Mr NEUMANN (Blair) (12:01): I move:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House notes that the Turnbull Government's return to surplus in 2019-20 is reliant on a one-off tobacco tax collection timing trick".

I rise to speak on the Customs Amendment (Illicit Tobacco Offences) Bill 2018. This piece of legislation, together with the Treasury Laws Amendment (Illicit Tobacco Offences) Bill 2018, provides a new framework for strengthening illicit tobacco offences by removing existing obstacles to prosecution. The Treasury Laws Amendment (Illicit Tobacco Offences) Bill 2018 is currently before the Senate, and Labor has agreed to support that bill, as I outlined in this place on the 28 February. Naturally Labor will support the bill currently before the House, because we believe in cracking down on illicit tobacco as well as eliminating smoking related illness and death. Illicit tobacco refers to tobacco sold to Australian consumers without the payment of relevant taxes. There are several types of illicit tobacco, including contraband, which is manufactured legally outside of Australia and smuggled into the country; counterfeit, which is manufactured illegally without permissions and smuggled into Australia; and unbranded tobacco, which usually comes in loose leaf and is known colloquially as chop-chop. I suppose the Australian public would know that one more than the others.

The report Illicit tobacco in Australia released on 20 April this year by KPMG states that Australian tobacco consumption for the 2017 calendar year was 15.6 million kilograms, and around 15 per cent of this, or 2.3 million kilograms, was illicit tobacco. According to the report, the illicit tobacco consumed would have had an estimated excise value of $1.91 billion if it had been consumed legally. There are, however, other estimates of this figure because measuring the illicit tobacco market is, naturally, inherently difficult. The Department of Home Affairs has estimated the excise value at between $0.5 billion and $2.3 billion, whilst others have estimated the cost to the Australian public purse to be up to $6 billion. Regardless of this figure, as illicit tobacco enters the market, lost excise normally charged as a tax or duty is not being collected by the Australian government to be spent on other services such as health, infrastructure, education et cetera for our society and our community.

Last week two students in Sydney's north were arrested after attempting to import 778 kilograms of loose-leaf tobacco sent as sea cargo from China, with the excise for this shipment alone estimated to be worth more than $780,000. I commend the Australian Border Force officers for intercepting this shipment in Adelaide last month and for the daily work they do in protecting our borders. Another such instance uncovered by Australian Border Force officials was an alleged Chinese syndicate smuggling into Australia tobacco and cigarettes hidden in children's toys. There are other instances I could outline to the House. For example, six tonnes of illegal tobacco leaves and vast fields of mature plants worth more than $13 million in excise were seized in a raid on a rural property in the Northern Territory in July. The media has reported these events on numerous occasions.

I have heard from my own constituents and from small business operators in my electorate of Blair in South-East Queensland stories about businesses being undercut by those purportedly selling illicit tobacco to sometimes unknowing customers who think they're just getting cheaper cigarettes and cheaper tobacco. In Queensland, as recently as Saturday, The Queensland Times reported that a local store in Ipswich in my electorate was selling 50 grams of loose-leaf tobacco for just $20, compared to $69 in the supermarket. Illicit tobacco may seem harmless, but purchasing it actually helps fund the criminal networks that run these operations. They use illicit tobacco as one of the many branches of their criminal operations, which include such things as human trafficking, people smuggling, illicit use of firearms and drug smuggling. People who innocently buy tobacco on the cheap from local shops may be surprised to find out they may be partaking of this illicit tobacco trade. They're actually funding these operations by buying chop-chop.

We must take every step possible to crack down on illicit tobacco and the people who run these illegal operations. Since 1 July 2015, over 114 people have been charged with tobacco related border offences. However, only 69 of those charged have been successfully prosecuted under the Customs Act. There are a number of limitations with the existing tobacco related revenue evasion offences in the Customs Act and the Excise Act because the offences are inconsistent. The Customs Act offences only apply when knowledge of defrauding or intention to defraud revenue can be proven. By comparison, the Excise Act offences are associated with relatively low penalties and do not provide a sufficient deterrent to those dealing in illicit tobacco. Events can only be successfully prosecuted if it can be proven whether tobacco was imported or produced domestically. Because of these inconsistencies, neither officers of customs, who administer the Customs Act, nor officers of the Australian Taxation Office, who administer the Excise Act, are currently able to target the full range of illicit tobacco offences.

The bill before the House amends the Customs Act 1901 to create two new offences in respect of importing illicit tobacco based on recklessness and ensures customs officers can investigate and enforce new illicit tobacco offences relating to the proof of origin in the Taxation Administration Act 1953. In addition to this, there are paragraphs that create new offences which lower the standard of proof from intention to defraud or knowledge of defrauding revenue to recklessness. Recklessness is a lower standard of culpability than intention or knowledge. With these amendments, customs officers will be able to target a wider range of participants in the illegal tobacco trade and strengthen the illicit tobacco enforcement regime in Australia. In turn, this will allow greater opportunities for successful prosecution of those involved in the illicit tobacco market.

The bill also proposes to extend the power to arrest without warrant under section 210 of the Customs Act if an officer of customs or police believes on reasonable grounds the person has committed or is committing an offence. Labor supports this. It should be noted, however, that the power of arrest without a warrant can only be exercised if an officer believes on reasonable grounds that proceedings by summons against a person would not achieve one or more of the several purposes set out in the Customs Act. It's appropriate for the power to arrest without warrant to be extended to prevent the continuation of illicit tobacco offences and to ensure that people appear before the court in relation to those offences.

Whilst we welcome the measure to combat illicit tobacco, we on this side of the House are always prepared to hold this out-of-touch Turnbull government to account. As I referred to in my second reading amendment, the Turnbull government is relying on a one-off tobacco tax collection timing trick to help them bring up a budget surplus. In the 2018-19 budget, the Turnbull government miraculously announced that they were going to achieve surplus in 2019-20, a year earlier than previously anticipated.

Currently, importers who import tobacco are required to pay duty when the tobacco leaves a warehouse. As a result of this, there have been instances of tobacco being removed from warehouses without duty being paid, resulting in the illicit tobacco entering the Australian supply chain. In an effort to combat this, from 1 July 2019 importers will be required to pay all duty and tax liability when tobacco enters the country rather than when it leaves a licensed warehouse and enters the domestic market.

As a result of this measure, the Turnbull government announced a transitional measure, with importers having 12 months to pay tax on tobacco stored in warehouses. This means that, instead of duty being collected in the latter years, when it leaves a warehouse the revenue of over $3 billion will be collected in the 2019-20 financial year—a timing trick perpetrated to achieve a budget surplus. The 2019-20 financial year is also the year in which the Turnbull government says it will reach a $2.2 billion surplus—a $2.2 billion surplus and a $3 billion timing trick to achieve it. The Turnbull government is using the risk of illicit tobacco entering the market to reach a surplus a year earlier than they previously anticipated or expected to announce it. It is clear that, without this one-off tobacco tax collection timing trick, the Turnbull government would not be able to achieve a surplus in 2019-20 as they claim they will. I note that this measure will require another piece of legislation, currently titled the Customs Amendment (Collecting Tobacco Duties at the Border) Bill in the legislation proposed to be introduced in the spring sittings, as circulated by the Department of the Prime Minister and Cabinet.

Labor is awaiting this legislation to be introduced in the House and the government's further admission that without this additional revenue they will not be able to achieve a surplus one year ahead of schedule. Of course Labor have supported measures before the House when we've seen better and more improved economic reforms to pay down Australia's debt and to ensure bigger surpluses and a fair and sustainable taxation system for all Australians. For example, this plan from our side of the chamber involves capital gains tax reforms and reforms in relation to excessive dividend imputation credits, which crack down on an unsustainable tax loophole that gives tax refunds to people who don't actually pay income tax.

Labor has made a strong commitment historically in relation to getting rid of the scourge of smoking. Smoking accounts for 15,000 deaths every year in this country. Policy reforms implemented by former Labor governments made significant advancements towards drastically reducing that number—for example, what Australia did under the last Labor government in becoming the first country in the world to introduce plain packaging for cigarettes. We also increased the excise rate applying to tobacco products by 25 per cent as part of our budget, and we commend the government for mimicking what we had to do. We invested money—for example, $61 million in a national tobacco campaign. We introduced legislation to bring restrictions on internet advertising of tobacco products into line with advertising on other media. We took a strong, principled stance.

Unfortunately, there are parties on the other side of the chamber who have been shamelessly accepting donations from big tobacco. The latest records from the Australian Electoral Commission show that the National Party accepted $15,700 in donations from the tobacco industry in the 2016-17 financial year. This is simply not good enough. It's not good enough to say one thing in this chamber, to say one thing about the tobacco scourge and reducing deaths and illness in relation to tobacco related illness in this country, but to do another thing in Canberra or organisationally in your party. We don't think that's good enough.

I think the Prime Minister should explain why it's acceptable for his coalition partners to fill their coffers with donations from the tobacco industry. On this side of the chamber we've consistently shown our commitment to policies to reduce the instances of tobacco related illness and disease in this country. We support the passage of this bill through the House to stop the scourge of illicit tobacco and ultimately improve health outcomes for all Australians. I commend the legislation and the amendment to the chamber.

The SPEAKER: Is the amendment seconded?

Mr Snowdon: Yes, and I reserve my right to speak.

The SPEAKER: I thank the member for Lingiari. The original question was that this bill be now read a second time. To this the honourable member for Blair has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. If it suits the House, I'll state the question in the form that the amendment be agreed to. The question now is that the amendment be agreed to.

Mr TED O'BRIEN (Fairfax) (12:14): The Customs Amendment (Illicit Tobacco Offences) Bill 2018, with measures making policing of the market in illicit tobacco more fit for purpose, is a very important part of the long-running, largely bipartisan effort to reduce the human and dollar costs of smoking. These costs come in at around 15,000 lives and $30 billion in health services on an annual basis, and we can add to that a recent and rapidly increasing loss of revenue from the surging black market in illicit tobacco. These are enormous costs, and governments at all levels—federal, state and local—have been working to reduce them since the mid-1990s—with considerable success, I might add.

As recently as the mid-1990s, almost one-quarter of all Australian adults smoked. That is now down to about 13 per cent, with the trend suggesting it can and will be driven considerably lower, saving lives and billions of dollars, in what has been a remarkable policy turnaround spaced over several decades. In the 1930s, before the links between smoking and disease were established, the tobacco industry in Australia was actually promoted and protected. Federal law in that era required that 50 per cent of the tobacco in cigarettes be Australian grown, which embedded a strong tobacco-growing industry in Queensland and Victoria. The proportion of local content was even boosted, to 57 per cent, as late as 1977.

But progressively, and certainly very strongly by the early 1990s, a range of factors came into play that led to a pretty sudden and absolute about-face. Freer trade, with significantly lower tariffs, meant that previous constraints on the importation of cheaper tobacco were reduced, which in turn crippled the relatively high-cost local industry. After a restructuring scheme, the industry shrank from about 600 growers in the 1970s to no growers by 2006. Almost simultaneously, there was a growing awareness of the appalling health and financial costs of smoking, which quickly gave rise to a highly effective legislative and regulatory campaign against tobacco use in this country. Advertising was banned in 1992, and since then, especially over the past decade, antitobacco, pro-taxpayer measures have proliferated. Excise was increased by 25 per cent in 2010. Plain packaging with graphic health warnings was instituted in 2011. In 2013, annual 12½ per cent increases in excise began, going through to 2017. In the 2016-17 budget, those increases were extended through to 2020 as part of a broader package of measures instituted by this government to increase the national effort against smoking, with this bill being part of that package. As a result, thousands of lives will be extended, and many billions of dollars will now be available for more productive work on behalf of Australian taxpayers.

But the success of this ongoing campaign to reduce the human cost and the dollar cost of tobacco consumption has created major challenges for law enforcement. As a direct result of having created the most expensive tobacco market in the world, we have made ourselves a big target for illegal products, especially from countries to our north, who have some of the lowest tobacco prices in the world. In China, for example, a pack of 20 cigarettes retails for about $3.40, compared with about $25 to $26 here. In South Korea, the price is about $3.60. In Indonesia, it's under $2 a pack. The temptation for criminals is obvious: produce or buy cheaply in any number of countries then smuggle the product into Australia, deliberately avoiding customs duties, and you'll make a lot of money. Today's illicit tobacco trade operates in much the same way cheap booze from Canada and the Caribbean flooded into the United States during the prohibition era—to enrich and empower vast criminal enterprises.

The ATO and the Department of Home Affairs estimate that almost $600 million in tobacco duty was forgone in the 2015-16 financial year due to Australia's illicit tobacco trade. Regular reports by KPMG that seek to quantify the scale of the illegal market suggest the cost of this illicit tobacco could be as high as $1½ billion in avoided duties, based on the estimate that about 14 per cent of tobacco sold in Australia is now illegal. If KPMG is right, one in seven cigarettes smoked in Australia avoid excise duty. The impact of that at a national level is twofold. One is revenue lost. Tobacco taxes currently contribute around $9 billion annually for taxpayers, with that number set to grow exponentially given the ongoing big increases in excise. By 2020, excise revenue will likely be around $13 billion. The second highly likely impact is a reduction in the rate at which people either quit or resist the smoking habit due to an increasingly ready access to cheap illicit tobacco products. Should this impact be felt, any resurgence of tobacco use will, as a consequence, have a discernible negative impact on national life expectancy and health costs.

But, in addition to the border national impacts of lower revenue and higher health costs, there are also some very important local impacts, including loss of income for many hardworking small businesses who are in fact selling the real deal, the real thing. While regularly doorknocking businesses across my electorate, it has become apparent to me how many small businesses are being hurt by this illicit trade. Many of these are convenience stores; they're tobacconists; they're newsagencies—businesses that already operate on very tight margins, and they rely on their local trade. These businesses already face the challenge of supplying a highly regulated product to an even smaller customer base—a customer base that has reduced significantly over the years, as we have already noted. However, while it has been government policy for many years to discourage tobacco use and offset the burgeoning public health cost, these retailers do remain law-abiding tax-paying businesses. These are Australian businesses, employing Australians. And while the ultimate public policy objective, through education, excise and regulation, remains consistent, this does not mean that small businesses should face the added burden of aggressive competition from a criminal black market in illicit tobacco. Clearly we need to increase our efforts to not just stall the growth of smuggled product but cut into it as deeply as possible with tougher laws and more rigorous controls at the border via new agencies, such as the Tobacco Strike Team recently established by Australian Border Force.

That's one task, but it's not the only one, because a second layer of activity in relation to excise avoidance is now also in play, with illegal onshore tobacco cultivation making something of a comeback. In March last year, a crop worth $11 million was discovered in New South Wales near Cooma. In March this year, 4.2 tonnes of tobacco leaf and 12 acres of crop were discovered near Ballarat in Victoria. In April, in the largest cross-agency investigation that that Australian tax office has been involved in, a $60 million operation was discovered in the Bundaberg region in Queensland. There are many other examples, but that sample is indicative of the fact that the profit motive for criminals intent on avoiding their liability to pay excise duty has grown domestically as well as internationally, in lock step with the increase in tobacco price.

In a 2015 report, the Australian Crime Commission suggested that organised crime syndicates are deeply involved in this multibillion dollar racket because the rewards are great and, currently, the risks are slight. The very clear likelihood—the inevitability, you could say—is that this sort of activity is going to increase unless it is checked by tougher laws and more rigorous activity by our border and tax authorities.

This bill involves giving Australian Border Force personnel improved tools for dealing what has proved to be a significant problem in prosecuting smugglers at the border under the current form of the Customs Act. The act requires that, in order to lay the groundwork for a prosecution, knowledge or intent by principals to avoid excise-equivalent customs duty is required. Experience has established that proving such knowledge or intent to the level necessary for a successful prosecution is extremely difficult. Indeed, it is nigh on impossible in the face of people who are well-trained agents of, typically, highly organised crime syndicates, with a fine understanding of the fact that the Australian law requires extremely high levels of proof.

The bill therefore amends the Customs Act. The Customs Act will be changed to reduce the onus from knowledge or intent to avoid duties to one of recklessness, whereby perpetrators will be culpable for what is a lesser offence if it is established that their involvement with the importation of illicit product was undertaken with a reckless attitude towards whether duty was intended to be paid or not.

Other linked measures are contained in a separate bill, the Treasury Laws Amendment (Illicit Tobacco Offences) Bill, which was introduced into the parliament on 15 February. That bill eases one of the biggest problems that officers of the Australian Taxation Office have in prosecuting matters around illicit tobacco when it is discovered beyond the border. A current requirement of the law is that officers must be able to determine whether the product they are dealing with has been produced domestically or overseas to establish whether the issue is one of customs duty or excise evasion. That is a requirement that has also proved extremely difficult to establish. Attempts have been made to analyse samples to establish whether their origins are local or international to settle that question, but such is the nature of tobacco plants that that has proved impossible. Lack of cooperation from those being investigated, or their lack of knowledge, can stymie authorities on the spot. The Treasury bill therefore removes the need to establish origin. What will have to be established is a reasonable suspicion that either customs duty or excise duty has been avoided, whatever the actual source of the product.

This is an important battle and these are important bills in that context. At stake is an improvement in life expectancy for a significant number of Australians. At stake is the massive health bill that this significant number incur. Also at stake are billions of dollars in revenue that should accrue on behalf of taxpayers but is currently going to criminals and often to well-organised crime syndicates that channel their gains to help finance even further crime. Destroying this criminal enterprise completely may be beyond us. Nonetheless, doing all we can to minimise it remains our key responsibility, and it's for these reasons that I commend the bill to the House.

Mr TIM WILSON (Goldstein) (12:29): I would like to continue on from the contribution of the member for Fairfax, an excellent contribution no less, to this important discussion around the Customs Amendment (Illicit Tobacco Offences) Bill 2018. The basis of my short remarks is to support the bill and the spirit and the intent in which it seeks to achieve its outcome in the context of existing law, because I do have broader concerns about the operation of the regulatory framework and the way in which we engage with this product—tobacco—and the consequences it has in fuelling the illicit trade.

Illegal tobacco threatens the safety and health of our community and the viability of local business operators, and the measures in this bill will arm customs officers, Border Force agents, with the tools to fight organised crime and their illegal tobacco trade. I don't dispute its objectives, and they're very good ones, and that's the basis upon which I will be supporting this bill. But we also cannot forget part of the reason we are in this situation. It is because of the measures that we have taken to date and what they have done to fuel the illicit trade. I was not in this parliament at the time these matters were considered, but had I been I would have raised my deep reservation around, particularly, some of the ways that we sought to tackle the challenges around illicit tobacco, as well as the incapacity, or the inability, to address some issues that we confront today.

From 2013 to 2016, Australia's smoking rate fell by a dismal 0.6 per cent. This came off the back of a long period of reform to try and reduce the consumption of tobacco. In many cases, I support those measures. As somebody for whom tobacco contributed to the early death of three out of four grandparents, I believe strongly in tackling these issues. But we made a series of questionable judgements in the past. The first is the constant increase in tax rates and excise on tobacco. This makes it a more desirable product because the cost basis of production is becoming increasingly distant from the price of consumption. That gap, or the consumer surplus that grows with the increase in the tax rate, means that it becomes a more desirable product for organised crime, because the margins that can be secured from engaging in the trade are considerable. And that will not change. So long as we keep the excise at the rate that it is we will continue to encourage illegal gangs and those engaging in ill means to engage in the illicit tobacco trade. But we've doubled down on that by not just increasing the tax rate, increasing the consumer surplus and increasing the desirability and attractiveness of this trade by increasing the tax rate; we have also increased the desirability of this product by making it interchangeable.

A couple of parliaments ago this parliament introduced plain packaging legislation in the Commonwealth of Australia. And what was the consequence of plain packaging? It took a product that was already of high value and had a high consumer surplus and said, 'Now it is interchangeable, indistinguishable.' That's the whole point of plain packaging legislation—to take a product and remove its branding so consumers can see no difference, while at the same time increasing and ratcheting up the price. So, its desirability goes up, it's capacity to be engaged in counterfeiting and illicit production increases even more dramatically, as do the benefits of illicit trade. This is the fundamental problem with this approach to dealing with issues around tobacco regulation. You're actually fuelling, or at least increasing the risk of fuelling, the illicit trade, mostly to the benefit of criminal gangs. That's what comes out very clearly in different pieces of research and reports. We know that illicit consumption is up. We know the illicit trade is up. We know that the loss to government revenue continues to increase, year on year, and it's aided and abetted by the measures that have been consistently applied by previous parliaments.

