Minister.
I am on my feet. Point of order, Chair; I'm on my feet.
Government senators interjecting—
Order! I will recognise the Leader of the Government in the Senate, Senator Abetz, first, as would be ordinary practice. There is no question before the chair, but if anyone is seeking leave to speak.
I am seeking leave—
Senator Wong, I have recognised Senator Abetz, if he is seeking leave.
Sorry; you gave him the call and he is silent, so I think I should have the opportunity to make a contribution, if I may, Mr President.
Opposition senators interjecting—
Order!
You're just having a chat are you?
No, your leader is having a chat, Senator Macdonald!
Senator Abetz, are you seeking leave?
If you will just bear with us, Mr President.
Order! Senator Abetz, I need to know whether you are going to seek leave or not seek leave. I will give you one opportunity if you wish to seek leave. I am sorry to both of the leaders. The Senate must proceed; we cannot have discussions like this.
The committee is considering the Clean Energy Legislation (Carbon Tax Repeal) Bill 2014 and seven related bills. The question is that opposition amendment (3) on sheet 7527 moved by Senator Singh be agreed to.
I rise to speak in support of this amendment. In the context of this committee debate, the ending of this committee debate I anticipate, the government has made clear that it intends to gag and guillotine this debate if it is not concluded shortly. It is very clear that the deals have been done and the government is likely, finally, to have the numbers in this chamber to end an effective response to climate change.
I was in this chamber when the CPRS, the Carbon Pollution Reduction Scheme—something which would have introduced a market mechanism, a floating price for carbon—was voted down by this Senate. The reason it was voted down on that day, the fundamental reason, is the same reason this legislation is likely to be voted down today—that is, a man called Mr Tony Abbott. He decided that it was in his political interest not to look to what was responsible, not to look to what was right, not to look to an effective, credible response to climate change, but to stake his political career, his political ambitions, on fearmongering and scaremongering. That is what this debate has been about for years. It has been about Mr Tony Abbott wanting the leadership of the Liberal Party, wanting to be Prime Minister, and staking his political campaign on fearmongering. The man who told us that Whyalla would be wiped off the map now cannot even guarantee to Australians that they will get the sorts of price reductions that he campaigned on for years.
If these bills pass today, it will be a day in history where this parliament failed the test of leadership, failed the test of rising above opportunistic politics and short-term sectional interest to act in the national interest. If these bills pass, this nation will have walked away from a credible and effective response to climate change, it will walk away from reducing our greenhouse gas emissions and it will walk away from the task of transforming the Australian economy into the clean energy economy that we have to be in the 21st century. If these bills pass, this nation will be the only nation in the world going backwards when it comes to tackling climate change.
Putting a price on pollution is the most environmentally effective and economically responsible way of reducing greenhouse gas emissions. And I remind those opposite of the journey to populism and fearmongering that they have undertaken—a sorry tale indeed. Let us not forget there was once a bipartisan commitment in this country half a decade ago to act on climate change. There was a bipartisan commitment half a decade ago to do the right thing, to do the responsible thing. Those opposite talk about intergenerational responsibility. Senator Cormann talks about not giving a credit card to the next generation. That is precisely what you are doing. You are passing a credit card for all of our inaction on this serious threat of climate change to our children and our grandchildren. It is an absolute abrogation of the responsibility that we have in this place.
Let me remind those opposite of what Mr Howard said in 2007. There is a great YouTube clip that people can go back to. I am quoting:
I will also be announcing a 'cap and trade' emissions trading system that will help Australia substantially lower our domestic greenhouse gas emissions at the lowest cost.
Stabilising atmospheric concentrations of greenhouse gases will be difficult, but not impossible. We do not have to sacrifice our economic prosperity to tackle the problem.
Australia will more than play its part to address climate change, but we will do it in a practical and balanced way, in full knowledge of the economic consequences for our nation.
So John Howard in 2007 backed in an emissions trading system, the same as the Labor Party is currently moving in this place—the same principle, the same approach, that Labor is putting to this chamber: an emissions trading scheme to give the most effective response to climate change, a cap on pollution, a price set by the market, firms able to find the cheapest and lowest cost way of reducing the pollution we put into our atmosphere.
The fundamental problem is this: as long as something is free our economy will continue to do it. As long as polluting is free, we will see more and more pollution. We understand that intuitively. We understand that in so many other areas of policy, but on this the government has chosen to go down a path which is opportunistic, which is all about fearmongering. I think future generations will look back on these bills and they will be appalled at the short-sighted, opportunistic, selfish politics of those opposite. Mr Abbott will go down as one of the most short-sighted, opportunistic, selfish and small people ever to occupy the office of Prime Minister.
What we will see and what we are seeing from those opposite are short-sighted politics to dismantle a policy which has been supported by them, by the overwhelming majority of scientists and the overwhelming majority of economists. It is easy to run a campaign against a price on carbon, because you are saying to people: 'What we are doing is polluting the atmosphere and we now have to stop doing that. We have to change how our economy works.' But it could have been done if those in the Liberal Party—Mr Turnbull and other moderates—turned their backs on a man who describes climate change as 'absolute crap' and did the right thing by the nation.
There is a lot of talk in politics today about the need to have the reform imperative—about the need to have the courage to reform. If you look back to the great economic reforms governments have implemented—and I particularly want to talk about the opening up of our economy, the liberalisation of trade, the floating of the dollar under the Hawke and Keating governments—it would have been easy to run scare campaigns on those policies. But there was a modicum of bipartisanship for the betterment of the nation—responsibility being taken at that time for future generations. Where is that now? The man who killed it is the man who occupies the Lodge—or, not the Lodge, Kirribilli. The man who killed it is the man who occupies the office of Prime Minister—a short-sighted, opportunistic scaremonger. That is this Prime Minister.
These bills dismantle a policy which has been in place for two years which is working exactly as it was intended, reducing emissions, reducing pollution while supporting the households of Australia and the competitiveness of our economy. I think future generations will look back at the people who claim the carbon price was a wrecking ball and identify the real wrecker—a Prime Minister who has practised hypocrisy, deception and destructive politics when it comes to the challenge of climate change. We on this side of the chamber accept the science. We on this side of the chamber accept the responsibility to do something in this time for the next generation and we in this chamber will never walk away from a serious and credible response to climate change.
Yesterday I asked the minister a question that I did not get the answer to. I will repeat that question and then I will ask it again after I have read out a couple of letters I have received. My question was: Minister, can you guarantee that average Tasmanian household costs will drop by $550 each and every year, as guaranteed by the Prime Minister? This is a question that not only myself but many Tasmanians are interested in. I received a letter via email from a small-business owner in Tasmania and I want to read it out:
Hi Senator,
Can you advise me how much I can expect to save this financial year by the abolition of the carbon tax.
I have heard that the Government has stated it should be on average $550 however Aurora Energy today advised me that their power charges will not reduce as a result of the carbon tax being taken away. I do recall this being a reason used by them for the increase in the market wholesale price of electricity.
The small-business owner also then sent me a letter that he had received from Aurora Energy, the suppliers in Tasmania:
Dear Customer
YOUR AURORA ENERGY CONTRACT PRICES FROM 1 JULY 2014
We write to you with regard to the prices in your Aurora Energy electricity supply contract that will apply from 1 July 2014, in light of the likely repeal by the Australian Government of the carbon pricing scheme.
As of 1 July 2014, there will be no change in the price of your supply contract, as the wholesale energy purchasing arrangements which underpin the provision of electricity to you have not changed. There will also be no change to prices in the event of the carbon tax being repealed, as the costs of providing energy to you will remain unchanged with the wholesale energy market having already factored in the probability of the carbon tax being repealed.
When the time comes to sign a new supply contract with Aurora Energy, the cost of carbon, if there is any, will be captured in the energy pricing that we quote you in your next contract. There will be no separate rate for carbon.
Should you have any questions relating to your contract and the impact of carbon, please do not hesitate to call our Business Sales Team … and we will be able to answer any questions you may have.
So, again, my question is: Minister, can you guarantee that average Tasmanian household costs will drop by $550 each and every year as guaranteed by the Prime Minister?
Firstly, in relation to the last question in terms of electricity price reductions in Tasmania: as I said yesterday, the Office of the Tasmanian Economic Regulator released a statement on 19 June 2014 that electricity prices would fall in real terms by 7.8 per cent with the removal of the carbon tax. In relation to the $550 reduction in cost of living for the average household, that assessment is based on the exact same methodology as used by the previous government when they claimed a reduction in costs of $380 on the basis of replacing the carbon tax with an emissions trading scheme. We are basing our advice to you in relation to this on the exact same methodology that the previous government did.
I wanted to ask the minister some questions. I might ask whether he has the figures for the Queensland regulator and what prices would fall in Queensland. I also seek from the minister confirmation that I am not—and I am asking the minister this—living in another world. I heard the Leader of the Opposition filibuster for about 12 minutes at the beginning of this committee session this morning. She did not even pretend to ask a question of the minister. The debates in the Senate and, particularly, in the committee stages are intended to allow senators to ask precise questions about the bill and the amendments before the chair.
We heard from the Leader of the Opposition in the Senate—one of the leadership group of the party which went to the 2010 election promising there would be 'no carbon tax under a government I lead' and then, when it got into government, immediately introduced a carbon tax—not a question but just a 12-minute rant to waste the time of this committee and to prevent other senators from asking questions. We got that from that senator who is supposedly the leader of a party in this chamber. You would expect that a leader might, at least, show some responsibility. That is my recollection.
After hearing the Leader of the Opposition, I have to ask the minister whether my recollection is correct in that the Australian people at the last election voted overwhelmingly against the Labor Party and the Greens political party. Is it also true—and is my recollection correct—that it was made very clear for about 2½ years before the last election that the last election would be a referendum on the carbon tax? That is my recollection. But, after hearing the Leader of the Opposition, I must have been on a different planet! Clearly, Australians went to the last election accepting this was a vote on the carbon tax or otherwise. The Australian public answered that question, giving Mr Abbott and his team an overwhelming response—an overwhelming answer—in the election held last year.
Similarly, those senators in this chamber supporting the lied-about carbon tax lost one-fifth of their number. Parties in this chamber which indicated they also opposed the carbon tax—which included the coalition, Palmer United Party, Senator Xenophon, as I recall, and I think Family First, Democratic Labour Party and the Liberal Democrats—did very, very well. And yet, if you heard the Leader of the Opposition in the Senate today, you would think that the Australian public said something else. So my question to the minister is: Am I right that the last election was said to be a referendum on the carbon tax? And was the result such that the Australian public spoke?
Senator Wong gets up here and says that she and her colleagues in the Labor Party know everything and know what is best for Australia. She says there are a lot of scientists and economists who also think that this should be abandoned. In the minute I have left to me, I just want to ask again: Did the Australian public clearly say at the last election they wanted to get rid of the carbon tax? For all of the economists, for all of the so-called scientists that Senator Wong quotes and for all of those people in the Labor Party who say differently, wasn't it a fact that the Australian people, voting at the last election on what was clearly a referendum on the carbon tax, gave their answer and gave it overwhelmingly?
I thank Senator Macdonald for those questions. He is of course right—the last election was a referendum on the carbon tax. The verdict of the Australian people was very clear: they want the carbon tax gone. That is why the government is determined to deliver on our commitment to the Australian people.
In relation to electricity price determinations by the Queensland regulatory authority, I can indeed confirm that the Queensland Competition Authority has stated that electricity prices would fall by 8.5 per cent in a typical household as result of scrapping the carbon tax.
The CHAIRMAN: The question is that amendment (3) on sheet 7527 moved by Senator Singh be agreed to.
by leave—I move amendments (1) and (2) on sheet 7531 together:
(1) Schedule 2, item 3, page 75 (line 33), omit "electricity; or", substitute "electricity.".
(2) Schedule 2, item 3, page 75 (line 34), paragraph (f) of the definition of electricity retailer in section 60A, to be opposed.
Yesterday, I made it fairly clear that the way that the bill is written captures households with solar panels on their roofs and the Royal Children's Hospital, which has a co-generation plant, because the definitions are that an 'entity' includes an individual, the 'energy retailer' definition captures people who produce energy, and 'customer' captures those people who buy energy. I note in today's media:
Martijn Wilder, a partner at Baker & McKenzie, said that “on a plain reading, the law does apply to power sold from solar roof panels” and the letter of the law did not reflect the assurances the minister had given. “At best, it is legally ambiguous,” he said.
At the same time, the ACCC has said that they would be guided by what the minister had said in his second reading speech, but the point here is that the High Court, on several occasions recently, has shown that what parliament intended by legislation means nothing if the statute gives rise to a clear explanation, which, in this case, it does. So the courts will take notice of the law, not what the minister cobbles together in a second reading speech
On that basis, my amendment removes any ambiguity about whether this captures people who are producing electricity from their solar panels, or a hospital that is producing electricity with co-generation, or any other. Since that clearly is not the intention of the legislation we ought to remove the ambiguity from the legislation. That is why I am moving to remove from section 60A, this amendment, section (f), that was put in House, which says:
(f) any other entity who produces electricity in Australia.
By removing that you would remove any ambiguity so that people with solar panels and people who are into co-generation—in hospitals and the like—would not be captured by this piece of legislation. It would leave the ACCC without the burden of having to have on the statute books something that it will not enforce, even though it is the law that it does enforce it.
Our job is to make laws that are clear to people, and not to leave the law ambiguous, which will mean that it will land up somewhere in the courts. So I ask the government, the opposition and other crossbench members to support this amendment to give clarity to the law and to give comfort to people who have solar panels, people who are into co-generation and other people who were never intended to be caught up in this legislation in the first place. I recommend the amendment to the Senate.
The government does not agree to this amendment, which waters down the protection to consumers. The government has made it clear already that the interpretation of 'electricity retailer' is limited to electricity retailers and electricity producers selling electricity, in a wholesale electricity market, to a retailer. This means that small-scale electricity producers such as families and businesses with solar PV on their rooftops are not covered.
The government considers that protections for electricity consumers are an important part of ensuring customers receive the full benefit of the removal of the carbon tax. That is why we have added various new protections to these bills, which will apply to electricity retailers.
The minister is wrong because all the minister is doing is referring to Minister Hunt's second reading speech by saying that that is how they have made it clear that this applies with regard to selling into the wholesale market, but that is not what is in the legislation. So the government is refusing an amendment which clarifies the situation. I think that is a very sad thing.
Before we vote on this amendment I would also like to have the minister clarify what he said yesterday. In here he said yesterday that airlines and supermarkets would be legally required to remove the carbon price. In fact, that is not the case. I note in the ACCC's brief to the big polluters—the Australian Industry Greenhouse Network—that despite the ambiguity in the final form of the repeal bills the ACCC would only enforce price reductions for electricity and gas retailers and bulk importers of synthetic gases used in refrigeration and air-conditioning. They would not be enforcing price reductions anywhere else.
So the minister needs to clarify that. The ACCC is telling people that they would only be doing that. I think this really puts the lie to the government's claim that they will be forcing price reductions on everything. They cannot and they will not. The ACCC went on to say that, under the false and misleading conduct powers, they will be looking at the public statements made by companies in relation to what they have done. But that is a vastly different thing from the enforcement of price reductions.
It is very clear on the record, from the ACCC now, that the only enforceable price reductions will be electricity, gas and synthetic greenhouse gases. For everything else there will be no requirement, and therefore the $550 claims about the community being better off are simply hot air. I would like the minister to clarify: is the government's understanding and intent the same as what the ACCC said yesterday? Isn't that the case?
I thank Senator Milne. Firstly, Senator Milne did not accurately quote what I said to the chamber yesterday. She is right, though: we did go through this in some detail. As I pointed out yesterday, as a result of this bill, the ACCC will have price-monitoring powers under section 60G. The ACCC will be provided with new powers to monitor the prices offered, displayed or advertised of electricity, natural gas, synthetic greenhouse gas, synthetic greenhouse gas equipment and any other goods designated by regulation in relation to the carbon tax repeal.
False or misleading representations are obviously also prohibited, consistent with section 60K, so all corporations—and that includes airlines and others—will be prohibited from making carbon specific false or misleading representations during the effect of the carbon tax repeal on prices. This prohibition covers all goods and services and carries a penalty of up to $1.1 million for a corporation and $220,000 for an individual.
The question is that Greens amendments (1) and (2) on sheet 7531 be agreed to.
I move opposition amendments (4) to (6) on sheet 7527:
(4) Schedule 2, page 71 (line 1) to page 101 (line 20), to be opposed.
(5) Schedule 3, page 102 (lines 1 to 26), to be opposed.
(6) Schedule 4, page 103 (lines 1 to 29), to be opposed.
I would like to highlight the importance of the Steel Transformation Plan, which this government seeks to abolish in this legislation. Senator Cormann, given the state of manufacturing in this country, I do not understand why you would not keep the Steel Transformation Plan and, given the wrecking this government has done to the car and ship industries, will you justify why the government would not retain any mechanism that improves investment, innovation and competitiveness in the manufacturing sector?
I thank Senator Singh. What is described in an Orwellian fashion as the 'Steel Transformation Plan' was in fact nothing other than a last minute bit of compensation at the behest of various union representatives to repair the injury that the carbon tax was putting into the steel industry. Of course, by getting rid of the carbon tax we remove the injury but we make sure that Australian business can be more competitive again internationally and is able to compete on more of a level playing field. As such, there is absolutely no reason to keep the compensation for an injury that this government is about to remove.
The question is that schedules 2 to 4 stand as printed.
The question is that schedules 2 to 4 stand as printed.
The question is that schedules 2 to 4 stand as printed.
The opposition opposes schedule 5 in the following terms:
(7) Schedule 5, page 104 (line 1) to page 105 (line 4), to be opposed.
Schedule 5 absolutely cripples ARENA. It drops the amount of money available for this very valuable organisation to enable and encourage development in critical renewable energy projects. That value of projects funded to date, we know, has been unquestionable. Australia has all the raw ingredients and talent required to be a world leader in renewable energy development and commercialisation and yet this government is trying to rip the heart out of ARENA, cripple its funding, take Australia backwards, take a whole new investment in renewable energy backwards, which surely is an economic driver of innovation and prosperity for our nation. We do not support the government's schedule.
The Greens oppose schedule 5 in the following terms:
(7) Schedule 5, page 104 (line 1) to page 105 (line 4), to be opposed.
I am moving the same amendment, because it is critically important that we keep the Australian Renewable Energy Agency. For the benefit of people thinking about this, we set up the Australian Renewable Energy Agency as part of the deliberations of the Clean Energy Package. At the time, renewable energy projects, grants, the Solar Flagships and so on were all across the government. It was a complete mess, and so we pulled together all of the renewable energy programs and we set up a new statutory authority, the Australian Renewable Energy Agency, and it was linked to the Clean Energy Finance Corporation so that you had the whole spectrum from early research and development, pilot stage to the commercialisation of these projects.
It was a very good piece of architecture in terms of legislation. It meant that, as the Clean Energy Finance Corporation project started to make money, the profits would be cycled back through to ARENA to fund early research and development so it would become a self-sustaining system of money going back in. The government has a schedule to abolish the clean energy bills and to take a vast amount of money out of ARENA. As the government has proposed, over the next three years, if the government's schedule stands, ARENA's funding would drop from just over a billion dollars down to $341 million. In other words, if you vote for the bill as it stands, you are voting to take $717 million out of the Australian Renewable Energy Agency. What does that mean? It means ARENA will not be able to fund new projects. Effectively, what they do need is $150 million a year to keep the high-quality research and development moving. If you end up with only $89 million in 2014-15 and $59 million the following year, you end up with no new projects. ARENA has 152 projects in their pipeline worth $5.6 billion in investment that will just disappear. This is our reality.
We already have companies out today—for example, GE, a US multinational and one of Australia's largest foreign investors, saying its $3.5 billion pipeline of investment in green energy in this country is at risk because of possible changes to the RET. That is a separate issue, I agree. But it demonstrates how much interest there is in rolling out these technologies across the country. So it is a very bad mistake for the government to be taking $717 million out. I have heard some crossbench senators say that they want to save ARENA. You do not save a renewable energy agency by taking $717 million out of it over the next three years and leaving it with no ability to fund new projects.
Secondly, the ARENA board have all now had their positions ceased because their contracts have all run out and as of the 17th, I think it is, there are none of them with an ongoing contract. Yesterday in the Senate, as a result of the motion that I moved, the Senate asked the government to reappoint people to the ARENA board. If this motion is unsuccessful and they lose $717 million, and they have no board anymore—the secretary of the department is effectively heading ARENA, overseeing their existing projects—frankly, by the time the bill comes in later this year to save ARENA, it will be a shell of its former self. You either vote to keep ARENA as it is with the ability to fund the projects in its pipeline and you get people reappointed to the board, because it is an independent statutory authority, or you accept that if you are going to wrench this money out of it and let it lapse with no board, then effectively you are killing ARENA through the back door. That is what is going on here.
I urge the Senate: if you are serious about saving the Australian Renewable Energy Agency, and if you like the kinds of programs that it is supporting, then support my amendment. ARENA is supporting programs right around the country; there are fantastic projects. Out in communities people are excited by this investment in renewable energy and by the innovation and jobs that are coming with it. The point that I just make very seriously is that there is a funding schedule here to take the money out of ARENA. The Greens are standing firm saying do not take that $717 million out of it and please reappoint people to the board, as the Senate asked yesterday, so we are not left with a shell of a former organisation with the departmental secretary overseeing the projects for which the money has already been allocated and that is virtually it. So I urge the Senate: if you are serious about supporting and saving ARENA, it is not enough to leave it to three months down the track to vote against the abolition bill. The fact is that you will be voting for its abolition if you take this money out and the board is gone—it is just a shell. I really urge people to support my amendment.
Senator Singh's comments just now, that this schedule would cripple ARENA, are really quite unbelievable, because what this schedule does is give effect to a Labor savings measure out of their last budget. That is all it does. We are giving effect to a savings measure that you put in your last budget, that you initiated, that you banked in your last budget and that you failed to legislate. Now you come in here and say that somehow we are crippling ARENA. That is just unbelievable. Of course, the government that initiated that savings measure and banked it in the last budget—the Labor government—when I last looked, was supported by the Greens political party in government.
