Richard Colbeck (Tasmania, Liberal Party, Minister for Senior Australians and Aged Care Services) Share this | Link to this | Hansard source

I table the revised explanatory memorandum relating to the Treasury Laws Amendment (Your Future, Your Super) Bill 2021 and move:

That these bills be now read a second time.

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

Leave granted.

The speeches read as follows—

COMPETITION AND CONSUMER AMENDMENT (MOTOR VEHICLE SERVICE AND REPAIR INFORMATION SHARING SCHEME) BILL 2021

This Bill establishes a mandatory scheme to promote competition in the Australian automotive sector by requiring all motor vehicle service and repair information be made available for purchase by independent repairers at a fair market price.

Motor vehicle servicing and repair is a $23 billion industry in Australia with nearly 35,000 businesses employing over 106,000 Australians.

Currently, around one in ten motor vehicles taken to repair workshops are affected by a lack of access to service and repair information.

When this is the case, it results in higher service costs for consumers. This is because there is little choice as to where a vehicle, particularly newer models, can be repaired safely and efficiently.

The 2017 Australian Competition and Consumer Commission (ACCC) market study into the sector found that a lack of access to service and repair information was causing delays and detriment to consumers.

The ACCC's market study also found that independent repairers were not often given fair access to the information they need to do their job safely and effectively.

The Scheme will mandate that all service and repair information that car manufacturers share with their dealership networks, must also be made available to all independent repairers and registered trading organisations to purchase.

The objectives of the Scheme, as set out in the Bill, are to:

To promote competition and ensure the provision of accessible and affordable information, scheme information must be offered at a price that does not exceed fair market value. Fair market value allows for cost recovery and a reasonable profit margin.

'Fair market value' is a recognised concept in both Australian law and in an international context. When undertaking regulatory action, it is established practice to ascertain fair market value by using an objective test. The factors to be taken into account in setting fair market value include the price charged to other repairers, reasonable recovery of costs, and the prices for information in overseas markets.

To support consumer choice of repairer, the majority of vehicles on Australian roads will be captured by the Scheme, including passenger and light goods vehicles manufactured from 2002.This approach is consistent with similar arrangements in overseas jurisdictions.

As you would expect, widespread access to safety and security information would create unacceptable risks to vehicle safety and security. Therefore, information related to safety and security will only be available to individuals that have the appropriate qualifications. This will protect consumers, repairers, and the general public.

Further information on the requirements for individuals accessing this information will be set out in scheme rules which will be consulted on shortly.

The Government has been working with industry to develop technical aspects of the scheme's design and has consulted extensively throughout the duration of the development of the Scheme to ensure it is effective, fair and safe.

Ongoing industry cooperation will be crucial to the Scheme's success. Therefore, a statutory adviser will be established and it will have a key role in the day-to-day operation of the Scheme. Importantly, the adviser will play a key role in assisting with the mediation of disputes and reporting to Government on the operation of the Scheme.

The Government intends for the adviser position to be conferred on a joint-industry led organisation that will have the technical expertise, experience and relationships within the automotive industry to support the Scheme.

Based on successful arrangements in the United States, industry representatives have advised me that this joint-industry led organisation will run an online portal to facilitate easy access to and supply of information for those that wish to participate. The Government will provide a $250,000 grant to facilitate online access to service and repair information.

This Bill provides a strong incentive to comply with these new obligations, with a maximum penalty of $10 million to apply in circumstances where data providers fail to comply with the Scheme. The ACCC will be responsible for monitoring compliance and taking action where necessary.

This Bill includes significant reforms to the service and repair industry that has only been made possible through a strong partnership with industry and I would like to thank the five signatories to the existing voluntary agreement for their ongoing engagement.

Full details of the measure are contained in the Explanatory Memorandum.

HIGHER EDUCATION SUPPORT AMENDMENT (EXTENDING THE STUDENT LOAN FEE EXEMPTION) BILL 2021

The Higher Education Support Amendment (Extending the Student Loan Fee Exemption) Bill 2021, builds on the Government's commitment to support students, providers and the broader economy through the ongoing impact of the COVID-19 pandemic.

Schedule 1of the Billamends the Higher Education Support Act 2003 to extend the exemption from FEE-HELP loan fees for approximately 30,000 undergraduate students mostly studying at private providers for a further six months. This exemption originally commenced on 1 April 2020 and will now continue through to 31 December 2021.