The challenge for us, if we want to cut tobacco consumption—and I do—is to introduce measures that actually help cut consumption, reduce the desirability for criminal gangs to be involved in the trade and to take advantage of the consequences of our legislative arrangements, and look at measures that work. We actually did an entire inquiry, in the Standing Committee on Health, Aged Care and Sport, on the legal accessibility of e-cigarettes and vaporisers and the legalisation of vaping as an alternative to smoking. What the data showed from these reports, looking at international research and the experience of other countries—even when I was in Manchester only recently speaking to health officials—is a very clear and consistent message. People did not think that vaping was necessarily the best measure that they would like to see. They'd rather see people quit, as would I. If they don't quit, particularly those stubborn lifelong smokers, then in the absence of that finding a harm reduction alternative is incredibly important. Vaping fills that critical and important gap. That is so much so that, as I learned when I was in the UK recently and spoke to health officials in Manchester, they now actively promote it as a measure to help reduce people's consumption and behaviour in light of the circumstances. So we put that against the backdrop of what we've been doing in tobacco, which is making it more profitable and more substitutable for criminal gangs, but we haven't then gone on and said that we should support the measures that we need to make sure that we can actually cut smoking rates.

I have to say that I have real concerns about the framework of the approach that many people are taking in this policy space, because it's not actually cutting smoking rates. It is rewarding criminals. It's not helping the consumers. It's also not helping, of course, one of the critical bases on which we have been told we have to support various bits of legislation, which is to increase government revenue to offset the consequences of tobacco consumption. Sadly and tragically, this approach that we have taken, for which we have sometimes been extolled internationally for being a world leader, is being adopted everywhere else. That isn't to say that there isn't a role for tax as part of disincentivising people from consuming tobacco. That's true, and that is a critical part of what we need to do, because there are some people who do have an inelastic approach and do need that incentive. But it would be foolhardy to say that it has not gone to quite incredible extremes in recent years. As I said, when you overlay that with the issues around plain packaging, you see the same consequences. We know that other countries have followed suit and followed us. Despite extolling the virtues of the plans around these policies, the UK, Ireland, France and New Zealand have, frankly, had deeply questionable outcomes, as we have, in the efficacy of these policies.

Of course, when we talk about the efficacy of these policies, yes, we're talking about things like government revenue. That's an impact, but the real impact is on human lives. Sadly, there are too many health sociologists parading themselves as public health officials who would rather keep supporting bad ideas they've come up with and taken ownership of than do the right thing and change the laws to enable people to have a pathway to reduce their consumption and hopefully move towards cessation.

I would hope that this parliament takes note. I would hope that this parliament seeks to consider other alternatives to reduce tobacco consumption in Australia and to improve the livelihoods, the health and the wellbeing of Australians who are caught in the trap and curse of tobacco consumption and nicotine addiction. That is why I am a proud supporter of people being able to access vaporisers and vape legally, not just with vaporisers but also with the capsules. If you want to introduce a policy framework which actually cuts tobacco consumption, that is the pathway in which you do it, on top of constraining and suffocating the criminal gangs who engage in taking advantage of the consequences of the laws we now have on the book. The consequences of the laws are the increase in the price of a product, the increase in the consumer surplus and the increase in the gap between the production and the consumption and the price, which makes it a very profitable industry for those who want ill-gotten gains. The measures we have taken have also made it a substitutable product, which has only exacerbated the already existing problems of that regime.

That's why I support this bill, because ultimately it works to empower and enable those Customs officers to do what they need to do to suffocate that trade. But that trade can be supported in its suffocation by reducing demand from consumers, because people no longer see the advantage of engaging in tobacco consumption and see the advantage of alternatives as a pathway to at least harm minimisation and hopefully cessation. If we do that, we would have a healthier, happier, longer living nation of people, with reduced dependence on nicotine addiction.

Mr Hawke: Tell us a bit more about that, would you? Keep going. Give a bit of a recap!

Mr Tim Wilson: I know I'm not alone in supporting this important issue in this parliament. I know a number of other members have spoken very directly about the importance of reducing tobacco consumption, some on the other side of this parliament and some on this side of the chamber as well. I know that there are other members who have been steadfast, dutiful and loyal to the pursuit of trying to reduce consumption, like the member for North Sydney and the member for Bowman, who support me on the quest to try to remove the barriers that stop people from getting off tobacco and onto alternatives, particularly vaporisers. I congratulate them for their efforts, their leadership and their courage in standing and doing the right thing. I wish I could see many more people stand up and follow their leadership on this important issue.

In the same way, I'd like to see an honest assessment of and honest reflection on the challenges we face in the tobacco consumption space and a proper consideration of the laws that are already on the books. I remember that back in the day when legislative arrangements around plain packaging were introduced, people said it was going to deliver all these wonderful things. But the truth is that consumption largely stagnated. It didn't actually have that effect, but we've gone on and extolled its virtues all around the world, mostly to fan the notoriety, professionalism and awards showered on the former health minister. But has it actually delivered the outcome? It's a classic problem that many people, including people like Milton Friedman used to argue, which is that you shouldn't judge a policy on its intent, but on its outcomes. When you judge a policy on its intent and not its outcomes, this is the situation you end up with—

The DEPUTY SPEAKER ( Mr Rob Mitchell ): Member for Goldstein, don't bang the desk any more. Enough! You've previously been warned by the Speaker.

Mr Tim Wilson: It's the passion I feel for the topic.

The DEPUTY SPEAKER: It is not appropriate behaviour in the chamber.

Mr Tim Wilson: This is the consequence when you judge a policy on its intent and not its outcomes: you have a ballooning illicit trade, which is to the benefit of those people who, let's face it, are the scum of the earth—organised gangs and those who seek to take advantage of the legislative arrangements and work the consequences of legislation and regulation to their own commercial benefit. I would have thought that people in this parliament would look at that situation and say, 'It is a travesty.' We have, of course, seen this before. If we go back to the prohibition movement in the United States in the 1920s, unsurprisingly, people produced products at a low price but were able to charge high prices because of their seemingly illicit and illegal nature. What occurred, of course, was that people found ways to profiteer and to make enormous benefits out of it for their own personal gain. And, frankly, they left a trail of human tragedy and misery behind them; but that did not concern them, hence I use the expression 'scum of the earth'.

That is the problem that we continue to face in this policy space. That's why we have to reflect very seriously on our policy objectives and what we're seeking to do in terms of achieving them and implementing them. We know that where there is a regulation that is unjust or has some sort of exceptional consequence, particularly for an interchangeable product, there is a way around it. There has been a long tradition of this. I used the example going back to the prohibition movement, where people found justifications to continue their consumption of alcohol. Some people used to shroud it in the environment of their faith and that they needed it as part of their access to faith. But, more critically, even people who were trying to do the right thing and comply with the law found ways around it—like people selling hops, barley and water and putting warning signs up: 'Warning, if you mix these ingredients then you will break the law and create beer.' That's how people got around it and took advantage of the legislative arrangements. Those are the sorts of lessons we should learn from and not repeat.

Mr TAYLOR (Hume—Minister for Law Enforcement and Cyber Security) (12:44): I'd like to thank all honourable members for their contributions to this debate on the Customs Amendment (Illicit Tobacco Offences) Bill 2018, including and particularly the contributions of the members for Fairfax and Goldstein and the other members who made their contributions. As those members well know—indeed, as some of them have raised it with me on prior occasions—criminals who profit from the trade in illicit tobacco undermine the government's strategies to promote good public health outcomes and they threaten the viability of law-abiding local business operators.

This bill enhances border and law enforcement agencies' ability to investigate and prosecute the illegal importation of tobacco and supports the new illicit tobacco offences contained in the related Treasury Laws Amendment (Illicit Tobacco Offences) Bill 2018. Together these two bills establish a comprehensive set of offences targeting the importation, possession, purchase, sale and production of illicit tobacco. The amendments will make it easier for the Australian Border Force and the Australian Taxation Office to investigate and prosecute criminals who are involved in the illicit tobacco trade, regardless of its origin, whether smuggled or grown domestically. New offences will allow enforcement officers to target a wider range of participants in the illicit tobacco trade and will enable our courts to impose severe fines and lengthy prison sentences on criminals who engage in deliberate and highly calculated defrauding of the Australian public.

The framework the government seeks to legislate is backed up by our commitment to over $70 million in funding to the ABF-led Illicit Tobacco Taskforce in the 2018-19 budget. Together with its predecessor, the Tobacco Strike Team, the Illicit Tobacco Taskforce has seen considerable operational success since its establishment, including as recently as last weekend. Last financial year the ABF detected more than 240 million cigarettes and 217 tonnes of tobacco at the border. Worth over $356 million, it evaded duty that would otherwise have belonged to the Australian taxpayers, the Australian public. While it has been illegal to grow tobacco in Australia for over a decade, since July 2016 the ATO has seized 231 tonnes of illicit tobacco, worth an estimated $194 million in forgone tobacco duty.

The Turnbull government is committed to stamping out the trade in illicit tobacco and disrupting the serious and organised criminal groups that profit from it. On that note, I commend the bill to the House.

The DEPUTY SPEAKER ( Mr Rob Mitchell ): I thank the minister. The original question was that this bill be now read a second time. To this the honourable member for Blair has moved an amendment that all words after 'That' be omitted with a view to substituting other words. The immediate question is that the amendment be agreed to.

Question negatived.

The DEPUTY SPEAKER: The question now is that this bill be now read a second time.

Question agreed to.

Bill read a second time.

Mr TAYLOR (Hume—Minister for Law Enforcement and Cyber Security) (12:48): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Mr FITZGIBBON (Hunter) (12:48): I will begin by formally moving the amendment distributed in my name, and I understand that it will be seconded by the member for Lingiari, and I thank him for that. So, I move:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House notes that the Turnbull Government has failed to ensure that the collection of levies and charges which are directed to our agriculture-based research and development corporations enables a greater effort to improve the take-up of the best and latest farm management practices, particularly in light of the current drought crisis".

I've deliberately moved that after giving it some thought, for very important reasons. Obviously the opposition will be supporting the bill before the House. This is about the third attempt by this government to get what is a fairly simple change in the legislation. It's a very significant change, but very simple in legislative terms. It should not have been so difficult. In fact I think the first time I spoke on a bill related to these changes was in March 2016. The government clearly was unable to have the legislation passed through the parliament before the July 2016 election. Then we had another go after the election and that bill secured passage. On both occasions, during the debates I warned that there were real and meaningful concerns about the lack of protections around the way in which levy payer information might be shared with third parties. One of the things that this bill does is give greater confidence that that assurance has now been forthcoming, although I do note that in the Senate committee report there are some ongoing concerns, particularly around the excessive use of delegated executive power rather than enshrining some of these measures in legislation. But these are very difficult to fix from opposition. We will let this bill go through in its current form and give the system an opportunity to work and to work well.

I want to highlight two points. I'll return to them both. First of all, our research and development corporation structure, its architecture and the way it operates is in need of review. The second point is that I think it is wrong and inappropriate for us to be speaking on agriculture matters in this chamber at this point in time without having a conversation about drought. As the Prime Minister said yesterday, we are certainly in the worst drought since the 1960s and, if we don't receive meaningful rain in the not-too-distant future, we will almost certainly be in the worst drought in the history of European settlement. Many farmers are hurting, and hurting badly, along with their families. At this point in time it should be a priority for this government.

It disappoints me again that there are no members of the government speaking on this bill. I see the member for Calare in the House. He may be on chamber duty or he may be a late addition to speak on the bill; I'm not sure. But this is not just today; this is now a trend. Week in, week out, in parliamentary sittings, I find myself in here talking to my colleagues. That is wonderful and fine, because they all have a deep and abiding interest in matters to do with agriculture and are certainly concerned about the drought; but I never see any speakers on the government's side. What is the explanation for this absence? You could come to many conclusions. I like to think they haven't abandoned the agriculture sector—surely not. It's such a substantial part of our national economy. I suspect they're just a bit shy about coming in here these days to try to defend the record, behaviour and lack of achievement of this government. I remember that just after the 2013 election it was quite the opposite. Because they had so many members of the National Party, for example—I concede that a number of Liberals represent regional seats—they'd be in here en masse wanting to talk about agriculture policy and the issues impacting upon agriculture. But these days they don't turn up at all. It's very curious. I think they're just embarrassed. I don't think they want to be in here defending the Turnbull government and its record, particularly in the agriculture sector—another matter I will return to. For five years we've had lots of talk about the agriculture sector being the fifth pillar, I think it was, of our economy, but all we have is a failed white paper and a pedestrian response to drought, notwithstanding the fact that we have been alerting them to the issues for up to five years now, but I'll return to that.

Throughout the course of this week a number of people have announced that they're leaving this place at the next election, and it makes one think about the reason we are all here. I'm sure that without exception we are all here to make a difference, to make Australia a better place. Most of us arrive here having chosen a political party as our vehicle, and we choose the party which is most likely to achieve the things that drive us. You always have to be cautious about trying to summarise it, but I think it's fair to say that it's as simple as this: we're here to expand the economy; to make sure that everyone gets a fair share of the dividends of that growth; to ensure that every Australian, regardless of their background or economic position in life, has the best opportunity to capitalise on a strong Australian economy; and to give a hand up to those who slip through the cracks for whatever reason—be it prejudice, poverty, disability or any other form of disadvantage, we as a parliament are there to ensure that they too have an opportunity and to help them get there.

After more than 30 years I still very firmly believe—in fact, I know—that I chose the right party in the Australian Labor Party. I have no regrets. I think it's fair to say that Labor's achievements in government have been many: in education and the expansion of higher education in particular to all Australians, not just those with the biggest credit cards; in workers' rights, one of the key reasons for our existence; in building social justice and equality; in correcting the wrongs of the past through our response to the Mabo case, for example, and former Prime Minister Kevin Rudd's apology to the stolen generations—the list goes on and on. In the eighties and nineties the Australian Labor Party opened up and made the Australian economy more competitive, putting us on a path to 27 years now, I think, of unbroken economic growth, building a resilience which allowed us to go through the global financial crisis without technically going into recession. They are big achievements, and all of us on this side are proud of them and like to talk about them.

Amongst those many achievements of the eighties and nineties was one that doesn't rate too many mentions and deserves to be mentioned far more—that is, under former minister John Kerin, the establishment of our current agriculture based research and development corporations. In all parts of our economy we can't hope to be competitive and to meet all our aspirations in future decades ahead if we haven't fully embraced and adopted research and innovation, and agriculture is no exception. What was somewhat unique around the world about the research and development corporation structure John Kerin put in place was its co-funding model. In other words, the government took the view that, to maximise effort, it was appropriate for taxpayers to match levy payer contributions under that research model up to a certain gross value—I think it's 0.5 per cent—of the sector involved. Back then, and still today, we have 15 agriculture based research and development corporations across the various commodities: Meat & Livestock Australia in the red meat sector, Dairy Australia in the dairy sector, the Grains Research and Development Corporation in the grains sector—the list goes on. Four of those remain statutory research and development corporations—in other words, tightly controlled by the government under legislation—and the balance of them, 11, are now industry-owned organisations. All of them do a wonderful job. The Kerin model lives on today and lives on very, very effectively. However, 30 or more years on, it's time to revisit that model to ensure that levy payer money and taxpayer money is being spent in the most efficient and effective way in each of those commodity sectors and in terms of the contribution they make to the Australian economy.

That was certainly the view of the government of the day in 2011, when it commissioned a Productivity Commission report into the agriculture based rural research and development corporations. I have the report with me. It should be compulsory reading for anyone with an interest in the agriculture sector. It's a comprehensive report, and it identified back then that there were ways in which we could make that model even better, because obviously, over that considerable period of time since 1991, the economy and the world have changed so substantially. It could be taken as a criticism of the former Labor government that, having reported in 2011, we didn't embrace any of the changes recommended either, but I think most people would fairly appreciate that there was a very limited time between the tabling of this report and the September 2013 election. But this government has had five years to have a think about this report, and the only thing we've seen in terms of adjustment of that model are the measures that we're talking about today. Again, while I think they are important and Labor supports them, I hardly think they are revisiting in a full review the RDC system and how it operates.

The bill makes a number of changes that will ensure improvements to the collection and reporting of agricultural levies and charges to ensure better consistency between the legislation and industry changes. The bill also makes improvements to the effective operation of levy payer registers. I will focus on that point for a few moments. As I said, the last time the government attempted to get this bill through the parliament, I made the point that, surely, people listening to the debate would be surprised that levy payers, whether they be cattle producers or grain growers, pay their levies to the Australian government, which then passes them on to the relevant research and development corporation. But the part that would really surprise people is that the research and development corporations still don't know who their levy payers are. These are organisations which are focused on their commodity sector, and there are many of them. The 15 RDCs I mentioned strike 130 levies collected across 77 commodity sectors. They look at their sectors, and their job is to ensure that farmers, growers and producers have available to them the very best in research and innovation and that that innovation is getting inside the farm gate down on the ground where it really can make a difference. But RDCs don't know who their levy payers are, which I think is somewhat surprising, because if you don't know who they are, you're not necessarily well placed to have a proper dialogue with them. These amendments will allow that opportunity, but, more particularly, they are about making sure that that information isn't inappropriately shared with third parties, and that's the issue I raised on the last two occasions that I spoke to this bill. Hopefully, these amendments put in place the changes that provide the necessary protection. Data and information like that, as you know, is quite a valuable commodity these days, and our right not to have that information shared is very important as well. Again, while this is not a big change to the model, the changes will be important if they are properly implemented.

I return to drought and, more generally, lost opportunities in the agriculture sector for the course of the past five years. I note that in the Prime Minister's speech—I think it was in his last speech and certainly in the Prime Minister's speech yesterday—he made reference again to this aspiration that Australian agriculture will be valued at $100 billion by 2030, I think it was. I think it's important to have aspirations and goals, whether they be exercise goals—losing weight—or whatever it might be. Goals can't hurt. But I think $100 billion is somewhat modest. I think we can do better than that, if we try harder—and we should strive to do better than that. In fact, $100 billion would just leave us on the same trajectory we've been on for the past 10 years, if you rely on the ABS stats.

We can do better than that, but it won't happen magically. It will require ongoing hard work by those who work in the production of our food and fibre. It will also require smart guidance from government—something that's been lacking over the course of the past five years. In fact, over the course of the past five years there has been no guidance. We waited very patiently for an agriculture white paper, and when it finally came it was a dud. That's something that I think is generally accepted in the agriculture sector now. You won't hear too many saying it publicly, but when you talk to the sector's leadership and to growers and producers on the ground, that's what they say all the time. Expectations were raised, and they were deflated as a result of that white paper. It's never referred to now. In fact, when the now Prime Minister, Mr Turnbull, launched the latest document, spruiking the aspiration of $100 billion by 2030, I thought it was an admission on his part that the world had moved on, that the agriculture white paper was no longer of any use to the sector and that it would provide no guidance and provide nothing special to help us go beyond those aspirations.

That takes me to drought: I talked already about how bad the drought is, and it is certainly very, very bad. Is there a role for government? Yes, there certainly is. Is there a limit to how much government can do? Yes, there certainly is. Governments can't make it rain. But there are important things for government to do. The first, of course, is to ensure that those who, for whatever reason, just haven't been able to manage the severity of the drought have an income support payment for them and their families when things get tough. You can prepare for some droughts—many droughts, very bad droughts—but you can't necessarily prepare for the worst of the droughts. And there will always be those who, through no fault of their own, have been unable to work their way through a protracted drought period.