The Greens were standing behind the budgets of the previous government. The Greens have said that they were part of guaranteeing supply to the previous government. They have got a member in the House of Representatives who was a part of guaranteeing supply to the previous government. The previous government delivered a budget which reprofiled $370 million in funding over the forward estimates into later years—2019-20 to 2021-22—and reduced funding for ARENA by $435 million over the forward estimates. The changes in this schedule give effect to the Labor Party's last budget. So for Senator Singh to come in here and say that we are somehow crippling ARENA by giving effect to their last budget's savings measures is really quite hypocritical, I would suggest to the Senate.
As Senator Milne and Senator Singh would well know, the future of ARENA, structurally, is going to be the subject of different legislation. It is not the subject of the package of bills that is in front of us here today. The government will not be supporting these amendments. We will be voting for the schedules to stand as printed and that is what we would recommend every senator to do in this Senate—in particular given the absolute mess that the budget is in after six years of Labor waste and mismanagement.
I would just like to ask the minister to inform the Senate how the government intends to respond to the motion passed yesterday to reappoint the board of ARENA.
That is not a matter related to the bill before us. It is not a matter related to the amendment before us. It is obviously a matter for Minister Hunt. Obviously, in the ordinary course of events, Minister Hunt, on behalf of the government, will respond to the motion passed by the Senate.
The CHAIRMAN: The question is that schedule 5 stand as printed.
The remaining amendments are consequential on amendments that have not been passed. So I now put the question that the bills stand as printed.
I move:
That the report from the committee be adopted.
The question is that the report from the committee be adopted.
I move:
That these bills be now read a third time.
I rise in what is a critical moment for this nation. The vote—
The will of the Australian people has been endorsed.
Order on my right!
It is based on lies.
Order on my left!
Senator Ian Macdonald interjecting—
Senator Macdonald and Senator Cameron, order! Senator Milne, you have the call.
This is a critical moment for our nation. There are a number of new senators in this chamber and their vote today, and the vote of every person in this Senate, will be the legacy of their political career. That is because voting for—
That is what they were elected to do.
Senator Macdonald! Senator Milne, you have the call.
A vote for the abolition of the clean energy package is a vote for failure. It is a vote to fail—
Mr President, I rise on a point of order. I appreciate those on the other side may not agree with the contribution, but Senator Macdonald could at least desist from interjecting for perhaps 10 or 15 seconds while another senator is making a contribution on the third reading.
Thank you, Senator Wong. I remind all senators in the chamber that interjections are disorderly and Senator Milne has the right to be heard on this third reading debate.
A vote for the abolition of the clean energy package is a vote for failure because it is a recognition that this parliament does not want to face up to the four to six degrees of warming, which is the trajectory we are on as a planet. They do not want to face up to what is intergenerational theft, because a planet facing the warming that we are now being subjected to, and will be subjected to, is a planet experiencing the sixth extinction crisis. It will be a planet suffering rising sea levels. It will be a planet suffering food security crises and it will be a nation, Australia, failing to play our role in global negotiations. We will be a global pariah as the rest of the world moves to try to secure a treaty in 2015 to give people on this planet a chance of survival in the face of a climate emergency. Australia will be relegated to a pariah and a backwater. But it is also a failure to understand that the future is going to be powered by renewable energy, by innovation, by excitement and by new manufacturing.
If this parliament votes to abandon the clean energy package, you are voting against the best interests of the nation. It is a huge opportunity cost to Australia. We will be sidelined in global capital markets. We will be sidelined in innovation. Already GE is out today saying that the pipeline of investment in renewable energy is in jeopardy because of what Australia is doing. This is an appalling day for Australia when a government, rather than lead in the face of what the world is facing up to and rather than lead and be ahead in the race to the future, is determined to stick with the past. So the Greens say, absolutely: this will be a short-lived victory for the Abbott government and those who vote with it today, because Australia will not stand for it. People want this country to lead. People want innovation. People want the clean energy future and people will understand very quickly that the supposed benefits will not be realised. But what people will face is another summer of extreme weather events and more summers after that, as our Pacific neighbours will
And so, I am here to say that the Greens will join with everyone across the country in bringing back to this parliament a more rigorous framework of legislation that will get Australia onto the track we need to be on; that is a 40 to 60 percent emissions reduction target on 2000 levels by 2030 and net carbon zero by 2050. That is the kind of ambition that we will be out talking to the community about and making sure that we get back to this parliament. We will give hope to future generations. That is what we are going to do: go out and provide hope and a focus on the future while the government and those who support it today are going out to the community focussing on the past and giving people nothing but despair. The future demands people who face the challenges posed now. The Greens are up and ready for that task.
As one who, at the very beginning of this debate, crossed the floor against my own party, I would like to say a couple of words in the final debate on this long-running issue.
First of all, we have heard from the Greens political party the ultimate in hypocrisy. The Australian people, clearly, voted at the last election on what everyone knew was a referendum on the carbon tax, to get rid of the carbon tax. I want to congratulate those political parties who went to the election promising the repeal of the carbon tax and who have actually voted on the basis upon which they were elected. I mention the Democratic Labour Party, Senator Xenophon, the Palmer United Party, the Liberal Democrat Party and the Family First Party, all of whom made it quite clear when they went to election, like the coalition, that if Australians voted for us we would get rid the carbon tax. It is the ultimate in hypocrisy for the Greens political party then to say that they know better than the Australian public, that they know better than our fellow Australians voting at an election. It is typical that the Greens think that they know better than everyone.
Opposition senators interjecting—
Order on my left.
Let them go, Mr President, I enjoy it! They will not understand the will of the Australian people and yet they claim to be part of a democracy. Can I conclude on a matter that I mentioned in my very first speech in this place. If there is a problem with global warming—notwithstanding that in Brisbane on Saturday morning we had the coldest day in 113 years, but I leave that behind. I have always indicated that I have an open mind on this. But what I do say is that Australia emits less than 1.4 per cent of global emissions. Without serious work by the United States, China, Russia and the European Union, a five per cent reduction in Australia will make not one iota of difference to all of the things which the leader of the Australian Greens political party would have us believe will occur as a consequence of today's vote. I congratulate the Australian public for their decision, and I congratulate all the parliamentarians who have followed the dictates of the Australian public in having this bill passed today.
This is a fundamental moment in Australia's history. We are about to devastate the future of this country. We are about to take this country backwards in droves through the mindless ideological bent of the coalition. Australia today will be a laughing stock to the rest of the world. We are sending this country backwards—and all for what? For playing politics: playing politics with Australia's future, playing politics with our environment and playing politics with our children. It is an outrageous moment in Australia's history when the coalition are sending this nation backwards. We know that there are so many of them who do not believe the science. Senator Macdonald's contribution just now makes it clear—the hypocrisy—that in fact he does not have an open mind. He has never had an open mind on this issue. Labor stands by the science. We stand by the economists who have made it very clear that an emissions trading scheme is the way forward for this country—as so many other countries are moving towards, or have already moved towards, including some of our most hugest trading partners—China, the US—
Most hugest?
Most hugest?
our largest trading partners, China and the US. This is a moment in Australia's history, a fundamental moment when this country is going backwards. Labor will not stand with the government on this. Labor stand with the scientists, and we stand with the economists. Labor is voting for the environment. We are voting for the future, the future of our children. And that is why Labor will not support these bills.
The question is that the Clean Energy Legislation (Carbon Tax Repeal) Bill 2014 and seven related bills be now read a third time.
The reason Labor is seeking to amend the Asset Recycling Fund Bill 2014 and related bill is that we believe that infrastructure should be built where it will create jobs and growth, not rolled out for short-term political gain. Our amendments will improve the operations of this bill and make it more transparent for taxpayers and industry. Unlike the government, Labor cares about the types of asset sales that will be eligible for a Commonwealth-funded incentive.
We will ensure that funds set aside for education and research infrastructure remain dedicated to that productivity-enhancing endeavour, with proper governance retained. We will make sure that the rules that apply to the Building Australia Fund—a fund to be emptied into this new Asset Recycling Fund—will continue to apply. This is in line with and continues what we did when we were in government. The Labor government established a transparent process to ensure that scarce government money was spent on the most productive investments to create the biggest benefit to the national economy. Our focus was on what was in the best long-term interest of the nation, not what was in our own short-term political interest. It is essential that government investment in infrastructure goes into the most productive infrastructure possible.
Labor will move two groups of amendments to this bill. The first will maintain the $3.5 billion in the Education Investment Fund and those funds dedicated to the purposes of that fund. The second will require that asset sales transactions are approved by the parliament and that a proper analysis is undertaken when decisions are made on productivity-enhancing infrastructure. Part of this amendment will ensure that funded projects have published analyses of project benefits.
I can understand why the Nationals may not be too keen on amendments like this, as all of us are well aware of the National Party's record with regard to the 'regional rorts' program under the Howard government. Who can forget the Auditor-General's report into this program, which found that 43 projects were signed off without departmental approval between 2003 and 2006. And 38 of those 43 projects were in coalition seats. The Auditor-General also found that, in some instances, ministers approved money for projects without even receiving a funding application. If that does not smell like a pork-barrel, a rort, then nothing does. They actually approved funding without receiving an application from the people who they were funding. What was the coalition's response while in government to this damning report by the Auditor-General? Did they think that the independent Auditor-General's recommendation ought be adopted?
Senator O'Sullivan interjecting—
I know the good Queensland senator over there thinks an amendment like this is like a wooden stake to a vampire. It attempts to put to an end the raison d'etre for the Liberal National Party in Queensland: pork-barrelling. So I can understand why I am getting interjections from the other side. But what did they say about this report?
When criticised, the coalition government so often played the man. The Nationals may remain keenly attached to this particularly rancid form of pork-barrelling, with unproductive projects. The Liberals, usually, are just happy throwing a few dollars to their coalition lapdogs so that they can continue to count on their support—just toss them a few pork-barrels and that will keep those nuff-nuffs in the National Party in Queensland happy. That is the way the Liberal Party operates. It has worked for 50 years and they want to keep doing it in this particular bill.
We're grateful.
You are grateful. We appreciate that you show your gratitude to them. But the Labor opposition want to ensure that this does not become a marginal seat pork-barrel operation for a mates-based approach to government spending. The focus should always be on productivity and jobs.
Labor sees the value in working with the private sector to develop nationally significant infrastructure. People watching and listening to this debate should not fall into the trap of thinking that Labor is anti privatisation. Labor's view is that decisions about assets that are earmarked for privatisation need to stand on their own merits. The question that needs to be asked is: is the privatisation of this infrastructure asset the right approach that will benefit taxpayers and the long-term interests of our country? This should not be done simply to support an ideological fanaticism to privatise assets in the mode of those flat-earth, economic puritans on the other side. Nor should it be the basis for the Commonwealth's commitment to cut funding for nation-building infrastructure. The Commonwealth currently provides grants of up to 80 per cent for infrastructure. Will the states be left to do the heavy lifting on infrastructure, as the Commonwealth steps back and offers only 15 per cent for privatising? Thanks to Labor, current legislation already seeks to encourage private sector investment through a range of measures that were established after extensive consultation with industry. The government just does not seem to be aware of this.
So let me explain it to those opposite. In the 2013 budget, Labor created incentives through uplifting the value of carry-forward losses to bring them in line with the 10-year bond rate for eligible projects up to a value of $25 billion in total. Labor also exempted the carry-forward losses and bad debt reductions from continuity of ownership and the same business tests for eligible projects. These changes encouraged private sector ownership of brownfield infrastructure projects, where expenses are heavily front ended. They came about thanks to an exhaustive consultation process with the sector. They encouraged private investment in nationally important infrastructure. Yet here we are, and the coalition does not even seem to be aware of what legislation is already in place.
On our changes to carry-forward losses, we built this into the Infrastructure Australia process. In order to receive the tax-loss incentive, the independent expert Infrastructure Australia was involved. We specifically put an independent group of experts into the process to ensure it remained fair and proper. The infrastructure being built had to be nation-building infrastructure to access this support. That is the rationale for the amendments we are putting forward to this bill. There needs to be transparency and the government's infrastructure expert needs to be involved so that any privatisation of assets is productivity enhancing.
Labor welcomes the decision the government made a fortnight ago to accept all of the Senate amendments—mainly from the opposition—to the Infrastructure Australia bill. These amendments retain Infrastructure Australia as an independent adviser to government. The challenge now is for the government to accept IA's advice; having talked the talk, it now needs to walk the walk. The advice IA provided on East West stage 2 was that it is not ready to proceed. There is a pretty good reason for that. As someone who lives in Melbourne, I know that the inept, incompetent Napthine government has not actually submitted any significant details—basically, a letter of request. There is a reason why it has not submitted any significant details. You see, when you build a tunnel you normally need two things: you need to know where you are going to start and you need to know where you are going to finish. This proposal is so half baked—no, that is being unkind to half-baked proposals! This proposal is so weak they have decided they know where they are going to start digging a billion-dollar tunnel but they have not actually decided where it is going to come up. That is true. You are trying to hide your laughing! They actually got funding for a tunnel on the basis that they know where they are starting but they do not know where it is going to come up! There is no plan. They have not even got as far as working out where the tunnel will come up in Melbourne. I know, because I live on the western side of Melbourne, that it is somewhere in the west of Melbourne that they are going to bring the tunnel up. But that's all right, let's give them a billion dollars in advance! They have actually given them a billion dollars, two years in advance, before they even know where the tunnel is going to come up. That is what we call pork-barrelling to help out a desperate state Liberal government that is facing oblivion at the polls. So they have thrown a billion dollars at this project to try and make the Napthine government look good before an election. Who would fund one end of a tunnel? Seriously Mr Acting Deputy President, would you fund one end of a tunnel? It is tragic, but it is all true.
It wouldn't be appropriate for me to comment, Senator Conroy.
You've got to start somewhere!
That's right, you've got to start somewhere! We will just build half a tunnel and work out later where it is going to come up! It had better not come up anywhere near my place! This is a project that Infrastructure Australia has advised is not ready to proceed—and here he is, the fiscal messiah, giving a billion dollars to the tunnel when they have not even worked out where it is going to come up. They are not going to start building it for two years but you have given them a billion dollars before they even know where it is going to come up.
I think it is also worth reflecting on the government's Orwellian terminology of 'asset recycling'. Let us call this bill what it is—'encouraging privatisation'. That is what this bill is doing and that is what it should be called. As I said, Labor is not against privatisation. We support it when it results in an addition to productive nation-building infrastructure. We support it when regulation and competition can ensure benefits for consumers with a good return to government. On that, we note the recent comments from the ACCC chair about the risk of inadequate regulatory protections for the sale of monopoly assets in order to access the 15 per cent Commonwealth incentive before July 2016—and well should we note these comments. But, as is typical of this government, they want to hide what they are doing with spin and word-games. They should just own up to what they want out of this legislation and call it the 'Encouraging Privatisation Bill'.
Before I conclude, I want to say a few words about the coalition's short-sighted decision to abolish the $3.5 billion Education Investment Fund. This cut to the education fund comes on top of the government's $5.8 billion cuts to higher education and student support. It is a far cry from their pre-election promises of 'no changes to education'. We all remember the then Leader of the Opposition, Mr Tony Abbott, looking the television camera in the eye and saying, 'No cuts to education.' But the EIF provides funding for projects that create or develop significant infrastructure in higher education—research and vocational education and training institutions. Its abolition raises serious questions about this government's commitment to long-term sustainable infrastructure for teaching and research at Australia's public universities.
Mr Abbott looked the television camera in the eye and said, 'No cuts in education'—just another lie. This is not the government the people of Australia voted for. Mr Abbott made a great play over the last three years about trust—'Take me at my word' and 'I mean what I say'—and he lied his way through the election campaign. This is just another demonstration of the extent of the lies that Mr Abbott told to the Australian people to gain their trust and support going into that last election. That is why one of Labor's amendments to this legislation is to reinstate this fund. According to the Australian Technology Network of Universities:
EIF funding has been used to develop new research and education infrastructure across universities, VET institutions, research centres and institutes and the CSIRO.
That is what this fund is being used for. They go on to say:
To date 71 infrastructure projects have been funded by EIF to the sum of $2.4 billion.
They also say:
Without systematic and sustainable funding for research infrastructure, Australia will not be able to attract the best and brightest researchers in the world, nor commit to significant long term research and commercialisation projects as is done in our competitor economies.
This is another act from a government that does not understand or care about science and research.
Our amendments are important amendments that improve the operations of this bill and they make it more transparent for taxpayers. It will never be a perfect block to those pork-barrellers from the Queensland Liberal and National parties—nothing will ever stop them; they will find a way to get their snout in any trough—but this is as good as is possible to do in this chamber today. Our amendments will ensure that a vital fund is retained so that it can continue to support education infrastructure. These amendments continue the focus that Labor had when in government: that infrastructure decisions need to be based on what is best for Australia in the long run—for our national interests, not the National or Liberal party interest in pork-barrelling in marginal seats in Queensland and other states.
I rise to make some comments on behalf of the Australian Greens on the Asset Recycling Fund Bill 2014 and related bill. I agreed with much of what Senator Conroy said. In fact, when we come to the committee stage, the Australian Greens will be moving an amendment. We think the bill is not particularly accurately named and we will be moving to change the name of the bill to the 'Encouraging Privatisation Bill'—which it quite clearly is.
The only significant difference that I have with Senator Conroy is where he points out that this was the best that could be done by the Senate today—and I strongly disagree. The best that could be done by the Senate today would be to block this bill and send it back to the drafters in the Prime Minister's office or from whence it came to have a good hard think about exactly what it is that they are proposing to do. This bill should not proceed, for reasons that are so self-evident as to be barely worth documenting.
The myth of the pre-eminence of private sector efficiency for running essential services—and, in particular, for running natural monopoly infrastructure—should be set aside today, before this bill is committed to the vote, for the shallow and self-serving ideological dead-end that it is. Bribing financially stretched state governments to sell assets in return for funding catastrophically expensive urban freeways and tunnels graphically illustrates the coalition's poverty of vision when it comes to infrastructure funding.
The Australian Greens strongly oppose this measure. We will continue to promote deliberative planning processes to establish infrastructure plans that actually serve communities rather than divide them. This bill—to put it as plainly as I can—is about bribing state and territory governments to sell off public assets in order to obtain Commonwealth funding. We will be urging Labor to join with the Greens and vote down this bill which would, among other things, create a slush fund for toll roads at the expense of investment in public transport.
I think I understand why Prime Minister Tony Abbott is such a hardliner on climate change. I think part of it is ideological and I think part of it is that he is generally too terrified to acknowledge what is happening to the global climate and part of it is that the Liberal and National parties are bought and paid for by the coal, oil and gas industries. That is reasonably easy to understand. But I find it harder to understand why the Prime Minister has such a hatred of public transport. Is it just that he does not ever use it himself? Is it that basic, or is there more at play? Why would you come into power and crash public transport projects that had already been funded and that were already in the advanced design stage? I am speaking of course of the Perth light rail project.
That was a proposition put forward initially by the Greens. I acknowledge the work of the state Labor government—the Gallop and later Carpenter governments—and particularly former WA minister Alannah MacTiernan in doing early study work on light rail for Perth. It is never the coalition, either at a state or federal level, that brings these projects forward. The Greens launched the proposal at the 2007 federal election. After a couple of years of campaigning and hard work, the Barnett government—deeply unpopular, traumatised, moribund and in a bit of a mess—took up the idea, proposed it and committed a little more than $4 million to design and pre-feasibility work.
So that was a Green initiated project, designed by Liberal and National parties in Perth and Western Australia—and we got $500 million from a federal Labor minister in the Commonwealth budget for implementation and development. So it was very much a cross-party initiative. At about this time last year we were thinking that we had actually managed to pull politics out of the proposal and that the Liberals, Nationals, Greens and Labor were going to be able to get a light rail network built in Western Australia—for the first time since 1958.
What happened? Prime Minister Tony Abbott comes to office and says, 'There will be no public transport under a government I lead,' pulls $5 million off the table and instead we get this obscene $925 million contribution—which effectively gets the project over the line and makes it bankable—for a private freight highway through a wetland. That is one of the reasons why we are opposing a bill such as this. The federal government have effectively put on the table $9½ billion worth of funding around the country for projects that have effectively circumvented Infrastructure Australia's arms-length assessment procedure, and now they are just dropping freeways on people's heads. It is a little similar to the east-west tunnel catastrophe that Senator Conroy was outlining, although I understand that the Labor Party has a rather morally ambiguous position towards whether that gets built or not.
In Western Australia, the situation is much clearer. The state and federal Labor Party oppose this freeway. The state and federal Australian Greens oppose this freeway. The community oppose the freeway. Most of the local government authorities in the area oppose the freeway. People who care about urban bushland oppose it. The local Aboriginal mob oppose four lanes of tarmac smashing through sacred sites on the shores of Bibra Lake, or Walliabup. So it is fairly easy to see that this project should never have seen the light of day. But there was $920 million committed to it before you had even seen the design. The Commonwealth bureaucrats who are writing the cheques out did not even know whether it would be an elevated freeway or not. Nobody knows what is going to happen to all the traffic—the masses of container traffic that you are going to be dumping onto Tydeman Road through four sets of traffic lights. Nobody knows. The thing has not been designed. Nobody has released the cost-benefit analysis—based, undoubtedly, on hallucinations of time savings that amount to $4 billion or $5 billion, just imaginary numbers.
The government believe that anything that is not nailed down should be privatised. They never saw an urban freeway that they did not like, and they have this strange loathing of public transport. Maybe you spend your entire time being carted around in Comcars and chauffeur driven limousines and do not feel the need for public transport. It should be user-pays, shouldn't it? That loathing for public transport such that you would abolish projects already afoot is stranger to me than understanding how the coal industry could have just bought and written your climate policy for you. It is simpler to join those particular dots. So I hope that Labor will rethink their support for this bill.
We will go into this in detail in committee, but I foreshadow that we will be supporting most of the amendments that the Labor Party are putting forward around cost-benefit analysis. They are entirely consistent with amendments that we passed a fortnight ago when we were debating the Infrastructure Australia Amendment Bill. They are sensible. If this thing is going to be passed back to the House of Representatives, it does make sense to ensure that those checks and balances are in there. But I do find it strange to see the Australian Labor Party aiding and abetting Prime Minister Tony Abbott's privatised urban freeways agenda. It is strange, particularly when you have been so strong at home in the instance of the Roe Highway. I find that a bit peculiar.