The Australian Government is committed to supporting the higher education sector, and ensuring that all Australians can access high-quality educational opportunities that provide the job-ready skills they need to enter the workforce. Due to the COVID-19 pandemic, the Government understands that students and higher education providers alike have been put under significant financial pressure.

The FEE-HELP loan fee exemption will encourage students to continue or commence study for the remainder of 2021 and, in doing so, will support providers to continue delivering the high quality education necessary for Australia to recover economically from the COVID-19 pandemic.

I commend the bill.

PRIVATE HEALTH INSURANCE AMENDMENT (INCOME THRESHOLDS) BILL 2021

The Private Health Insurance Amendment (Income Thresholds) Bill 2021 implements a measure announced in the 2021-22 Budget. It will provide continuity for the current policy settings by continuing the pause on the indexation arrangements for income thresholds in the Private Health Insurance Act 2007 for a further two years, and updates the indexation arrangements to apply to the current thresholds from 2023-24. The income thresholds contained in the Private Health Insurance Act 2007 are used in determining the tiers for both the private health insurance rebate and the Medicare levy surcharge. The rebate and surcharge will continue to be income tested.

The Government invests over $6 billion each year in the private health insurance rebate which contributes to the affordability of Private Health Insurance for Australians. Following significant reforms over recent years which have made private health insurance simpler and more affordable, the 2021-22 Budget sees the Australian Government continue to increase overall spending and investment in health. This includes investing in ongoing reforms to private health insurance which to date have resulted in the lowest annual average premium change for consumers since 2001 - 2.74 per cent. Specifically in the 2021-22 Budget the Government is investing $30.6 million over 4 years to continue to make private health insurance simpler and more affordable for Australians.

Australians continue to rate the quality of healthcare available in our country at near record high levels but are concerned about the system becoming overstretched. Private health insurance continues to be viewed by Australians as a vital element of the health system, providing choice and helping to relieve pressure on the public system.

The Bill supports ongoing reforms in private health insurance. More than half of the Australian population have some form of private health insurance. Income-tested rebate arrangements are a foundation stone of these arrangements and continue under this legislation.

This Bill preserves the explicit link between the rebate and the Medicare levy surcharge. It makes no changes to the Medicare levy surcharge rate or the private health insurance rebate rates. This is important as they operate together to ensure that people whose rebates are reduced because of means testing continue to have a strong incentive to retain their private health insurance.

It is important to note that these changes over the next two years will not affect individuals with an income that remains below current base tier thresholds of $90,000, or couples and families with an income that remains $180,000 or below. Higher income earners without private health insurance will continue to be subject to Medicare levy surcharge.

Importantly the bill will ensure the recommencement of annual indexation from the current income thresholds following the end of the pause, which is important for the continuity of policy settings and predictability for Government financing.

This Bill provides stability regarding access to the private health insurance rebate and application of the Medicare levy surcharge. During this pause the Government will undertake a detailed study into the settings of these two important private health insurance policies to ensure they provide the appropriate incentives for individuals, couples and families when choosing the healthcare cover that best suits their circumstances.

TREASURY LAWS AMENDMENT (2021 MEASURES NO. 3) BILL 2021

This Bill will implement a number of urgent and important measures which are designed to provide relief and support to Australians in need.

Schedule 1 to the Bill amends the Medicare Levy Act 1986 and A New Tax System (Medicare Levy Surcharge - Fringe Benefits) Act 1999 to increase the Medicare levy low-income thresholds for singles, families, and seniors and pensioners, consistent with increases in the consumer price index. These changes will ensure that low-income households who did not pay the Medicare levy in the 2019-20 income year will generally continue to be exempt in the 2020-21 income year if their incomes have risen in line with, or by less than, the consumer price index.

The Medicare levy low-income thresholds ensure that people who pay no personal income tax due to their eligibility for structural offsets—such as the low-income tax offset or the seniors and pensioners tax offset—generally do not incur the Medicare levy.

The changes to the thresholds mean that no Medicare levy will be payable for individual taxpayers with taxable income that does not exceed $23,226 in 2020-21 (increased from $22,801). Single seniors and pensioners with no dependants who are eligible for the seniors and pensioners tax offset will not incur a Medicare levy liability if their taxable income does not exceed $36,705 (increased from $36,056).