But there's another important point to that. It's why, when the COAG ministers entered into an intergovernmental agreement in 2013, they said, 'Yes, there should be a welfare payment'—I shouldn't say 'welfare payment'; I meant to use the right description, which is income support payment—'but it should be limited,' so that people have three years to work their way through their situation. And if, through no fault of their own, they haven't been able to adjust sufficiently to make their farm enterprise viable, then it might be time to do something else and to liquidate their assets. The important part of that, of course, is that there were supposed to be other measures taking place, other guidance from government, throughout the five-year period of the intergovernmental agreement, which would have helped farmers build that resilience and that capacity to make the decision to stay. But that work hasn't been done.

So, what happens? The government takes the clumsy, lazy policy way out and says, 'Oh, we'll just extend it for another year.' Well, we support extending it for another year. The drought is very, very bad, and that support is desperately needed. But it's not a policy solution to an issue that we will continue to confront for decades to come. We have to accept that the climate is changing; it's becoming more challenging. Those on the other side want to argue about what is causing it. I'll let them go. Interestingly, Minister Littleproud said on Q&A last Monday night that he didn't care what was causing it, which I thought was a curious approach. They can have that argument, but they should at least embrace the precautionary principle and accept that if there's a case to be made that human activity is causing the climate to change for the worst, we should act. So mitigation is step one. The second step is adaptation. If the majority of the scientists are right and the weather will only continue to get more challenging, we need to assist farmers to adjust to that situation.

Let me give the government a rap, as it will please the member for Dawson. There are two components to this. I won't dwell on the positive for too long, member for Dawson, because it won't take me long. There are two components to this. First, we need to give farmers the incentives that they need to invest in infrastructure: water infrastructure, irrigation infrastructure and fencing, et cetera—

Mr Christensen interjecting—

Mr FITZGIBBON: I'll take the interjection from the member for Dawson. He says dams. They talk about dams in a generic sense. We never know whether they're talking about on farm dams, off farm dams, off river dams, catchment dams—

Mr Christensen: All of them.

Mr FITZGIBBON: All of them he says. I said to the member for New England, 'Scrap all the COAG approaches to long-term drought reform,' because he was just going to build a dam. I said he'd never build a dam and he never did. Now he's sailed off into the sunset—

Mr Christensen: We did.

Mr FITZGIBBON: The member for Dawson said he did. He's talking about the augmentation of Chaffey Dam, which was a Labor government initiative. It was all but finished when the now member for New England was elected in 2013. I say to the member for Dawson: who do you think you are talking to when you make these claims? If you are talking to the farmers and the people who live in New England, they know that is rubbish. It does your credibility no good telling porkies around the electorate and taking credit for projects you had no control over and can take no credit for.

But this government did do a few things. They improved accelerated depreciation for farmers on water infrastructure, smaller projects on the farm that might help them build resilience, and Labor supported those. In fact, our Australian investment guarantee now expands that proposition. And they made some adjustments to the farm management deposits scheme, which is a scheme that allows farmers to put money away in good times to draw down at a concessional tax rate in tougher times.

I should reflect there on Minister Littleproud, who has tried to make the focus of the drought debate his most recent changes to FMDs. That is, putting some pressure on the banks to provide offsets between the FMDs and their debt, and that's fine. But guess what, most of the farmers who are struggling don't have money in FMDs. It's axiomatic. They don't have money in FMDs, so don't make FMDs the focal point of your drought response, because it is not the answer. It's about as good an answer to building catchment dams, which is a 19th century solution to a 21st century problem. The member for Dawson should know better.

The next thing is the way in which farmers approach their business model and, in particular, how they farm the land. This is not new. We've known for a long time that European farming methods—the overapplication of fertilisers and other methods—have been bad for our landscape. This is where we should never talk about farmers generically, because many, many farmers embrace the latest science based farming methods, but not sufficient are. This is the area where this government has done absolutely nothing in five years, and worse it abolished the COAG committee designed to progress it. We're now five years behind the times in what could become the worst drought we've faced. But it's not too late. It's not too late to accept that the climate will continue to change and become more challenging, and that we need to improve the uptake of adaptation and the embrace of the best and latest farming methods—whether it be cell grazing, whether it be the planting of trees, whether it be work on lifting the carbon levels and other organic matter levels in our soil so that we can retain more moisture in our soils. I say to the member for Dawson: we can retain more moisture, improving the carbon levels in our soils, than we can do building dams, and we can do it more cheaply, certainly more quickly, and certainly with less adverse impact on the environment—certainly.

I now go back to the first tranche: income support. We've been saying for 4½ years now that Farm Household Allowance is not working for many, many farmers. In fact, my colleagues will recall my asking the member for New England a question on this in this place back in 2014, because we were very concerned it wasn't working, that it wasn't reaching farmers. And what did he do? He embellished. He deliberately gave an incorrect answer and then decided to doctor his Hansard, which led, very sadly, to the dismissal of his departmental secretary, because his departmental secretary had the temerity to challenge the minister, because he was drawing his professional and dedicated public service into the mire.

The key point here is that we've been saying this for more than four years, and it still isn't getting fixed. We welcome the change to the assets test and we welcome the supplementary payment for those already on Farm Household Allowance. But we have seen little sign that it's going to be any easier to secure Farm Household Allowance. The big black hole of Centrelink and the paperwork appear to be very much still in place. That model has not changed. Until it does, farmers and farming families will continue to struggle to secure it.

This is a debate about our research and development corporations. I have challenged the government to return to the COAG model and to work out how we get a better uptake of the best and latest science based farming methods. We have reflected on this for a long time, because it is hard to get more innovation rolled out onto the farms—there are at least 80,000 of them and they are spread geographically across the continent. There are organisations that are already doing it to an extent, and they are called our research and development corporations. The grain growers have their GrowNotes—the messages that go out to the growers on the latest and the best information, whether it be on genetics or soil health. MLA does something similar. Dairy Australia does these things.

But it's nowhere near enough, and that's why I announced a fortnight or so ago that a Labor government would better-utilise the research and development corporations. We would ask them to come together through the Council of Rural Research and Development Corporations and lead and mobilise a much greater effort, both on furthering the science but more particularly on getting the innovation down onto the farm. They have the resources, they have the people, they have the experience, and, as we were talking about today, through the levy system they have this special relationship with growers and producers. In my view, all they need is some guidance from government. It is not that difficult. But if they are going to do it most effectively, we need to ensure that the more than $300 million of taxpayers' money they receive to do this work is being spent most effectively and most efficiently. That also goes for the money that comes from levy payers.

That is why we need a broader review of our research and development corporations. It is not to give them less money—no, no, no. It is to make sure that the money they receive from both the taxpayers and the levy payers is spent in the best possible way, producing the best possible outcome for both our growers and producers and also for the Australian economy and the Australian people.

The DEPUTY SPEAKER ( Mr Rob Mitchell ): Is the amendment seconded?

Mr Zappia: I second the motion and reserve my right to speak.

Mr BRIAN MITCHELL (Lyons) (13:19): I just want to give fair warning to the whips, who may be listening: I don't propose being on my feet for the full 10 minutes, but I did want to follow the shadow minister, the member for Hunter, to emphasise the importance of the amendment to this bill. The Primary Industries Levies and Charges Collection Amendment Bill 2018 itself is fairly unremarkable. The role of RDCs is supported by both sides of the House. The shadow minister quite eloquently described how important they are in terms of providing expert advice on agricultural policy to the government. As he said, we need to make sure that their expertise is properly utilised, and he's proposed a way forward on that.

I wanted to get to my feet today to talk about the shadow minister's second reading amendment. It is an important amendment to this bill, because, if you turn on the television anywhere in Australia today, it's drought-affected New South Wales and Queensland that are right there in full view. This country arguably has never seen a worse drought. Thousands and thousands of families are affected by it. Millions of Australians have responded with donations, as is the Australian way. We've seen convoys of hay and feed making their way to these drought-stricken farmers. This parliament has a duty to do all that it can to ensure that farmers in regional communities are supported in their time of need, so it's disappointing that the bill before the House today fails to ensure the collection of levies and charges that are directed to our agriculture-based research and development corporations, enabling a greater effort to improve the take-up of the best and latest farm management practices, particularly in light of the current drought crisis.

We need to get serious as a nation about encouraging farmers to employ the best and latest farm management practices. That includes—it must include—a focus on climate change, which arguably poses the greatest threat to farming in Australia today. I note the member for Dawson interjected earlier, saying, 'Stop it? How are you going to stop climate change?'

An honourable member interjecting—

Mr BRIAN MITCHELL: He should. We don't pretend to be godlike on this side of the House. We don't think we can stand in the way of climate change. I think that time has passed. All the scientific evidence is that climate change is upon us. It's not something in the future; it's upon us now. We need to manage its impact as best we can. Climate change is affecting farmers right now. You talk to farmers. They know these changes are not just part of the cyclical weather patterns that we see from season to season. These are permanent changes to the climate. The climate in Australia is getter drier and it's getter hotter. You talk to firefighters who go out every day during summer to fight blazes, and they'll tell you: the fires are hotter and more frequent than they used to be. And the firefighters are not going out just in summer anymore; they're going out all through the year. So we need to address climate change. It's not some sort of voodoo science, some sort of conspiracy of the Left against those on the Right; it's a scientific fact. Ninety-seven or 98 per cent of climate scientists in the world agree. It is real. You need to face up to the fact that climate change is real. It's impacting farmers and it's impacting agriculture in this country, and, unless we face up to this reality, we're going to be behind the eight ball every day of the week. I wanted to get to my feet to briefly discuss that, because I think this second reading amendment is very important in addressing this point.

There was a piece in The Conversation last year titled 'Australian farmers are adapting to climate change'. This is true. We on this side of the House have had briefings from farmers who want policymakers in this place to get serious about climate change as it pertains to agricultural policy. They don't see this as some sort of inner-city issue; they know that climate change is affecting them on the land. Rising temperatures caused global wheat yields to drop by around 5.5 per cent between 1980 and 2008, and the effects in Australia have been larger, as a result of major changes in rain patterns. Talk to farmers in New South Wales and Queensland. It's winter. The paddocks are normally green this time of year. There's dust—dust in the middle of winter! You can't bury your head in the sand on this issue. You can't say that you care about farmers, that you care about the impacts of and addressing drought, unless you're serious about addressing climate change. They go hand in hand.

Labor does support the bill. We think it needs to go further. I think this government's most, not famous, but most well-known contribution to agriculture policy to date has been the release of the member for New England's book, Weatherboard and Iron. That's perhaps what most people would associate with agriculture policy from this government. Certainly the white paper on agriculture came and went with nary a whisper. I think they were too embarrassed by that document. On that note I will conclude. I thank the House.

Ms PRICE (Durack—Assistant Minister for the Environment) (13:25): I'd like to thank those members for their contribution to the debate. The Primary Industries Levies and Charges Collection Amendment Bill 2018 will improve the collection and reporting of agricultural levies by allowing the acts of intermediaries to be clarified under the legislation. The bill further supports the operation of levy payer registers, including by protecting the privacy of levy payer details. It allows the secretary to impose conditions on an approval to disclose levy payer information to third parties. It allows revocation of an approval if conditions are breached and permits reconsideration and review of such decisions. It also provides for the collection of commodity-specific information if needed for levy payer registers. The amendments also allow the publication of statistical information about levies and charges to allow primary industries to make informed decisions about their levies. An efficient and effective levy system will support producers in managing their levy investments for profitable, sustainable industries. I commend the bill to the House.

Question negatived.

Original question agreed to.

Bill read a second time.

Ms PRICE (Durack—Assistant Minister for the Environment) (13:27): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Dr LEIGH (Fenner) (13:28): It is hard to think of a government that has been as hopeless on multinational tax avoidance as this one, a government that has blown so much hot air about its record on multinational tax avoidance yet done so much behind closed doors to defend multinational tax loopholes. While this government is cutting health spending and education spending, it wants to give $80 billion in corporate tax giveaways to the biggest firms, including $17 billion to the big banks. When we look at multinational profit shifting, we have a government that is defending tax havens at every turn, that is defending tax-shifting behaviour, that is unwilling to crack down on the debt deduction loophole that is currently allowing multinationals to shift profits offshore.

Labor's policies on this have been clear, consistent and strong. Since the beginning of our first term in opposition, we've outlined a package of measures that would close debt deduction loopholes and crack down on inappropriate behaviour by multinationals. Labor believe that multinationals should pay their fair share of tax. We don't believe they should be exploiting loopholes that are not available to regular small businesses. Mums and dads can't turn around in their small corner shop and say, 'We're just going to use a debt deduction loophole.' No, that's not available to them.

The DEPUTY SPEAKER ( Mr Hogan ): The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour, when the member for Fenner will be able to speak in continuation.

The SPEAKER (15:12): I present the annual report of the Australian National Audit Office for 2017-18.

Ordered that the report be made a parliamentary paper

Mr TAYLOR (Hume—Minister for Law Enforcement and Cyber Security) (16:14): I move:

That the amendments be considered immediately.

Ms BUTLER (Griffith) (16:14): Labor opposes the amendments. Labor is very concerned about the Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018 as a whole. We voted against it last time it was before the House, because of the reduction in the repayment threshold for higher education contributions. We think that this is another example of the Turnbull government's war on young people. We've just heard this week of young people going without food while they're studying at university.

This government seems to be making it harder and harder for people to get a higher education. They've tried to cut university funding every single opportunity that they have had throughout the entire period that they've been in government since they were elected five years ago. They originally tried to implement a 20 per cent cut to public funding for universities and a reduction in the HECS repayment threshold. They then tried to make it a 7½ per cent cut, plus an additional cut on top of that. That also failed in the Senate. Then, last year, what did they do in MYEFO? They implemented a $2.2 billion cut to university funding, and that is being felt on university campuses around this country.

Why does this government have such a problem with higher education? Why is this government seeking to find ways to cut higher education funding every time it gets the opportunity, and why does it seek to make life harder for students and people who have recently been to university? Make no mistake: that's what this bill does. HECS, the Higher Education Contribution Scheme, was supposed to be an income-contingent loan scheme, because it purported to represent the private value of higher education.

The DEPUTY SPEAKER ( Mr Hogan ): I call the minister. The question is that the amendments be considered immediately.

Mr Taylor: Mr Deputy Speaker, the amendments haven't been moved yet. I wonder whether we should move them.

The DEPUTY SPEAKER: I take the point. We might get to where the member for Griffith can address that.

The SPEAKER: The question is that the amendments by the Senate be considered immediately.

The SPEAKER (16:27): I understand that it is the wish of the House to consider the amendments together.

Mr TAYLOR (Hume—Minister for Law Enforcement and Cyber Security) (16:28): I move:

That the amendments be agreed to.

Ms BUTLER (Griffith) (16:28): It's important that we acknowledge that two tranches of amendments are being considered together: the first tranche by the government is to change some of the timing in relation to the implementation of these measures, and the second tranche that had come from the crossbench relates to loans fees in respect of the HECS arrangements and the FEE-HELP arrangements for certain table 2 institutions.

Labor will oppose both sets of amendments. Obviously they're being considered together. We are very concerned about the continuation of the coalition's war on young people. This is yet another example of this government trying to make it harder for people to get a higher education and trying to make it harder for people who are on low incomes to be able to get by. This is a government that doesn't care about the housing affordability crisis facing young people in this country. They absolutely do not care about the fact that young people are finding it harder and harder to get a quality education. It's not just the $270 million that was cut from vocational education in this year's budget. There was also $2.2 billion cut out of universities in MYEFO alone last year. This is yet another example of the war on young people. The government is now seeking to decrease the point at which people make a higher education contribution. This is an attempt to make people who are worse off pay HECS, even though they are demonstrably not receiving a private benefit from their higher education.

The purpose of HECS is for people to make a contribution in recognition of the private benefit they receive. How much private benefit is someone getting from their higher education if they're on 42 grand a year? How well off is someone on $42,000 or $45,000 a year? What do you think you're doing with these changes? You are making it harder for people to get by. You're making it harder for young people, particularly, to get by. We don't know, on this side of the House, why you hate young people so much. We don't know why the Turnbull government is so, so determined to make it harder for people to get a higher education.

Since the government were elected in 2013, they have taken every opportunity to attack the higher education sector. There was the 20 per cent public funding cut that they tried to bring in in the 2014 horror budget. They failed to get that through. Then there was the 7½ per cent funding cut plus an additional funding cut on top of that last year. They failed to get that through. They finally got through their $2.2 billion cut administratively, bypassing the parliament, in MYEFO, and now they're making a further attack on our university system and on young people, reducing the threshold so that people who are earning very low amounts of money have to start making an additional contribution to the Commonwealth government because they had the temerity to get above their station and go to university.

We know how the other side feels about us and the people that we represent going to university, because the Prime Minister has told us. The Prime Minister looked over at our side and said, 'Look at you people; you all went to university, ' as if having a higher education is something that we should be ashamed of. But we are proud of the fact that so many of us on this side of the parliament are the first in our family to go to university. Our parents might have left school at 15. Our grandparents might have had to live in a tent during the Depression. Our parents and our grandparents might have come from very, very working-class stock. But our parents worked hard and they helped put us through university. We understand aspiration on this side of the House. You lot like to talk about it. We like to demonstrate it. We are the living embodiment of it. That's why we'll stand up for students. That's why we'll stand up for people who go to university.

What do you think this bill is going to do to someone who goes to work for a charity, for a community legal centre, in a low-paid occupation? Do you think there's going to be an incentive to work in the community sector? Why would people do it? They're already going to take a discount on wages. Why would you punish them further by taxing them, by making further higher education contributions required so that you can just gather a little bit more money from them, even though they're working in that lower paid occupation?

Well, we won't stand for it. We'll stand up for aspiration. We'll stand up for people who want to go to university. We'll stand up for low-paid working people, because they deserve champions, and they will have them in this place as long as Labor is here. We will stand up for working people, and that includes people who went to university. It also includes vocational education. It also includes making sure that we do something about housing affordability. This government might be waging a war on young people, but young people will always have a voice in the Labor Party. The young people of Australia, who are this nation's future, will always have a voice. That's why we'll fight so hard on climate change. That's why we'll fight so hard for funding for vocational education and we'll stand up for public TAFE. That's why we'll always fight your cuts to university funding. That's why we'll always stand up against your cuts to the pension. And that's why we will oppose these amendments and this bill, because this bill punishes young people and it punishes lower paid workers—and you should be ashamed.

Ms PLIBERSEK (Sydney—Deputy Leader of the Opposition) (16:33): We don't agree with these amendments and we don't support the Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018, because it is one more example of this government's vandalism when it comes to education. This is a government that, just before Christmas, cut another $2.2 billion from our universities, not by taking it through the parliament and allowing us on this side to make clear our opposition to these university cuts but by pushing it through in the midyear economic update, just before Christmas—a $2.2 billion cut. All this government has done is make it harder for young Australians to get a university education.

And what do we want? We want every young Australian to have the opportunity, if they're prepared to work hard and study hard, to get a great education—at university, at TAFE; it doesn't matter. But we know that most jobs of the future will require one of these. They will require either a university education or a TAFE education, and this government is wrecking both. It is wrecking universities, making them harder to afford and harder to attend, and it is wrecking TAFE, by ripping billions out of vocational education, apprenticeships and traineeships, including hundreds of millions in the last budget alone. We know that many Australians are already turning their backs on a university education because they just can't afford it. This week, just days ago, we heard that one in seven university students are regularly going without food, because they can't afford to study and eat.

I was speaking today to one of our major universities that says that a large proportion of the homeless young people in their city are university students who haven't got a place to live. We saw an article this week in The Conversation about young women in particular trading sex for accommodation, including students who were doing this. What are we doing to our young Australians that we are making it so impossible to make ends meet to invest their time and their energy in a university education that gives them hope for the future?

It is incredible that we are asking young people on lower and lower incomes to pay a larger share of their income, repaying their debt sooner. We know who this hits hardest. It hits people in lower paid jobs harder, because they will be spending a disproportionate amount of their income, that should be covering necessities, on repaying their education sooner. We know that most of these people will be women. These measures disproportionately affect women, and Labor has said so all along. Sixty per cent of all Australians with a HELP debt are women and two-thirds of the Australians impacted by these changes will be women.