We believe that public assets should remain in public hands unless there is a very compelling case for them to be sold off. A couple of weeks ago, at the ACOSS national conference in Brisbane, I caught up with Professor Charles Sampford. He has very interesting views on these things. He has spent many years studying what actually happens in the process of state asset sales. Professor Sampford is Foundation Dean, Professor of Law and Research Professor in Ethics at Griffith University. He is not a hardline pro- or anti-privatisation person per se. In fact he has got some quite strong comments for anybody residing at the opposite poles of the debate, telling them to take a look at what the actual costs are and arguments that can be made for where the state should not own a particular thing. I will give one example that is close to my heart. With the National Broadband Network, we supported the wholesale arm of that company being brought back into public hands from Telstra. But, at the retail level, there is no sense having a state owned retailer necessarily. It makes entirely good sense for the private sector to be competing to provide a decent service to people. But, for heaven's sake, you do not privatise the wholesale essential service end of the network, which is a natural monopoly. So there is a spectrum of views.
Professor Sampford's take on it is very interesting, because he looks into what happens during the process of state asset sales and looks at all the hidden costs that exist, which I mention for the benefit of the boosters, those right up the far end of the pro-privatisation spectrum, who just want to sell everything off because they do not really believe in the existence of democratic states, which is kind of bizarre. Here is what he says:
Transfers of ownership are not without cost. Transaction costs include the costs of legislation, legal advice, due diligence, brokerage and underwriting fees. The fees can easily reach 2-3 per cent of the value of the enterprise and are not irrelevant to the excitement privatisation generates among the legal and stockbroking industries—and the uncritical support they offer for it.
That is kind of interesting when you see that the range of voices in the public debate demanding that things be sold off tend to come from the very same people—the hordes of parasites who swirl around try to take a cut out of these things—who are the direct financial beneficiaries of asset sales. Professor Sampford goes on:
To this must be added the tendency to underprice the asset to ensure that the privatisation is a 'success'. Politicians pushing privatisation are less concerned that the price be maximised than that the sale go through. In this they will be aided and abetted by the underwriters who want to minimise their own risk.
So there you have it. There is a certain kind of moral hazard. The private sector see a fat asset that they can potentially strip, fire a whole heap of people, break up and do with as they wish—an asset built up over years or decades by taxpayers' money that can be sold cheaply to them to suck a profit out of. So they are all for it. Then there are the analysts, the lawyers, the underwriters, the brokers and this whole cloud of people who materialise out of the woodwork to assist the government in flogging off something that people built. They are all for it. They are busily writing op-eds in the newspapers saying that this will be a fantastic thing, and the public interest gets wiped off the table.
We can see, from the clauses and the way in which this bill has been presented to the parliament, that the Abbott government is right up the far end of the pro-privatisation spectrum. That is why, if the bill is to pass the Senate, the Greens will be supporting the Labor amendments around some checks and balances, and we will be introducing some amendments of our own. It is not appropriate to be bribing state governments who are starved of cash—and we know that; the Commonwealth has got most of the taxing power; it has got 75 per cent of the taxing power. The states sit upon a perilously narrow taxation base. To be telling them, 'If you want new transport infrastructure you need to sell hospitals, you need to sell ports, you need to sell what is left of your electricity grids or power stations,' as much as they remain in public hands, 'and you need to basically throw them to the whims of the market, otherwise you will not see a dollar in Commonwealth funding,' is a disgrace. I will have a great deal more to say when we come to the committee stage of the bill and start going through amendments in details, but it is the strong view of the Australian Greens that this bill not proceed past the second reading stage.
I rise to speak on the Asset Recycling Fund Bill 2014 and cognate bill which essentially provide for the Commonwealth to provide an incentive to privatise state and territory assets and to recycle the proceeds into new infrastructure. The Commonwealth contribution is to provide state and territory governments with an additional 15 per cent for the reinvested sale proceeds to the cost of the project. Firstly, I support the position from Labor that projects funded under the scheme should be subject to the advice from Infrastructure Australia but, in particular, I support the position that a disallowable instrument should be provided for each potential sale so that the parliament can block any potential asset sale as ineligible for this scheme. This is because I have some very serious concerns about how this scheme will be applied in the Northern Territory, as do many Territorians who have contacted me with their concerns on what the Northern Territory Country Liberal government will do under the scheme.
Territorians do not want the scheme to be used by the CLP government to justify selling off our valuable public assets. They do not want the CLP government to sell off Power and Water, TIO and the Port of Darwin. This is why the Labor amendment supporting the disallowance instrument is so important. I will come back to the concerns that I and many other Territorians and community members have in relation to the selling off of our efforts.
As we all know, the Northern Territory suffers from a major infrastructure deficit. This is not a political statement; it is a fact. It is why we have a parliamentary committee looking into developing the North. We are also currently suffering from a major lack of infrastructure funding. The budget had no new infrastructure funding for the Northern Territory. All they have done is to attempt to re-announce projects from previous budgets. In fact, the Abbott budget outlined that over the next seven years the Northern Territory will get less than one per cent of the nation's infrastructure budget. You simply cannot develop the North by spending 99 per cent of the funding down south. Our lack of infrastructure funding has been met with a great deal of dismay in the Northern Territory. Even Chief Minister Adam Giles has been pushed to attack his own party for the pathetic amount of funding coming to the Northern Territory. Recently Treasurer Joe Hockey came to Darwin. He was asked by journalists at a press conference about the lack of funding. He said we should not be jealous. Can you believe that? This is exactly what he said, 'Don’t be jealous, because the rest of the country is jealous of your unemployment rate and the fact you have a very strong economy here. In other parts of the country we would need to lift the economy because ultimately it is not about getting a greater share of the pie. It is about lifting the total economy so that everyone can benefit.' Remarkably, member for Solomon Natasha Griggs supported his claims and said that the money should go down south because we did not have the workforce in the Northern Territory to carry out the work. Naturally, the Darwin media, as you can imagine, gave a lot of coverage about her outrageous, her outrageous remarkable claims, which no-one simply agreed with. She tried to claim that she was taken out of context so the Northern Territory News printed the entire claim. They hung her out to dry with her own words. There was nothing out of context. She simply outlined that she thought infrastructure funding should not come to the Northern Territory.
We have also seen in the Northern Territory News Joe Hockey refusing to rule out that they will not use the revenue they get from their planned fuel tax to pay for roads they have already committed to. Regardless of the views of Natasha Griggs and Joe Hockey, everyone else in the Northern Territory is concerned about the lack of funding, including Northern Territory government.
As I mentioned, the other major issue is the Northern Territory is under threat of privatisation. The Northern Territory government is clearly looking at selling off several of our assets. The big three currently under threat are Power and Water, Territory Insurance Office and the Port of Darwin. The Northern Territory government is clearly looking at selling these assets and I am concerned that they will use the asset recycling scheme as a justification to sell them. I am also extremely concerned that the Commonwealth would use the scheme as a gun to be held to the Northern Territory's head: 'Sell your assets or forget about infrastructure funding!' We should not have to sell our assets to get infrastructure funding. Projects should be funded based on needs not on whether you are willing to sell your assets.
Prior to the last election in the Northern Territory, the Country Liberal Party signed written contracts with several remote communities and regions which they have since effectively torn up. None of the infrastructure spending promise has been delivered. This is one of the main reasons three of the regional members walked out on them. For example, they promised an all-year accessible road to Wadeye. They promised this in a signed, written agreement with the community. In the tropics, such a road would cost hundreds of millions of dollars. We are coming up to nearly two years since the promise was made and two budgets have come and gone. There has been no funding or even a suggestion of funding. There has been no sign of any attempt to deliver on this promise. This was just one example that made up billions of dollars of underfunded election promises in the bush that are simply not happening. As former Chief Minister Paul Henderson, said, 'They are just spreading fairy dust in the bush.' He was right. They made underfunded promises they never intended to keep and it is coming back to bite them. As I have mentioned, they have already lost three of their own bush members.
I am concerned that in the CLP's desperation to pretend to be delivering on the billions of dollars they require that they would definitely sell off our assets under this scheme. I will briefly go through each of them and our concerns. Power and Water is the first one. After the CLP promised to cut the cost of power, they even ran election ads complaining about how much people dreaded their power bills. They immediately put up power bills annually by $2, 000 a household. Most people at the time were very much of the view that the CLP were fattening Power and Water up for sale. It now looks as though they were right. The Northern Territory government, without any analysis, modelling or consultation, has recently split up Power and Water into three separate entities. The only reason to do this would be to sell it, breaking it up into nice little saleable entities. In fact, the Chief Minister has already suggested that the sale of Power and Water under the asset recycling scheme will be considered. He said he had the view that the scheme is a means to get extra taxpayer value for public assets and he would not rule it out.
We have no gas pipe to the households in the Northern Territory and we are very reliant on Power and Water for air conditioning. We had the highest power bills in this country. We also get some pretty big storms and reliability is a big issue. Just last month we had the town of Nhulunbuy without power for 24 hours. We have seen the same in Darwin. Could you imagine if Melbourne or Sydney was without power for 24 hours—and this happens regularly in Darwin?
People in the Northern Territory know that selling Power and Water would guarantee two things: higher prices and longer, more frequent blackouts. I am therefore very concerned that Power and Water will be sold off under the scheme that this bill creates. I am also very concerned that the people of the Northern Territory will get no say.
The time for this debate has now expired.
I present the ninth report of 2014 for the Selection of Bills Committee.
Ordered that the report be adopted.
I seek leave to have the report incorporated in Hansard.
Leave granted.
The report read as follows—
SELECTION OF BILLS COMMITTEE
REPORT NO. 9 of 2014
1. The committee met in private session on Wednesday, 16 July 2014 at 7.25 pm.
2. The committee resolved to recommend:
That—
(a) contingent upon its introduction in the House of Representatives, the provisions of the Crimes Legislation Amendment (Psychoactive Substances and Other Measures) Bill 2014 be referred immediately to the Legal and Constitutional Affairs Legislation Committee for inquiry and report by 2 September 2014 (see appendix 1 for a statement of reasons for referral).
3. The committee resolved to recommend—That the following bills not be referred to committees:
True-up Shortfall Levy (General) (Carbon Tax Repeal) Bill 2014
True-up Shortfall Levy (Excise) (Carbon Tax Repeal) Bill 2014
Customs Tariff Amendment (Carbon Tax Repeal) Bill 2014
Excise Tariff Amendment (Carbon Tax Repeal) Bill 2014
Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Amendment (Carbon Tax Repeal) Bill 2014
Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment (Carbon Tax Repeal) Bill 2014
Ozone Protection and Synthetic Greenhouse Gas (Import Levy) (Transitional Provisions) Bill 2014
The committee recommends accordingly.
4. The committee considered the following bill but was unable to reach agreement:
5. The committee deferred consideration of the following bills to its next meeting:
(David Bushby)
Chair
17 July 2014
APPENDIX 1
SELECTION OF BILLS COMMITTEE
Proposal to refer a bill to a committee:
Name of bill:
Crimes Legislation Amendment (Psychoactive Substances and Other Measures) Bill 2014
Reasons for referral/principal issues for consideration:
Concerns about unintended consequences and to look at alternative models.
Possible submissions or evidence from:
Key stakeholders in drug and alcohol sector.
Committee to which bill is to be referred:
Legal and Constitutional Affairs Legislation Committee
Possible hearing date(s):
Late August / September
Possible reporting date:
September/October 2014
(signed)
Senator Siewert
Whip/Selection of Bills Committee Member
I move:
That the report be adopted
I move:
That at the end of the motion, add, "but, in respect of the National Security Legislation Amendment Bill (No. 1) 2014, the bill be referred immediately to the Legal and Constitutional Affairs Legislation Committee for inquiry and report by 8 November 2014.
The question is that the amendment be agreed to.
Question negatived.
I seek leave to make a short statement. I understand it will be possible to debate this motion. I want to put very clearly on the record why I am proposing an amendment as it is a rather unusual thing to do to a Selection of Bills report.
Leave granted.
I thank the chamber. It is unusual for a senator to come forward and bring a disagreement to the chamber with a Selection of Bills Committee report.
Senator Brandis has brought forward a bill, the annual expansion of ASIO's powers—sometimes it is more than annual but I think it has been about a year since we were last here—and effectively cherry picking a set of recommendations from a Parliamentary Joint Committee on Intelligence and Security report from last year.
Without any disrespect at all to the PJCIS, I think it is utterly inappropriate to take a batch of recommendations that came from that joint committee, embed them into a bill and then send that bill back to the same committee that proposed the measures for review. What do we think they might say? Do we think they might give it impartial scrutiny and critique, call witnesses and go through it carefully; or will they say, 'This looks very familiar to what we said should happen 12 months ago'? It is entirely inappropriate that the committee that proposed the measures should now be the one to scrutinise them.
I hope that I will have Labor and crossbench support to allow the Senate to do its job. We have Senate standing committees to assess and analyse bills, to take evidence for, against, neutral, and to improve bills like this, particularly a bill as sensitive as this one. The proposal to expand ASIO's sweeping powers is so controversial—and I don't quite understand where the Labor Party's heads are at, because we hear different things from different spokespeople—but, the very least that should happen is that the Senate should be permitted to do its job, and that is why I have brought this motion forward.
In order not to take up too much of the chamber's time, I will also foreshadow a motion that I am bringing forward before too much longer to require the National Security Legislation Monitor to also investigate these bills. The reason for that is very simple: the parliamentary joint committee that provided this report last year that Senator Brandis is now cherry picking from said—and this is a recommendation that Senator Brandis will have signed off on and that the Labor Party will have signed off on; there are no crossbench voices any more than that committee because those positions were wiped out after the election. Presumably, the government doesn't care to hear from independent voices, but Senator Brandis signed off and the Labor Party shadow Attorney-General signed off on a recommendation that said that the National Security Legislation Monitor and the Inspector-general of Intelligence and Security—two small but very important offices, in fact, who hold, on one hand, the policy recommendations and the operational recommendations of our covert and clandestine intelligence gathering and police agencies—should be required to review the bills.
So the first thing that happened in response to that recommendation was that Senator Brandis proposed as a part of red tape removal that the National Security Legislation Monitor be abolished. So way to go with the transparency. I understand he may have changed his mind, although I would appreciate confirmation that that is the case.
I will shortly be moving a motion that ensures that the legislation monitor provides a report and that the IGIS provides a report. The only thing that distinguishes Australia from a police state is this so-called red tape: accountability and offices like the IGIS and analysts like the National Security Legislation Monitor. That is the thin line that stands between us and unregulated secret police and surveillance powers, and that is not overdoing it.
In Australia we have royal commissions into police corruption every couple of years around the states and territories. These are people—they are not immune to the pressures of the offices. They do dangerous and demanding work. They are not immune to corruption, and I don't think any of us should be surprised that a secret police or a secret intelligence-gathering agency should come to the parliament every few months asking for more intelligence-gathering powers. We should not write them a blank cheque. At the very least, I implore you, colleagues, to let the Senate do its job.
The amendment that Senator Ludlam is speaking to has already been dealt with. The question is that the report be adopted.
Question agreed to.
by leave—I move:
That Senator Ronaldson be granted leave of absence for the period 14 July 2014 to 18 July 2014 inclusive, on account of ministerial business.
Question agreed to.
by leave—I move:
That Senator Xenophon be granted leave of absence for today, 17 July 2014,.on account of personal reasons.
Question agreed to
At the request of Senator Heffernan and Senator Sterle, I move:
(1) That the following matter be referred to the Committee of Privileges for inquiry and report:
In the context of an inquiry by the Rural and Regional Affairs and Transport References Committee into aviation accident investigations and Budget estimates hearings of the Rural and Regional Affairs and Transport Legislation Committee in May 2013:
(a) whether disciplinary action was taken against either a witness before the committee or a person providing information to the committee; and
(b) if so, whether any contempt was committed in respect of those matters.
(2) That, for the purpose of providing further information to the Committee of Privileges, the Standing Committees on Rural and Regional Affairs and Transport have access to the records of the committee in the previous Parliament.
Question agreed to.
I move:
That the following matter be referred to the Community Affairs References Committee for inquiry and report by the second sitting week in February 2015:
Out of home care, including;
(a) drivers of the increase in the number of children placed in out of home care, types of care that are increasing and demographics of the children in care,
(b) the outcomes for children in out of home care (including kinship care, foster care and residential care) versus staying in the home;
(c) current models for out of home care, including kinship care, foster care and residential care;
(d) current cost of Australia's approach to care and protection;
(e) consistency of approach to out of home care around Australia;
(f) what are the supports available for relative/kinship care, foster care and residential care;
(g) best practice in out of home care in Australia and internationally;
(h) consultation with individuals, families and communities affected by removal of children from the home;
(i) extent of children in out of home care remaining connected to their family of origin; and
(j) best practice solutions for supporting children in vulnerable family situations including early intervention.
Question agreed to.
) ( ): I, and also on behalf of Senator Xenophon, move:
That the Senate—
(a) notes:
(i) water is one of our most important resources and is critical to Australia's economic growth,
(ii) the National Water Commission (the Commission) plays a crucial role in monitoring, auditing and assessing water policy,
(iii) the independence of the Commission is vital to its effectiveness, and
(iv) the 2011 Council of Australian Governments review of the Commission stated that it should continue 'for the lifetime of the NWI' and 'without sunset provision until the NWI is substantially replaced'; and
(b) calls on the Government to reverse its position on the closure of the Commission.
The question is that General Business Notice of Motion No. 354 be agreed to.
At the request of the chair of the committee, Senator Seselja, I move:
That the time for the presentation of the report of the Community Affairs Legislation Committee on the Aboriginal and Torres Strait Islander Amendment (A Stronger Land Account) Bill 2014 be extended to 29 October 2014.
Question agreed to.
I move:
That the following bill be introduced: A Bill for an Act to amend the law relating to defence to provide for parliamentary approval of overseas service by members of the Defence Force, and for related purposes. Defence Legislation Amendment (Parliamentary Approval of Overseas Service) Bill 2014.
I would add that this is the 29th year that this bill will have been on the Notice Paper.
Question agreed to.
I present the bill and move:
That this bill may proceed without formalities and be now read a first time.
Question agreed to.
Bill read a first time.
I move:
That this bill be now read a second time.
I seek leave to table an explanatory memorandum relating to the bill.
Leave granted.
I table the explanatory memorandum and I seek leave to have the second reading speech incorporated into Hansard.
Leave granted.
The speech read as follows—
DEFENCE LEGISLATION AMENDMENT (PARLIAMENTARY APPROVAL OF OVERSEAS SERVICE) BILL 2014
Australia is one of the few remaining democracies that can legally deploy its defence forces into conflict zones without recourse to the Parliament: the decision is reserved to the executive alone. As kindred democracies around the world have enacted reforms to vest the so-called 'War Power' in elected Parliaments, Australia has remained anchored to a pre-democratic tradition founded in hereditary monarchies and feudal states.
If this anachronism had served Australia well, it might be possible to mount an argument that "if it isn't broken, it doesn't need fixing."
If the horror unfolding in Iraq does not comprehensively put this view to rest, it is difficult to imagine what would. On the basis of fabricated and wilfully misinterpreted intelligence, Prime Minister John Howard followed the United States and the United Kingdom into an illegal and open-ended war in Iraq. Our Parliament, and by extension the voting public of Australia, were cut out of the decision, despite the fact that hundreds of millions of people around the world organised and campaigned against the decision to go to war.
There are few credible analysts left anywhere who do not regard the decision by hardliners within the Bush Administration to invade Iraq as one of the most grievous strategic disasters in modern history. The vast majority of Australians were right, and the executive authorities in the US, the UK and Australia, were wrong. No inquiry into the decision to go to war has ever been held in Australia, only a handful of piecemeal attempts to pin the blame on intelligence services and shift focus away from the actions of the Howard Government.
At the time, Iraq was not threatening war. There was no connection or allegiance between the secular Baathist regime that ruled Iraq and the fundamentalist Al Qaeda networks responsible for the 9/11 attacks. There were no weapons of mass destruction in Iraq, and hadn't been since 1991. Intelligence agencies within the US, the UK and Australia understood these facts, but inflexible groupthink prevailed within the White House, Downing Street and the Prime Minister's office here in Australia. It was rumoured at the time that Australian Special Forces units were among the very first on the ground inside Iraq, even before President Bush went on live television to announce that Operation Iraqi Freedom had commenced.
Australia is entirely complicit in the violent, decade-long occupation that shattered Iraq's social and economic structures, and ignited long-dormant sectarian tensions that now threaten to plunge the crippled country into full-blown civil war.
At the time of speaking, Sunni fundamentalists considered too extreme to remain part of Al Qaeda have established a new Caliphate in territory carved out of Syria and Iraq. The brittle institutions of Iraqi governance, bombed into existence by the United States, now threaten to collapse entirely.
If there is a strategic policy failure more complete than the catastrophic invasion of Iraq, it is difficult to recall it. This dismal outcome was predicted at the time by many of those who opposed the war, but the executive's lock on the process means that the normal Parliamentary processes of critique and accountability were bypassed. Somewhere between 100,000 and one million Iraqis have paid for this obscene oversight with their lives.
Should Prime Minister Abbott decide to compound the strategic incompetence of 2003 with a further deployment as the security environment in Iraq deteriorates, the Australian Parliament, and the Australian people, would be cut out of the decision again.
Concurrently with the Iraq deployment, Australia has also fought a long, costly, and ultimately futile war in Afghanistan. The heaviest cost was carried by the Afghan people: tens of thousands of civilians killed, maimed and traumatised as the US Government's saturation bombing campaign transitioned into a long, untenable occupation. Forty one Australian soldiers have lost their lives in Afghanistan. Out of respect to them and their families, Parliament pauses to acknowledge their sacrifice when news breaks of another death. No such respects are paid to those Afghans who also paid the ultimate price; no-one even appears to be keeping count.
It is no longer tenable that the decision to deploy into conflict zones should be left to the executive alone. Our current Defence Act does not allow for any level of transparent decision making, scrutiny and debate, but this is an artefact of legislation, not the natural order of things.
The Defence Legislation Amendment (Parliamentary Approval of Overseas Service) Bill 2014 inserts a new section 50C into the Defence Act to require that decisions to deploy members of the Australian Defence Force beyond the territorial limits be made not by the executive alone but by Parliament as a whole. This means debate in both houses, followed by a vote.
This Bill was initiated by the Australian Democrats and supported by the Australian Greens, who took carriage of the Bill after 2007. It is the latest iteration of a Bill introduced into the Senate in 1985. In 2015 it will mark its 30th year of languishing in plain sight while Liberal and Labor Prime Ministers alike reserve this power to themselves, plunging Australia into a tragic series of overseas expeditionary wars that have had little or nothing to do with the defence of Australia or collective security.