Further, in combination with the individual thresholds, couples and families who are not eligible for the seniors and pensioners tax offset will not be liable to pay the Medicare levy if their combined taxable income does not exceed $39,167 (increased from $38,474). Couples and families who are eligible for the seniors and pensioners tax offset will not be liable to pay the Medicare levy if their combined taxable income does not exceed $51,094 (increased from $50,191). The thresholds for couples and families go up by $3,597 for each dependent child or student (increased from $3,533).

The increase in thresholds will apply to the 2020-21 income year and future income years.

Schedule 2 to the Bill introduces an amendment to the National Housing Finance and Investment Corporation Act 2018 (the NHFIC Act) to establish the Family Home Guarantee.

From 1 July 2021, 10,000 guarantees will be made available over four years to eligible single parents with dependants (predominantly women) to build a new home or purchase an existing home with a deposit of as little as 2 per cent, regardless of whether that single parent is a first home buyer or previous owner-occupier.

The Family Home Guarantee recognises the importance of housing in providing a foundation for social, economic and emotional wellbeing.

By establishing the Family Home Guarantee, the Government is providing a pathway to homeownership for single parents with dependants who have struggled to save enough for a deposit while paying rent and/or restarting their lives, allowing them to purchase a modest home sooner, subject to an individual's ability to service a loan.

The amendments to the NHFIC Act operate at a high level and will be supported by amendments to the National Housing Finance and Investment Corporation Investment Mandate Direction 2018.

Schedule 3 to the Bill will exempt eligible payments made by the Australian Government to Thalidomide survivors from income taxation and from the social security and veterans' entitlements income test.

The Australian Government's 2020-21 Budget measure, Support for Australia's Thalidomide Survivors, will provide $44.9 million over four years (and $3.9 million per year ongoing) to Thalidomide survivors.

Schedule 4 to the Bill provides an income tax exemption for qualifying grants made to primary producers and small businesses affected by the February and March 2021 storms and floods, which had a devastating impact on communities in Australia.

Schedule 4 provides that qualifying grants are Category D grants provided under the joint Commonwealth-State Disaster Recovery Funding Arrangements 2018, where those grants relate to the storms and floods in Australia that occurred due to rainfall events between 19 February 2021 and 31 March 2021. These include small business recovery grants of up to $50,000 and primary producer recovery grants of up to $75,000.

These grants provide support in addition to other assistance that the Australian and State Governments have provided to assist communities as they begin to build and recover following these devastating events.

Impacted small businesses and primary producers are encouraged to apply for these grants. Further information on disaster recovery assistance is available on the Disaster Assist website.

Schedule 5 to the Bill amends the Income Tax Assessment Act 1997 to include Alliance for Journalists' Freedom Ltd, The Andy Thomas Space Foundation Limited, Youthsafe, RAS Foundation Limited, The Judith Neilson Institute for Journalism and Ideas, and The Great Synagogue Foundation Trust on the list of gift deductible gift recipients (DGRs). Schedule 5 also extends the specific listing of The Centre for Entrepreneurial Research and Innovation, and Sydney Chevra Kadisha. DGR status allows members of the public to receive income tax deductions for donations of $2 or more that they make to these eight organisations.

Full details of the measures are contained in the Explanatory Memorandum.

SYDNEY HARBOUR FEDERATION TRUST AMENDMENT BILL 2021

The Sydney Harbour Federation Trust was established in 2001 by the Howard Government, as a transitional body to rehabilitate prominent former Defence sites on Sydney Harbour and open them up to public access and for the benefit of current and future generations.

In that time quite a bit has changed for the Trust. Its portfolio has grown, its life has been extended and it has successfully opened-up all of its sites to the public, with only some small areas still closed.

The Trust is now increasingly focused on the day-to-day management of the sites and the longer-term planning and actions to protect, preserve and enhance the sites consistent with the requirements of the Sydney Harbour Federation Trust Act 2001.

Recognising this, in 2019 the Government announced an independent review into the Trust's future arrangements to ensure that the right arrangements are in place for the important sites the Trust manages.

The report of the review was published in June 2020, making 21 recommendations, and finding widespread support for the work of the Trust.

The Government agreed immediately with the central finding of the review that the Trust should become an ongoing entity, retaining responsibility for the sites, rather than handing them over to the New South Wales government and local councils for ongoing management.

The 2020-21 Budget provided $40.6 million in funding over four years for the Trust to support its work in rehabilitating its sites, and providing valued community spaces, facilities, and attractions. This is in addition to the $9 million made available to the Trust on release of the review report, to keep its sites safe and accessible.