Of course our investment in education as a nation benefits the people who get the education. But those students, when they graduate, we hope go on throughout their professional lives to earn well and repay their debt—not just their HECS debt but their broader debt to society. Through their increased taxation as their wages increase they are supporting other young Australians to get a university education. Investment in education doesn't just benefit the individuals who receive the education; it benefits our nation. We know that Australia cannot be a wealthy and successful nation when we continue to cut university funding, as those opposite have done, and cut access to university education, as those opposite have done, by freezing university funding.

Our investment in university education has a substantial economic return. Just today, we saw another report, commissioned by the Group of Eight universities—I think done by London Economics—saying that in 2016 $12 billion was spent on their universities and $66 billion was returned in economic growth through that investment. Research, discovery, innovation and learning—the economic activity of the people who are working to supply the universities, particularly in our regional communities—makes a huge difference.

Mrs ANDREWS (McPherson—Assistant Minister for Vocational Education and Skills) (16:38): I rise to speak on these amendments. There are two points in particular that I would like to make. Firstly, I support the amendments that will be before us, and potentially discussed in a little bit more detail shortly.

What I would like to say is that I am particularly keen to support the amendment that deals with the removal of the loan fees from students of the table B providers. In particular, that affects one of the universities in my electorate of McPherson on the Gold Coast—that is, Bond University. For some time I have worked with Bond University, with the Vice Chancellor, Professor Tim Brailsford, and with students at the university for the removal of the loan fees. It has been a contentious issue. I have fought long and hard to have those fees removed, so I'm absolutely delighted to support that amendment today.

The other point that I would particularly like to make is in respect of vocational education. Let me start by saying that we are most definitely the party that is going to produce the results in the vocational education field. When Labor were in government, they absolutely decimated the sector. I've said before and I will say again—and I will continue to say it—that Labor, when in government, brought vocational education in this country to its knees. They did that by significantly reducing employer incentives in the vocational education space, and apprenticeships in particular. Under the former Labor government, the number of apprentices that we had in training dropped dramatically. When I speak of apprentices, I am, of course, speaking of Australian apprenticeships, which include apprentices and trainees. This government has put $1.5 billion on the table to increase the number of apprentices that we have in training.

There are clearly some strong target areas that we need to look at, and we're working with a number of states. There are five states and territories that have signed on to the national partnership agreement: New South Wales, South Australia, Tasmania, the ACT and the Northern Territory. We are continuing to work with them on the projects that they will be implementing to improve the number of apprentices that we have in training, not just in the coming year but for four years in total under the national partnership agreement, because this government recognises how important apprentices are to the future of Australia. So we'll be working with the states and territories in some targeted areas. We're certainly going to be looking at health, at ageing and at the disability sector. We'll also be looking at manufacturing, and we'll be looking at agriculture. We will work with every single state and territory to make sure that we are addressing the skills shortages that currently exist in this country and will continue to exist unless urgent action is taken.

So, when I say that we are the party that will stand up for vocational education, I can assure you that we have got the runs on the board, and we will continue to do that. It was just recently—maybe six weeks ago or maybe eight weeks ago—that one of the key stakeholders in the vocational education sector said to me that, for the first time, they can see the green shoots in vocational education, because, after such a long time in the darkness under Labor, we are now seeing some significant gains being made in that space. There is clearly more work to be done, but we have done a lot already to clean up the nightmare that we were left with when we took government.

Apprentices are and will continue to be our target into the future, but we will continue to look holistically at education. I've said before in this place that we see education as a highway where you can start with early childhood and you can go through schools, you can go into vocational education and you can go into higher education. We will continue to strongly support education in this country to make sure that everyone has the opportunity for a quality education.

When we talk about education, one of the things that we must be mindful of at all times is ensuring that the education that we are providing to our young people, not just at school but through vocational education and in higher education, is of a high quality and that those coming through higher education or vocational education are, in fact, job ready and have the skills that industry is crying out for. This is what this government stands for: high-quality education at universities, at schools, in vocational training and in our early childhood centres. So what we will do is continue to take up the fight to make sure that our children in Australia have the opportunity for an ongoing high-quality education.

Ms BIRD (Cunningham) (16:43): Young people across this nation must look at this government and think, 'What did we ever do to you?' This government is trading off the future of young people time and time again across significant portfolio areas, making it more and more difficult for them, and it comes into this place with a bill like the one before us, which adds to that burden.

Young people in my community—and, I'm sure, the communities of many of my colleagues across the board—are facing challenges in getting, firstly, into post-secondary education opportunities. We know the impacts of the freeze on higher education funding and what that will do to universities and the offerings that they can make to students. We know that that will put pressure on them to decrease the opportunity to get a university qualification if that's where your interests and your ability lie.

I have to say I really admire the assistant minister's capacity to try and spin a good story out of what has been the devastation of the vocational education sector on the government's watch. She consistently says that this government is a serious friend of vocational education, but you've just got to look at the figures—the massive drop in the number of people undertaking vocational education, the huge decrease in the number of apprentices and trainees. It's like they've got one little lifeline that they cling to in this space, so the assistant minister constantly raises the fact that Labor cut back the employer incentives for traineeships—not for traditional apprenticeships. That was because there was a misuse of traineeships going on. If the government are critical of Labor's ensuring integrity in the provision of apprenticeships and traineeships, which is what we did with those changes, then I can only assume that they don't have any interest in the rigour and integrity of the system.

Only a couple of weeks ago, I was meeting with people involved in the TAFE sector about their concerns about the impact on diploma enrolments at TAFEs across the country—across electorates, like my own—as a result, to a significant extent, of the changes that the government has made around the VET FEE-HELP loan arrangements. They're causing a real problem. We know that diplomas are right in that sweet spot where a lot of future career opportunities are going to lie. A lot of people, particularly those retraining or re-entering the workforce, and young people straight out of school, will go and do their certificate-level courses in areas where there's going to be huge job demand—aged care, child care, disability care—and then seek to add a diploma onto that. But we've seen a massive drop-off in diploma enrolments, something the government just doesn't have an answer for. It's the same with apprenticeships: there are over 140,000 fewer apprenticeships on their watch. If, as the shadow minister says, there was a problem with what Labor was doing, why have the government been digging the hole deeper? They haven't put in place a policy that has arrested, let alone reversed, that trend. And so, as we've seen, for young people across the board, post school, the pressures are mounting.

Then let's add in the cost of housing. I've had many young people, under 30, say to me, 'I don't think I'll ever own a home.' This is what young people say to you now. They're struggling to pay rent because the market is so competitive for them. So they've got those cost burdens on them. Then they're trying to support themselves while they're studying. Let's not even get into the incompetence—how long it takes to get youth allowance processed and actually get payments coming into your bank account. I've heard stories of people who are entitled to youth allowance going a whole semester with no income. Then the government say, 'We'll get rid of their penalty rates,' if they've got a job that they work on a Sunday so they can actually make ends meet. 'Yes, we'll get rid of those too.' Then, just to top it off, they bring this bill into the parliament and say, 'Even though you're earning as little as $42,000,' which is not a lot of money—as the shadow minister said, the idea of HECS is to pay it back when you're reaping the benefits of that investment; on $42,000, you'd be lucky to be keeping your head above water—'we're going to rip into you and take some money from you now.'

It is no wonder that young people will be looking at this government, asking: 'When are you going to give us a go? When are you going to give us a future that we can look forward to?' And I haven't even touched on policy areas such as climate change or health—talk to young people about private health insurance. This government is completely out of touch with young people's needs.

Mr STEPHEN JONES (Whitlam) (16:48): We do not agree to these amendments. We do not agree to these amendments, and the reason is this: a few moments ago, the Prime Minister and his entire frontbench got up and walked out of the chamber, turning their back on this debate just as they are turning their back on the young people of Australia. They are turning their back on the young people of Australia. Make no mistake about it. From a government which has lectured Australians and the Australian Labor Party on the need for tax cuts, what this policy represents is a tax increase on young people at a time in their lives when they can least afford it.

They are making it harder for students to get into university by increasing the tuition fees that they pay and by reducing the funding that is available to universities to support new students. They are making it harder for students to stay at university through a whole mix of policies, which the member for Cunningham has now just gone through. The fact is that it is harder for a young person to keep a job and to ensure that they're earning enough from that job, because of penalty rate cuts and because the jobs are not paying enough to keep pace with the cost of living increases. They are making it harder for them to get into university and stay in university, and they are making it harder for them to pay their debts once they have left university. That is why young people around the country are asking, 'What has this government got against us? They are loading us up with debt and making it harder and harder for us to meet those expenses when we leave university.' They have got nothing in their policy swag for the young people of Australia.

This is just part of the suite of education policies which are having a pernicious impact on young Australians. It goes hand in hand with the $17 billion worth of cuts to school education. These people over here think it is more important that we give big banks a $17 billion tax cut than it is to give a struggling public school or independent school assistance with their teaching, assistance with their school facilities and some additional funding to help struggling students meet their education needs now and into the future. It also comes hand in hand with their cuts to TAFE. I'm reliably informed that there are in excess of $3 billion worth of cuts to the TAFE system. So it's harder to go to school and harder to go to university. What are your options? Vocational education, generally. But this mob over here, with their born-to-rule attitude, are making it harder to get into TAFE as well by ensuring that they are cutting funding for TAFE and ripping the guts out of the vocational education system, with $2.2 billion worth of cuts across the vocational and higher education system.

The people of Australia deserve better than what is on offer from this government. There used to be a time when the Prime Minister used to lecture Australians about the importance of being a smarter country. He used to tell us about how all Australians had an obligation to ensure that we pulled together and became a smarter country. You can't become a smarter country if you're ripping the guts out of the school education system, if you are ripping the guts out of the university system and if you are ripping the guts out of the vocational education system.

he message to the Prime Minister, the message to all of those backbenchers who are feeling very, very nervous indeed after the last round of by-elections, is to come back to this place and reject these amendments. They have a choice. They can stand by their Prime Minister and go down the gurgler with their Prime Minister or they can stand up for their electorates. They can stand up for the young people in their electorates and reject these amendments, reject the cuts to the vocational education system and the school education system, and say quite clearly to their Prime Minister, 'We do not support the tax cuts to big business or the $17 billion giveaway to big banks. Let's invest that money into schools, universities and the vocational education system. Let's put our priorities where they should be.' It's in the young people of this country. Not the big banks, not the big corporations. Let's get our priorities right. We can't become a smarter country if we're doing dumb things like this.

Ms MADELEINE KING (Brand) (16:53): I too do not agree with these amendments that we see before us today. It's a rotten day when you have to stand here in this parliament and defend higher education and the opportunities available to young people in this country. This should be a non-partisan matter. What happens to this country when we stop supporting higher education and stop supporting universities and the students that attend them, day in and day out, to get themselves a better life? This should be non-partisan. Why is it that the Liberal Party always pick off the low-hanging fruit? The low-hanging fruit for them is universities.

There are a number of universities around this country. I'm proud to have worked for one for about 10 years, at the University of Western Australia. It's where I learnt so many things. I was also an undergraduate there. Like many people on this side of the House, and I'm sure on the other side of the House, I'm the first in my family to graduate from a university. I was a state schoolkid—I went to Safety Bay Senior High School—and I've got to say, in speaking for the first time at the despatch box as a shadow minister, I'm very proud to have been a state schoolkid and to be defending higher education and universities in this country.

As I said, I worked at the UWA for many years, and I've had a lot to do with the five universities in my state: Curtin University in Bentley; Murdoch University in South Street, close to my electorate and the member for Tangney's electorate—I don't see him speaking against the cuts to Murdoch University, which is desperately in need of good, adequate funding to help its research program; Edith Cowan University; and the private university, the University of Notre Dame Australia. The poor public universities need this funding to help the young people of Western Australia. A $2 billion cut to their income, to the competitive grant that they get, which is an effective freeze on places for Western Australian students in Western Australian universities, is denying Western Australian young people the opportunity to go to university.

This government has no idea how the university sector is funded. We heard the Minister for Education and Training, Senator Birmingham, cry about the rivers of gold that he thinks universities have inherited over the last couple of years through the demand-driven system. What the demand-driven system did was allow more people—young people who would never have thought university was accessible to them—to go to university. That's what the demand-driven system, introduced by the Gillard government in this place, brought to the young people, to all people, of Australia—greater opportunities to go to university. And what does the current minister for education, Senator Birmingham, have to say about it? He calls it 'rivers of gold'. Well, go tell that to a vice-chancellor who has to spend several millions of dollars of their annual income trying to maintain things like, I don't know, libraries, museums or expensive art collections that they don't necessarily collect themselves but which have been gifted to them by people that are generous benefactors. They are great gifts to universities. These are some of the things universities have to maintain.

What should we have? Should we have 100-year-old institutions just crumbling to the ground so that these rivers of gold can go elsewhere? Why do the government ignore the fact that there's a cross-subsidy between research and education in this country? The reason we have a research-teaching nexus in universities in this country is so students who attend universities as undergraduates can learn from the best researchers in the country and in the world. That is of great benefit to all of us. The members on this side spoke about the Prime Minister's ridiculous and empty innovation agenda. We saw where that went. Where did it go? It just popped up, we had a nice couple of graphics that whirled around for a while, and then it all petered out. Do you know where the real innovation is happening? It's where the actual science is happening, and that's in universities. It is done by students, research students as well as undergraduate students, and their lecturers.

The bill we see today, which is going to bring down the threshold for when students have to pay back their HECS and HELP fees, is going to deny more people access to the greatest kind of education you can get. It's an amazing opportunity that this government are seeking to deny young people. It's an outrageous attack, and a continual, persistent and consistent attack, on young people in this country. The government just keep piling on the pressure on young people. They won't do anything about housing affordability. Oh, no, they won't do that. They won't do anything about penalty rates. Most young people are working in pubs and bars to try and make ends meet while they're at university, but they won't do a thing about penalty rates. Instead, the government are just going to make it harder for vulnerable people, for people from low-SES areas to go to university. That's a crying shame, and they should be ashamed of themselves.

Mr HART (Bass) (16:54): I rise to speak on the amendments to the Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018. I thank the member for Brand for her contribution. She quite rightly paid particular attention to the fact that this Orwellian treatment—so-called sustainability—of higher education is in some way supporting the university sector and supporting the ability of people to go to university and advance themselves in life. We know, on this side of the chamber, that this represents the most grievous attack not just on the universities but also on young people and people in the regions.

I have the pleasure to represent—as does my friend the member for Braddon—Northern Tasmania, an area which historically has underperformed. There has been a lot of economic analysis as to what it is that holds back Northern Tasmania and Tasmania as a whole. Of course, the fact that the Tasmanian economy has significantly underperformed the equivalent economies even in regional Australia is something that has been the subject of economic analysis. One of the theories underpinning this is the fact that educational attainment, in particular higher educational attainment, is not keeping pace in Tasmania. So what we need is not less support for higher education and the higher education sector in areas like Northern Tasmania and other regional communities throughout Australia but more.

The important thesis is that average incomes in the regions are significantly below those in urban communities. We have better educational attainment in the urban communities, while the regional parts of states, particularly in a state like Tasmania, suffer from lower educational attainment. And in the cities we see a greater representation of people who have graduated with higher degrees. It is reasonable to suggest that investment in education—not denying investment in education—is the way this parliament should proceed. We know, on this side of the House, that investment in higher education and education generally is an investment in the economy in the long term. This government, as I've said previously, has a one-point plan for the economy in Australia—a one-point plan which involves shovelling $80 billion worth of money out the door, in particular to the big banks.

We know there's a better way to proceed. We know it's not coincidental that the amount of money that is being invested in the tax cuts for the big banks is roughly the same that is being denied to education.

Mr Laming: It's a conspiracy!

Mr HART: Thank you to the member for Bowman. He should know a conspiracy when he looks at it. The important thing is that the Labor Party, this side of politics, has recognised that investment in education is important, particularly for regional Tasmania. That's why, during the 2016 federal election campaign, we committed to the university transformation project in Northern Tasmania. We committed to the fact that we need to improve educational attainment in Northern Tasmania. We want to see higher education with better numbers of students graduating from university, higher incomes and higher productivity, particularly within the Tasmanian economy. Every small business in Northern Tasmania should aspire to the fact that they will have better productivity by paying their highly educated workforce more and, of course, improving the economic performance of their business.

Now, there is no doubt that people recognise that universities represent a significant opportunity for economic growth. Recent studies suggest that the mere presence of higher numbers of university graduates in an economy significantly drives employment not just within the graduate cohort but within the wider workforce. What's the response of this government? The response of this government is to make it more difficult for people to attend university or, if they do attend university, they'll have a higher education debt, which they'll pay off earlier, because this government simply don't see our young people or our people in regional Australia having the opportunity to get ahead. We know that regional Australia, regional economies and the other states throughout Australia need this investment in higher education. It's vitally important that we push back, that we reject these amendments and that we reject this legislation. Thank you.

Mr HILL (Bruce) (17:04): I want to echo what has already been said about the appalling impacts of the substantive provisions of the legislation to lower the thresholds and make young people repay their education debt earlier—but I'll touch on that in a moment. At the outset, I want to call out the appalling process that the government has gone through, which has been almost an abuse of the House. We have debated a version of this legislation twice at length. Sloppily reheated seconds came back when the government couldn't get the first go through, so they thought, 'We couldn't get $42,000 through; we'll try $45,000.' They shunted that off to the Senate. They read the writing on the wall that it was going to again fail in the Senate and die where it should've, and at the last minute they've cooked up a dodgy deal with the crossbench, which the House has not been briefed or advised on. We haven't had a moment to reflect on what it actually means. It's an appalling way to make education policy.

From what I've been told there is a second amendment. We are debating two amendments concurrently, and the debate so far has focused quite rightly on the awful impacts on young people in our communities, but the other amendment, which we're being told we have to debate and vote on concurrently, relates to extending loans to table B providers for private universities and removing loan fees for these institutions. That may be a good idea. I understand that Labor has an open mind to this. This is exactly the kind of issue we would publicly and transparently consider with consultation in a proper, grown-up policy process. All the government muppets who ran away from this debate are going to wander back in, stick their hands up and have no idea what they're actually voting on. In fact, hardly anyone in the House has any idea what we're voting on, because the government has done some dodgy deal with Senator Bernardi in the other place.

I don't understand the policy impacts or arguments around extending loans for table B providers for private universities. The extension of the loans in the system may have some value, but we have said that, in government, we would consider it in our national inquiry on post-secondary education, where everyone can have a say. It's probably old-fashioned, with the government's approach to making policy and legislation, to actually allow members to understand what they're voting on and put the detail in front of them; nevertheless, I think it is important that the House understands that we're voting on two very different things, one of which has never been part of the government's legislative proposal and has never been considered or debated in any sense by this House.

With regard to the other provision, the government's latest attempt to make life harder for young people, we hear from those opposite that lowering the repayment threshold, the income at which young people will be forced to repay their education debts, doesn't really matter, because it's just $5 or 10 bucks a week, not a lot of money. It might not be a lot of money to people in here—to those opposite, who just awarded themselves a tax cut worth $7,000 when it fully rolls out—but $5 is a lot of money to people in my community, to students struggling to make ends meet and put themselves through university while the government opposite cuts their penalty rates. On behalf of young people in my community I don't accept that $5 or $10 is a just little bit of money; it is significant.

I have to speak up on behalf of my electorate. During the last campaign I doorknocked more than 12,000 houses over 18 months and asked people, 'What matters most?' The No. 1 priority that kept coming back was education, whether I was talking to a young person thinking about their future, a grandparent worried about their grandkids, or a parent worried about how their kids are going to get to TAFE or university. Most particularly, migrants, who come to this country seeking a better life for their kids, have a laser-like focus on education. In the electorate that I've been proud to represent almost 60 per cent of people are born in another country. They come here, work hard and look for education. This bill takes us in the wrong direction. It makes it harder for young people to get into university.

When you think about our partners and friends in Asia—our competitors in the coming decades—the OECD and everyone else say we should invest in two things: infrastructure and education. A smart country would be lowering barriers to education so that the brightest kid from the poorest family can have a chance to go to university. That was part of my family story. My mum left school at 15 in Footscray. Her family could not afford the uniforms to go to a school that offered year 12. My father, on the other hand, had the opportunity to pay his way through university. He failed a bit and just kept paying. That was seared into my consciousness: every kid, no matter their circumstances, should be able to go to university.