In August 2009, I referred the Bill to the Senate Standing Committee on Foreign Affairs, Defence and Trade. The majority of the committee resolved to refuse to take evidence in a hearing. Nonetheless, the Committee made a useful critique of the Bill without undermining its essential purpose, in its report of February 2010.
My dissenting report into the Bill provided the transcript of an informal hearing that we held, after the majority committee's short-sighted decision not to take evidence directly from witnesses.
This Bill would bring Australia into conformity with principles and practices utilised in other democracies including Denmark, Finland, Germany, Ireland, Slovakia, South Korea, Spain, Sweden, Switzerland and Turkey, where troop deployment is set down in constitutional or legislative provisions. Some form of parliamentary approval or consultation is also routinely undertaken in Austria, the Czech Republic, Italy, Japan, Luxembourg, the Netherlands and Norway. Our ally the United States has a similar provision that subjects the decision to go to war to a broader forum—section 8 of Article I of the US Constitution quite clearly says, "Congress shall have power to declare war". In the wake of the disaster in Iraq, the Westminster Parliament now holds the de-facto war power, a new convention that prevented a rushed deployment into Syria earlier in 2014.
Arguments against vesting the power over troop deployment to Parliament include that it would be impractical, restrictive and inefficient. Such arguments ignore the fact that parliaments can and do make complex and nuanced decisions, rapidly when necessary. As we have seen, decisions about war and peace made in undue haste that do not enjoy the mandate of the population – expressed through the Parliament, if nowhere else – have no legitimacy.
There are appropriate exemptions made in this Bill to avoid interfering with the non-warlike overseas service with which Australian troops are engaged – referring in particular to new subsection 50C(11). There are also appropriate exemptions in the Bill to provide for the practicalities of situations where Parliament cannot immediately meet – referring to subsections 50(3) and (7), which provide for the Governor-General to be able to make a proclamation regarding the declaration of war, provided that Parliament is then recalled within a period of two days.
It is time that Australia joined its closest allies and like-minded democratic states by involving the Parliament in the decision to deploy the ADF. The entwined tragedies of our recent military misadventures, and the threat that history may soon repeat, make passage of this Bill more urgent than ever.
Once again, I commend the Bill to the Senate.
I seek leave to continue my remarks later.
Leave granted; debate adjourned.
At the request of Senator Xenophon, I move:
That there be laid on the table by the Minister for Defence, no later than 4 pm on Friday, 18 July 2014, a document providing the following information:
(a) the name of the successful tenderer for Australian Defence Force boots, Tender DMOLSD/RFT0129/2012; and
(b) the price differential of the winning tenderer compared to that of the closest Australian tenderer as per one of the following ranges:
(i) less than 10 per cent,
(ii) between 10 per cent and 20 per cent,
(iii) between 20 per cent and 30 per cent,
(iv) between 30 per cent and 40 per cent, and
(v) 50 per cent and over.
Question agreed to.
At the request of Senator Xenophon, I move:
That the Senate—
(a) notes that:
(i) over the past 6 years electricity prices have more than doubled for average households, with the carbon tax being one of the elements of that price increase, and
(b) network charges have been responsible for approximately two thirds of this rise in power prices; and
(b) calls on the Government to urgently review the National Electricity Rules governing the setting of network prices by taking a leadership role in the Council of Australian Governments to ensure a review of the rules by the Australian Energy Market Commission.
Question agreed to.
I seek leave to table a report that is referred to in the motion that I will move.
Leave granted.
I table the document Budget 2014 Policy Briefing Papers from ConNetica, and I move:
That the Senate—
(a) notes the findings of the Connetica Budget 2014 Policy Briefing Papers which outline:
(i) the disproportionate burden the 2014 15 budget cuts will place on young people,
(ii) the potential for an increase in suicides and mental ill-health among young Australians as a result of harsh budget measures, including changes to Newstart, increases to university fees, cutting the Tools for your Trade program, and ending support programs like Youth Connections, and
(iii) that isolation, dislocation, loneliness, hopelessness and unemployment can increase anxiety, despair and depression;
(b) recognises that public policy has a direct impact on the mental health and wellbeing of the community; and
(c) urges the Government to reverse budget decisions which will adversely affect the mental health of young Australians.
The question is that the motion be agreed to.
I move:
That the Senate calls on the Government to cease the current 'on water' screening and transfers of asylum seekers which the United Nations High Commissioner for Refugees has said fall well short of Australia's international obligations and could mean that asylum seekers were returned, or refouled, to persecution.
I seek leave to make a short statement.
Leave is granted for one minute.
The government will not be supporting this motion. The government forthrightly reject the suggestion that Australia is in any way in breach of our international obligations. Australia returned to Sri Lanka 37 Singhalese and four Tamils because none engaged in any of Australia's protection obligations and hence were not refugees. To suggest otherwise provides tacit approval for illegal migration. The government's focus is to do everything in its power to prevent people smuggling and loss of life at sea.
The question is that general business notice of motion No. 361 be agreed to. A division is required. We will ring the bells for four minutes, as I understand some senators have left the chamber.
I move:
(1) That there be laid on the table by the Minister representing the Minister for the Environment, no later than noon on 26 August 2014, any document in relation to the water quality offset imposed on the Abbot Point dredging and dumping approvals in December 2013 that discusses or assesses:
(a) the likely costs of offsetting 150 per cent of fine sediments 'potentially available for resuspension';
(b) the contributions of North Queensland Bulk Ports, Adani or GVK to accomplishing this offset; and
(c) contributions from the Queensland or Federal governments to accomplishing this offset.
(2) Documents previously released publicly pursuant to freedom of information or Senate orders for production of documents need not be included.
I seek leave to make a short statement.
Leave is granted for one minute.
The motion relates to documents on offsets for the Abbot Point coal port approval. The question of offsets for this approval is a matter currently before the Federal Court and proceedings commenced by Mackay Conservation Group. This is the second motion in relation to the Abbot Point proceedings that this chamber has considered this year. The Federal Court has appropriate processes and procedures relating to the disclosure and use of documentation. The rights of the parties, being not only the Commonwealth but also commercial entities like NQBP, Adani and GVK, are protected through these processes and procedures.
I seek leave to make a very brief statement.
Leave is granted for one minute.
I will clarify for the benefit of Senator Fifield that the matters before the court are not in conflict with the subject of this order for production of documents. The order relates specifically to whether or not the government will be contributing to costs of the proponents complying with an offset condition, which many believe is ludicrous and impossible—but that is beside the point. There is no conflict on that particular point between that and what is before the courts. I would urge the senator to support the motion.
The question is that the motion moved by Senator Waters be agreed to.
The Senate divided 12:33
(The Deputy President—Senator Marshall)
I move:
That further consideration of the National Security Legislation Amendment Bill (No. 1) 2014 be postponed and made an order of the day for the later of:
(a) 8 September 2014; or
(b) the next day of sitting after the Government complies with Recommendation 41 of the report of the Parliamentary Joint Committee on Intelligence and Security, Report of the inquiry into potential reforms of Australia's National Security Legislation, at least, by seeking the views of the Independent National Security Legislation Monitor and the Inspector-General of Intelligence and Security on the bill, and tabling a copy of those views in the Senate.
I seek leave to make a one-minute statement.
Leave is granted for one minute.
Any extension of the powers of our intelligence agencies needs to have appropriate scrutiny by politicians, the Australian community and key stakeholders such as the Inspector General of Intelligence and Security. For this reason, Labor welcomes the fact that the National Security Legislation Amendment Bill (No. 1) 2014 has now been referred to Joint Committee on Intelligence and Security and that there will now be an inappropriate period for the public and key stakeholders to also comment on the significant changes being proposed. With respect to the Independent National Security Legislation Monitor, I welcome Senator Brandis's announcement yesterday that the government is backing down on its plan to abolish that office. Labor fought against the abolition of this important role. While we do not support Senator Ludlam's motion today, if an appropriately credentialed and experienced monitor can be appointed expeditiously by the government, Labor would certainly welcome the new monitor's views on the bill that is proposed.
The question is that general business notice motion No. 364 be agreed to.
Question negatived.
I move:
That the Senate notes:
(a) That the 20th International AIDS Conference is being held in Melbourne from 20 July to 25 July 2014, and will be attended by about 12 000 delegates from nearly 200 countries representing science, civil society, politics and the private sector;
(b) that this biennial conference is the premier international gathering for those working in the field of HIV, policy makers and people living with HIV;
(c) Australia's resolve to work with governments, the business community and civil society across the region to reach the goals That the international community has set – zero new infections, zero AIDS related deaths and zero discrimination;
(d) that while HIV/AIDS in Australia is lower than in many comparable nations, around 5 million people in our region are living with HIV/AIDS;
(e) that Australia has spent A$1billion combatting HIV/AIDS in our region over the past decade and has committed $200 million over 3 years to support the Global Fund to Fight AIDS, Tuberculosis and Malaria, and That the Global Fund has already invested around $US6.8billion in the Indo Pacific region delivering HIV treatment to over 700 000 people; and
(f) the Australian Government's release on 7 July 2014 of the 7th National HIV Strategy and its commitment to reverse the increasing trend of new HIV diagnosis and work towards the virtual elimination of HIV transmission by 2020.
Question agreed to.
I move:
That the Senate—
(a) notes:
(i) the launch of the Roadmap to Close the Gap for Vision by the University of Melbourne released in July 2014,
(ii) that Aboriginal adults are 6 times more likely to become blind than non Aboriginal Australians, and
(iii) that 94 per cent of vision loss in Aboriginal adult Australians is preventable or treatable; and
(b) urges the Federal Government to:
(i) review the report and provide national leadership on eye health, and
(ii) address the gap between Aboriginal and non Aboriginal eye health as a matter of priority.
Question agreed to.
Pursuant to order, I present the report of the Senate Finance and Public Administration References Committee on Commonwealth procurement procedures, together with the Hansard record of proceedings and documents presented to the committee.
Ordered that the report be printed.
I move:
That the Senate take note of the report.
This important inquiry has explored the operation and effectiveness or, indeed, otherwise of the Commonwealth procurement rules. These rules set out the processes and rules for government purchasing. We also explored in some depth procurement related policies, which, interestingly, are not overseen by the Department of Finance but a range of other departments to which those procurement related policies belong.
The inquiry explored the impact of Australia's international obligations arising from bilateral free trade agreements on procurement policies. The committee formed the view that government procurement policies, as part of the value-for-money assessment, should take into account the effect of those procurement decisions on communities and the broader economy.
Throughout this inquiry, witnesses made clear to the committee that the value-for-money proposition is not merely a matter of comparing prices; it ought to be a matter of assessing the broader benefit, as well as the costs of the available options. For example, the committee received evidence suggesting that the procurement of locally produced stationery had definite economic benefits for government, including greater government tax revenues from individuals and companies, the benefit of supporting Australian jobs and, indeed, the development of Australian workers' skills in this area.
Mr Travis Wacey from the CFMEU reflected on the estimate of job losses in the paper and forestry industries as a result of Australian Paper not being awarded the envelopes contract in 2013 by DHS. He said:
We are not just talking about one or two jobs; we think that 15 to 20 direct production jobs were triggered by the loss of this contract, and it is a situation representing literally hundreds of thousands of dollars, if not millions of dollars in lost taxpayer revenue in the short, medium and longer term just for the $8,000 benefit.
That was the difference in the bottom line price in that particular tender. It was noted:
Australian Paper also provides significant revenue to all levels of Government; equivalent to $1.81 for each and every A4 ream of copy paper that we make and totalling $432 Million in 2012.
These are just some of the considerations that brought the committee to the conclusion that there is an urgent need for a stronger methodology to assess whole-of-life costs within the value-for-money assessment component of procurement decision-making. It is quite a mouthful, but this issue goes to the heart of how Australian industry has opportunities to compete on a level playing field.
The committee formed the view that, with consideration of the broad economic benefits of procurement as part of a comprehensive value-for-money assessment and the effective application of the range of procurement related policies, combined with the scrutiny and accountability measures contained in our recommendations, procurement outcomes for Australian companies would be considerably improved without impacting on our international bilateral trade obligations and without necessarily needing to change the procurement rules dramatically. In fact, one of the issues was that, if all of the procurement related policies and rules were applied with a genuine whole-of life, value-for-money assessment, the policy would not need to change much at all. It is about the application, effectiveness, oversight, transparency and genuineness of the objectives contained within procurement policies.
There was quite a deal of concern from a number of industries, including the IT industry. We heard evidence from Michelle Melbourne and Suzanne Campbell, representing the Business Council of the ACT and the Australian Information Industry Association. They spoke specifically about a company called Intelledox. Michelle Melbourne, through her own experience, reflected on this and said:
… it is not an even playing field … over there; it just isn't … So we—
that is, Australia—
follow the rules with the free trade agreement, but the US do not do that. They are fiercely parochial. Each state and procurement body that you deal with over there asks you: 'Who is your local partner?
The committee asked for details on how our international free trade agreements apply. The evidence we got is that we seem to not utilise the range of exemptions that are available for small to medium sized Australian businesses to the extent that our partners in these free trade agreements do. Therefore, our recommendations point to an exploration of the scope to work within those obligations—no-one is suggesting stepping out of those obligations—to fully garner the benefit that other nations have through those bilaterals and support our small to medium sized enterprises.
I am very conscious of time and I will, at the conclusion, seek leave to continue my remarks. However, can I thank the committee secretariat, in particular, Lyn Beverleyand Ann Palmer, and a particular thank you to my Senate colleagues, who worked constructively. A minority report came in from government senators, who, interestingly, agree with some, certainly not all, of our recommendations.
I would particularly like to acknowledge Senators Madigan and Xenophon, who have supported the recommendations of the majority committee and added strength and detail in their own words as they continue to promote these issues relating to Australian companies' access to Commonwealth contracts. The key issue is in the capacity of companies to grow and expand and support the local community. I seek leave to continue my remarks.
Leave granted; debate adjourned.
I continue to talk to the Asset Recycling Fund Bill 2014 and related bill. If I can go back to where I was before the debate was interrupted. The people of the Northern Territory know that selling Power and Water will guarantee two things; higher prices and longer, more frequent blackouts. So I am very concerned that Power and Water will be sold off under the scheme if this bill is passed.
I am also concerned that the people of the Northern Territory will get no say. It will just be announced one day and that is the way the Northern Territory government currently operates. We will wake up one morning and there will be an article on the front page of the Northern Territory News telling us that Power and Water will be sold. A deal has been done with the Abbott government and it will be sold. The Territory Insurance Office, TIO, is the only remaining government-owned insurance and banking institution in the country. There has been much talk about the potential sale of Power and Water over many years. As the only remaining financial institution in government ownership, it can be seen by some as an obvious candidate for sale. But let me tell you that people in the Northern Territory do not want it sold.
Living in a cyclone-prone area we have an extra interest in home and contents insurance. It is already expensive and people simply do not want TIO sold. Again, from their public comments, the Northern Territory government are clearly looking at selling TIO. They refuse to rule it out.
The next candidate is the Port of Darwin. The port is less visible in the day-to-day lives of people in the Northern Territory than Power and Water, and TIO. But it is still extremely important to Territorians. Private investment in the port and its operations should be encouraged but, in an underdeveloped economy, we should not be selling off the assets that are so crucial to our plans to develop the north. Again, it would be outrageous if funds for our roads, to get cattle and minerals to the port, depended on the sale of our port. Those are my concerns about what the Northern Territory government would do with this fund.
That is why I support Labor's position on any potential sale that it be subject to a disallowable instrument. If the CLP government sell off any of our assets without proper consultation process or against the public interest, then we can block it from being eligible for sale under this scheme.
If a state or territory government go through the proper processes of selling an asset, if they undertake a full cost-benefit analysis and take their plans to an election and receive the endorsement of the community and the people of the Northern Territory, then and only then a contribution from the Commonwealth under this scheme will be warranted.
However if a government—and the CLP government in the Northern Territory are probably the most unlikely to do this—just suddenly announce a sale without any analysis and in complete opposition to community sentiment, then it is not appropriate that the Commonwealth support the sale through this scheme.
Finally, these are my main points. Our infrastructure spending should not be dependent on selling our infrastructure. In order to get our fair share of infrastructure funding, we should not be required to sell off our vital public assets. I am concerned that the Commonwealth government will use this fund to encourage the Northern Territory government to sell off our assets. I am also concerned that the Northern Territory government will use this fund to do what they want to do and that is to sell off our assets.
We are only getting less than one per cent of the Abbott government's infrastructure budget over the next seven years. Selling everything is not the solution. The Commonwealth parliament should be allowed to block a sale through a disallowable instrument.
The Asset Recycling Fund Bill 2014 and the Asset Recycling Fund (Consequential Amendments) Bill 2014 are a desperate and belated attempt by the Abbott government to gain some credentials as an 'infrastructure government'. It is though infrastructure is an afterthought to them, not something they care a great deal about. The government do not even go close to matching the former Labor government's record investment in infrastructure.
After all, it was Labor that invested $16.2 billion during the height of the global financial crisis, through the BER program, Building the Education Revolution, to build the school infrastructure of the 21st century. This was investment which helped stimulate the economy. We saved hundreds of thousands of jobs during the GFC, opposed by those opposite who, had they got their way, would have seen Australia plunged into recession.
Our economic stimulus plan, including the BER program, was praised by Nobel prize winning economist Joseph Stiglitz as being well designed. In fact, Professor Stiglitz said that, had it not been for the economic stimulus package designed by Labor and opposed by the economic neophytes opposite, Australia's national debt would have been considerably larger.
It was a Labor government which initiated Australia's largest ever national infrastructure project. I am talking, of course, about the National Broadband Network. I cannot emphasise enough how people from my home state of Tasmania, who are now connected to the network, are describing to me the transformative effect it is having on their lives and businesses.
Infrastructure spending overall under Labor went up by 42 per cent since the last full year of the Howard government—a government which paid very little attention to building Australia's infrastructure. Labor lifted annual infrastructure spending in Australia, from $132 per person to $225. We upgraded 7,500 kilometres of Australia's road network and upgraded 4,000 kilometres of Australia's rail network. Road spending doubled under Labor and we invested $13.6 billion in urban rail—more than had been invested by all of our predecessors combined since Federation. We also invested a further $3.4 billion in rail freight, which has been of great benefit to my home state of Tasmania, which relies heavily on rail for the transportation of freight across the state.
When Labor took office, Australia ranked 20th in the OECD in infrastructure spending; because of Labor's record investment in infrastructure, Australia now ranks first. In my home state of Tasmania, we saw significant investment going into the south of the state for the first time in over a decade. While the Howard government had focused on projects in the marginal electorates of Bass and Braddon, Labor delivered hundreds of millions of dollars in funding to projects such as the Blundstone Arena upgrade; the Brighton bypass and transport hub; the Kingston bypass upgrades to the Brooker Highway; trade training centres and GP superclinics; the Huon Valley and south-east Tasmania water schemes; and several of the first rollout sites of Labor's National Broadband Network—that is, the real NBN, not the coalition's second-rate alternative. Under a Labor government, the annual infrastructure spending to Tasmania almost doubled—from $157 per Tasmanian to $264 per Tasmanian. Not only did Labor in government dramatically boost Australia's infrastructure investment, we implemented important reforms to make sure that we got the best value out of all our infrastructure spending.
Infrastructure Australia was established as an independent expert authority to advise the government—and, more importantly, the public—on Australia's infrastructure needs. One of Infrastructure Australia's roles is to evaluate the contribution of proposed infrastructure projects and rank them in order of their contribution to Australia's productivity. An important part of this reform was that Infrastructure Australia's advice be provided to the public. Part of the reason Infrastructure Australia was established with this function was to give the Australian government an incentive to invest in the infrastructure projects that provided the best outcomes for Australians, not the best outcomes for the government's political fortunes.
Unfortunately though, pork-barrelling to marginal electorates has been a longstanding practice of coalition governments—and one of the reasons why we need a national body to provide independent advice on infrastructure. Our reforms to infrastructure funding were implemented after the Australian National Audit Office released a damning report on the Howard government's Regional Partnerships program. The report said that the program had 'fallen short of an acceptable standard of public administration'. Grants had been provided for projects that had not been properly assessed, that government departments had advised against, and—listen to this—to groups that had not even applied for funding. You did not even have to apply for funding and you got some!
I am pleased that the government has not proceeded with its previous plans to gag Infrastructure Australia and take away its independence and has agreed to the Senate's amendments to its bill. It was completely bizarre that the government guillotined debate on that bill in the House back in December but did not bring it to the Senate until as late as June this year. Perhaps they finally succumbed to pressure from the business community, who supported Labor's call that infrastructure policy actually be made on the basis of what is in the national interest. The attacks by the Abbott government on the independence of Infrastructure Australia were just one part of the story of this government's poor record on infrastructure. The coalition has made various attempts to trumpet its achievements as 'an infrastructure government'—and all of them have fallen flat. After all, this is the government which has scrapped both the Regional Infrastructure Fund and the Regional Development Australia Fund. The government's decision to gut funding for regional Australia has been supported by, strangely, the Nationals, who continue their bizarre charade of pretending to stand up for regional Australia.
The Abbott government has claimed credit for various road and rail projects, worth more than $12 billion, despite these projects already being announced and funded by Labor. A great example of one of the road projects funded by Labor and then re-announced by the coalition is the Huon Highway-Summerleas Road intersection. This particular intersection is in the electorate of Franklin and just a stone's throw from my electorate office in Kingston. I stood at that intersection, with the federal member for Franklin, Julie Collins, in August when Labor announced a $17.5 million commitment to the intersection which had been funded in the 2013-14 federal budget. So I was quite amused to see a contribution from Senator Bushby in the local newspaper, the Kingborough Chronicle, in which he announced that the government was funding this project where Labor had 'failed to deliver on it'. Senator Bushby referred to years of inaction by state and federal Labor governments and said that the dangerous intersection was of great concern to him. It is interesting, therefore, that Senator Bushby was strangely silent on the intersection during the federal election. Maybe that is because the coalition failed to match Labor's $17.5 million commitment until February the following year, a full five months after the election, even though the upgrade had already been funded in the previous year's budget.
