income) in the 2018-19 or 2019-20 income year to access temporary full expensing. This alternative test targets Australian businesses that have a track record of investing in Australia but could not qualify under the existing test as their turnover was aggregated with an overseas parent or affiliate.
To ensure that the integrity rules associated with this extension operate as intended, Schedule 1 includes a number of clarifications to the tax law. For firms that qualify for full expensing under the alternative test, certain classes of assets are excluded, and this exclusion will apply to assets made available to a related party or a foreign entity.
These amendments provide businesses with more flexibility by allowing businesses to opt out of full expensing and the backing business investment incentive on an asset-by-asset basis.
Schedule 2 to the Bill amends the Competition and Consumers Act 2010 to better enable the Consumer Data Right to grow in a way that is coordinated, accessible and secure.
These amendments will consolidate key Consumer Data Right policy functions to improve coordination of the ongoing expansion and operation of the regime. They will also clarify the ways in which digital businesses accredited to use the Consumer Data Right are able to employ agents to assist in providing services to their consumers.
Schedule 3 to the Bill amends the Australian Charities and Not-for-Profits Commission Act 2012 to encourage charities that may have been responsible for past institutional child sexual abuse to participate in the National Redress Scheme for Institutional Child Sexual Abuse.
This measure will amend the definition of basic religious charity (BRC) to remove a religious institution's eligibility to be classified as a BRC if it has a claim against it under the Redress Scheme, and does not join the Redress Scheme.
A BRC that fails to take reasonable steps to participate in the Redress Scheme would be subject to existing compliance powers, including deregistration. Deregistration would result in the entity losing access to a suite of Commonwealth benefits and concessions, including tax concessions.
This amendment is consistent with the public's expectation that generous support from the Commonwealth by way of charitable tax concessions should not be provided to institutions who fail to fulfil their moral obligation to survivors of child sexual abuse.
Schedule 4 to the Bill makes a number of amendments to Treasury portfolio legislation to:
These amendments further the Government's commitment to the care and maintenance of Treasury laws and will make it easier for Australians to comply with current laws.
Full details of the measure are contained in the Explanatory Memorandum.
Ordered that the bills be listed on the Notice Paper as separate orders of the day.