The SPEAKER: The question is that the amendments be agreed to.

Mr COLEMAN (Banks—Assistant Minister for Finance) (17:19): For the information of members, I present a replacement explanatory memorandum to the Primary Industries Levies and Charges Collection Amendment Bill 2018, responding to concerns raised by the Senate Standing Committee for the Scrutiny of Bills.

Mr GOODENOUGH (Moore) (17:19): On behalf of the Parliamentary Joint Committee on Human Rights, I present the committee's report titled Human rights scrutiny report: report 7 of 2018.

Report made a parliamentary paper in accordance with standing order 39(e).

Mr GOODENOUGH: by leave—Of the new bills examined in report 7, 12 have been assessed as not raising human rights concerns as they promote, permissibly limit, or do not engage, human rights. To complete its technical assessment of compatibility with Australia's international human rights law obligations, the committee has requested further information in relation to 10 bills and legislative instruments.

Of these bills and instruments, I would like to highlight four instruments made under the National Disability Insurance Scheme Act 2013, which relate to:

the resolution of complaints about national disability insurance scheme (NDIS) providers;

incident management systems for NDIS providers to record reportable incidents;

the disclosure of information by the NDIS Quality and Safeguards Commissioner; and

the conditions of registration for NDIS providers that use 'regulated restrictive practices' in delivering NDIS support.

As outlined, these instruments raise a range of issues relevant to the human rights of people with disabilities. Consequently, the committee has requested further information from the minister as to the human rights compatibility of these instruments, particularly regarding the scope of various measures and the adequacy of safeguards to protect human rights.

Chapter 2 of the report contains the committee's concluded examination of 10 bills and legislative instruments. It includes the committee's concluded examination of five park management plans made under the Environment Protection and Biodiversity Conservation Act 1999.

In relation to these instruments, the committee has sought further information from the minister as to whether the measures engage and permissibly limit the right to freedom of expression on the basis that they provided certain restrictions on media reporting. The minister's response contained additional information which enabled the committee to conclude that, while certain measures in the plans do limit freedom of expression, they are nevertheless likely to be compatible with this right, because they are sufficiently circumscribed and are only as extensive as necessary to achieve a legitimate objective. This illustrates the constructive process of liaising with legislation proponents to identify relevant information in order to assist the committee in its assessment of legislation.

I encourage my fellow members and others to examine the committee's report to better inform their consideration of proposed legislation.

With these comments, I commend the committee's Report 7 of 2018 to the chamber.

The DEPUTY SPEAKER ( Mr Howarth ) (17:23): The Speaker has received advice from the Chief Opposition Whip nominating a member to be a member of the Standing Committee on Employment, Education and Training.

Mr COLEMAN (Banks—Assistant Minister for Finance) (17:23): by leave—I move:

That Ms Sharkie be appointed a member of the Standing Committee on Employment, Education and Training.

Question agreed to.

Dr LEIGH (Fenner) (17:24): For the avoidance of any doubt, I will move the second reading amendment that has been circulated in my name, which I understand the member for Parramatta will second when I have concluded my remarks. I move:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House notes the Coalition’s failure to close multinational loopholes and its failure to improve tax haven transparency".

Labor supports the Treasury Laws Amendment (OECD Multilateral Instrument) Bill 2018, which contains amendments to the International Tax Agreements Act to give force of law to the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, known for convenience as the multilateral convention. The multilateral convention is a tax treaty that enables jurisdictions to quickly modify their bilateral tax agreements to give effect to internationally agreed tax integrity rules and to improve dispute resolution mechanisms. The proposal was announced by the government on 8 June 2017, at which point they announced that Australia had signed the multilateral convention and that they would introduce a bill to give the convention the force of law in Australia. The measure is estimated to give an unquantifiable gain to revenue over the forward estimates.

The multilateral convention is just one of many action items in the OECD's and G20's base erosion and profit-shifting strategy to coordinate global action against tax avoidance and minimisation strategies by multinational firms. The project was initiated by the G20 in 2012 and is headed by the OECD. Although Australia has adopted many of the multilateral convention's articles, it has not agreed to article 10, an anti-abuse rule for permanent establishments situated in third jurisdictions, also known as tax havens. It has not agreed to article 12, the artificial avoidance of permanent establishment status through certain arrangements, despite an earlier Treasury paper indicating that Australia would adopt this article.

So, Labor are left in the position where, while we support the bill, we haven't received a clear indication from the government as to why they aren't supporting article 10 and article 12. Given the government's lack of action on multinational tax avoidance—in particular, their lack of action on tax havens—we're particularly concerned about the government's failure to agree to article 10. So I want to note now that the failure of the government to provide a clear rationale for not signing up to these two articles means that a future Labor government would use the resources of Treasury to explore the ramifications of not signing these two articles and consider whether or not that question would be revisited by a future Shorten Labor government.

Once the multilateral convention enters into force for Australia—and subject to the entry into force for the relevant partner jurisdictions—it will have the following impacts on Australia's existing tax agreements with partner jurisdictions: first, in respect of withholding tax on amounts paid or deemed to be paid by a nonresident on or after 1 January, occurring on or after the latter date of entry into force of the multilateral convention for Australia and the partner jurisdiction; second, in respect of other taxes levied by Australia in relation to income profits or gains of any income year beginning on or after six months after the latter date of entry into force of the multilateral convention for Australia and each of its relevant partner jurisdictions; and, third, in respect of the mutual agreement procedure and mandatory binding arbitration, generally the latter date of entry into force of the multilateral convention for Australia and each of the relevant partner jurisdictions.

The Joint Standing Committee on Treaties recommended that parliament ratify the instrument, but I would draw the House's attention to the additional comments from Labor members and senators where they said that the committee process was 'constrained by inexplicably vague information provided in evidence from Treasury', relating to some revenue details.. The only non-Treasury submission to the committee process was the Tax Justice Network's. While overall supportive of parliament ratifying the instrument, they noted disappointment that the government had chosen not to support articles relating to tax havens. It's our understanding that if the bill isn't passed by the government's intended time frame of this month then a year of implementation would be missed. As such, Labor can assure parliament of our support for the expeditious passage of this bill through the other place.

As we debate in this place the issue of multinational tax avoidance, we do so in the broader context of my second reading amendment, noting that many of Australia's largest firms have paid no tax for the past few years. While inequality is high and rising and while this government has been cutting health funding and education funding, its priority still remains an $80 billion tax cut to big Australian firms, $17 billion of which goes to the big banks.

We know that Australia is missing out on billions of dollars in tax revenue due to the government's failure to act on tax loopholes. Labor has a clear and costed plan and clear proposals on improving tax transparency, so the Australian people can see more tax being paid by multinationals and garner a clearer picture of exactly how multinational tax avoidance is affecting the public coffers. Labor has proposed public reporting of country-by-country reports which could help stem the flow of missing money. But we've seen from this Treasurer an unwillingness to close the loopholes. Corporate profits have soared. Australia's company tax rate is only in the middle of the G20 pack, and we now have the example of the United States, whose corporate tax cut has not flowed through to a significant increase in wage growth.

Despite all of that, the government remains wedded to a big-business tax cut. They talk a big game on multinational tax, but their ads, in many cases, have cost more than their measures have actually raised. They've spent more on patting themselves on the back over multinational tax avoidance than they've raised through attempting to close loopholes. They were walking around claiming that their multinational tax laws had clawed back some $4 billion in multinational tax revenue—a claim which unravelled when it was revealed that the revenue was for tax years prior to the commencement of the government's multinational anti-avoidance law and their diverted profits tax. On 22 August 2017, the Minister for Revenue and Financial Services claimed that, of that $4 billion 'about $2.9 billion came from just seven companies alone'. Labor legislation was being applied in all seven cases cited by Minister O'Dwyer. Specifically, the cases involved Labor's Tax Laws Amendment (Countering Tax Avoidance and Multinational Profit Shifting) Bill 2013 and the Tax Laws Amendment (Cross-Border Transfer Pricing) Bill (No. 1) 2012. The coalition voted against these bills in both houses.

That wasn't an isolated fib. There was extraordinary chutzpah from the Turnbull government when they tried to claim credit for the Australian tax office's victory over Chevron in the Federal Court by claiming their own piecemeal tax measures were 'working'. On the day of the Federal Court decision, Treasurer Morrison tweeted:

Chevron will pay more than $300m to the ATO proving the govt’s program of tax avoidance funding and new measures is working.

The thing that he didn't tell his Twitter followers was that he voted against the very laws which secured that judgement against Chevron. If Treasurer Morrison had had his way, if the parliament had gone the way he voted, then those laws wouldn't have got up, and the Chevron decision wouldn't have gone through, because, in 2012, the coalition voted against the then Labor government's Tax Laws Amendment (Cross-Border Transfer Pricing) Bill (No. 1) 2012. The Treasurer voted against it. The Minister for Revenue and Financial Services voted against it. Yet, when that very bill was used to secure a judgement against Chevron that improved the budget bottom line and slightly reduced the debt blow-out that is occurring under this government, the Treasurer and the minister for revenue didn't issue a mea culpa. They pretended to the Australian public that it was their laws which had secured that judgement. Their reason for voting against that 2012 loophole-closing bill was a claim that the law was retrospective, but, in reality, that law simply clarified the operation of our tax laws and made sure multinationals couldn't exploit loopholes.

What we've also seen is that, as well as misrepresenting their own votes, the government have misrepresented Labor's votes. They've said that Labor voted against the multinational anti-avoidance law—a simple mistruth. Labor never voted against the Multinational Anti-Avoidance Law. What they may be confusing is Labor's voting against a dodgy deal between the Liberals and the Greens to water down tax transparency in Australia and take two-thirds of the private firms out of the tax transparency net by raising the threshold for tax transparency disclosure. I've got to say that, when I'm on my street stalls, I'm not besieged by constituents saying to me, 'The real problem is we have too much tax transparency in Australia!'

When we first came towards the first reporting deadline, we saw a farrago of confused excuses from this government as to why we oughtn't have tax transparency. They said it was a form of red tape. They said it would create security concerns, raise the kidnap risk for those running private firms, while later admitting that they had received no advice on kidnap risk from security or policing agencies, leading one tax expert to describe the purported kidnap risk as, 'The stupidest excuse for non-disclosure', that he had ever seen.

From this government we've seen an attempt to hide the truth from the Australian public about what big firms are paying. We've seen an attempt from this government to mislead the Australian people about their own record on multinational tax avoidance and about Labor's voting record in this place. Labor knows what needs to be done. We'll continue to lead the debate on multinational tax avoidance. If the Turnbull government were serious about tax fairness, it would adopt Labor's plan to close tax loopholes and crack down on tax evasion.

Labor's plan includes tightening debt deduction loopholes used by multinational firms, improving the budget by billions of dollars over the medium term. Labor's plan involves introducing public reporting of country-by-country reports, which is high-level information about where and how much tax was paid by large corporations—those with over $1 billion in global revenue.

Labor's tax plan involves providing protection for whistleblowers who report to the Australia Taxation Office on entities evading tax. Where whistleblowers information results in more tax being paid we would see them collecting a share of that tax penalty. It is not a radical idea, one which exists in an analogous form in the United States at the moment, and one which would ensure that we get greater compliance with our tax law.

Labor's multinational tax plan includes introducing a publicly accessible registry of the beneficial ownership of Australian listed companies and trusts. That will allow everyone to find out who really owns our firms. Shareholders shouldn't be able to use complex structures and sham ownership to avoid complying with corporate transparency rules. Yet, the government has explicitly said that while at some point in the undefined future they might do something about a beneficial ownership register, it won't include trusts. That beneficial ownership register itself is nowhere in sight and the government is devoting paltry resources towards introducing it.

Labor's multinational tax plan includes introducing mandatory shareholder reporting of tax haven exposure. If companies are doing business in a tax haven then they must disclose to shareholders that activity as a material tax risk. We would guide companies on which jurisdictions carry a material tax risk through a tax haven blacklist. Labor's multinational tax plan includes appointing a community sector representative to the Board of Taxation, ensuring community sector voices are heard in tax design and review processes. Labor's multinational tax plan includes introducing public reporting of Australian Transaction Reports and Analysis Centre data and requiring the annual public release of international cash flow data. Our plan would require government tenderers to disclose their country of tax domicile if they're bidding for government contracts worth more than $200,000. Those with particular tax domiciles wouldn't be ruled out, but we believe that it's appropriate that, if a firm is headquartered outside Australia, the Australian taxpayer is aware of where that tenderer is headquartered for tax purposes.

Labor's multinational tax plan develops guidelines for tax haven investment by superannuation funds. Those guidelines will be developed by the Australian Taxation Office in collaboration with the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority. Labor's multinational tax plan would require that the Australian Taxation Office's annual report provide information on the number and size of tax settlements. Finally, Labor's multinational tax plan would deliver more tax transparency by restoring the original tax transparency thresholds. When Labor enacted tax transparency laws, under then Treasurer Wayne Swan and Assistant Treasurer David Bradbury, we had in place a $100 million threshold for both public and private firms. In a dodgy deal between the Liberals and the Greens political party, this was raised to $200 million for private firms. That had the effect of taking two-thirds of the private firms out of the tax transparency mix. While the Greens have belatedly backflipped on this, supporting our private senator's bill to restore a lower threshold for reporting, the government eventually gagged debate when that bill was returned to the House. If the government really cared about transparency, if they really cared more about making sure that Australians know what company tax is paid, rather than protecting their mates, then they would facilitate debate in this House on that bill.

The Liberals won't close tax loopholes. The Liberals won't crack down on tax havens. Since coming to office, the Liberals have cut over 4,000 staff from the Australian Taxation Office. Only Labor has a complete tax-haven plan. Only Labor can be trusted to get tough on multinational tax avoidance.

The DEPUTY SPEAKER ( Mr Buchholz ): Is the amendment seconded?

Mr KEOGH (Burt) (17:41): It's my absolute pleasure to second the amendment and to speak to the Treasury Laws Amendment (OECD Multilateral Instrument) Bill 2018. The government's Treasury website states:

Australia is leading the global fight against multinational tax avoidance and is cracking-down on taxpayer tax evasion with a number of reforms announced as part of the 2016-17 Budget.

Well, how can that actually be possible when one in five of Australia's biggest companies have paid no tax in the last three years? Malcolm Turnbull and Scott Morrison say they've been cracking down on tax avoidance, yet we know their true tricky priority is looking after their buddies in big business. They are not only not cracking down on tax avoidance but indeed are giving them a further $80 billion tax cut. What a joke. There's no way that Australia's biggest money-makers aren't contributing to our nation's tax reserves! But unfortunately that is precisely the case. In 2015-16, 17 of the top 50 companies paid no corporate tax, leaving just 33 to shoulder that burden. Between them, they provided just under $20 billion worth of tax. Interestingly, the Prime Minister's old employer, Goldman Sachs, is among these. While it had revenues of at least $1.8 billion over the last three years, with an operating profit in each of those years, it paid zero dollars of corporate tax.

Australia is being deprived of billions in tax revenue, thanks to loopholes that the Turnbull government refuses to act on, despite Labor's alternative of tax transparency laws showing just how the people of Australia are losing. There are numerous studies and analyses that show the extent to which multinational tax avoidance prevents national governments and their citizens from receiving the funds they are due. This in turn inevitably means the tax burden falls unfairly on domestic companies and individuals, that global inequality is sharpened, and that public goods and services are not funded or delivered. We know that fair taxation is an essential element of a well-managed domestic and global economy. It is both inefficient and indeed immoral when companies play tricky, complicated games in order to avoid contributing their fair share to society—the society from which they derive their existence and indeed their profits.

We know that the introduction of public reporting of country-by-country reports, as suggested by Labor in our policy on properly assessing and taxing, could help stem the flow of missing money. The Treasurer, on the other hand, doesn't want to get his boys in big business offside and doesn't want to close these loopholes. Despite soaring corporate profits and the fact that Australia's company tax rate actually places us in the middle of the G20 pack, the only policy he has is a big-business tax cut. The government continues to talk a big game on multinational tax, yet to date it has failed to actually deliver any significant results.

The multilateral convention that we are here to discuss as part of this legislation today is a tax treaty that enables jurisdictions to quickly modify their bilateral tax agreements to give effect to internationally agreed tax integrity rules and improved dispute-resolution mechanisms. The multilateral convention is one of many action items of the OECD in the G20's base erosion and profit shifting strategies to coordinate global action against tax avoidance and minimisation strategies by multinational companies. This is indeed a global effort and global push, but one that it seems the Turnbull government doesn't want to wholly sign up to. The multilateral instrument will enable jurisdictions to swiftly modify their bilateral tax treaties to implement measures designed to better address multinational tax avoidance.

Although Australia has adopted the majority of the convention's articles, there are two major components that for some reason this government has decided not to agree to. The first is article 10, an anti-abuse rule for permanent establishments situated in third jurisdictions, which is a euphemistic way of saying tax havens. This article denies treaty benefits where an entity that is a resident of a jurisdiction party to a bilateral tax agreement derives certain income from other jurisdictions. The Tax Justice Network is opposed to this decision of government. It believes the Australian government should adopt article 10 without reservation to further deter the use of secrecy jurisdictions to avoid paying tax. The OECD notes this particular article was intended to address:

… potential abuses that may result from the transfer of shares, debt-claims, rights or property to permanent establishments set up solely for that purpose in countries that offer preferential treatment to the income from such assets.

The network is deeply disappointed this government has not adopted the article as it provides a loophole for big business to continue to avoid taxation.

The second article that this government has refused to adopt from the treaty is article 12. The intention of this article was to ensure where an intermediary habitually concludes contracts or habitually plays the principle role in concluding substantially finalised business contracts in a jurisdiction on behalf of a foreign enterprise that arrangement would be deemed to constitute a permanent establishment. A permanent establishment is a taxable presence threshold for determining whether a jurisdiction can tax business profits derived by a foreign resident enterprise. This means, potentially, a foreign enterprise can avoid local taxation of business profits by implementing arrangements that circumvent the existing treaty based definition of a permanent establishment. The Tax Justice Network, again, have told us that they are deeply disappointed that the Australian government has decided to not adopt this provision, which is a reversal of their initial position. The network believes that this article would have assisted in further curbing foreign multinational entities from seeking to artificially avoid creating a permanent establishment. This, in turn, will prevent the government from taxing these businesses profits.

Despite these obvious flaws, Labor do support the treaty action overall. But we observe that this government has done virtually nothing to address the key issue of multinational tax avoidance through the refusal to take up these two critical articles. Even from opposition, Labor has been alone in carrying forward the vital policy work and policy arguments on this vital issue of multinational tax avoidance. Back in 2015 Labor proposed a comprehensive multinational tax package that included a number of measures specifically designed to address the scourge of debt deduction loopholes. This alone would have added $5.4 billion to the budget bottom line over a decade. Elements of this proposed package included the adoption of worldwide gearing ratios to address the issue of thin capitalisation; the implementation of a publicly accessible registry of the beneficial ownership of Australian legal entities, including trusts, as per the G20 principles that Australia has adopted; and the restoration of $100 million as the tax transparency threshold in relation to the public reporting of tax data for private companies. It would also have appointed a community sector representative to the Board of Taxation and delivered increased compliance funding for the Australian Taxation Office.

Meanwhile, the Turnbull government talk a big game on multinational taxation, but they've spent more on spruiking their laws than the legislation has actually directly raised, continuing the coalition's form of neglect of this pressing reform area. In 2012 the coalition opposed Labor's tax law amendment on cross-border transfer pricing, which, after passing, was integral to the ATO's recovery of some $300 million from Chevron. There are numerous studies and analyses that show the extent to which multinational tax avoidance prevents national governments and their citizens from receiving the funds that they are fairly due. This in turn leaves the tax burden on domestic business and on individuals in each nation. This result serves only to heighten global inequality and the lack of funding available for the vital services needed in our community for our citizens, for our people. Labor regards fair taxation as an intrinsic and essential element of a well-managed domestic and global economy. It is both inefficient and, as I said before, immoral when companies are able to play the game, use the loopholes, and put their funds and run their profits through tax-avoidance centres instead of paying their fair share under the tax regime that should fairly apply in Australia.