After failing to commit to this and several other funded infrastructure projects in the south of Tasmania, the Abbott government has now set about re-announcing them as if they were its own. These projects include the Huon Highway-Summerleas Road intersection; upgrades to the Brooker Highway between Elwick Road and Howard Road; and Tasman Highway on and off ramps at the East Derwent Highway intersection. The Abbott Government has still failed to make up the $100 million shortfall in Labor's funding for the Midland Highway. While Labor had provided $500 million funding for upgrades to the highway, the Abbott government announced that it would provide $400 million for the full duplication of the highway to four lanes. Good luck with that! In reality, this project would cost about $2 billion, whereas $400 million would probably provide duplication as far as Bridgewater to Bagdad. Unfortunately, it took until after the election for the Prime Minister to belatedly admit that $400 million would not provide for full duplication.
As if they have not embarrassed themselves enough in Tasmania, in the last budget the Abbott government triumphantly announced infrastructure spending of more than $40 billion over the next six years. But many of those projects were also recycled Labor commitments. Prior to this budget, Labor had already approved projects worth $35 billion over the next six years, and several of the coalition's new road projects—$5 billion worth—have been funded by ripping money out of rail projects. In fact, by refusing to fund any new rail or other public transport projects, this government is creating a perverse incentive for state and territory governments to divert funding to road projects even if roads do not provide the greatest productivity gain.
This is a double whammy for commuters, who will be faced with fewer public transport options and slugged another $2 billion to $3 billion with the government's reintroduction of the petrol excise. The budget also rips funding out of public transport concessions. Perhaps the government has a secret agenda of trying to get more transport users on the roads so that they can collect more revenue from the fuel tax hike. If that is not the reason, then I fail to see the logic in determining, as this government has, that roads are the responsibility of the Commonwealth but rail infrastructure is not. I would be willing to bet that most Australians are with me on that one too.
Of course roads are an important part of our transport infrastructure, but so is public transport. In fact, investment in public transport helps reduce traffic congestion, provides a cost-effective alternative for many commuters, and is better for the environment than car transport. But, unfortunately, the Abbott government seem unable to see the bigger picture when it comes to transport infrastructure funding. Unfortunately, they have also gone back to their old practice of pork-barrelling—the old practice that the Howard government engaged in.
According to Fairfax Media analysis, as reported in the Sydney Morning Herald last month, the infrastructure projects that have received new funding favour coalition electorates by a ratio of three to one. The Herald also pointed out that the majority of projects the Abbott government had withdrawn Commonwealth funding from were in non-coalition electorates. The Herald article quotes Monash University Professor of Transport, Graham Currie, who said:
The question is whether they want to be a professional government or they want to pork-barrel, and whether we'll forge the idea of trying to be professional about how we manage resources or just do it on a political basis.
I don't think that's how a country should be run.
So that, in a nutshell, is the Abbott government's record on infrastructure investment so far—pork-barrelling, recycling old projects, attempting to deny proper public assessments of projects and having a bizarre bias against rail projects in favour of roads for no explicable reason. The two bills that are now before the Senate, regrettably, do not improve on this record.
The two bills we are currently debating form part of the Abbott government's infrastructure package announced in the 2014-15 federal budget. The key element of the bills is the Asset Recycling Initiative, which will be used to incentivise the states and territories to invest in new productive infrastructure by privatising existing assets. The Commonwealth will provide a contribution of 15 per cent of the reinvested sale proceeds to the cost of the project. This initiative is still subject to a national partnership agreement.
With these bills, the government are up to their old tricks again—trumpeting the investment they are making in infrastructure when they are actually just redirecting money that is already committed to other things. In the case of the Asset Recycling Fund, the government are doing some recycling of their own—taking $2.4 billion of uncommitted funds from the Building Australia Fund and $3.5 billion of uncommitted funds from the Education Infrastructure Fund—for an initial contribution of $5.9 billion. Like the EIF and the BAF, the Asset Recycling Fund will be managed as part of the Future Fund. Unlike the EIF and the BAF, projects to be funded by the portfolio ministers will not be subject to recommendations by an advisory board as to the merit of the projects. It begs the question: how does the government know that a project is going to be 'productivity enhancing' when it is put forward for a grant or payment? Is it just another case of the government picking winners, like they will with their Emissions Reduction Fund? The more important question is: how does the public know? How can the public have confidence that this fund is actually investing in projects that produce an economic gain for Australia? They have provided no independent mechanism for ensuring the project will actually have productivity gains or for comparing the productivity gains of different proposals.
Labor achieved record investment in infrastructure, and we did so during the largest global economic crisis since the Depression. We also achieved this by funding projects on a 50-50 basis and without the need for state and territory governments to sell public assets. Given Labor's record investments in infrastructure in partnership with the states and territories, we believe that replacing this support with a 15 per cent incentive payment is a backward step. This government is handballing its responsibility for real investment in infrastructure to the states and territories. Wouldn't it be better if the government would help the states to fund their infrastructure priorities regardless of where the funds come from? Why does the government see it as necessary to provide the states with an incentive—or a 'bribe' as it was described by Chris Aulich, Professor of Public Administration at the University of Canberra—to privatise their assets?
We on this side believe that the concept of asset recycling can have merit in some circumstances. For example, in 2007 in my home state of Tasmania, there was a very sensible instance of asset recycling when the Labor government sold the Hobart Airport site and invested the proceeds in the Brighton transport hub, the Royal Hobart Hospital and irrigation projects. However, we want to ensure that the money that is invested in new projects is invested wisely—that Australians get maximum bang for their buck. After all, when state and territory governments privatise their assets they can only sell them once.
Labor will be moving amendments to this bill. The amendments will require, as a precondition for spending Commonwealth funds on the Asset Recycling Initiative: an assessment by Infrastructure Australia of the new infrastructure as 'productivity enhancing', including a published cost-benefit analysis; and tabling of a disallowable instrument for each privatisation and reinvestment transaction. I hope that the government senators and the crossbenchers will support our amendments to this bill. I am disappointed that the government did not support our amendments in the other place, as it was a good opportunity for them to demonstrate that they support transparency and due diligence. These amendments are about increasing the accountability and transparency of the Asset Recycling Initiative, to ensure that the projects funded through this initiative will genuinely enhance productivity.
Labor believes that Infrastructure Australia, an independent and expert body, is best placed to assess the contribution of new infrastructure projects to Australia's productivity. Strengthening the role of independent expert bodies to ensure good policy outcomes is a core belief of Labor, as distinct from a government that is working to dismantle independent advisory bodies such as the Climate Change Authority, the Immigration Health Advisory Group and others working on positive ageing, social inclusion, animal welfare, Indigenous leadership and a variety of other policy areas. It is vital that infrastructure decisions are made by this government with the national interest in mind, not their own political interests. We do not intend to allow the Asset Recycling Initiative to become a slush fund to allow state and territory governments to pork-barrel to marginal electorates.
These amendments are about taking an evidence based approach to decisions on infrastructure funding. Before the infrastructure minister makes a grant or payment to a state or territory, they must first receive an independent evaluation of the project which confirms that the project will actually have productivity gains. The requirement for the minister to approve grants via a disallowable instrument is to ensure that not only are quality decisions made on infrastructure investments but quality decisions are also made on privatisation of the assets sold to fund them.
Unlike those opposite, Labor is not of the view that all privatisation is necessarily good. These bills are providing the states and territories with an incentive to privatise assets, and the Commonwealth should not be rewarding them for engaging in a fire sale of assets or for selling assets without appropriate regulatory protections. The idea that privatisation is good in all circumstances is Tea Party thinking—the kind of attitude that the ideologues who have taken over the Liberal Party seem to be engaging in more and more. This is a flawed bill, but it can be improved with Labor's amendments, which I hope that the other side will agree to and which I commend to the Senate.
I rise to speak on the Asset Recycling Fund Bill 2014. Australia's infrastructure is too important to be left to pork-barrelling and the whims of the political cycle, especially the whims of this government. In the committee stage, Labor will seek to pass two amendments. We will look for crossbench support, because it is about ensuring that there is transparency and openness of the process for approving infrastructure projects. All Australians would want that, to ensure that there is scrutiny of those infrastructure projects. The coalition's plan for asset recycling has three major flaws. Firstly, it does not allow for independent scrutiny of the infrastructure projects. Secondly, it distorts the state government's decisions on asset sales, promoting the ill-thought-through selling of assets for short-term gains. Thirdly, it does not guarantee any new money for investment in infrastructure.
Infrastructure spending under Labor rose to record levels. We went from being 20th in the OECD, in terms of spending on infrastructure as a proportion of GDP, to first, under Labor's watch. Labor lifted funding for infrastructure from about $130 for each Australian to about $220. Labor doubled the roads budget, to $46.6 billion, and upgraded 7,500 kilometres of road. But we also recognise that it is not enough just to increase funding. The money has to be spent on worthwhile infrastructure that will create not only returns for Australians but productivity increases into the future. Labor created Infrastructure Australia to research and rank proposed infrastructure projects based on their potential to add economic productivity. Infrastructure Australia introduced independent advice and the opportunity to add transparency and openness into the process for planning for infrastructure in Australia. Labor also planned for the future. The National Ports Strategy and National Land Freight Strategy meant that informed decisions could be made about infrastructure investment in the context of a broader plan for ports and freight. Infrastructure, without this sort of strategic plan, is just a recipe for expensive white elephants. This government wants to throw up plenty of those.
We on this side of the chamber are proud of Labor's achievement in infrastructure. Indeed, this government seems proud of Labor's achievements too. Almost all of the coalition's announced infrastructure projects are re-announcements of Labor funded projects. Take one example. Take the Bruce Highway. During Senate estimates, we learnt there was no new money. Mr Truss uses the terms 'locked in', 'confirmed', 'affirmed', 'reconfirmed' or 'recommitted', but what he really should say is simply 're-announced'. Labor invested $5.7 billion in the Bruce Highway, dwarfing the $1.3 billion spent by the previous Howard government. For all their rhetoric, under the Howard regime they did not spend on infrastructure. Labor delivered four times the funding in half the time. Labor remains committed to improving the Bruce Highway, fixing up the area that the Howard government failed to act in and this government is also ignoring.
The coalition has failed to follow Labor's lead in investing in important Queensland infrastructure. The Cross River Rail project is a good example of a coalition failure. Infrastructure Australia said the Cross River Rail project was a strategic priority for Australia's infrastructure, and it judged the project as passing the cost-benefit test and ready to proceed. The Liberals have pulled $700 million out of the project. It defies good decision making and shows that this government is focused on pet projects and not projects which can drive productivity or develop infrastructure from the best business case. The federal government already provided the bulk of funding for large infrastructure projects, so this needs to be protected and not raided by this government to pay for the Asset Recycling Fund. This Asset Recycling Fund must provide funds in addition to existing federal commitments. There must be new nation-building projects in road, rail and other nationally significant infrastructure, otherwise it is just recycling in truth.
We know we cannot trust the government on this. We have seen already the twisted priorities of the coalition government—the way they try to hide their cruel cuts to pensioners and ordinary Australians, pretending that taxes are not taxes really and that cuts to education and health are not truly cuts. They use miserable words to describe their short-sightedness, but the country cannot afford those cuts and cannot afford cuts to infrastructure. As a start, they are taking $2.4 billion from the Building Australia Fund and $3.5 billion from the Education Investment Fund for the Asset Recycling Fund. What they effectively are doing is shuffling the money out of one area into another, claiming that it is new money. It is not new money from infrastructure; it is already there.
On top of that, they are also taking cuts from local government which are going to hurt local infrastructure. I know in Queensland lots of local councils are going to be affected. Recently, I visited Councillor Jim Madden of Somerset Regional Council to highlight this fact because they face a stark choice: either they have to raise rates or they have to cut their budget, cut roads spending and cut infrastructure spending. What sort of choice is that? It is not only blame shifting; it is also show cost shifting coming out of a hard budget. The Abbott government has broken its promise to regional Australia. Mr Warren Truss said before the budget:
To ignore regional Australia’s need for investment and growth is to turn our backs on the opportunities for the future.
In just two weeks, the Abbott government have savaged local government by ripping a billion in funding from local government, cutting into the financial assistance grants. Local governments rely on those grants to fund local roads and infrastructure. The government have created an Asset Recycling Fund. They want to gold plate highways but they will end up with broken roads because councils will be starved of funds to meet their obligations in investing in a road network. It is about a road network not about a gold plated highway. If it fails at the last mile, at the shopfront, at the small business or at the home, it is not a road network. These cuts will disproportionately affect rural communities, pushing some of them to the brink. These cruel cuts will mean more roads that go nowhere and bridges to nowhere as real communities suffer. These are contradictory forces at play and it is not surprising when you look at the twisted priorities the government have.
The decision to sell assets needs to be made by the state government after sober analysis. Liberal state governments have been seduced by the short-term incentives of the political cycle to sell assets. The additional 15 per cent proposed by the federal government does skew the incentives of the state governments and encourage sales of assets. It pushes the sale of assets in the short-term interest without looking at the longer term national interest. The federal government needs to play—and it has been absent from the field—a leading role with states the territories to encourage decisions to be made in the national interest. Although asset recycling is not without its merits, in some cases it is not always the answer. The answer for many state-owned assets is better and more transparent management. The erosion of freedom of information under this government and cuts to information-gathering organisations which make proper decision-making possible are working against these outcomes of openness and transparency.
This government hugs the dark. It prefers the shadows. It does not like transparency. Why? Because it does not like the truth about its decisions to be exposed. They are bad decisions by a government which wants to take cruel cuts. It takes cruel cuts to the Australian Bureau of Statistics. These are also quite concerning. This government does not want to know about that state of its books. It does not suit its ideological views. ABS cuts hurt private businesses just as much, especially small business which does not have the resources to forecast or run surveys and the lack of information means that when you remove information from the availability of the pool, where do get decision making? You end up with poor decision making without the charter and all you get is it—cash created by the federal government for the states. The government seems to be wilfully blind to this prospect. That is the kindest I could say about it. I could say it is deliberately doing it but I think ultimately it is literally blind to the consequences.
We have seen the forecasts and estimates for asset sales and infrastructure projects. Again, they seem to be very overly optimistic. We will get an opportunity in the Senate to hold this government to account on their forecasts. Let us not hear from those on the other side that, 'We didn't quite get that right. Our methodology was flawed. We missed some opportunity.' In this instance they own these figures. An article in the Oxford Review of Economic Policy found that 50 per cent of traffic forecasts in infrastructure projects were wrong by at least 20 per cent. If we further reduce the quality of data and research, those estimates are going to get more and more difficult. We need to consider the facts of asset sales and not some ideological driven crusade by those opposite—although they do seem to like Don Quixote.
The Australian Competition and Consumer Commission is warning the government that it needs to be wary of asset sales. Speaking to the Committee for Economic Development of Australia conference, Rod Sims, the chair of the ACCC, warns about privatisation and the perverse incentives present for the state governments. He said:
Short-term gains of maximising the up-front price received by the government is short-term gain increased and encouraged by the federal government and will have long-term costs in reduced competition and higher costs to consumers and damage to Australian businesses.
I think the quote from Mr Sims says it all:
The ACCC is becoming aware of an increasing level of concern among businesses that are most directly affected by the sale of upstream monopoly assets to downstream competitors. The trade-off here is short-sighted and the costs in terms of productivity and investment are likely to be significant
He also said:
Privatising in ways that limit competition in order to maximise the sale proceeds is the wrong way.
The government's rush to sell off assets without examining the long-term consequences means that we pay a high price for this asset fire sale, and businesses and ordinary consumers footing the bill will suffer. Instead of investing in infrastructure with a strong business case, the states and federal government are investing in public relations. You do not have to look far to find a good example: the Queensland government has spent $6 million on an advertising campaign instead of investing in the analysis necessary for the business case for asset recycling. Instead of showing the business case for asset sales, they are being offered websites, TV ads and glib one-liners to support why they should sell assets. This shows utter contempt for Queenslanders. If there is a business case, which includes the long-term impacts of asset sales, show it to the people, be transparent about it, demonstrate why it is necessary rather than a one-word slogan.
Labor is seeking, as I indicated earlier, two amendments to improve this bill and increase the transparency and openness of the process of approving infrastructure projects. The first of our amendments allows for the tabling of a disallowable instrument for each privatisation reinvestment transaction so that, if the government is not going to cast light on their projects, then the Senate can have a look at the projects. They can be properly scrutinised by parliament.
Second, our amendments would require projects to be assessed by Infrastructure Australia and be deemed productivity enhancing. That is what infrastructure, building for the future, is all about: making sure we have got assets that will increase our productivity now and into the future. Projects, including an estimate of the productivity gain from the project, should also be published.
This cost-benefit analysis must include the true cost of these sales. What are the lost revenues to government? What is the effect on competition? What is the effect on consumers? What is the effect on jobs? What is the effect for rural communities? Is the sale just short-term political expediency or is it in the nation's interest?
You have to ask: why is the federal government afraid of these questions? They want to hide scrutiny. They don't want these questions answered, and it leaves a huge question mark about the motives of this government when it turns to asset sales.
The threat to assets is most grave in Queensland. The debt and deficit falsehood set by Canberra has spread to governments like the Newman government but sometimes it gets lost in translation. The Newman government has been witless enough to take up the Abbott government's debt rhetoric at face value. They have promised that asset sales will be used to reduce debts and not to recycle assets. The combined ineptness of the Abbott and Newman governments means Queenslanders will suffer twice. Queenslanders will be paying their taxes to provide a bounty, effectively, to the ideologically driven sale of other state assets while Queensland stock of infrastructure will deteriorate and not be replaced.
The Toowoomba Second Range Crossing Project I have taken a very special interest in—there are many in Queensland, who live on the other side of the range, who also follow this with a passion. I hope that some of the light I have attempted to shine on this project will mean an end to the waste and prevarication from the Abbott government on this project. I am concerned that this three-year project as detailed in their own documents has been pushed out to five years. Every year's delay costs $100 million, but don't take my word for it; take Mr Truss's own figures. These accounting tricks, costs pushed out beyond the budget forward estimates, have real costs for ordinary Australians.
This is infrastructure on the never-never by a government that is using all the tricks in the book to try to achieve a smoke and mirrors on infrastructure.
On behalf of Senator Xenophon, I seek leave to incorporate his speech on this bill.
Leave granted.
The speeches read as follows—
I take this opportunity to express my serious concerns about the impact and long-term consequences of the privatisation of state assets.
I acknowledge the intent of this bill is to encourage states to invest in infrastructure projects by way of incentive payments from the Commonwealth upon the sale of state assets. I question whether this plan is short sighted and not in the interests of Australia's competition policy.
In June this year Mr Rod Sims, Chairman of the Australian Competition and Consumer Commission expressed concerns that competition has taken a back seat in the recent wave of state-owned asset sales.
He pointed to the ACCC's recent rejection of AGL's application to acquire Macquarie Generation, Australia's largest electricity generator, as an example. In a media release dated 4 March 2014, Mr Sims said:
The proposed acquisition would result in the largest source of generation capacity in NSW being owned by one of the three largest retailers in NSW. Indeed, with this acquisition, the three largest retailers in NSW would own a combined share of 70 to 80 per cent of electricity generation capacity or output. This is likely to raise barriers to entry and expansion for other electricity retailers in NSW and therefore reduce competition compared to the situation if the proposed acquisition does not proceed.
The Australian Competition Tribunal approved AGL's application to acquire Macquarie Generation's assets, despite the ACCC's warnings that 'the proposed acquisition is likely to mean that consumers will ultimately pay more for electricity, receive lower quality service and be offered less choice.'
Time will tell whether the ACCC's warnings should have been heeded. Unfortunately it will be consumers who will be the first to feel the pain if the ACCC's predictions about electricity price rises are correct.
Mr Sims has also stressed that it is vital state governments must be 'vigilant in setting up competitive structures when they privatise their assets.' The recent sales of some ports have seen the ACCC receive complaints that these ports have been privatised without appropriate open access regimes.
As a member of the South Australian parliament in the late 1990s, I vehemently opposed the privatisation of the then Electricity Trust of South Australia (ETSA). Not only because it was a broken promise of the then Olsen government but because it was also a bad deal for consumers.
I believe the privatisation of ETSA was structured in such a way as to maximise value of the state's assets, thereby reducing a greater amount of state debt (a legacy of the former Labor State Government), but by doing so it shifted the burden onto households and businesses with dramatically higher power prices post-privatisation. I received very sound advice back in the late 1990s from Danny Price, then at London Economics, who is now Managing Director of Frontier Economics. He was vilified by the state Liberal government at the time for his modelling and predictions of power price rises with the privatisation model adopted, and sadly his predictions were uncannily accurate. I should add, the accuracy of his modelling and predictions has not changed over the years given his concerns over the carbon tax and the CPRS legislation introduced by the former government.
If all the privatisation is doing is shifting public debt onto households and businesses then it seems to be a foolish and counterproductive exercise.
However, in the event that this bill does pass, I would like to see it passed with material improvements and for that reason I put on notice I support the amendments proposed by the opposition in this regard.
If taxpayer money is being used to encourage the privatisation of state assets, we have a duty to ensure the public—especially, families and small businesses—do not end up footing the bill by way of higher prices.
I thank all senators who have contributed to this debate, in particular, Senator Conroy, for his very constructive contribution. The Asset Recycling Fund Bill 2014 and consequential amendments establish a new fund as a vehicle for providing financial assistance and incentives to states and territories to invest in infrastructure. A new fund is necessary to support the government's asset recycling initiative, a key initiative, that will encourage the states and territories to sell existing assets and reinvest in new infrastructure that contributes to a more prosperous economy.
Payments from the Asset Recycling Fund will also be used to fund nation-building infrastructure and other National Partnership agreements payments to other bodies will be administered by the Department of Infrastructure and Regional Development and will support important local initiatives such as the Roads to Recovery program in the usual way.
Establishing a new fund to support the government's infrastructure package is sound economic policy. It allows funds being committed now to be invested so that more is available when payments become due. Entrusting the Asset Recycling Fund to the Future Fund Board of Guardians will maximise the growth of assets. The board has a proven track record in managing assets on behalf of the taxpayer. It has grown the Future Fund from around $64 billion in 2006, when the previous government invested budget surpluses into the Future Fund, to over $97 billion by the end of March—in fact, at last count, it had exceeded $100 billion.
The government is committed to the new fund, which will be established with $5.9 billion funded by an amount of uncommitted funds from the Education Investment Fund and the Building Australia Fund that have not been allocated to approved projects. The government will make further contributions following the successful privatisation of Medibank Private; it has also said that it is open to committing proceeds from other future asset sales. Finally, the Asset Recycling Fund is an essential element of the government's infrastructure package announced in the 2014-15 budget to support economic growth. I recommend that it be supported by the Senate.
Question agreed to.
Bill read a second time.