The Sydney Harbour Federation Trust Amendment Bill 2021 is the next major step in the implementation. As with the review, the Bill has been framed in consultation with key stakeholders and the wider public.

The Bill takes forward four of the review recommendations as well and other amendments to improve the operation of the Act and to better equip the Trust for its new on-going role.

The Bill implements the central finding of the review - that the Trust become an ongoing entity.

The Trust was originally set up with a mission to remediate the sites and hand them over to NSW and relevant local councils for ongoing management.

The independent review affirmed the community's strong support for these important sites to remain in federal government hands, managed by the Trust on an ongoing basis.

The Government agrees with this proposition, and so the Bill will ensure the sites remain in the hands of the Trust into the future.

The Bill supports the review's recommendation for a refresh of the Trust's membership requirements to ensure it is equipped with the skills and expertise needed for the future.

The Bill also updates provisions regulating the Trust's commercial activities. The primary purpose of Trust sites is to remain open for public access and amenity. But the last 20 years of operations has shown that sensitive commercial activities have a role to play in bringing life and amenity to the sites and contributing to the costs of protecting the sites.

The Bill maintains and strengthens key protections by ensuring long term leases are only available where it is clearly consistent with the objectives of public access and amenity, and the conservation of heritage and environmental lues. As part of this, the community will get a direct say in any such proposals.

To continue to support the Trust in its new ongoing role, the Bill also modernises the language of the Act and includes amendments related to a review of regulations under the Act. Which are due to sunset and anticipated to be remade later this year, following community consultation.

Overall, the Bill supports the recommendations of the independent review, and the Government's commitment to ensure it has the right arrangements in place to protect the special sites managed by the Trust into the future.

WATER LEGISLATION AMENDMENT (INSPECTOR-GENERAL OF WATER COMPLIANCE AND OTHER MEASURES) BILL 2021

In September 2020 the Government announced its intention to create the Inspector-General of Water Compliance. Today, on behalf of the Government, I am very proud to introduce this Bill.

W ater is a shared responsibility

Water in the Murray-Darling Basin is a finite resource.

To ensure a healthy working Basin, water management is a shared responsibility between the Commonwealth and Basin States. That's why we have a Basin Plan - an agreement between all Basin jurisdictions that we will manage its finite resources in a sustainable way.

In developing this Bill, the Australian Government has worked closely with Basin States to ensure the Bill will have their support before it commences. I thank them for their constructive engagement.

Improving confide nce

Establishing the statutory position of the Inspector-General of Water Compliance is the keystone of this Bill.

This role will combine compliance and enforcement powers currently held by the Murray-Darling Basin Authority with the assurance role of the current Interim Inspector-General.

In this role, the Inspector-General will listen to the concerns of Basin communities to ensure that their voices are heard when it comes to water compliance.

The Inspector-General will also undertake audits and inquiries and report in a transparent manner.

The Inspector-General will also work with other Basin States to develop more consistent standards and guidelines.

Compliance

Compliance is at the heart of a fair water sharing system.

All participants need to know they're being held to the same standard and that they're playing by the same rules.

This Bill strengthens compliance by enhancing the existing offences and the penalty regime under the Water Act. This includes strengthening penalties for water theft and water trading offences.

Importantly, this Bill recognises that the States are the primary and frontline managers for water compliance.

This does not change.

What this Bill does is enable the Commonwealth to step in and take enforcement action on water theft if a Basin State is unwilling or unable to do so.

The Inspector-General will work closely with Basin enforcement agencies to develop complementary compliance and enforcement policies.

Ensuring independence

The Inspector-General will be operationally independent.

That is, the Bill ensures that the Inspector-General is at arms-length from government and has the freedom to choose how to pursue Basin compliance.

Ethical walls will separate the new regulator from the Department's water purchasing and policy programs.

The Inspector-General will be truly independent with its own work plan, budget, and the ability to enter into its own contracts and appoint its own Authorised Compliance Officers.

Establishing the benchmark

The Inspector-General will work closely with State authorities in developing guidelines and standards.

This will include careful consideration of input from Basin States, such as relevant state standards and policies.

Through the development of standards and guidelines the Inspector-General will seek to improve consistency across the Basin.

The guidelines and standards will clearly articulate to Basin State regulators, communities and other stakeholders what constitutes best practice for Basin water management.

The standards and guidelines will provide the Inspector-General with a framework to evaluate the performance of Basin jurisdictions, including the Commonwealth, in delivering the Basin Plan.