If the government were serious about tax fairness, it would adopt Labor's plan to close loopholes and crack down on tax havens; it would tighten debt deduction loopholes used by multinational companies, which would improve the budget bottom line by billions of dollars; it would introduce public country-by-country reporting of tax information specifically about where and how much tax was paid by large corporations; and it would provide protection for whistleblowers who report tax-evading entities to the ATO. We believe these whistleblowers should be rewarded where information provided by them results in more tax being paid, allowing them to collect a share of that tax penalty. Let's make sure we get the real word on what's happening. The joint parliamentary committee report was unanimous in its view as to the changes that we should see to whistleblowing laws here in Australia and, once again, the government squibbed on its proposed changes to whistleblowing legislation.

The government needs to introduce a publicly accessible register for the beneficial ownership of Australian listed companies and trusts. This will provide transparency. It will allow anyone to find out who the real owners of our firms are and to see if they are complying with tax requirements and laws, instead of using these structures to avoid taxation. The government should introduce mandatory shareholder reporting of tax-haven exposure. Companies must disclose to shareholders as a material tax risk if a company is doing business in a tax haven, because there are real risks for the ongoing profitability of those companies where they do this contrary to what not just should be the law of this country but is the law of many others. The government should get on with appointing a community sector representative to the Board of Taxation to ensure community views are heard in tax design and review processes.

Finally, it should be introducing public reporting of AUSTRAC data and requiring the annual public release of international cashflow data. But there's more the government could and should do. They should require government tenderers to disclose their country of tax domicile. All firms tendering for government contracts worth over $200,000 could be made to state their country of domicile for tax purposes. Given we'll provide them with taxpayer dollars, it probably makes sense to know where those dollars will end up. The government can develop guidelines for tax haven investment by superannuation funds. They could require the ATO to annually provide information on the number and size of tax settlements. They could deliver more tax transparency by restoring Labor's $100 million threshold for public reporting of tax data by private companies.

We support this bill, but we note it is still deficient in the way in which the government has signed up to this treaty. Without the resources of Treasury we're not in a position to know precisely why the government declined to adopt the treaty in full but, under a Shorten Labor government, we will review that decision. We want to best understand why the government is doing what it's doing. Why is it not signing up to ensure we have the tightest of tax laws in this country, to ensure we don't have leakage, to ensure we have the revenues we need to provide the services our community badly needs and in fact deserves? We will also, as it would seem we are left to, continue to lead the debate on multinational tax avoidance, because we know that when multinationals—or indeed anyone—don't pay their fair share of tax, the rest of us are left to pick up the tab. That's not fair to the Australian taxpayer or the Australian community, and it would seem that the government is quite happy to not be fair.

Mr THISTLETHWAITE (Kingsford Smith) (17:54): I'm speaking in support of the amendment moved by the member for Fenner. The Treasury Laws Amendment (OECD Multilateral Instrument) Bill 2018 contains amendments to the tax agreements act to give the force of law in Australia to the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting. Labor does support this bill, subject to the amendment that's been moved by the member for Fenner. But we note that the government has declined to adopt two of the articles in the convention that are designed to deter the use of tax havens. Under a Shorten Labor government we will review the decision not to sign up to those parts of the treaty, utilising the resources of Treasury.

Looking at the detail of the bill, the multilateral convention is a tax treaty that enables jurisdictions to quickly modify their bilateral tax arrangements. This helps to give effect to internationally agreed tax integrity rules and improve dispute resolution mechanisms. The multilateral convention is one of many action items of the OECD's and the G20's base erosion and profit shifting strategy to coordinate global action against tax avoidance and minimisation strategies by multinational companies. The project was initiated at the G20 in 2012 and is headed by the OECD. Although Australia has adopted the majority of the multilateral convention articles, it has not agreed to a number of key aspects. They are article 10, which is the anti-abuse rule for permanent establishments situated in third jurisdictions—or tax havens, as they are more commonly known—and article 12, which covers artificial avoidance of permanent establishment status through certain agreements. I want to note that, without a clear rationale from the Turnbull government about their refusal to sign these tax haven measures, a future Shorten Labor government, if we are elected at the next election, would utilise the resources of Treasury to explore the ramifications of not signing these two articles.

When it comes to tackling multinational tax avoidance, it's Labor that's been leading the way, with the Turnbull government following in our wake. One in five of Australia's biggest companies have paid no tax for at least the past three years. There's a lot of anger and resentment out there at the moment in the community about many of these corporations. We've seen that in the approach that many people have taken to the banking royal commission and to the disclosure of the amount of tax that big companies actually pay in this country and the enormous deductions that they're able to use to basically reduce their taxable income and in some cases pay no tax at all. It should never be forgotten that it was Labor that originally established these tax transparency rules to oblige those companies to disclose the amount of payments they are making to governments through the taxation system. And it was the coalition that got into bed with the Greens and watered down those tax laws. They reduced the number of companies that are subject to the law and therefore have to report on an annual basis.

This government claims that they're about tax transparency. But in practice they're actually doing the opposite, reducing the amount of transparency and the number of companies that need to disclose the tax that they pay to the Australian government. We all know that this government's priority at the moment is an $80 billion tax break for the biggest companies throughout the country. They want to give a tax cut to some of the largest corporations in Australia—which include those big banks that have done such a wonderful job by the Australian people over the course of the last decade! As we're seeing in the royal commission, they've been such great backers of Australian small businesses, farmers, and families and have been so generous in their approach to their insurance arms, to their wealth management arms and to disclosure and transparency! Yet this government wants to give those sorts of organisations and the people who run those organisations, and their shareholders, a tax cut. Well, Labor simply won't stand for it. We've had enough of these organisations ripping off the Australian people, being deceitful, being dishonest—sending farmers, small businesses and families to the wall—and getting a tax cut. It's not on, and we're going to stand up for those hardworking small businesspeople, the farmers, Australian workers and their families, and oppose this government's dastardly attempts to give those organisations a tax cut.

Australia is also missing out on billions in tax revenue thanks to loopholes that the Turnbull government refuses to act on, despite Labor's tax transparency laws showing just how much the people of Australia are losing. The introduction of key public reporting of country-by-country reports, as suggested by Labor—in particular in the resources and extractive industries such as mining, oil and gas—could help stem the flow of missing tax revenue.

Labor's also leading the way in ensuring that large Australian resources companies are good corporate citizens and maintain accountability and transparency through systems that not only ensure they pay their fair share of tax but help combat corruption, particularly in countries where they're operating offshore mining and resources projects, many of them in our backyard in the Pacific. Our policy will require large extractive companies to disclose payments arising from any activity involving exploration, prospecting, discovery, development and extraction. Disclosure under the regime will be on a country-by-country and project-by-project basis. Payments to be disclosed include taxes on income; production and profits of companies; royalties; dividends; signature discovery and production bonuses; fees, including licence fees, rental fees and entry fees; other payments, licences and concessions; payments for infrastructure improvements; and production entitlements such as profit resources. Payments must be disclosed if they are made to any national, regional or local authority of the country, including a department, agency or state-owned enterprise.

Disclosure under this regime should apply to large extractive companies in Australia. A large company shall be defined as a company that meets at least two of the following criteria: it has a balance sheet total that exceeds $50 million, its net turnover on the balance sheet date exceeds $100 million or the average number of employees during the financial year to which the balance sheet relates exceeds 250. A single or series of related payments within a financial year must be disclosed if the payments amount to at least $150,000. A mandatory reporting regime for extractive industries will increase the availability of verifiable, disaggregated information from company financial reports regarding payments made to governments, and this information would build public accountability and trust in companies and governments.

A Shorten Labor government, if we're elected, will also establish a multistakeholder committee to work with the government on the implementation of the reporting regime, including defining project-level reporting and the establishment of an online reporting mechanism to ensure public transparency and accessibility. The legislation would include equivalency provisions so that companies captured by other jurisdictions due to cross-listing on stock exchanges would only be required to lodge one report. If we're elected, the extractive industries transparency regime will require subjected companies to begin reporting payments in 2020.

In line with consultation from interested stakeholders, this policy mirrors as closely as possible the UK scheme and the equivalent provisions contained therein. Our policy, if we are elected, will ensure that extractive companies are among the most transparent and accountable in the world. Our companies will be adopting best practice when it comes to ensuring that they're disclosing payments to government and they're transparent, accountable and combatting corruption in the countries in which they operate. Improved transparency and accountability in extractive industries is an effective mechanism to combat corruption in developing and developed countries.

Again, it's clear that the Turnbull government doesn't want to close some of the corporate tax loopholes that exist. Some of those relate to tax havens that are part of the OECD and the G20's base erosion and profit shifting agenda. That's evident in the fact that they're not signing up to that article contained in that plan. Despite soaring corporate profits and the fact that Australia's company tax rate places us in the middle of the G20 pack, the only policy that they have is one for a big business tax cut, not further transparency, and that's simply not good enough.

That's why Labor is proposing to look at those additional two articles that the government hasn't signed up to, and that's why we're proposing and promising that if we're elected we'll go further, with additional transparency and accountability, particularly in the resources and extractive industries, on a country-by-country and project-by-project basis. I urge all members to support the very sensible amendment that has been moved by the member for Fenner.

Ms O'DWYER (Higgins—Minister for Revenue and Financial Services, Minister for Women and Minister Assisting the Prime Minister for the Public Service) (18:05): I listened carefully to the speech of the member for Kingsford Smith on the Treasury Laws Amendment (OECD Multilateral Instrument) Bill 2018, and I was a little disappointed to find that it was devoid of so many facts. So, I appreciate the opportunity to now set the record straight when it comes to the government's commitment to tackling multinational anti-avoidance of tax. If a multinational corporation makes money in Australia, it is right they pay tax in Australia. The Turnbull government has introduced new laws to close loopholes, to ensure that profits are taxed here. The Turnbull government is absolutely determined to make sure that everyone is paying the right amount of tax, and large multinationals must pay their share. Deliberate tax avoidance will not be tolerated, and tax cheats will be tracked down and will face the full force of the law.

Whilst the Turnbull government have taken strong action and introduced tough new laws, Labor, by contrast, when they were in government, did virtually nothing to combat tax avoiders, and in opposition they opposed our Multinational Anti-Avoidance Law and the introduction of the country-by-country reporting regime. Paying tax is not optional. The Turnbull government will ensure that multinational companies pay the tax that they owe in Australia. As a result of our new laws, more money will be invested here, benefitting our community and helping guarantee the essential services and infrastructure that Australians rely on.

Given the fact-free contribution by the member for Kingsford Smith, I'd like to place on record that, since the government established the Tax Avoidance Taskforce, the Australian Taxation Office has raised around $7 billion in income tax liabilities against large public groups and multinationals. The Australian Taxation Office has collected $4.1 billion in cash, with $3.1 billion of that amount from multinational enterprises. Of that $3.1 billion, the Australian Taxation Office has collected over $1 billion from ecommerce companies. The government's coordinated plan to tackle profit shifting and avoidance of Australian tax law will keep paying dividends as well. The Australian Taxation Office confirms that the Multinational Anti-Avoidance Law alone has seen additional sales income of $7 billion each year now being returned in Australia. Furthermore, hundreds of millions of dollars of additional GST revenue is now being paid. The Australian Taxation Office has publicly indicated that there is a significant change in how multinational companies are approaching their Australian tax obligations as a result of the tough new anti-avoidance laws put in place by this government and not supported by those opposite. In fact, Australia is leading the way in combatting multinational tax avoidance—no thanks to those who are not trying to find solutions to the problems that we have identified and tackled.

I would, though, like to thank those who have made a contribution to this debate. This bill will help Australia to quickly and efficiently modify the majority of Australia's bilateral tax treaties to bring them into line with international best practice when it comes to tackling multinational tax avoidance. It will complement the other measures implemented by the government to enhance tax system integrity, including the Multinational Anti-Avoidance Law, country-by-country reporting and the diverted profits tax. The multilateral instrument is a unique tool that is expected to update more than 1,100 bilateral tax treaties worldwide. At present, based on the known positions of other jurisdictions, the multilateral instrument will modify 31 of Australia's 44 existing bilateral treaties. Modifying these treaties through the multilateral instrument will save time and expense, significantly, for Australia, compared to the alternative of bilaterally renegotiating each treaty to achieve similar outcomes.

The multilateral instrument will ensure that multinational entities are no longer able to exploit Australia's bilateral tax treaties in order to avoid paying tax. Additionally, the multilateral instrument will provide greater certainty for taxpayers by strengthening current tax treaty related dispute resolution procedures. Australia has committed to working closely with its treaty partners to resolve treaty related tax disputes through the multilateral instrument. Where both treaty partners agree, taxpayers will also have access to independent and binding arbitration, thereby allowing disputes to be resolved more quickly.

Looking to the future, the government will continue to work with the G20 and the OECD bilaterally to ensure that the international tax system operates as efficiently, fairly and effectively as possible. The multilateral instrument clearly demonstrates the benefits of international cooperation, and the government encourages other jurisdictions to adopt it to the fullest extent possible. I commend the bill to the House.

The DEPUTY SPEAKER ( Mr Buchholz ): The original question was that the bill now be read a second time. To this the honourable member for Fenner has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. The immediate question now before the House is that the amendment be agreed to.

Question negatived.

Original question agreed to.

Bill read a second time.

Ms O'DWYER (Higgins—Minister for Revenue and Financial Services, Minister for Women and Minister Assisting the Prime Minister for the Public Service) (18:12): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Ms KEAY (Braddon) (18:12): Thank you for the opportunity again to speak on the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017, as I only had a minute yesterday. In continuation, I want to stress from the outset that this bill will actually mean a loss of hundreds of thousands of seafarer jobs in this country. Many of those could potentially be from my electorate. I'm from an island state which is predominantly an export state, and a number of shipping companies could potentially be at risk from this bill. It will mean that foreign ships and foreign crews could come in and take over some of the destinations and the work undertaken by Australian crews and Australian ships. We've seen it before with this government when it's been issuing permits left, right and centre that have resulted in hundreds of Australian jobs being lost, replaced by foreign workers. I've heard the Prime Minister say time and time again, 'The government is the friend of the worker.' Well, not when it comes to the maritime industry.

I was born into a seafaring family. My father was a seafarer. He was a steward on the Princess of Tasmania, the Empress of Australia and the Abel Tasman, where he passed away at sea while I was quite young. These vessels were largely passenger ships bringing visitors to and from Tasmania. Much like the current Spirit of Tasmania ships, they also had a large freight component.

I would also like to share with the chamber what a local seafaring job means to people in my electorate. I have a number of ports in my electorate, probably more than any other electorate in Tasmania, so there are many, many people that are supported by the shipping industry in Tasmania. Being from an island state that is absolutely reliant upon Bass Strait shipping, Tasmanians have a strong cultural affinity with the sea and with Bass Strait. Maritime operations are central to life in my electorate of Braddon and are vital to the Tasmanian economy. Like many in my home town of Devonport, Bianca, whose husband works as a seafarer, saw the crew from the Alexander Spirit when it was docked in Devonport in 2015—we have just celebrated the third anniversary of that dispute. The crew were told they would be sacked and replaced when the ship next docked in Singapore. This action has had a profound effect on her family and puts a human face on what it would mean, should this government have its way. Bianca told me: 'I lay awake at night, worried about my husband's job, worried that he and his shipmates are going to be replaced with a foreign crew, without warning. The current coastal shipping laws mean some security for my family. It means that my children, as proud Australians, will have a chance to go to sea, just like generations of my family have done before me.'

Over 99 per cent of Tasmania's freight volumes are moved by sea. The timely and efficient movement of passengers and goods to the mainland not only mean hundreds of local jobs but also supports important industries in tourism, agriculture, forestry, aquaculture, and the mining and manufacturing sectors. The most recent data from Tasmania's Department of State Growth states that over 12.5 million tonnes of freight is moved through Tasmania's publicly owned ports. An additional 2.4 million tonnes of freight is move through Port Latta, which is in my electorate. Tasmania's freight task is a mix of bulk commodities, at 65 per cent, and containerised freight, at 35 per cent. Eighty per cent of Tasmania's sea freight is for interstate trade, 17 per cent is for international exports, and a small amount is direct overseas freight.

Our containerised freight task is also seasonal. For imports, volumes increase in the spring and early summer. For exports, volumes increase between the summer and late autumn, driven by agricultural production. Tasmania is well serviced by three Australian owned and crewed shipping companies: Toll, SeaRoad and TT-Line. Just last week Toll Shipping announced its two new Bass Strait freighters are expected to start operating on 1 March next year. My local Burnie newspaper, The Advocate, reported that this is part of a $311 million spend, which the Melbourne headquartered company said would significantly increase shipping capacity between Tasmania and the mainland and support economic growth and rising demand for Tasmanian produce. The vessels set to operate between Melbourne and Burnie are being purpose-built at a cost of $170 million. The project also includes $141 million to upgrade terminals, wharves and berthing facilities at both ports. Toll Group managing director, Michael Byrne, said:

This is the largest ever investment by a logistics business in the Bass Strait, and underpins Toll's commitment to the Australian domestic market and the Bass Strait trade.

Another Bass Strait operator, SeaRoad Shipping, launched its $110 million Searoad Mersey II vessel in 2016, which lifted the operation's capacity by 62 per cent. They also have plans to replace the Searoad Tamar. All of this investment and the hundreds of jobs it supports would be placed at risk by this bill. That is unacceptable to me and to the people in my electorate.

The Tasmanian government's Tasmanian Integrated Freight Strategy contains the following statement:

Tasmania’s freight system underpins business and economic growth in the state. … It also equips our economy to optimise growing national and international demand for Tasmanian products. A reliable freight system is critical to Tasmanian businesses retaining and accessing new markets.

I would think the ears of those opposite should be pricking up on this kind of language.

A large proportion of Tasmanian sea freight is also time-sensitive, reinforcing again the need for reliable shipping services. This time-sensitive task is especially important to Tasmania's agriculture and aquaculture industries. These are high-value products and include seafood, cherries and berries. Currently, there is no dataset that comprehensively defines or quantifies the time-sensitive freight market. However, the Tasmanian government, through Infrastructure Tasmania, has recently completed a report examining production volumes and potential market growth across 28 time-sensitive freight commodities, including salmon, potatoes and frozen meat. The findings of this report are significant when you give consideration to future freight volumes and a vital need for a regular and reliable shipping services. The review found that even under a modest growth scenario the time-sensitive freight segment is forecast to increase by 43 per cent.

I trust the House now understands how vital a regular and reliable shipping service to Tasmania is. This government has destroyed Australia's car manufacturing industry, and now it seems that this government is determined to destroy Australia's coastal shipping industry and, more broadly, our maritime industry. I have listened intently and I'm yet to hear one member on the opposite side say the magic words, 'I support the Australian shipping industry, Australian ships, Australian crews and Australian jobs.'

As with so many other pieces of legislation that come into this place, this government has form. A previous bill that sought to deregulate the Australian domestic shipping industry resulted in replacing Australian ships with foreign ships and replacing Australian crews with cheap overseas labour. Tasmanian-owned shipper SeaRoad said at that time that they could be forced to replace local crews with foreign workers. SeaRoad was also concerned that that bill would ultimately lead to reduced services and increased prices. The government's own modelling from that bill anticipated that four of the six ships serving the Bass Strait would be foreign-flag vessels if that bill was passed. Fortunately, the Senate saw the multiple flaws in that piece of legislation and rejected it.

Even with the failure of that bill, a dozen Australian ships have been reflagged as foreign ships, replacing Australian crews with overseas labour. I put this test to every member sitting opposite who intends to support this bill: go and speak to one of the many, many workers on the MV Portland or the Alexander Spirit, who were sacked at the stroke of the pen by Senator Abetz, which meant that those ships were going to be sent off, replaced by a foreign ship with a foreign crew. Many of those workers, including in your state, Mr Deputy Speaker Buchholz, have yet to find other work. The crew of the Alexander Spirit, while docked in Devonport, were told they would lose their jobs when the vessel next docked in Singapore. While this ultimately did happen, I was heartened to see the strong community support for the crew of the Alexander Spirit. Those crew members were not local to my home town, where that dispute took place. They were from across the country, but the community stood beside them. Braddon voters, Tasmanians and Australians do not want to see Australian jobs going to overseas workers. This is what this bill would do, and those sitting opposite who vote for this are potentially sacking hundreds of seafarers and replacing them with foreign workers doing exactly the same job as the Australian workers.