I table a supplementary explanatory memorandum relating to the government amendments to be moved to the Asset Recycling Fund Bill 2014.
I have a suggestion that may assist our progress. Given that the opposition is supporting all of the government's amendments, I am offering the minister the opportunity to move them together. I am not sure if the Greens have an alternative view, but I am offering that opportunity.
In speaking on behalf of the Australian Greens, I am happy, Senator Cormann, if you want to move government amendments en bloc. The Greens will be supporting them all.
by leave—I move government amendments (1) to (21) on sheet HT101:
(1) Clause 2, page 1 (line 9), omit "1 July 2014", substitute "the day after this Act receives the Royal Assent".
(2) Clause 4, page 3 (lines 30 and 31), omit "Financial Management and Accountability Act 1997", substitute "Public Governance, Performance and Accountability Act 2013".
(3) Clause 4, page 4 (lines 24 and 25), omit "Financial Management and Accountability Act 1997", substitute "Public Governance, Performance and Accountability Act 2013".
(4) Clause 8, page 9 (line 1), omit "appropriate", substitute "permissible".
(5) Clause 8, page 9 (line 3), omit "powers", substitute "power".
(6) Clause 12, page 11 (lines 10 to 12), omit "Special Account for the purposes of the Financial Management and Accountability Act 1997", substitute "special account for the purposes of the Public Governance, Performance and Accountability Act 2013".
(7) Clause 12, page 11 (lines 13 to 17), omit "Special Account" (wherever occurring), substitute "special account".
(8) Clause 13, page 12 (line 5), omit "On the commencement of this section", substitute "At the start of the 28th day after this section commences".
(9) Clause 13, page 12 (line 17), omit "On the commencement of this section", substitute "At the start of the 28th day after this section commences".
(10) Clause 16, page 15 (lines 16 and 17), omit the note, substitute:
Note: See section 80 of the Public Governance, Performance and Accountability Act 2013 (which deals with special accounts).
(11) Clause 17, page 17 (lines 13 and 14), omit the note, substitute:
Note: See section 80 of the Public Governance, Performance and Accountability Act 2013 (which deals with special accounts).
(12) Clause 21, page 19 (line 22), at the end of subclause (2), add "The State or Territory must comply with any such terms and conditions.".
(13) Clause 22, page 20 (lines 2 and 3), omit "Special Account for the purposes of the Financial Management and Accountability Act 1997", substitute "special account for the purposes of the Public Governance, Performance and Accountability Act 2013".
(14) Clause 22, page 20 (lines 4 to 8), omit "Special Account" (wherever occurring), substitute "special account".
(15) Clause 23, page 20 (lines 14 and 15), omit the note, substitute:
Note: See section 80 of the Public Governance, Performance and Accountability Act 2013 (which deals with special accounts).
(16) Clause 27, page 22 (line 12), at the end of subclause (2), add "The person must comply with any such terms and conditions.".
(17) Clause 28, page 22 (line 26), at the end of subclause (2), add "The person must comply with any such terms and conditions.".
(18) Clause 34, page 26 (line 23), omit "On the day that this section commences", substitute "On the 28th day after this section commences".
(19) Clause 34, page 27 (line 14), omit "On the day that this section commences", substitute "On the 28th day after this section commences".
(20) Clause 35, page 28 (lines 17 and 18), omit "Section 39 of the Financial Management and Accountability Act 1997", substitute "Section 58 of the Public Governance, Performance and Accountability Act 2013 (which deals with investment by the Commonwealth)".
(21) Clause 47, page 36 (lines 26 to 28), to be opposed.
The Asset Recycling Fund Bill 2014 and the Asset Recycling Fund (Consequential Amendments) Bill 2014 establish a new fund as a vehicle for providing financial assistance and incentives to states and territories to invest in infrastructure. The new fund is necessary, as I have just said in my summing up speech, to support the government's asset recycling initiatives. The amendments being introduced by the government are primarily a necessary consequence of delays to the passage of the bill through parliament. Amendment (1) revises the commencement date from 1 July 2014 to the day after the bill receives royal assent. This will ensure that the parliament does not pass legislation that has retrospective effect.
Amendments (2), (3), (6), (7), (10), (11), (13) to (15), (20) and (21) are minor amendments taking into account that the Public Governance, Performance and Accountability Act 2013 took effect on 1 July. Amendments (4) and (5) clarify the Commonwealth can only make payments where it is permissible to do so under its executive power. These amendments provide clarity on what the government has the power to do under the Constitution. They ensure that this government and future governments cannot do anything under the bill that is inconsistent with this power. Amendments (8), (9), (18) and (19) ensure the Future Fund board of guardians has sufficient time to transfer $5.9 billion of uncommitted balances from the Education Investment Fund and the Building Australia Fund to the Asset Recycling Fund. Amendments (12), (16) and (17) ensure that the recipients of incentives and contributions towards large-scale infrastructure, including states and territories, are bound by the terms and conditions of the agreements under which funding is provided. The amendments strengthen accountability requirements that provide taxpayers with further confidence that funding is used for purposes allowed under the proposed legislation.
Labor do not oppose these amendments. These amendments are just dates of effect, correcting new legislation and make miscellaneous minor amendments to the bill. Once again, we note the government is being forced to amend its own bill.
There is always a sting in the tail, isn't there? If the bill had been properly drafted in the first place, we would not be here. Nonetheless, as far as the Australian Greens are concerned, while opposing the entire intent of the bill and the thinking that underlies it, these amendments are technical and largely administrative in nature. I think Senator Cormann has reflected accurately their intent and the Greens will not be opposing them.
Before putting the question, I advise that amendments (1) to (20) will be put and then amendment (21) will need to be put separately. The question is that amendments (1) to (20) moved by Senator Cormann be agreed.
Question agreed to.
The TEMPORARY CHAIRMAN: The question now is that amendment (21) moved by Senator Cormann be dealt with. The question is that clause 47 stand as printed.
Question negatived.
by leave—I move opposition amendments (1) to (6) and (14) to (17) on sheet 7486:
(1) Clause 4, page 4 (lines 16 to 18), omit the definition of Education Investment Fund.
(2) Clause 4, page 4 (lines 19 to 21), omit the definition of Education Investment Fund Special Account.
(3) Heading to subclause 13(1), page 12 (line 4), omit the heading.
(4) Clause 13, page 12 (line 5), omit "(1)".
(5) Clause 13, page 12 (line 14), omit "subsection 34(1)", substitute "section 34".
(6) Clause 13, page 12 (lines 16 to 28), subclause (2), to be opposed.
(14) Heading to subclause 34(1), page 26 (line 19), omit the heading.
(15) Clause 34, page 26 (line 21), omit "subsection 13(1)", substitute "section 13".
(16) Clause 34, page 26 (line 26), omit "subsection 13(1)", substitute "section 13".
(17) Clause 34, page 27 (lines 10 to 31), subclauses (4) to (6), to be opposed.
The focus of my remarks is around the issue of the somewhat ill-advised proposal to abolish the Education Investment Fund. I find it an extraordinary proposition that the government is seeking to do this, given the claims about the Prime Minister's obsession with infrastructure. We would all surely agree that infrastructure is critical to securing the future of the nation, but I would have thought that infrastructure would also include investments in our science and research and at our teaching facilities at our universities, at the CSIRO and TAFE colleges.
This proposition goes to the very heart of that. These institutions, of course, are where we find the new technologies that we need to ensure that we are able to generate the economic and social benefits not just now but well into the future. That depends upon the capacity of the Commonwealth to invest. The abolition of this fund would prevent that. I am very surprised that the government should try to slip this through as being part of the arrangements for this bill. Upon reflection, I can nonetheless understand, given the government's deep antipathy to higher education. It is in that context, I suppose, that it fits with the government's mentality when it comes to the removal of the Education Investment Fund. It is another broken promise. This is exactly the opposite to what the Liberal Party said during the last election. Senator Mason was quoted in The Australian newspaper before the election as saying:
We would seek to reinvest and rebuild EIF back to its former state wants the budget is back in surplus. This is a nation-building fund and the coalition intends to restore it as such.
Of course, this could be nothing further from the truth in terms of what has actually happened with the proposal contained in this bill. I would have thought that we would have heard more from the Liberal Party itself about this act of blatant vandalism towards the higher education system in this country. I have enormous regard for Senator Mason. I think it is a great tragedy that he is not engaged in the higher education sector in this government. Of course, the obvious point that is so often made in political comedy or farce is that as soon as you actually know something about a particular field it is not surprising that governments seek to move politicians out of that field. Senator Mason certainly fits that category.
The opposition amendments provide the opportunity for this chamber to reconsider this very, very rash decision. The amendments would save the Education Investment Fund. Our amendments do so because the Education Investment Fund provides the funding for the very projects that we need to develop the infrastructure in higher education research and vocational education. If the government succeeds in abolishing the fund, serious questions must be raised about its long-term commitment to investment in these areas. It is clear that the Asset Recycling Fund will not be available for investments in those areas. Is a perverse outcome, because 59 per cent of the funding for the Asset Recycling Fund comes from education. What an extraordinary proposition: research infrastructure which is so vital to the future economic and social health of this nation is being used to fund privatisation of assets.
I note the Australian Technology Network, the group that involves a number of very respected institutions—QUT; RMIT University, in my home state of Victoria; the University of Technology, Sydney; the University of South Australia; Curtin University—has raised concerns. In their submission to the Senate inquiry into the bills they state:
The ATN is concerned about the continuation of research infrastructure funding from 2015 and the lack of guidance in the Bill as to how future research related infrastructure projects will be prioritised for funding via the ARF.
The Australian Technology Network of universities went on to say that the coalition election policy stated that the coalition was in the business of:
… building a world-class Education and Research sector
This bill could be nothing further from that. It notes the statement in which the coalition government pledged that it would:
… encourage modernisation and the development of world-class Education and Research capabilities and support the use of new technologies, particularly digital and IT.
This bill could be nothing further from that. This government attacking the agencies that could deliver on such an election commitment, such as Australian universities, CSIRO, and NICTA. This is exactly the sort of thing I suppose we could relate back to what the Prime Minister said when he said that we 'should judge him on his performance'. His performance in this matter is abysmal. The ATN also noted:
The provision of modern research capabilities comes at a cost. To date 71 infrastructure projects have been funded by EIF to the sum of $2.4 billion. This included $643m in funding for pure research infrastructure …
The ATN submission also raise concerns about the removal of the remaining research funding mechanisms:
Therefore following the removal of EIF the remaining research funding mechanisms, including research block grant funding, are not sufficient to create world class research infrastructure.
It strikes me that this is a pretty fair point. You take this money away and what are we going to use to fund the necessary research infrastructure in this country? How are we going to be able to fund the work that CSIRO does in terms of research infrastructure, the work of the universities, the work of the other science agencies?
I might emphasise that I have got a bit of an interest in this matter, because when I was the minister the fund operation placed particular importance on proper administration by an independent board. It was not a pork-barrelling exercise, as we have seen with this government in its attempt to use Australian Research Council funding. It was not done in any way other than on a competitive basis—on the basis of an evaluation of projects under very rigorous criteria. There were over four funding rounds and 71 projects were supported. They were projects on university campuses, TAFE campuses—projects supporting major scientific infrastructure. They were projects like these: the Science and Engineering Precinct in Ballarat, now at the Federation University; the Science Place for northern Queensland at James Cook University; the Indian Ocean Marine Research Centre at the University of Western Australia; the University of Tasmania Institute for Marine and Antarctic Studies; the University of Adelaide's Institute for Photonics and Advanced Sensing; the Latrobe Rural Health School in Bendigo; the University of Western Sydney Centre for Climate Change and Energy Research.
I note that on Tuesday—and this is a particular irony—the Minister for Industry was at Mount Stromlo launching another project that was funded through this fund. The project is, of course, the Advanced Instrumentation and Technology Centre. And I will seek leave to table the minister's press statement from Tuesday because it will highlight the sorts of infrastructure projects that are funded by this government which, of course—I must say that the minister was at least gracious enough to acknowledge that the funding had actually been provided by a Labor government.
By you.
I won't be so crass, Senator!
That is a first!
But I will suggest that it is quite unusual for this government to acknowledge the work that we did in regard to the provision of basic infrastructure and, particularly, in regard to the importance of the universities and scientific agencies. I quote from the media release:
Australian scientists have snared two world-leading contracts to make astronomical instruments which will further consolidate Australia’s reputation for global innovation, Minister for Industry Ian Macfarlane said today. The Australian National University’s Advanced Instrumentation and Technology Centre at Mount Stromlo has been contracted to design one of the first instruments for the Giant Magellan Telescope (GMT), a super-giant earth-based telescope being built in Chile that is set to revolutionise our view and understanding of the universe.
I understand the minister is happy for me to table that press release.
Is leave granted for Senator Carr?
Leave granted.
I do that because it might help the minister understand the importance of these issues of which his colleagues obviously do appreciate. But it has not sunk in. This very principle of the importance of universities in Australia winning major contracts and providing the central thrust for our science and research effort in this country has just not registered. At the same time, of course, this is a government that the very next day seeks to debate in this chamber a proposal to abolish the fund that actually ensures that these sorts of projects go ahead.
Of course, it is not just the universities that will suffer. The Education Investment Fund has been a great benefit to the CSIRO. That may well be a problem for this government given the hostility this government has shown to the CSIRO. It may well be that this is yet another one of its cunning plans to do great damage to our scientific infrastructure. It was the fund that we used to actually provide the new deep-sea research vessel, the Southern Surveyor. Without EIF, this nation would be left without the capacity to carry out our marine and ocean research—our blue-water research capacity.
The minister has appointed a working party to look at this. There have simply been no answers to the way in which we can ensure future funding arrangements, unless there is provision made—you actually have to do something and not just have good intentions or just make an assertion that you are interested when all of the evidence and all of the facts point to exactly the opposite.
The last budget that this government brought down highlighted its intentions. It was where it put its actions on the line rather than its statements. We saw during the election campaign that commitments were being made which are clearly being breached. This is yet another example of the way in which commitments that this country so desperately needs—to ensure that our universities are able to sustain their capabilities and to ensure that our universities are not placed in the position that they cannot provide the capabilities that we need to ensure the prosperity for this country—are being breached.
I know that the real opportunity for the government here is to allow this bill to go through in its full, which will in turn lead to the universities having to undertake even more drastic actions in regard to the privatisation of their efforts. The consequences are simple: this is a country that will be poorer as a result of this government's policy positions. That is why it is so critical for us in this Senate to weigh up carefully what is being said to us by this government, to reject the proposals that the government is making and to support the amendments. Because, without systematic and sustained funding in our research infrastructure, this nation will not be able to prosper and Australia will not be able to attract the very best and very brightest in the world. That is what we are doing with the investments that we are making in terms of our long-term commitment to research into commercialisation of research.
The abolition of the Education Investment Fund is an ill-considered decision by a government that does not understand the consequences of treating the research community in this way. You simply cannot treat the research community in a way of just turning on and off the tap of government support. That is why these amendments are being moved. This government's proposal is a demonstration of a wilful neglect to the fundamental principle of being able to provide this country with the necessity of ensuring that our universities, our scientific agencies and our TAFE colleges have the funding support they need to be able to provide the basic infrastructure they need to be able to ensure that this country is able to maintain its prosperity. I urge all senators to support these amendments.
Mr Temporary Chairman, I made an error before—I was not seeking a separate vote on the particular items that have been moved here. I do want it recorded that the intention of items (1) to (6) and (14) to (17) on sheet 7486 is to prevent the government from transferring $3.5 billion from the Education Investment Fund into the Asset Recycling Fund. I believe that this should be opposed. I intend to oppose it. The purpose of the amendments is essentially to restrict the amount of funds available to promote privatisation and to place limits on the types of infrastructure that the Commonwealth is promoting. I intend to vote against this. I will, however, vote in favour of another section of Senator Conroy's amendments, subject to it being amended by my amendment.
I will provide some comments on behalf of the Australian Greens. We support the Labor amendments that Senator Conroy foreshadowed and Senator Carr has just spoken to. The idea that the Australian government would effectively sneak through the abolition of a $3½ billion education and research fund for university and research infrastructure projects beggars belief. To bring it forward under the rubric of 'privatise everything' and at the stroke of the pen knock over $3½ billion worth of university and research infrastructure work is extraordinary.
The EIF is one of three nation-building funds, along with the Building Australia Fund and the Health and Hospitals Fund. It was established to build a modern, productive and internationally competitive Australian economy by supporting world-leading, strategically focused, infrastructure investments that will transform Australian tertiary education and research. What part of that statement is offensive to the Liberals and the Nationals? How could you conceivably come in here and gut funding for something that had that as its intention? How can you then front press conferences day after day talking about innovation, economic growth and strength and staying at the forefront? What century is it that you are try to keep us in?
As a result of the Commission of Audit on the future use of nation-building funds—and I guess without too much surprise: you commission these reports and they will give you what you expect in large part—the government announced that the EIF would be axed, that no further funding rounds would be held and existing projects would continue to be funded, but basically it turned off the funding tap for such an important fund.
One of the reasons that the Greens are strongly in support of the amendments and strongly defend the EIF is the kinds of projects and work it has been funding. When you look at those you realise exactly why it is that the coalition loathes it so much. The EIF supports clean energy research infrastructure. It provided $4 million to the University of Queensland to build research infrastructure to support the AGL Energy Photovoltaic Solar Flagship. There we go! That starts to give us a bit of an idea of why the coalition might hate it. It has the words 'energy efficiency' in it, it has the word 'solar' in it, therefore wipe it out. The EIF regional priorities round funded 10 projects, including Creative Futures Tasmania and advanced design and engineering training in Victoria. Round 3 included the EIF sustainability around. Oh, another word that the coalition cannot abide! Anything with the word 'sustainability' in it is being abolished as well. Nineteen projects were approved for funding across tertiary education and research sectors, including the advanced manufacturing centre at Swinburne University and the Indian Ocean Marine research Centre at the University of Western Australia. Why would we need people to be researching oceanography? Get rid of that. Central Tech Green Skills Training Centre at Central TAFE in WA? Yes, absolutely—the word 'green' is in that one. The University of Wollongong's Retrofitting for Resilient and Sustainable Buildings? Obviously that is the kind of thing that the Liberal and National parties hate. The Greens strongly support these Labor amendments and commend them to the chamber.
On behalf of the government I indicate to the chamber that we will not be supporting these amendments. These amendments seek to prevent the government from transferring, as Senator Leyonhjelm indicated, $3.5 billion in uncommitted funds from the Education Investment Fund to the Asset Recycling Fund. Without the proposed transfer from the Education Investment Fund, the Asset Recycling Fund will not be viable for the purposes for which it is being established. The proposed transfer, as I have indicated, relates only to uncommitted funds in the Education Investment Fund—that is, amounts for which no projects have been either approved or identified. The government will meet commitments to projects already previously approved for funding from the Education Investment Fund, including those approved by the previous government. These projects will not be affected by the transfer of uncommitted amounts to the Asset Recycling Fund.
The question is that amendments (1) to (5) and (14) to (16) be agreed to.
The Senate divided. [14:01]
(The President—Senator Parry)
Question agreed to.
Progress reported.
Honourable senators, there have been numerous media reports and commentary on the role of the Clerk and officers of the Department of the Senate in recent days. In consultation with the Clerk we have particularly chosen not to enter the debate for a variety of reasons. As this is the last opportunity prior to the Senate rising for the recess where all senators are present, I consider it important to state the following. I have full confidence in the Clerk of the Senate and her officers. All Senate staff serve the Senate in an entirely professional and impartial way and I reject any claims to the contrary.
I seek leave to make a 30-second statement.
Leave is granted.
I repeat on the record, and formally, what I said to the Clerk informally this morning. Government senators have full confidence in the professionalism of the Clerk and her staff, and are immensely appreciative of their service to us.
I seek leave to make a short statement.
Leave is granted.
I, too, wish to endorse, on behalf of all opposition senators, your comments and the comments of the Leader of the Government in the Senate. As I have said publicly, and I will state again, the Clerk of the Senate, Dr Laing, and her colleagues—and, in fact, all her predecessors—have served this chamber with professionalism, integrity and impartiality, and they do Australia a great service in the work they do.
by leave—Mr President, I join with the remarks that you have made and I endorse the remarks that Senator Abetz and Senator Wong have just made. Firstly, I want to express my thanks on behalf of the Australian Greens to Dr Laing and her staff, and all the Senate staff, for the way in which they support us in the job that we do. We have found them to be professional, impartial and helpful. They go out of their way to be of assistance, and I want to express our full confidence.
by leave—I wish to concur with the words that have been spoken. I believe the vast majority in this place will concur with these words: their impartiality, their professionalism and their integrity is unquestioned.
by leave—Mr President, on behalf of Senator Day and myself, we endorse your comments regarding the Clerk of the Senate. We have found the Senate staff to be delightful to work with. The class of 2013 would be even bigger bumbling fools than we are but for the Clerk and her staff.
My question is to the Minister representing the Minister for Health, Senator Nash. I refer to correspondence from Dr Fergus Whitehead, the chief executive officer of Adelaide Pathology Partners laboratory, on the $7 GP tax. Is Dr Whitehead correct when he says that the imposition of a $7 GP tax will result in added costs for pathology laboratories, given additional staff will be required to collect the tax in collection centres? Can the minister confirm that pathology laboratories will be required to send additional $7 accounts to patients?
No, I cannot confirm that statement, because we will not be aware which clinicians will be charging a co-payment until the scheme starts. This government has been very clear in making sure that the Australian people know exactly why the changes to the budget took place. The changes to the budget took place because of the previous government's economic mismanagement. The budget mess that they left us meant that we had to make some tough decisions in the budget. It was under the previous finance minister that we saw net debt treble from $42 billion to $153 billion. Perhaps if the previous finance—
Pause the clock. Senator Moore, a point of order.
Thank you, Mr President. My point of order, surprisingly, is on direct relevance. The specific question is about the cost of the additional $7 GP tax to pathology laboratories and the requirement to send additional $7 accounts to patients. I would ask you to draw that to the attention of the minister.
Thank you, Senator Moore. The minister has just over one minute left to answer the question. I draw the minister's attention to the question.
Thank you very much, Mr President. I answered it directly. I said I could not confirm it. We did not know what the processes would be; therefore, we would not know what the costs would be to the pathology labs. I was very clear. I was also very clear in stating to the chamber exactly why the budget contained tough decisions. It was because—
Pause the clock.
Honourable senators interjecting—
I will not call Senator Moore until there is silence. Senator Moore, a point of order.