Conclusion

Our government is delivering stronger compliance, greater accountability and strengthened integrity through this Bill.

This Bill will enable the Inspector-General to work across the whole Basin - all one million square kilometres of it - to improve trust, strengthen compliance, and increase transparency.

Let's get on with passing the Bill and appointing Australia's first statutory Inspector-General of Water Compliance.

It's what the community expects us to do.

TREASURY LAWS AMENDMENT (YOUR FUTURE, YOUR SUPER) BILL 2021

Australia's superannuation system manages $3 trillion in retirement savings on behalf of 16 million people.

Given the superannuation system's size and compulsory nature, every Australian should demand the highest level of accountability and performance from their superannuation fund.

This is why, on Budget night, the government announced the Your Future, Your Super package to ensure that the superannuation system is operating as efficiently as possible, to maximise the retirement savings of all members. The package implements a number of recommendations from the Productivity Commission's 2018 final report on 'Superannuation: Assessing Efficiency and Competitiveness'.

Too many Australians are paying too much in superannuation fees.

At $30 billion a year, the superannuation fees Australians pay exceeds the cost of household gas and electricity bills combined.

Australians today are paying $450 million a year in unnecessary fees as a result of 6 million multiple accounts.

The measures I introduce today have been estimated to save Australians $17.9 billion over the next decade.

The Bill will reform the operation of our superannuation system in three key ways.

Single default account

The Government believes new super accounts should no longer be automatically created every time a worker changes jobs when they do not decide on a superannuation fund. Holding multiple accounts is costly for members. Multiple superannuation accounts held with different funds results in members paying multiple sets of fees and insurance premiums and unnecessarily erodes their retirement savings.

Through Schedule 1 to the Bill, the Government will ensure that a superannuation member's account will be 'stapled' to them as they change jobs from 1 July 2021. At the time of starting a new job, unless a member decides otherwise, their employer will pay superannuation contributions into their existing fund.

Employers will no longer automatically create a new superannuation account in their chosen default fund for new employees when they do not decide on a superannuation fund. Instead, employers will obtain information about the employee's existing superannuation fund from the Australian Taxation Office, if it is not provided by the employee. This reform will ensure that members are no longer accumulating multiple superannuation accounts every time they change jobs.

The introduction of stapled accounts will implement Recommendation 3.5 of the Financial Services Royal Commission and Recommendation 1 of the Productivity Commission Superannuation Inquiry.

These reforms are estimated to boost balances in super by about $2.8 billion by avoiding duplicate fees and lost returns over the next decade.

Underperformance

The Productivity Commission's Superannuation Inquiry emphasised the need to address underperformance.

Schedule 2 to the Bill will require the Australian Prudential Regulation Authority to conduct an annual, objective performance test for MySuper products and other products to be specified in regulations.

All products that fail the test will be required to notify beneficiaries in writing. Where a product has failed the performance test in two consecutive years, the trustee will be prohibited from accepting new beneficiaries into that product. The amendments also provide APRA with a resolution planning prudential standard making power.

The introduction of this new test is expected to deliver $10.7 billion in benefits for members over 10 years as members leave underperforming products, some underperforming products improve their performance and others merge with higher performing funds.

Schedule 2 to the Bill will also facilitate the creation of the Government's new interactive 'YourSuper' comparison tool. The tool will provide members with simple, clear and trusted information on MySuper products. The tool is expected to boost retirement savings by $3.3 billion over 10 years through empowering more members to engage with their superannuation.

Best financial interests duty

Schedule 3 to the Bill implements Recommendation 22 of the Productivity Commission Superannuation Inquiry, by amending the existing best interests duty to clarify that this duty requires the trustee to act in the best financial interests of the member.

In addition, enforcement of this obligation is strengthened by:

Importantly, there is no 'mental' element required to be established by either a regulator pursuing civil penalties or an individual pursuing recovery of losses or damages against a trustee or individual director for a breach of the best financial interests duty.

Schedule 3 to the Bill will also remove the exemption that allows trustees not to disclose up to five per cent of holdings as part of their portfolio holdings disclosure, empowering members to make fully informed decisions about their retirement how their retirement savings are invested.

In conclusion, through the Your Future, Your Super package, the Morrison Government is taking the next step in modernising and renovating the architecture of the superannuation system to ensure it is working harder for you.

Full details of the measures are contained in the Explanatory Memorandum.

Debate adjourned.

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