Not only that; this bill places more risk on our fuel security and our national security. To some members opposite, these are important factors that they support at any other time of the week. If they vote for this bill, to me it's just an ideological attack on maritime workers and the industry and any future notional support from those opposite to espouse national fuel security as something they care about is just a hollow, insincere gesture. If those opposite are truly concerned about fuel security, as I know the member for Canning is—he's the chair of the Parliamentary Joint Committee on Intelligence and Security—and Liberal Senator Jim Molan, they should cross the floor and not support this bill. It's that simple.

I will explain a little bit further. I've spent a lot of my time outlining why a regular and reliable shipping service is critical to Tasmania. I would have thought that to give the Australian shipping industry confidence the government would want to achieve bipartisan support. In fact, in the minister's own discussion paper for this bill he said that bipartisan support is essential. On this count alone he has failed. This bill allows temporary-licence foreign-flag vessels to significantly vary their freight volumes and the days they are carrying the domestic freight, at the same time making it almost impossible for an Australian general-licence ship to contest those movements. This means that Australian shippers simply won't know what is being carried until after the event. In effect, this means that any half-smart foreign operator and 'compliant' local freight company can game the system to use foreign-flag ships.

What is also disappointing is that despite the minister making a commitment to consult on this bill, he did not do this appropriately. Australia's peak shipping industry body, Maritime Industry Australia Ltd, was not invited to the consultation sessions on this bill. MIAL's membership includes Toll, SeaRoad, ANL, North West Shelf Shipping Services Company and BP Shipping to name just a few. No other Australian maritime businesses, except Carnival Australia, which is a cruise ship operator, were invited. How can you possibly consult on shipping changes without speaking to the actual shipping companies? It was almost as if the minister wanted to consult in an echo chamber, where the sounds he heard were the ones he wanted. If he had consulted with MIAL, he would have heard this—and I quote from MIAL's media release from September last year:

… there is nothing in the Bill to assist Australian shipowners compete with foreign ships that have all but unfettered access to coastal trades. We held low expectations on that front and unfortunately haven't been disappointed there.

This is a damming indictment of this bill from Australia's peak shipping industry body.

Following discussions with SeaRoad, I understand Bass Strait may currently have some protections. There is only one temporary licence available for Bass Strait. If one was issued from Devonport to Melbourne or Bell Bay to Melbourne, SeaRoad would be able to object and stop it. Similarly, Toll could do the same from Burnie to Melbourne. However, I invite the government to provide Tasmanian shippers with an assurance that this will continue, because I am concerned that, if this bill passes, Bass Strait may be opened up more widely to temporary-licence vessels. I am advised that this could be the case. If this is the case, how can potentially opening up Bass Strait to the whim of foreign shipping companies achieve the Tasmanian Liberal government's own objective of a reliable shipping service? What measures will the government put in place to prevent foreign shippers cherry-picking Tasmania's peak periods, thus undermining existing Australian owned shippers? What guarantee can the Prime Minister give to ensure Tasmania is serviced by Australian flagged shippers? I look forward to receiving these answers, and I will be on it until I get those answers. But there are so many other reasons why Labor will not support this bill.

Mr RAMSEY (Grey—Government Whip) (18:26): Welcome back to the member for Braddon. I'm not sure how much you've learnt in the time you've been away, but I was interested to listen to that long list of great Tasmanian products that you are very confident about growing, and I know the Hodgman government is very confident about the growing agricultural sector in Tasmania. But it seemed to me that you were very focused on the jobs of MUA workers and very poorly focused on the jobs of those who work in agriculture. There is repeated evidence that the Australian coastal shipping trade runs at roughly four times the cost of the international trade, and that will be worn by the Tasmanian industries that you're so very proud of and that I'm keen to see succeed as well.

You also touched on fuel supplies. If we lose the coastal shipping trade, there is not one Australian registered tanker. There is not one tanker. Every voyage has to be offered up to the market and then it is passed by, which is a two-day delay, and then it is given to international shipping. So, unfortunately, you are defending something that has virtually passed us by.

I remember that we debated this bill in 2012. The member for Grayndler, then the minister, brought in the platform that we are living on now. He was very keen to give his mates in the MUA a good run. At the time, there were 22 Australian registered vessels. That was down from 55 six years before. Now, as it was then, the fleet remains old by world standards. We are the fourth-largest user of shipping in the world, but for most of the tasks we are served by a competitive world practice. But, if you're an Australian business needing Australian supplies, it's a whole different world. It's roughly four times the cost and a whole lot of red tape. This bill seeks to streamline, to speed up, the permit system.

In 2012, when then Minister Albanese brought in the current act, he said it was designed to ensure the Australian shipping industry survived. In 2012 there were 30 ships. In 2018 there are 13. That reduction was under the act that the member for Grayndler said would protect Australian shipping. There was a reduction in deadweight capacity, over those six years, of more than 65 per cent.

The average age of the registered fleet, all 13 of them—there are 13 registered under the Australian flag—is 24, up from 23 last year. The oldest vessel is 26 years old and the youngest is two. There is one vessel that is only two years old. But, if you remove the two-year-old vessel from that list, every other vessel is at least 17 years old, and the average age goes up to 26. This is a very old fleet by world standards. In fact, the world standard is around 13 years old. It's 13, and we've got a fleet servicing Australia that is 26 years old. The largest vessels—and this is interesting—those over 10,000 tonne deadweight, are all over 19 years old. Sadly, in June, CSL's Iron Chieftain, used to bring coal to Whyalla, suffered a fire on board. While it is still actually registered, it has been retired. The Iron Chieftainwas our largest vessel, at 50,600 tonnes—not too bad a size. The next largest vessel we have surviving in the trade is 27,700 tonnes. So it's a 20-year-old fleet, when the world average is 13. I'm glad the member for Grayndler has just walked in, because it is his act that has brought us to this stage.

How strong a message do we need? We are still protecting, basically, a dying species. There are 13 ships left in the trade. When will we wake up and realise that the horse has expired—or perhaps, a bit more like Monty Python, that the parrot is dead? Electorates like mine are in the firing line. Nyrstar in Port Pirie; GRA in Thevenard, out west of Ceduna; Liberty OneSteel in Whyalla—they are all users of coastal shipping. The best way to avoid this overly expensive and antiquated fleet is to import product as well.

At the time of addressing that bill in 2012, I brought up the issues for GRA, west of Ceduna. It is cheaper, as it was then, to bring gypsum in from South-East Asia to Brisbane and to Sydney than it is to ship it around the Australian coast—basically, from just west of Adelaide, to Sydney and Brisbane. It's four times the distance, but it's cheaper to bring it on the overseas fleet. I'm even hearing stories at the moment of companies talking about shipping their goods to Indonesia and then bringing them back again so they can avoid the coastal shipping trade. This is an incredible inefficiency that we are visiting upon our industries.

I touched on oil tankers; we don't even have an oil tanker. There is not an oil tanker registered in Australia. Yet, if the refinery companies want to shift fuel up and down the coast, they have to put that out to tender on the Australian market—only to find no-one tenders—and then they can go to the international market. Talk about ridiculous red tape. We need to let this system evolve to reflect the Australia that we are living in at the moment.

I also raised, in 2012, the cost of demurrage. I haven't checked the figures again, but I don't imagine they're much different today from what they were then. Demurrage is $10,000 a day. That is when a ship is lying off-port, at anchor, waiting to get into the loading dock. It's $10,000 a day for an international ship and $37,000 a day for an Australian registered ship. That's enormous! That is an enormous difference. Essentially, we are inflicting extra cost on our fully Australian industries—those employing Australian labour, as the member for Braddon talked about; those that are giving a leg up, an opportunity, to our kids. We are imposing extra costs on them to protect an ever-dwindling number of jobs in the MUA.

The parliament is indebted to a former member for Wakefield, Bert Kelly—a heroic man who waged a one-man battle against tariffs in Australia throughout his time in parliament. Gough Whitlam eulogised Bert Kelly at his funeral. He said, 'No one man has done more to change Australian economic policy as a backbencher than Bert Kelly.' Bert Kelly talked about lowering tariffs and protections when it was completely unfashionable. His adage was that one man's tariff is another man's job. So it is with the coastal shipping act. The protection of the marine workers is costing jobs in the rest of Australia. Other people are paying the cost of those jobs.

We are a free and open economy in most cases. We certainly have to trade with the world. We sell 75 per cent of the food we grow to the world. We are a major export nation. In as much as we can access overseas shipping for the bulk commodities, we are treated well. But in as much as we're trying to support our manufacturing industry, shifting commodities around Australia for the blast furnace in Whyalla or the blast furnace and metal manufacturing plant in Port Pirie, or trying to get gypsum from Kevin around to Melbourne so we can use gyprock to build Australian houses, we are imposing a major penalty on those employers and on those businesses. This bill doesn't seek to abandon the Australian maritime industry—even though, probably, if I had my druthers, I would—but perhaps it is being a bit more pragmatic about the world in which we live at the moment. It is an assessment of the capacity of the Australian fleet.

The bill also seeks to lighten the red-tape disincentives for superyachts to come and visit our communities. I'm not too sure how many superyachts you have, Mr Deputy Speaker Vasta. I don't have one yet. But the people who have them like to sail the world, and they like to come to the South Pacific.

An honourable member interjecting—

Mr RAMSEY: And they like to spend money—thank you for that help. At this stage, it's difficult for them to come to Australia, because they'd have to get single-voyage permits, so they go to New Zealand and they go to Fiji. So, New Zealanders and Fijians are benefiting from Australia's coastal shipping act. It seems absurd, really, doesn't it? I don't know how it's protecting jobs here. I don't even think it's protecting our superyacht owners. Perhaps it's protecting their wharf space from Europeans and Americans coming into their little bit of port. I don't know. I mean, it is clearly absurd. Of course I'm making fun of the situation as it sits at the moment, but this bill seeks to get past that, to open up trade—as we should. We should always be opening up Australia to trade, on every front. We should always be breaking down the barriers that impose costs on our local businesses.

All in all, this bill is not as ambitious as the one that was put forward by the former Deputy Prime Minister, Mr Truss, but it is a reflection of what's happened to the shipping industry, which, despite the efforts of the member of Grayndler, continues to dwindle. More than 50 per cent of the capacity has gone since Mr Truss introduced that bill—63 per cent in 2012. Half the vessels have gone. The age of the vessels is double the world average. The writing is clearly on the wall. We are protecting an inefficient and outdated industry here, and Australia needs to sharpen up, get on with its act and reflect the realities of the day. This bill goes a little way—a little way—to addressing some of the issues that Australian industries face. I recommend it.

Mr ALBANESE (Grayndler) (18:38): I rise to oppose the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017. Australia is an island continent girt by sea, located in a relatively remote part of the globe. Almost all of our imports and exports are transported in the hulls of ships. Equally significantly, one-tenth of global sea trade flows through our ports. However, despite this obvious reliance on the maritime industry, Australia's own merchant fleet, as well as the skilled workforce it trains and employs, is fast disappearing. Our responsibility is to prevent the demise of this proud industry. The government's approach is to hasten the demise of this proud industry.

It is about more than jobs and skills; there are also very sound national security and environmental reasons for having an Australian fleet. Firstly, there are clear synergies between our naval and merchant fleets. Defence experts have long recognised the importance of maintaining a domestic maritime workforce that ensures Australia has a pool of highly skilled labour that can be quickly mobilised during times of war or other national emergencies. A national workforce forum that was established with a former Public Service Commissioner as chair, involving industry, the Navy and the agricultural sector, came up with a consensus proposal to advance workforce development with a very modest contribution from the Commonwealth, which was cut to zero as one of the first acts of the incoming Abbott government. Australian seafarers also undergo stringent background checks to ensure they pose no security threat. We hear a lot from this government about national security, including relating to people on boats, yet this government is prepared to have overseas seafarers whose backgrounds are a mystery on ships around our coast and in some cases in our harbours and our ports.

Secondly, Australian seafarers are familiar with our coastlines and have a vested interest in the protection of our world renowned environmental assets such as the Great Barrier Reef. All of the significant maritime incidents around our coast over recent decades have something in common: a foreign flag on the back of those ships. Be it the Pacific Adventurer or the Shen Neng, an enormous ship that ploughed into the Great Barrier Reef off the coast because the captain literally forgot to turn through the channel, the major maritime accidents that have occurred in our waters and New Zealand's in recent decades have involved foreign flagged vessels crewed by foreign seafarers.

There are good economic, national security and environmental reasons for having an Australian fleet, which is why the former federal Labor government was so determined to rebuild Australia's shipping industry following years of neglect. Our goal was simple: we wanted to see the Australian flag flying on the back of Australian ships with Australian seafarers carrying more Australian goods around the Australian coastline. We wanted to see an international fleet with the Australian flag on the back of it and with Australian seafarers.

After extensive consultations with all sections of the industry we put in place far-reaching reforms that were designed not as a protectionist model but as a model which reduces the costs faced by Australian shippers in order to level the playing field with their international competitors. The 2012 reform package amended legislation from the Navigation Act 1912. The major legislation governing shipping in this nation had been in place for literally 100 years. There were all sorts of arcane provisions in that legislation, such as the fact that a captain could be free from prosecution if they literally murdered a lunatic, defined in the act, around the coastline. That was part of the legislation that was still in place, which was derived not of course from 1912 but really from Westminster in the 19th century. Yet it hadn't been updated.

We had a comprehensive update. The package included a zero tax rate, more-generous accelerated depreciation arrangements, rollover relief for selected capital assets, new tax incentives to employ Australian seafarers, and an exemption from the royalty withholding tax for bareboat leased vessels. To further strengthen the local industry, an international shipping register was created, allowing operators of Australian flagged vessels to employ mixed Australian and foreign crews on internationally agreed rates and conditions. These measures were based on extensive reform programs that had already been implemented by other maritime nations, including the United Kingdom, Japan, China and Denmark. For example, when the UK government introduced a tonnage tax in 2000, its fleet almost doubled in size in just the next seven years. So, while others were employing policies to keep their industry afloat, our industry was sinking into oblivion. Importantly, Labor's changes did not preclude the use of foreign vessels. They simply required that firms needing to move freight between Australian ports first seek out an Australian operator. When none was available, foreign vessels could be used, as long as they paid Australian-level wages on domestic sectors.

Our efforts to revitalise this country's shipping industry didn't stop there. We also enacted that first major rewrite of the nation's maritime laws in a century. We've made sure that oil companies pay for any and all damage that their ships may cause. We developed Australia's first national ports strategy, and we replaced a myriad of confusing, often conflicting state and territory based laws and regulations with just one national maritime regulator, the Australian Maritime Safety Authority, administering one set of modern, nationwide laws. However, for Labor's suite of reforms to work, they needed time. Because they relied upon investment—and investment decisions don't occur over a month or even a year; they occur long term, for the life of the vessel—they needed that certainty. Before the reforms even took effect, the coalition sought to undermine them. Their attacks were calculated to create uncertainty and doubt in the minds of those considering investing in the Australian industry as to the durability of the regulatory changes and the new tax incentives. Still, some companies, like SeaRoad in Tasmania, certainly did invest in new vessels. But, not satisfied with white-anting Labor's reforms in opposition, once elected the coalition moved quickly to scrap them altogether and dismantle what remained of the industry.

All of us want to reduce the cost of doing business in Australia, but at what cost, if the cost is the destruction of a strategically significant industry and the loss of a highly skilled workforce? In the end, that will put up costs over a period of time if you don't have Australian competitors. The legislation put forward by then minister Warren Truss put ideology ahead of the national interest. Contrary to the coalition's repeated claims that their proposed changes were designed to eliminate red tape and strengthen shipping, what they were about was eliminating Australian jobs. That wasn't a matter of rhetoric or argument from the Australian Labor Party. You just had to look at the regulatory impact statement. The regulatory impact statement attached to that legislation stated explicitly that the savings were as a result of the replacement of Australian seafarers and wages with foreign seafarers being paid foreign wages. Ninety-three per cent of the savings that were identified were as a result of that.

No other major advanced nation has attempted to engage in such unilateral economic disarmament, which is what it was. For this reason, the Senate rejected the coalition's legislation after the evidence of people like Mr Bill Milby of North Star Cruises, who gave evidence that he had actually had consultations with officials from the department of infrastructure at forums where this policy was launched. Of course, it was launched at the body run by the foreign shippers. That was where the policy was launched. When Mr Milby asked for advice on what to do, he was advised to replace the Australian flag, to register as a foreign flagged vessel and to replace his Australian workforce with foreign workers—quite extraordinary. That was the evidence given by Mr Milby before the Senate committee in this parliament—an extraordinary proposition.

What we've seen since then is, quite frankly, an abuse, including by the department, with regard to the way that the legislation has been implemented. The legislation, as it currently exists, provides for temporary licences. We did that to allow flexibility. What has occurred is abuse. Perhaps the most obscene example of that is the MV Portland. The Portlandtakes the raw materials for aluminium from Western Australia over to the smelter in Portland on the coast of Victoria and then goes back again. There is nothing temporary about the Portland. Yet, in the middle of the night, seafarers were thrown off that vessel. People on that side talk about thuggery. People were thrown off their workplace in the middle of the night to be replaced by foreign workers. I don't understand how the National Party, a party that says it's about the Australian national interest, can support that, but it has supported it over and over again. On this government's watch, the Pacific Triangle, the CSL Pacific, the Lindesay Clark, the Tandara Spirit, the British Loyalty, the Hugli Spirit, the Alexander Spirit, the MV Portland, the CSL Melbourne, the British Fidelity, the CSL Brisbane and the CSL Thevenard have all gone, replacing the Australian flag with the white flag when it comes to the protection of Australian jobs and the Australian national interest.

This bill will only accelerate the industry's decline, eventually consigning Australia's status as a proud maritime nation to the history pages. That would be an unbelievable development for an island continent like Australia. It's no wonder that, the last time this legislation was before the other chamber, it didn't even get a second reading. People like former Senator Nick Xenophon and others, who always vote for a second reading in the other place because they argue that that's just allowing further debate, saw this legislation as being so reactionary, so against the Australian national interest, that it didn't even get to that stage. Let me tell you: this legislation will not go anywhere either. It is sunk before it has even been through this chamber, and that is a result of the implications which are in it. That's why there's no support.

In spite of the fact, as we've run through minister after minister—and there have been four infrastructure ministers in the recent period that I've shadowed; it's a revolving door—I've said that I'm prepared and Labor is prepared to have constructive dialogue, but they are not interested. This legislation was introduced not by this minister or the minister before, but, I think, the one before that. Minister Chester, I think, introduced this legislation. It has not received any support. The Australian shipping industry itself opposes this. The workforce opposes this. People who actually understand this industry are all opposed to this legislation because it would undermine the integrity of the entire coastal trading regime. So we will be moving a second reading amendment, and then we will have further amendments in consideration in detail.

Let's look at the two sets of amendments in this bill which are particularly problematic. The first amendments relate to the tolerance provisions. The proposed changes to the tolerance provisions would further deregulate what is already one of the world's most liberal coastal trading regimes. The proposed amendments would make it almost impossible for a general licence holder—namely, an Australian-flagged vessel—to contest work, because their owner-operator would never know the actual volume to be loaded or the precise loading date. So they're being asked to basically go for a contract for work without knowing when it'll happen and what the task is. No wonder the domestic industry opposes it. In its submission to the discussion paper, the Australian Institute of Marine and Power Engineers said:

The ultimate voyage carried out may bear no resemblance to the original voyage for which the Temporary Licence was granted. AIMPE opposes this proposal.

According to the peak industry body, Maritime Industry Australia Ltd:

Without the tolerances being meaningful (and remembering that these were expanded by the 2012 reforms from 10% and 3 days to 20% and 5 days) the system may as well be deregulated entirely.