Mr President, there were two parts to the question. The second part is about the additional $7 accounts being sent to patients. The minister has not addressed that part of the question at all.
The minister can address the question, and she has indicated in her previous response to a point of order that she did address the question. The minister can get to the second part of the question in her own time.
Thank you, Mr President. And, indeed, I answered it. We will not be able to determine what costs will be passed on until we determine whether or not a co-payment will be charged. It is very clear. I was indicating to the chamber that if it had not been for things like, under the previous finance minister, spending $34 million buying water from Tandou Station, which was supplementary water that actually does not exist except in a flood—it was the previous government's mismanagement that led to a tough budget.
Mr President, I ask a supplementary question. I refer again to the $7 GP tax and comments by Dr Whitehead, who says, 'The introduction of a co-payment for bulk-billed pathology services, which is the majority of our revenue, may mean the end of our business and the loss of 300 jobs in South Australia.' Will the introduction of a $7 GP tax cut services and cost jobs, Minister?
In answer to the question, the fellow is entitled to his views—Dr Whitehead is entitled to his views. We have been very clear: there have been some changes to the budget when it comes to health. There has been a requirement for a co-payment—indeed, supported by the shadow Assistant Treasurer and initially supported by the previous leader of the Labor Party and previous Prime Minister Bob Hawke. So we have been very clear. We have made these decisions because it is this government that is going to ensure a sustainable health system. When we are looking at potentially spending $34 billion on the MBS, this government is the one that recognises that we need to make the responsible decisions to have a sustainable health system.
Mr President, I ask a further supplementary question. Minister, given that Adelaide Pathology Partners is also responsible for the majority of cancer diagnoses in South Australia, won't the imposition of a $7 GP tax erode the quality of health care for South Australians as well as threaten 300 South Australian jobs?
It would be useful if those opposite did not run to scare campaigns. Indeed, it was the previous Prime Minister, Bob Hawke, and I will just quote—
Opposition senators interjecting—
Order! Pause the clock. Minister Nash you have the call.
I quote from the previous Prime Minister:
Is anyone seriously suggesting that, in the circumstance you're talking about, where there is the possibility of breast cancer, that is going to stop them going to the doctor? I mean, that is emotionalism being played at the lowest level.
That is what we have seen from those opposite. This government has been very clear. The best thing we can do for this nation is ensure a sustainable health system into the future. That is what we are going to do, because it is this government that recognises the responsible decisions have to be made to ensure that sustainable health system.
Order! I draw the attention of honourable senators to the presence in the chamber of the President of the New South Wales Legislative Council, the Hon. Don Harwin, MLC. On behalf of all honourable senators, I wish you a warm welcome to the Senate. With the concurrence of honourable senators, I invite President Harwin to take a seat on the floor of the Senate.
Honourable senators: Hear, hear!
President Harwin was seated accordingly .
I trust that senators will be suitably behaved during this time.
My question is to the Leader of the Government in the Senate, Senator Abetz. Can the minister advise the Senate of the size and scope of Australia's budget problems?
Can I congratulate Senator Canavan on his question and acknowledge his strong—
Senator Kim Carr interjecting—
Order! Pause the clock. Senator Carr!
Let us just cut to the chase. Labor is in deficit and debt denial. They know there is a budget problem. Do you know why they know there is a budget problem? It is because they created it. When they came to office in 2007, the budget was $20 billion in surplus and Australia had $50,000 million in the bank. In just six years Labor destroyed that golden legacy. They did it by spending more than they earned, wasting billions on pink batts and overpriced school halls. The Labor Party seems to have no appreciation of how much $1 billion is. Let me put it this way: a million seconds is about 11 days; a billion seconds is more than 31 years. A billion is a very big number indeed. Labor left behind projected deficits of $123 billion and projected debts of $667 billion. Let me tell you, if you converted that into seconds, it would be more than 21,000 years. The Labor Party might laugh about this but it is no joke. Government debt means higher pressure on the cost of living. Government debt means fewer jobs. Government debt means less money for services that the Australian people need. Debt means every single Australian suffers and that is why we as a government are seeking to reverse the position to ensure that there is a secure and sustainable future for our fellow Australians.
Mr President, I ask a supplementary question. Is the minister aware of any statements by key Labor Party figures that Australia needs to repair its budget?
As it happens, Senator Canavan, yes, I am aware of some of those statements. For example, 'Wayne Swan told me that the fiscal situation is ruinous.' Those were the words spoken by former Labor Minister Bob Carr, a fellow that used to sit in this chamber until very recently.
That is the best you've got?
Senator Conroy interjects that that is the best I've got. If 'ruinous' is not bad enough, Shadow Treasurer Chris Bowen said:
I certainly agree that there are long-term structural issues in the budget, absolutely.
That was only yesterday. Recognising the problems, what are they prepared to do about it? Do you know what they prepared to do about these structural problems that they now recognise? It is to vote down every savings measure that they recommended in their last budget. That is the height of the irresponsibility of Labor under Mr Shorten— (time expired).
Mr President, I ask a further supplementary question. Will the minister confirm that it is the government's position that repairing the budget is both essential and urgent?
(—) (): I can confirm to Senator Canavan and the Australian people that the task of fixing the budget is both essential and urgent. I say to the Senate that Australia does have a budget situation that needs to be fixed. If it is not fixed, we will end up like much of Europe—sliding into genteel poverty and regretting that we did not act when it was easier to do so. We know that it is not easy now, but we know that it is essential and it will be a lot harder in the future. The Senate has a choice. Each individual senator has a choice. You can either be part of the problem or part of the solution. You can either be a fiscal destroyer or a fiscal repairer. We can either build a better future for our fellow Australians or continue down the destructive path left us by Labor. (time expired).
My question is to the Minister for Employment, Senator Abetz. In the past fortnight, it has been announced that two mines have closed on the west coast of Tasmania. Two hundred jobs were gone overnight with 150 jobs to go next year. Why is it that the junior Assistant Minister for Employment, earlier this month, announced a $500,000 jobs initiative for Geelong and reinstated its local employment coordinator, but the senior Tasmanian Minister for Employment cannot do the same for the north-west coast and the west coast of Tasmania?
Unlike the honourable senator, I will not engage in crass politics—
Opposition senators interjecting—
Order on my left!
on the back of the loss of 200 jobs on the West Coast of Tasmania. If the honourable senator was genuinely concerned about the mining industry and jobs in the mining industry, she would have ensured the demise of the carbon tax a lot earlier than today.
Mr President, as you well know, coming from that region yourself, the state government quite rightly has developed a task force to look into the best possible way to deal with the situation on the West Coast. We can undertake the Labor method. The Labor method is: see a problem, throw a bucket of money over it and walk away without any responsibility, and simply say—
Senator Ian Macdonald interjecting—
You are right, Senator Macdonald: borrow the money to throw over the problem, and then walk away and somehow say, 'We've lived up to our moral obligation.'
We as a government will take a very considered approach as to how best to help the West Coast community of our home state. In relation to the workers: as I understand, a lot of them, in fact, live in Burnie and the north-west coast, driving in and out. There are also many workers that live in Queenstown, but they do have—
Pause the clock.
Mr President, I rise on a point of order. I thought that, with that time, the minister might have got to my question, but he didn't. So my point of order is on direct relevance. The question was specifically about the extra money and the LEC—the local employment coordinator—position. The senator asked particularly whether that particular process could be put in place, and the minister has not referred to that.
The minister was also asked about his involvement in the issue, and the minister has been answering the question.
The situation on the West Coast was clearly referred to, with the loss of the 200 jobs, and I was addressing—
Senator Wong interjecting—
how we, as a coordinated force between the government in Hobart and the government in Canberra were going to address the situation.
Senator Wong interjecting—
Senator Wong continues with her relentless interjections, yet had the audacity this morning to seek to raise a point of order against one of my colleagues. The duplicity of this— (Time expired)
Mr President, I ask a supplementary question. I refer to the government's inadequate response to these job losses. In the minister's joint press release with the Liberal member for Braddon, Mr Brett Whiteley, they simply recommend that workers contact Centrelink. Given that the workers at Mount Lyell have been off work on half-pay for around six months, is 'contact Centrelink' the best that the employment minister and Mr Whiteley can do?
Can I say to the honourable senator: it is very bad form to quote your own media release that had that falsehood in it, claiming that the excellent member for Braddon had only suggested that people should be contacting Centrelink. The member for Braddon did a lot more, is doing a lot more, and has put to shame the pathetic efforts of the Labor Party who think that by issuing a media release they can just somehow overcome the situation—a media release which, might I add, suggested throwing, I think, $20 million at the situation, with projects that had not been through due diligence, projects that had not been considered as to their value for money—and, indeed, wanted to steal money from Peter to pay Paul that would have cost other Tasmanian jobs. The height of— (Time expired)
Mr President, I ask a further supplementary question. The Liberal member for Braddon has also said that the Premier should raise West Coast employment at the Prime Minister's joint Commonwealth and Tasmanian council. Minister, what immediate support will the Prime Minister's council deliver to these West Coast workers?
Mr President, the council is about to meet later this month, and I am not going to pre-empt what the council might determine, because we actually want this council not to be the sort of ventriloquist doll of the government, like the Labor Party used to set up their task forces. We actually want this task force to talk to us, to tell us what the best way forward is for the Tasmanian economy. I can understand that Senator Urquhart believes that that is the way you do business. The people of Australia, and, in particular, Tasmania, voted for a change of government because they wanted a different style of government: a government that listened to the people, to get rid of the carbon tax, to get rid of the mining tax, to destroy that ridiculous forestry agreement—all those things that you, Senator Urquhart, championed, and the people of Tasmania rejected by electing Brett Whitely to the seat of Braddon. (Time expired)
My question is to the minister representing the immigration minister, Senator Cash. Considering that the Abbott government is currently holding 153 asylum seekers, including dozens of children, against their will at a secret location in the Indian Ocean, will the government answer a simple question about the welfare of those on board: how many nappies, Minister, if any, and what clean clothes have been taken to the vessel for the children detained?
As I have stated previously, the matter is currently before the High Court, and, accordingly, it would not be appropriate to comment any further on the matter. I can, however, reiterate the words of the minister, who has stated that any person who is in the care and protection of the Australian Customs and Border Protection Service will be in good care, and they are in good care.
I would also make this point, however: as Senator Hanson-Young raises the issue of the children, I will just remind the senator and those opposite that, in 2007, when the Howard government lost office, there were four people in immigration detention who had arrived by boat, and not one of them was a child. The reason that we are in this situation today is due solely, completely and utterly to the fault of those on the other side who were so actively encouraged, on a minute-by-minute basis, by the Australian Greens, led, of course, by Senator Hanson-Young, who, it is unfortunate, sometimes does believe that immigration policy is formed on the basis of an episode of Sea Patrol. Senator Hanson-Young, I can assure you: it is far more serious than that—in particular, when the policies you supported contributed directly to in excess of 1,200 innocent men, women and children dying at sea. They are the policies you support; they are not the policies that those on this side support.
Mr President, I ask a supplementary question. According to the Australian Customs and Border Protection Service, the ACV Ocean Protector has austere accommodation for up to 120 potential transportees. Considering the capacity of the largest Customs vessel falls short of the number of refugees or asylum seekers on the boat, does the government concede that those people and the Australian crew on board are being forced to live in cramped, unsafe conditions and are risking endangering their lives?
Again I reiterate to the Senate that, as this matter is before the High Court, it would clearly be inappropriate for me to comment, but I will say: please be assured that those on this side of the chamber have complete, total and utter faith in the good men and women of Customs and Border Protection, who are the people on the ground—not us here—that every single day ensure that Australia's borders are kept secure. I say thank you to the men and women of Customs and Border Protection and, quite frankly, Senator Hanson-Young, to insinuate that they are in any way not caring for people is demeaning.
Mr President, I ask a second supplementary question. Has the government considered the potential psychological harm that is being inflicted on children when they are held in the hull of the Customs vessel, being locked behind doors in rooms with no windows?
Again I refer to my previous answer in relation to the matter currently being before the court, but I would again say to Senator Hanson-Young: why did you not show the same interest every single time one of those 1,200 people who are confirmed dead at sea because they got on a leaky boat and risked their lives because your policies encouraged them to do so—
You're a grub!
Senator Collins, you will have to withdraw that.
I withdraw.
Thank you, Senator Collins.
The mere fact that you can come into this place and accuse this government of not caring is total, complete and utter hypocrisy and does not stand up when you look at the facts.
My question is to the Minister representing the Prime Minister, Senator Abetz. I refer to the government's review of the renewable energy target that will soon be handed down. I also refer to comments by Andrew Thomson, Managing Director of Acciona Energy, who said:
If governments flip-flop with policy to the extent that they drive the renewable energy sector out of this country and foreign investors away from this country, don’t expect to be able to attract them back in a hurry.
Does the minister agree that abolishing the renewable energy target will drive the renewable energy sector and foreign investors away from Australia?
We are getting very close to the hypothetical questions with the honourable senator's question because I am asked what might happen if we were to abolish the renewable energy target. The government has made no such announcement. What the government has said is that there would be a review of the renewable energy target, something that was actually in the legislation when it was passed. The review now falls to this government to undertake.
Like with everything we do, we will look at this in a methodical manner, in a purposeful manner and in a careful manner to ensure that we get the right policy settings. We will not be responding as Senator Singh and the Labor Party does—for example, there is a Four Corners program so you ban the live export trade. We do not behave like that in government. We take a very considered approach to policy making and that is why, Senator, whilst you want us as a government—and I can understand the political tactic of trying this—to be pre-empting our own inquiry and its findings, we will not be. We hear the comments of Mr Thomson and other people. I am sure they have put their views to the committee of review in relation to the renewable energy target. All that will come out in the wash with their report, and the government will consider it.
I refer to the Granville wind farm project that has the potential to employ 200 people on Tasmania's west coast. Is the minister aware of the comments by Westcoast Wind Director, Royce Smith, who said that the uncertainty around the RET review has 'got a few investors a bit shy at the moment because it's a bit hard to invest money if you don't know what the outcome is going to be'. Won't abolishing the renewable energy target undermine, rather than create, jobs on Tasmania's west coast?
Talking about the abolition of the renewable energy target in this manner, as Senator Singh has done, is more likely to undermine confidence than anything else. So the crocodile tears of Senator Singh are there for all to see. As I have indicated, we have a review being undertaken. We will consider the outcome of that review and make a decision that is in the long-term best interests of our nation, both economically and environmentally. Until such time as we have the review and have considered it, all the other commentary by Senator Singh might grab her a headline but, with great respect, is pure speculation that does nothing for the sector that she seeks to champion.
Mr President, I ask a further supplementary question. This is the minister's opportunity to get rid of that speculation. Can the minister confirm that the government remains committed to the Prime Minister's pre-election promise to maintain the renewable energy target?
I can confirm that the government are committed to undertaking the review which was always on the cards and which is now being undertaken. As a government that are committed to policies such as direct action to assist the environment, a policy that I am sure Senator Singh and her Labor colleagues will endorse and support us on, we will look at this review and its recommendations. Are we committed to renewable energy? The government are committed to working through these issues in a manner that is in the best interests of all Australians. When you have a taxpayer funded review, does it not make sense for a mature, stable government to say let's wait for the review? (Time expired)
My question is to the Minister for Defence, Senator Johnston. I refer the minister to his Prime Minister's comments where he described Japanese troops of World War II as 'honourable'. Does the minister agree with his Prime Minister's description of World War II Japanese troops?
I thank Senator Lambie for that important question. For 70 years now Japan has conducted itself in stark contrast to its history in the 1930s and 40s, and is a peace-loving country that has a constitution that has set it on a path of peace and harmony with both its neighbours and the rest of the world. The fact is we have served in a number of places with Japanese troops. We have been in Cambodia, we have been in East Timor, we have been in Iraq and we are currently in South Sudan with Japan Self-Defense Force members. Those Japan Self-Defense Force members are very, very honourable people. They have conducted themselves in difficult circumstances, in ways where they have extreme restrictions on their rules of engagement. They have participated in harm's way in a way that has been very honourable. Indeed, recently, as I am sure Senator Lambie knows, we have sought to have an increased defence relationship with Japan.
Currently, Japan has for at least 25 years been participating with the United States and with Australia in various trilateral exercises. Currently, Japan participates in RIMPAC every second year, an exercise put on in Hawaii by the United States Navy, by the Central Pacific Command. In all of those instances, Japan has conducted itself with great honour and integrity, and, I say, in contrast to what has gone before historically. Indeed, commercially, our relationship with Japan, more widely, has been a very successful one for Australia. (Time expired)
Mr President, I ask a supplementary question. Is the minister concerned about the high rate of suicide of former members of the ADF and will he support my call for a royal commission into the conduct and procedures of Veterans' Affairs?
Thank you, Senator Lambie. Let me pull up my brief on this matter.
Oh, dear. You should have done that first!
Order, Senator Conroy!
Opposition senators interjecting—
Order on my left! Senator Johnston has the call.
The fact is that we have a serious issue with post-traumatic stress disorder in the ADF. I have taken the time to compare the suicide rates known to us inside the ADF, and with recent veterans members leaving the ADF and going into the Veterans' Affairs jurisdiction, with those of the United States. The comparison is much more favourable for us. The rate is very, very disturbing in the United States. We leave no stone unturned in getting the transition right and in managing the mental health of our people. It occupies our mind every day for several hours. (Time expired)
Mr President, I ask a further supplementary question. Would the Minister for Defence agree that the transition period between defence and into veterans' affairs is an absolute failure?
Senator, I do not agree with that. Senator Ronaldson and I spend an awful lot of time looking at how we take veterans away from defence on their departure from active service, particularly in Army, into the jurisdiction of Veterans' Affairs. We have a huge responsibility to our men and women who have served us so well, particularly in Afghanistan. Of course, we take a great amount of time and put great effort into making sure that that transition, particularly where they have ongoing health issues, is as smooth and seamless as possible.
Senator, I thank you for your question. It is a valid question and it is a good question to ask in this chamber. We take great effort in making sure that the men and women who have served us so well have a seamless transition with all of their health issues into the Veterans' Affairs jurisdiction. It is an important matter and we are very, very much on top of it, can I assure you. (Time expired)
My question is to the Minister for Finance, the Minister representing the Treasurer, Senator Cormann. What was the state of the budget when the government came to office and what were the causes for the budget outlook?
I thank Senator Fawcett for that question. The state of the budget was very bad. It should not really surprise us that it was very bad, because Labor governments across Australia have a history of leaving behind budgets that are in a mess. That is what happened when John Howard became Prime Minister and that is what happened when we came into government. Of course, the previous government inherited the situation of no government net debt—a $20 billion surplus, more than $50 billion in the bank. We were collecting more than $1 billion in net interest payments on the back of a positive net asset position. What did Labor do? They delivered $191 billion in deficits in their first five budgets and another $123 billion in projected deficits in their last budget. They took us on a trajectory to $667 billion of gross debt.
No one believes you.
Senator Cameron says that nobody believes us. But do you know what? I suspect that even the people voting for the Labor Party know that the Labor Party do not know how to manage money. Here we are having to borrow $1 billion a month in order to just pay the interest on their debt. Do you know what $1 billion a month would pay for? It would pay for 47,719 hip replacements. It would pay for 49,371 knee replacements. And it would for 371,885 cataract surgeries. Instead, what do we have to do? We have to pay it every month. We have to borrow a billion dollars every month and spend it just on the interest on Labor's credit card bill. We could spend that money on so many better things if only we did not have all of this Labor debt to deal with. It is very important that we get the budget back under control so that in the future we can fund these important health services even better than we are now.
Mr President, I ask a supplementary question. Minister, how may decisions made by this parliament on proposed savings and revenue measures change the budget outlook?
I thank Senator Fawcett for the supplementary question. The choice for the Senate is clear, really. Either we stay on Labor's expressway to more debt and deficits or we turn the situation around and build a stronger, more prosperous economy where everyone can get ahead and where we can get the budget back into balance. Of course, we know that the previous Labor Treasurer, Wayne Swan, used to sell the virtues of surplus budgets. Every year he would promise us another couple of budget surpluses. 'The surplus years are here', he would say, and then he would deliver another couple of deficits. Of course, the Labor Party has not delivered a surplus budget since 1990. The Labor Party has not delivered a surplus budget in 24 years. This Senate needs to join the government in helping us fix the budget mess that we have inherited so that we can strengthen the future for our children. (Time expired)
Mr President, I ask a further supplementary question. Minister, what are the risks to all Australians if this parliament fails to address Australia's budget problems?
The risk is that on the back of continuing to borrow to fund our consumption today we will expose our children and grandchildren to lower living standards and we will force them to pay higher taxes and accept lesser services in order to pay for our cost of living today. That is of course entirely inappropriate. I have been reading out a few quotes in recent weeks and I came across this quote from John Edwards, the RBA board member who was appointed by Mr Wayne Swan and who was former Prime Minister Paul Keating's principal economics adviser. This is what he said:
I've no doubt there is a budget crisis. We're accumulating debt as a higher share of GDP and of course in absolute terms, [it's] absolutely astronomical …
This is Paul Keating's economic adviser:
… compared to far more serious episodes in Australian history, including recoveries from serious recessions.
So Paul Keating's economics adviser thinks this is worse than it has ever been. (Time expired)
I direct my question to Minister Cormann, representing the Treasurer. Considering that yesterday the Treasurer stated on Sky News that, 'the most significant individual item in the budget is a savings measure, it's a reduction in foreign aid.' Considering that the differential of any money allocated for a department that is not spent goes back into consolidated revenue, do you plan to make savings from the aid budget by slowing down expenditure on overseas aid programs? If so, which parts of the overseas aid program will experience reduced expenditure?
The government has been very transparent in the savings that we intend to make out of the foreign aid budget. Given the debt and deficit disaster that we have inherited from the Labor Party, we have no choice but to focus on getting our own affairs in order before we start spending money that we have not got. The Labor Party and the Greens might want us to continue to borrow money to give it away, but we think we have a responsibility to our children and grandchildren to repair the budget, to build a stronger, more prosperous economy, to create opportunity for everyone to get ahead, but we are not going to continue to spend money that we have not got. The spending growth trajectory in foreign aid that former Prime Minister Kevin Rudd locked Australia into in his quest to become the next Secretary-General of the United Nations was completely unsustainable and it was completely unaffordable. Our children and grandchildren would not have to pay the price—
Pause the clock. Senator Rhiannon on a point of order.