The Maritime Union of Australia says:

Such open-ended tolerance provisions would totally undermine accepted commercial arrangements and make it impossible for a GL holder to contest a cargo, as the GL holder would not know what they are contesting. The ability to position a ship when the loading date could vary by up to 30 days would be commercially untenable for a GL holder, as would be the unknown nature of the cargo volume.

Operators of vessels involved in the coastal trade have also expressed their concern about changes to the tolerance limits, including CSL, which currently owns three Australian-flagged vessels operating around the coastline. According to another, ANL:

… the current date tolerance seems reasonable …

There's no justification for putting this forward. There is a flexible regime now, but it works. By way of comparison—and I note the member for Dawson is here; he's a bit of a fan of President Trump—in the United States, there is no possibility of any ship other than one with an American flag on the back of it taking goods from San Francisco to Los Angeles—none! They have a completely closed system, and that's a bipartisan position supported by both the Democrats and the Republicans in the United States, because they understand that it arose out of the need to defend their nation. As a result of that and the emphasis they have on defence, they understood the importance of having a national maritime industry. Yet, here in Australia, which has one of the most liberal regimes in the world, this mob want to make it impossible to have an Australian-flagged vessel with Australian workers on it. Just think of the implications for national security.

The second proposal in this legislation is to so-called streamline the temporary licence variation process. I've already spoken about the abuse of the temporary licence process when it comes to vessels like those that replace the MV Portland. Currently there are two types of licence variations to an existing temporary licence. Firstly, there are authorised matters, namely a change to a loading date or volume on an existing planned voyage. Secondly, there are new matters, which authorise an entirely new voyage on an existing temporary licence. In the name of streamlining the bill proposes replacing the two types of licence variations with a single provision. However, reclassifying the addition of a new voyage to an existing temporary licence from a new matter to an authorised matter would halve the time available to a general licence holder—Australian ships—to apply for that new voyage from the current two days to just 24 hours, cutting it in half. In practice that would make it more difficult for the Australian industry to compete. Those opposite say they stand for Australian industry. According to Maritime Industry Australia Ltd—this is the peak Australian industry, not the Maritime Union of Australia; this is the industry, the employers and the bosses—any new voyage should be subject to the existing time frames for GL holders to respond or else the integrity of the system is undermined as GL holders' rights and opportunities are reduced.

In his second reading speech the former minister—Darren Chester, the one three ministers back, who introduced this legislation—assured the parliament that the bill makes amendments to the existing regulatory regime, rather than fundamentally restructuring it. However, in light of the two amendments I have just highlighted, this statement is not the case. This is what Maritime Industry Australia Ltd said on 13 September last year. They warned this:

… there is nothing in the Bill to assist Australian shipowners compete with foreign ships that have all but unfettered access to coastal trades. We held low expectations on that front and unfortunately haven't been disappointed there.

To be sure, the regulation impact statement is explicit about the bill's goal of increasing the presence of foreign vessels around the Australian coastline. This what is it says:

… the current framework makes it unattractive for foreign ships to enter the coastal trading sector … These amendments … will remove the barriers that currently face many foreign flagged vessels under the current system.

There you have it. They are saying explicitly what this legislation is about: favouring foreign-flag vessels rather than Australian vessels, all because of their ideology.

The destructive potential of this bill isn't limited to what remains of the Australian-flag merchant fleet. Just this week, Coral Expeditions, which is based in Cairns, has written about their opposition to this legislation. This is a cruise company whose vessels are crewed by Australians. They employ 150 seafarers in regional Queensland, North Queensland and Far North Queensland. They've been going for 34 years, and they're planning to invest some $100 million to acquire two new additional builds that will employ another 70 Australian seafarers. These cruises go to the Kimberley, Arnhem Land and Cape York regions. However, if the bill now before the House were to become law, it would not only jeopardise Coral Expeditions' expansion plans and the jobs they would create but it would threaten the very survival of the industry. This is what the company says: 'It will have the unintended consequence of killing off the growing and globally respected Australian-flag expedition cruise ship industry.' So says the group general manager, Mark Fifield, and the commercial director, Jeff Gillies. The letter concludes with this simple request to the parliament: 'We urge that the current restrictions on coastal trading for foreign flagged passenger ships be maintained in order to facilitate the steady and sustainable development of coastal tourism and the Australian seafaring industry.'

I spoke before about Mr Bill Milby of True North. He was opposed to the previous legislation. On the current legislation, he says this: 'The purpose of temporary licences was to allow foreign ships to carry cargo and passengers in the event that cargo and passengers were already waiting in a port to be shipped from one destination to another. This amendment allows foreign ships to apply for and be granted a temporary licence when there is no cargo or passengers thus allowing the foreign ship to wait at any port and choose to bid against any general licence holder at any time.'

So the fact is that this is opposed, and that's why I move the following amendment:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House:

(1) notes that during the current Government's tenure 12 previously Australian-flagged vessels have been reflagged to foreign States—in each case the Australian flag has been lowered and replaced with the white flag when it comes to Australian jobs;

(2) further notes that:

   (a) the consultations associated with preparation of the bill were negligible, the Minister failed to build bipartisan support for the changes he has brought before the Parliament, and the Government is attempting to tilt the 'playing field' further in favour of foreign operators to the detriment of Australian-based shipping companies and other domestic modes of transport, including rail; and

   (b) the Government's true intentions are confirmed in the bill's Regulation Impact Statement, which on page 9 reads '… the current framework makes it unattractive for foreign ships to enter the coastal trading sector' and on page 14 reads 'These amendments … will remove the barriers that currently face many foreign flagged vessels under the current system'; and

(3) reaffirms that Australia’s vital economic, environment and national security interests are best served when there is a viable, competitive and growing local shipping industry".

Before concluding, I want to touch briefly on the issue of superyachts. Over the past 12 months, there's been a concerted lobbying campaign to make it easier for foreign flagged superyachts to charter in Australian waters. They have sought changes to the coastal trading act which in turn would afford them protections from Customs obligations. In this bill, the government is attempting to do this, but the problem is that what it is doing through this legislation is potentially harming existing, more traditional sections of the domestic maritime industry. Indeed, it could open the way for foreign transhipment and bunker barge operators to apply for temporary licences to work around the Australian coast. Currently the companies performing these activities, which usually begin and end in the same port, are Australian based and employ Australian seafarers.

To be clear, Labor is open to reforms that are specifically about that industry and will promote the growth of the industry to the benefit of communities up and down the Australian coastline. But what we're not about is supporting reforms that have unintended consequences such as those that I have just described. We think a better, more sensible long-term solution would be new standalone legislation covering all tourism operators, both local and foreign. Alternatively, the government should give consideration to amending the Customs Act.

The fact is that this legislation as it stands is flawed. We will fight this legislation in the House. We'll fight it in the Senate. We'll continue to argue the case, because this is about a government that's not prepared to stand up for Australian industry and Australian jobs.

The DEPUTY SPEAKER ( Mr Vasta ): Is the amendment seconded?

Mr Giles: I second the amendment and reserve my right to speak.

The DEPUTY SPEAKER: I thank the honourable member for Scullin. The original question was that this bill be now read a second time. To this the honourable member for Grayndler has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. If it suits the House, I will state the question in the form 'That the amendment be agreed to'. The question now is that the amendment be agreed to.

Mr CHRISTENSEN (Dawson) (19:09): With great pleasure I rise to speak on the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017. I want to talk about the aspect of this bill relating to superyachts and the provisions around superyachts, because one of the greatest benefits of the bill will be the jobs that are created out of an expanding superyacht industry. I'm particularly thinking of jobs that will be created in my electorate, around the Great Barrier Reef, one of the prime spots that superyachts want to come and visit, particularly the Whitsunday Islands. The Whitsundays are somewhat of a sailing Mecca. This weekend Hamilton Island Race Week starts, followed the week after by the Shag Islet Cruising Yacht Club race week, where every sailor is also a vice-commodore. The Whitsundays are just so beautiful. People who have been there, who have been out on the water and seen those islands, know that this is a world-class destination comparable to any around the world when it comes to sailing, whether it be Monaco, the Greek islands or the Caribbean. Being biased, I've got to say that it's better.

In the Whitsundays, just near Airlie Beach we have the Abell Point Marina, a very large marina that's been developed in recent years by the company there, headed by Paul Darrouzet. They have been instrumental in pushing for the establishment of a superyacht hub in the Whitsundays. Kate Purdie, the general manager at Abell Point Marina, emailed me today saying that it's expected that large numbers of superyachts will venture into the South Pacific in the next few years leading up to the America's Cup in New Zealand. For the Whitsundays to benefit from this influx of superyachts, it is imperative that we have charter rules similar to those of other South Pacific countries, such as New Zealand. Should charter be permitted in Australia, it is expected that vessels will stay significantly longer in the region.

The problem, as was alluded to in that email from Kate from Abell Point, is that there are currently impediments amongst our regulatory settings that prevent superyachts from gaining a temporary licence for a round-trip voyage. The regulations currently force superyacht operators to pay customs importation duties and taxes, so they simply don't come. Why would they? When you're paying the equivalent of 10 per cent on a vessel that's $50 million or $100 million, you simply go elsewhere. So, we don't get them. We have some domestic superyachts, but in terms of the big international drawcard, we simply don't get them. They go elsewhere. They go to New Zealand, they go to Monaco, they go to Noumea, they go to Vanuatu and they go to Fiji. They go anywhere else that doesn't have these impositions. What ends up happening is that we just lose the revenue. There are significant economic benefits—revenue in particular, as I said. The ability for these vessels to charter would unlock about $1.64 billion for our national economy, creating almost 12,000 jobs. That's money that I want to see pumped into the Whitsundays economy, pumped into the Mackay economy and pumped into the Townsville economy. That will be pumped into the Gold Coast and it will be pumped up into Cairns, and jobs will be created.

Bizarrely, there is an argument that's been put here, and I've heard it—and I've got to say, it's quite unfortunate that I heard some derogatory remarks by the Labor Party around this provision, as if this is some benefit for the richies. They simply don't come. They don't come to Australia, because of this tax. So, no money is actually being paid in tax at the moment. They don't come. We have domestic vessels here, but the significant number of superyachts that sail around the world go to places where there's no financial imposition on them like what we have in Australia, so they don't come, and we don't get that income. We could be getting income, because if they came and then they chartered the superyachts we'd be collecting the GST on all the tickets that went out. But they don't even come, so we don't get anything at all.

Blue-collar workers would receive a very big benefit from superyachts being here in their droves. Tradies and small businesses would be the big winners from superyachts spending time in Australia. Each vessel spends millions of dollars—about 10 to 12 per cent of their vessel value annually—in maintenance, which goes directly into small family-owned businesses up and down the coast, in these marinas, and employs workers. It's critical for all of these ports, particularly in places like the Whitsundays. Industry peak bodies are saying that superyachts domestically—and perhaps there are a few that come in from time to time, but not many—add about $590 million to our economy, but it could generate $3.34 billion by 2020-21, if the regulatory settings were right.

In 2016, Queensland Treasury commissioned an economic impact study of the superyacht sector. It was done by the Queensland Labor government. The strategy forecast Queensland's share of the global superyacht sector to increase by about 10 per cent, making Queensland a key destination for superyachts throughout the Asia-Pacific. The majority of the benefits would be in the Whitsundays, Cairns, and Port Douglas. Again, this is a critical reason why I'm here speaking on this and pleading with the other side to let it pass so that we can create these local jobs. It is money spent in the local community. But it's more than just the vessels getting fixed or serviced. There's the retail spend of the people who go on these vessels. They are very, very rich indeed and they drop a fair bit of coin when they're in a port. There are the food services—food that has to be loaded onto the vessels for the people on them. There is the accommodation, if they stop for a little while. Then there are the running costs, the repairs and maintenance and other provisions and supplies. Having a single superyacht in the marina at Abell Point, or any marina for that matter, would push about $50,000 to $60,000 a week into the local economy—a job a week. I'm told that in Noumea they have about 200 sitting there for a week every year. Think of the income we're losing. That is a lot of money flowing through a regional economy.

I have to give a lot of credit to Paul Darrouzet for being at the point we are at today with this legislation, Paul being the owner of Abell Point Marina. Back in 2016 we started this journey of looking at these provisions. He got in contact with me and said that, unfortunately, due to 20-year-old restrictions we achieve visitation from less than one per cent of the world's superyachts. Consequently, the vast economic benefits inherent in these visits are reaped by all of our Pacific neighbours, and specifically New Zealand, with its now world-class superyacht refit, repair and new-build industries. He said at the time that six superyachts that he knew of had stated in writing their intention to avoid the region in the next year, unless those regulations were removed, either by legislation, regulation, ministerial instrument or whatever is necessary. He has begged this place to remove the bureaucratic roadblocks and allow Australia's emerging superyacht industry to achieve its potential. We are here today to do that.

This legislation will exempt superyachts from paying customs import duties and taxes. It will remove the five-voyage minimum requirement, which better reflects the superyacht operating model. Superyachts are often chartered for a single voyage at a time. The operators follow the best weather and cruise the Pacific's beautiful locations, like the Whitsundays. The legislation will also broaden the definition of a voyage to include round trips—superyachts can't get temporary licences, because they're usually round trips that start and leave at the same port. The legislation will also allow vessels to dry dock under a temporary licence, which means repairs and refits of superyachts can be done in these places, once again pumping money into local economies and creating a hell of a lot of local jobs. I am told that what this legislation will not do is remove protections for Australian-flagged superyachts. An Australian-flagged superyacht operator with a general licence would still have the same right to contest an application under the coastal trading act.

This is an industry that is ripe for the picking. We've just got to get the settings right. Let me just explain the flow-on benefits that this could potentially have. There's a little community called Bowen in my electorate. Bowen has been a Labor town for a long, long time—until recently, I have to say. It is a coalmining town and a port town. These are salt of the earth workers. It's a little town that's suffered a death of a thousand cuts economically. Slowly things have been whittled away from it. We've pumped in government services there but industries have closed down, meatworks and saltworks have scaled back, and there have been knocks to the ag sector there. Adani, which everyone opposes, and the expansion of Abbot Point could have lifted that town up by now but, no, that's not to be.

Paul Darrouzet has a vision to have a huge marina down there at Bowen, which would have servicing centres for superyachts within it. This could create a whole new industry in that small town, which, as I said, over a long period of time—decades—has been dying a death of a thousand cuts economically. It could revitalise the place. It could create so many new local jobs just if we did this one thing—if we passed this bill—because there are people who are already looking to jump on board that potential investment and get it going. I'm very hopeful that we'll be able to deliver that for Bowen, but it is going to take this bill getting passed through this place to get that done, otherwise all these opportunities are dashed.

I've got to say that a lot of work that I have done, along with other people in the superyacht industry down here, over the last couple of years will probably have been in vain if this is not passed. We've done a lot in terms of changing the settings within the Great Barrier Reef Marine Park, working with the former environment minister—now health minister—and working with the current environment minister to get settings changed where these superyachts were restricted throughout specific areas of the Great Barrier Reef. They are completely unnecessary restrictions, because these are first-class environmental vessels. While they're big, big ships, they actually carry a very small environmental footprint. They go to very sensitive areas and they do it in a very well-managed process and a well-managed operation where they're not upsetting the local environment. We've done all that. We've achieved all that. We got the settings changed when there were people at the start saying, 'You probably can't do that. People will get upset,' but no-one's been upset. They've all been achieved.

What we need to do now is remove these financial barriers that currently send these superyachts to Noumea, Fiji and New Zealand—anywhere elsewhere where there's no financial barrier. All these other places are reaping the rewards in terms of the spend that the people who go on board the superyachts bring to local communities. They're getting the jobs. We're not getting them. We're not getting them in Cairns. We're not getting them on the Gold Coast. We're not getting them in Townsville, Mackay, the Whitsundays or Bowen. The sad thing is that if this doesn't pass this place, we just won't get them. It will go begging. It will take a long while before we get back to this place again where we're able to have a bill before the House that actually allows us to do this. It would be a great, great shame. For a little town like Bowen, a solid Labor voting town over most of its years of existence, another economic opportunity will be denied to them.

There are cheap shots that can be thrown, and they have been thrown in this place, about removing the GST off superyachts like it benefits the rich. It's nonsense. It will benefit these poor people in Bowen who are unemployed, underemployed and desperately seeking work. It will benefit the workers in Airlie Beach. It will benefit all of these communities up and down the Queensland coastline that could potentially have superyachts in there revitalising their communities with that extra spend.

I urge each and every one of the members of this House to think of those communities, think of those job opportunities, think of that money that could be pumped into these economies and vote for this bill.

Mr BRIAN MITCHELL (Lyons) (19:24): I will respond to the member for Dawson. I could not help but think to myself, here he is advocating for the removal of GST from vessels worth $100 million, a tax that his party introduced to this parliament over the vehement opposition of those of us on this side. If his party hadn't introduced the GST he wouldn't be having that problem. You might want to think about that, Member for Dawson. This is a problem entirely of your own party's making. You brought in the GST; now you have to live with it. And to think that he stood there advocating for the removal of the GST from vessels worth upwards of $100 million, while the people of Bowen, when they go to their local shops, have to pay GST on the goods that they pay for—those good, hardworking people still have to pay the GST—well, it just beggars belief and says everything about those on that side of the House.

Australia is an island country. We are the only country in the world to straddle an entire continent. From east to west, north to south, we are surrounded by water. Of all the countries in the world, you would think that we, above all others, would cherish a domestic maritime fleet. Of all the countries in the world, you would think that it would be Australia that would home to a strong coastal shipping industry and that it would be Australia training the best maritime engineers, the best shipmakers, the best sailors and officers, the best technicians and the best navigators in the world. But that is increasingly not the case. Under the Howard government, Australian shipping was decimated. The Liberals happily turned a blind eye to massive rorting of temporary licences for foreign vessels in Australian waters, leading to the near disappearance of Australian vessels and Australian crews on our coastal routes.

When Labor defeated the Howard Liberal government, we introduced the Coastal Trading (Revitalising Australian Shipping) Act 2012, which breathed new life into the sector by changing tax rules and tightening the rules around foreign vessels. The member for Grayndler was infrastructure minister at the time, and his changes to the coastal trading act remain Australia's biggest maritime reform since the passing of the Navigation Act roughly 100 years earlier. But now, again, we have a new attempt by the Liberals to cripple Australian coastal shipping, and, more particularly, to target the men and women who work on Australian ships. I've heard it said by some that the decimation of coastal shipping is an inadvertent by-product of this. I don't believe it is. I think it's the aim of the government—to decimate Australian coastal shipping.

Let's not beat about the bush: we all know that the Liberals hate Australia's coastal shipping sector because its labour force is unionised and refuses to doff the cap. While workers are unionised, whether on ships or building sites, in schools or hospitals, or on trains, the Liberals will do everything in their power to bust them apart, because they know that workers who are not unionised are easier to control, will accept lower wages and will not stand up for their rights in the workplace. The Liberals care about one thing—getting the cheapest deal possible. They don't like Australian coastal shipping, because it costs more than the rust buckets crewed by exploited foreign workers that can get goods from A to B for a few dollars less. Little wonder then that the Liberals are so committed to repealing Labor's legislation, which provides fairness for workers and certainty for investors.

The bill we're speaking about today seeks to deregulate the Australian domestic shipping industry. It will have the same effect on Australian shipping that Liberal policies have had on Australian car manufacturing. It will destroy investment and destroy jobs. Importantly, it will destroy career pathways for young Australians. This bill removes the preference for Australian flagged and crewed vessels, and replaces the three-tiered licencing regime with a single permit system that grants access to vessels of any nationality to work the Australian coastline for a 12-month period. It significantly extends the period of exemption from domestic wage standards for workers on foreign vessels in Australian waters. It's a disgrace. Every bit of this bill is an affront to Australian workers.

The Liberals are actively seeking to replace Australian ships with foreign ships. The Liberals are actively seeking to replace Australian workers with foreign workers. The Liberals are actively seeking to replace Australian wages in Australian waters with foreign wages in Australian waters. And they're not even being covert about it. If they can do this with ships, they will do it with shops, and they'll do it on building sites. How long before the Liberals actively seek to replace Australian shop workers and Australian construction workers with foreign workers on visas? How long before the Liberals actively seek to replace Australian wages with lower foreign wages on land, not just on water?