Mr President, I rise on a point of order on relevance. The question was quite simple and direct and was about slowing down expenditure on overseas aid programs. Could you draw the minister back to the question please?
The minister has just over one minute left to answer the question. I draw the minister's attention to the question.
As I was saying, the Australian people should not have to pay the price for Mr Rudd going out and trying to stack the numbers in his quest to become the next Secretary-General of the United Nations. In this budget we have frozen the foreign aid allocation, the foreign aid budget, this year and next year at the same nominal amount. Then we are increasing it by the CPI instead of taking it up to 0.5 per cent of gross national income—as we transparently said we would do before the election and as we transparently said we would do in the budget. That is the responsible course of action given the debt and deficit disaster that we inherited from the Labor-Green government when we came into government in September. But of course, if the Greens support our agenda for stronger growth, if the Greens support our agenda to repair the budget, if the Greens support our agenda to get back into surplus, we will have more money available in order to invest in causes like foreign aid. But in the meantime, while we have to borrow a billion dollars a month just to pay the interest on Labor's debt, we just cannot afford more than what is in the budget.
Mr President, I ask a supplementary question. Minister, how do you reconcile the Treasurer's statement made last October—that the ambitious goals of eliminating extreme poverty will be meaningless unless strategy is actively pursued to achieve those goals—with the Treasurer's statement of yesterday that, 'We just have to reduce the expenditure as part of our budget savings.' Are you committed to reducing aid spending or to poverty alleviation?
The Greens might not understand—and these days it seems the Labor Party does not either—but the only sustainable way to increase spending on foreign aid is to get the budget back under control. The budget situation is such that we cannot continue to borrow money just to give it away. The Labor Party wants us to borrow money and give it away for all sorts of causes. Taken in isolation, you might say that every single cause has got merit, but, do you know what, when you are the government you actually have to prioritise how you allocate your resources. The truth is that you are in a situation where you are heading for $667 billion of debt, which the Labor Party wants our children and grandchildren to repay. I see Senator Cameron smiling. He does not care. Maybe he is quite happy to give his children his credit card with all of his grocery expenses on it for the next couple of years, as well as the interest bill. Would you do that, Senator Cameron? Would you put your groceries on your credit card over the years and then tell your children, 'Well, that's now your problem' or would you say, 'Actually, I've got to take responsibility for my own expenditure'?— (Time expired)
Minister, considering you have really just linked the aid budget with the surplus, how will further cutting the foreign aid budget deliver the new aid paradigm announced by Foreign Minister Julie Bishop and retain excellent aid programs that have seen over a million boys and girls enrolled in school and about 2.8 million children vaccinated against life-threatening diseases? These are some of the programs that are under threat if you continue to reduce spending in the coming period.
Foreign Minister Bishop is doing an outstanding job to make sure that the investment in foreign aid actually delivers real outcomes, because, under the previous administration, Mr Rudd was doing his work to do the numbers to become the next United Nations Secretary-General. Not only did he spend a lot of money on wasteful programs; he also spent a lot of money on massively increasing the size of the Public Service. The increase in the number of public servants in AusAID was much higher than the increase in actual funding into programs. What we are doing is saying, 'We can't continue to spend money that we haven't got. That would be irresponsible to our children and grandchildren. So we need to get the budget back under control.' That is what we are doing. Once the budget is back under control, we can have a conversation about how we best prioritise future spending decisions. But, in the meantime, while we have a deficit— (Time expired)
My question is to the Minister representing the Prime Minister, Senator Abetz. I refer to comments by new senator and senior Liberal campaign strategist, James McGrath, who said:
… the GST should be broadened to cover everything—and it should also be increased to 15 per cent.
Is the government considering this proposal to broaden the GST to cover everything, including fresh food, school fees, child care and medication? Is the government also considering an additional hit on Australians by increasing the GST to 15 per cent?
Order! Before I call the minister: Senator Cameron, you refer to Senator McGrath as 'Senator McGrath'. You forgot to give him his correct title.
I apologise.
Thank you, Senator Cameron.
I am absolutely delighted to inform the electors of Queensland and all Australians that, earlier today, Senator McGrath and I and the coalition and other senators voted to abolish the carbon tax. Senator McGrath ensured that that hit on Australians to which Senator Cameron was referring was actually reduced by $550 per annum for the average—
Mr President, I rise on a point of order going to relevance. This was a clear and simple question about the GST—the GST on fresh food, school fees, child care and medication, and an increase in the GST.
Senator Cameron, first of all, the minister had hardly commenced his answer. Secondly, he was being directly relevant to a portion of your question, so there is no point of order. Minister, you have the call.
Can I also commend the speech that Senator McGrath gave to all Australians—a very good speech. I might say, with respect to Senator McGrath: perfect as it was, it did canvass an issue that is not government policy, and we do not intend to increase the GST. This is a government that wants to try to keep the tax burden on our fellow Australians as low as possible. I understand that Senator McGrath's approach is to increase one tax and to replace other taxes, and therefore the overall tax burden would not be increased. But, having said that, I can inform the Senate and Senator Cameron that we do not intend to change the GST formula. However, can I just observe that it is an absolute delight that Senator Cameron listened to a speech without interjecting. That is why he actually got it and was able to ask his question today. Can I commend him to follow that line in the future. (Time expired)
Thanks for the advice, Senator Abetz. Mr President, I ask a supplementary question. I refer again to comments by the minister's Liberal colleague Senator McGrath who has called for the abolition of the federal departments of health and education. Is the government's $80 billion cut from hospitals and schools a down payment on Senator McGrath's grand plan?
Senator Cameron desperately, on behalf of the Australian Labor Party, continues to peddle this line that somehow the $80 billion to which he refers was actually funded. Every Australian knows that the promise of the $80,000 million, that was to be paid some time into the future, had no revenue base in any way, shape or form other than from borrowing from overseas. That was part of the trajectory into debt, which came to $667,000 million, something which the Labor Party seeks to deny. You cannot have it both ways. The $80 billion was part and parcel of the $667 billion. You know that, those on the other side know that and, Mr President, it is vitally important— (Time expired)
Mr President, I ask a supplementary question. Senator McGrath has also called for the ABC to be sold, echoing the calls of many over there and former deputy Liberal leader Neil Brown, who was recently appointed to the ABC board nomination panel. Given this growing push from within the Liberal Party and given that the Prime Minister has already broken his pre-election promise of no cuts to the ABC, will the minister now come clean about the government's secret plan to privatise our national broadcaster?
Let me confess, I am quite jealous. My first speech did not get the attention that Senator McGrath's has received. So I congratulate Senator McGrath for the attention that his speech has received, especially from our socialist friend on the other side Senator Cameron. Senator Cameron loves everything to be in public ownership. But what we as a government have committed to is keeping the ABC in public ownership. That will continue. There is no secret agenda. One thing we on the coalition side like is the aerating of different views and ideas. We actually allow that in the coalition, unlike those who, if they dare speak out against the carbon tax, are resigned to being silenced forever. Isn't that right, Senator Conroy? (Time expired)
My question is to the Attorney-General, Senator Brandis. Can the Attorney-General advise the Senate why it is so important that Australia modernise its national security legislation?
Thank you, Senator Reynolds, for that question. Can I acknowledge your interest in this area of policy as a former brigadier in the Australian Army who has served her country. As Senator Reynolds would know, intelligence is at the forefront of Australia's national security capability and our intelligence agencies serve us well.
Senator Reynolds might be interested to know that four planned terrorist attacks on Australian soil have been disrupted since the enactment of Australia's counter-terrorism laws in 2002. Twenty-three people have been convicted of terrorism offences under those laws, including eight individuals who returned from war fighting in Afghanistan. Most prosecutions have made significant use of intelligence information. It is, however, imperative that the statutory framework governing our agencies keep pace with contemporary evolving events and developments in modern technology.
As the parliament is aware, the activities in Syria and Northern Iraq have led to an increase in the number of individuals travelling to participate in those conflicts. Among them are, regrettably, a number of Australians, including some who have fought or trained with terrorist organisations. The threat posed by returning foreign jihadists is the most significant risk to Australia's domestic security that we have faced for decades. To equip our agencies with powers that enable them to function effectively in this environment, the bill I introduced into the Senate yesterday contains measures—in most cases identified by the Parliamentary Joint Committee on Intelligence and Security in its bipartisan report tabled last year—which will address practical limitations in the current legislation.
Mr President, I ask a supplementary question. Can the Attorney-General also advise the Senate how these new measures will protect Australians from contemporary security threats?
The National Security Legislation Amendment Bill (No. 1) 2014 will strengthen the legislative framework governing the activities of the Australian intelligence community by implementing measures including measures to: improve in limited circumstances information sharing between ASIS and ASIO about Australians of security interest overseas; modernise ASIO's warrant-based intelligence collection powers; and strengthen ASIO's ability to conduct covert intelligence operations, always subject to rigorous safeguards. These measures will provide the agencies with a significant boost in their capacity to fight terrorism and other national security threats. Importantly, increased security and safeguards for individual rights do not have to be mutually exclusive. I announced yesterday that the government will appoint a new Independent National Security Legislation Monitor and consider boosting resources for the Inspector-General of Intelligence and Security to achieve both of those objectives.
Mr President, I ask a further supplementary question. Can the Attorney-General advise the Senate whether the government is planning any further changes to enhance the powers of our intelligence and security agencies to protect Australians?
This bill is a significant contribution towards ensuring the future capability of Australia's intelligence agencies. However, it is just a first step in the government's commitment to improving Australia's already strong national security laws. The government is undertaking a comprehensive review of those laws, including the terrorism provisions of the Commonwealth Criminal Code, and it is responding to recent reviews, addressing any gaps in the current legislation to ensure our agencies can respond effectively to emerging security threats.
The government's No. 1 priority is keeping Australians safe and protecting Australians and our interests from those who would do us harm. Importantly, Australians can have confidence that this government will make the changes to national security laws in a measured and considered way. I thank the opposition for its bipartisanship on this issue.
My question is to the Minister Representing the Minister for Health. I refer to research by the University of Sydney that found 13 per cent of people in some parts of the community put off seeing a GP, or do not seek medical care, due to cost. What will be the additional impact of the Abbott government's $7 GP tax?
I am aware of the report that the senator is referring to, and there have been considerations around that report and the methodology that was used. There has been a range of commentary around the budget when it comes to health. The decisions this government has taken when it comes to the budget and health are to ensure a sustainable health system into the future. Unlike those opposite, who when it comes to health are prepared to run with policy that is ill thought through, this government is going to ensure a sustainable health system.
Mr President, I ask a supplementary question. Can the minister confirm findings from the University of Sydney that an older pensioner couple who hold concession cards would expect to pay $199 or more a year for GP visits, tests and medications as a result of the government's budget measures?
It is interesting to note that a range of those costs for retired people are not attributable to government. The report overstates the effect of the measure on older Australians by including per capita services across the whole population over 65. While the rate of service use and concession card status increases with age, the report does not exclude those items which are not included in the measure—for example, chronic disease management plans. It uses averages, rather than medians, and it is biased by using a small number of people. So the report, in a lots of ways, overstates the effect.
There are obviously a number of views about that report and other reporting on the budget. This government will ensure— (Time expired)
Mr President, I ask a further supplementary question. Can the minister confirm that an average general patient who has type 2 diabetes would pay in out-of-pocket costs an extra $120 per year in co-payments for GP visits and tests as a result of the government's $7 GP tax?
There are a range of measures when it comes to determining what those out-of-pocket costs are. Some of those, in terms of the reporting, have been looked at outside of what government provides. So I would suggest that senators opposite should not necessarily take as gospel what we are seeing in one particular report.
Unlike those opposite, this government is prepared to take the tough decisions when it comes to budgets to make sure we have not only a sustainable health system into the future but a sustainable economy. That is the right thing to do for the Australian people, and that is what this government will continue to do.
The clerk has asked me to thank honourable senators for their expressions of confidence in her and staff of the Senate department.
Mr President, I ask that further questions be placed on the Notice Paper.
I move:
That the Senate take note of the answers given by the Minister for Employment (Senator Abetz) to questions without notice asked by Senators Urquhart and Singh today relating to employment in Tasmania and to the Renewable Energy Target.
My question, I thought, was quite straightforward, but obviously the Minister for Employment was not able to answer it. The closure of the Henty mine was announced on 7 July, with the loss of 150 jobs, sometime around 2015. The immediate closure of Mount Lyell mine was announced on 9 July. The minister said that Mr Whiteley had done a lot more than say to the workers, 'Go to Centrelink'—and I would be very interested to know what that was. In a press release that Mr Whiteley put out on 9 July, he said he would expect that the Premier will request that challenges confronting the west coast be put on the agenda for the next Tasmanian Economic Council meeting, to be held in the next few weeks. So there did not seem to be a lot of urgency from the member for Braddon to get on and look at what help they could provide to the people on the west coast given the announcement of the closure of the mine.
My question was going to whether the government had thought about maintaining the local employment officer—that position will be axed from 30 July. In May, Central Coast Mayor Jan Bonde put out a press release and there was a story in TheAdvocate. Responding to a question about the position of the local employment officer, James McCormack, being axed, she said:
James, along with Sarah Jones from Enterprise Connect, has been a catalyst for change in the region. In my experience, they are the two best operators in terms of helping to transform our regional economies. He has been able to build relationships with all tiers of government and the key employers and industry groups.
I would have thought that that role would have been extremely helpful to people on the west coast of Tasmania Mayor Bonde went on to say:
Jobs Services agencies operate under a competitive model and it is impossible for councils to work collaboratively to help improved employment outcomes without someone likes James acting as the point of contact.
He has the ability and relationships to cut across the silos and other boundaries to help create a more co-ordinated approach to identifying and addressing challenges.
So the local mayor talks about how important someone in that role is. But Mr Whiteley does not think that that is important. Without somebody in the local area to help pull all that together it is a very difficult and tough time.
The regional coordinator put together a regional employment plan, and in that regional employment plan there are five goals. Within those five goals there are 19 strategies. The report, Regional Employment Plan: North West/Northern Tasmania Priority Employment Area, talks about things like supporting employment, workforce participation and skills development, including through maximising government investment; helping retrenched workers transition into new employment and/or training; facilitating employment and training opportunities for job seekers, including disadvantaged groups, with a focus on industries experiencing skills shortages; facilitating opportunities for employment in new, emerging and growth industries; and developing industry and community partnerships to increase participation in employment and training. I would have thought that those key areas contained in that priority employment area plan were all things with which the west coast could dearly use the assistance of someone like a regional employment coordinator. But, no, the government does not seem to think that it is important.
But I am heartened because, after a lot of calls, today, at around 9.30 am or 9.40 am, Mr Whiteley gave a speech in the other place in which he said:
At the request of the state government, I have committed to working closely with my good friend Adam Brooks MP, who is leading the group to an outcome that results in this region restored as the economic powerhouse of Tasmania as it once was.
So we had the announcement two weeks ago that the mines were closing and the member for Braddon has now got up and said that he is actually going to be part of that. (Time expired)
I am delighted to take part in this debate and remind Senator Urquhart of a little bit of history. James McCormack, the local employment coordinator to whom she refers, did a great job for Tasmanians in that particular area. But there was something that Senator Urquhart forgot to tell the Senate. Chances are she did not forget and she deliberately withheld, but I am willing to give her the benefit of the doubt. Do you know how long Mr McCormack—who did all this wonderful work—was contracted for by the previous Labor government? It was until 30 June 2014. So the very last budget for which Labor senators, including Senator Urquhart, voted for would have seen the stopping of his contract as of 30 June 2014. We implemented the Labor Party's approach in this area. So please, Senator Urquhart and other Labor senators, do not come into this chamber crying crocodile tears when you had no intention in any way, shape or form of continuing that position, as you did not make any money available for it beyond 30 June 2014.
Senator Polley interjecting—
I will take Senator Polley's interjection, 'Well, why don't you make more money available?' I indicate to Senator Polley and the Labor Party the financial difficulties we face today is courtesy of Labor mismanagement. As we speak, we are borrowing $1,000 million per month just to pay the interest bill on the existing borrowings. Today we heard in question after question from the Australian Labor Party that their answer to all the world's problems is 'just borrow more'. If you were to follow the Greens as well, you would borrow more from overseas so we could pay it overseas. That is why this nation is in the financial difficulties that she is in. It is the Labor-Green legacy. And we have now been given the task by the Australian people to repair the damage. Regrettably, when you waste your money on pink batts, school halls and cash splashes, the day comes when you have to repay that money with interest. As a result, good people like James McCormack, the local employment coordinator, cannot continue to be funded. But, please, do not blame us for that decision; it was a Labor decision—and when we looked for money, regrettably, there was none there because of Labor's legacy.
The member for Braddon, Mr Whiteley—who is doing a fantastic job for the people of Braddon—from the west coast and right through the north-west coast of my home state of Tasmania—saw the state government acting very proactively with a task force to assist with what is a devastating blow to the west coast with the closure of two mines. Given that it was a state government task force, it is appropriate to make the appropriate inquiries to ascertain one's capacity to make a contribution to it. That is what Mr Whiteley has done, and Mr Whiteley is now going to make a positive contribution to that task force. That is the way sound, sensible government conducts itself.
If you listened to all the questions from the Labor Party today you would get the impression that the Labor way is 'see a problem, borrow money from overseas, throw a bucket of money over it and then walk away because you have somehow satisfied your moral obligation'. We say that that is the Labor way but it is not a responsible way. It is not the honourable way. The honourable way is to take a step back, take a deep breath and ask, 'How do you handle this situation the best for the long-term benefit of not only the west coast but also all the individuals impacted?' and then hear from those people what is needed and how we can assist—and that is exactly the approach that we as a government here in Canberra and the new Premier, Will Hodgman, are taking to this devastating situation in Tasmania. (Time expired)
What we have heard here in the response to Senator Urquhart's questions by Senator Abetz, a Tasmanian senator himself, is: 'Don't blame us when it comes to workers and their families losing their jobs on the west coast of Tasmania. Don't blame us. We're just the government. We can't do anything.' Senator Abetz wants to keep going back in time and holding onto this thing of 10 months ago when Labor was in power, trying to blame every single lack of government policymaking that they currently have on Labor. Well, this is the government that is in power and this is the government that can do something right now to support those workers on the west coast of Tasmania.
Senator Urquhart asked a very specific question of Senator Abetz. He failed to answer it. She asked specifically about the employment coordinator position that no longer exists on the west coast of Tasmania. We know that these positions do not exist in fact anywhere in the country—the whole 21 of them have gone—except for in the electorate of Corangamite, in Sarah Henderson's electorate. I have got a press release here from Sarah Henderson, which she only put out on 2 July—I think it was following her appearance on a Q&A program. Senator Abetz came to her rescue. In relation to the Alcoa workers, Senator Abetz decided to come up with the $500,000 to reinstate the employment coordinator for the Geelong region. It is all right for Geelong. It is good enough Geelong, but it is not good enough for his own state of Tasmania. He is turning his back on the workers in his own state. He gets up here in the Senate and tells those workers, tells the Tasmanian community, that it is not the government's problem, that they are not going to do anything about it. It was okay for Geelong, but it is not okay for the west coast of Tasmania.
In relation to the member for Braddon, Brett Whiteley, we know all about him. We know he is all about bluff and blunder. He is not about action. He has got the mouth. He goes out there spreading the words, but they are not followed up with any action. Having said that, Senator Urquhart has informed the Senate that, after two weeks, he is finally going to do something and get involved with the working group, unlike what he has said in the past, which was: 'You're losing your job. Go to Centrelink. Don't come to me. I'm just the local member. I'm just the government. I can't help you.' That is what we get to hear from Senator Abetz and from Mr Whiteley.
We know very well the importance of Enterprise Connect. We know very well how important that coordinator position was in Tasmania and the work that was done by the former employment coordinator, James McCormack. That is why we are calling on the government to provide, right now, a regional employment coordinator for the west coast and the north-west coast of Tasmania, just as Geelong has been provided with, just as Sarah Henderson informed us, in her press release of 2 July, that she was provided with for her electorate of Corangamite. She knows the importance of the regional employment coordinator in the face of Alcoa workers losing their jobs. She says:
The funding will ensure there is a person on the ground in the Geelong region who can look at opportunities across our region to promote employment growth and better link job seekers and employers.
She knows very well that this job seeker initiative was a good policy that Labor started. That is why she urged Senator Abetz come forward with the $500,000. The only regional employment coordinator in the country is in the electorate of Corangamite. The rest of the country? Too bad. In Tasmania, Senator Abetz's own state, he says, 'Too bad.' Here are workers and their families whose livelihoods are on the line. They have been living on half-pay now for some time. They know that their future is bleak in that regional part of the state. There need to be those opportunities provided to them through the support of an employment coordinator. That is why Senator Urquhart and I, followed by the other Tasmanian Labor senators, are urging Senator Abetz to stand up for Tasmanians for once and actually come forward with this very small amount of money that will make such a difference to their lives. (Time expired)
Mr Deputy President, congratulations on your ascension to the role. I have not had the opportunity to formally congratulate you before.
The circumstances on the west coast of Tasmania are indeed unfortunate. It is a very difficult time for people on the west coast of Tasmania. If Labor members and senators think that the only thing that can be offered to that community is a local or regional employment coordinator, if that is all they are asking for, it shows how shallow their approach to this very, very difficult circumstance is.
I might reflect on some other difficulties that have occurred in my region over the last few years. It is good that Senator Carr is in the chamber, because he was part of the process under which we lost two paper mills and a carpet factory. What was the Labor government's response to that? The Labor government's response to the circumstance where the paper industry decided they were going to review—
Senator Polley interjecting—
Just wait and see what the response was, Senator Polley. The Labor Party's response was to call a meeting of interested parties.
Rubbish! Complete rubbish!
Let me finish, Senator. Not only did they call a meeting; Senator Carr would not even come to Tasmania. He called the locals to go to him in Victoria. They had to travel to Victoria to meet with him. He did not have time to come to Tasmania. Then he put into place a committee to consider the future of the pulp and paper industry, alongside the decision-making process of the company. And guess what?
The committee he put into place did not report until after months and months, after the company had made the decision to close. He said at the outset that this committee would consider the industry in conjunction with the company itself, so that the company could be informed by the process of the committee, but the committee did not report until well and truly later.
We are consulting with the community. The member for Braddon has already spoken to the Prime Minister in the Prime Minister's office. He has also spoken to the office of the Minister for Industry—who will be in Tasmania next week. With the former minister, they had to go to him.
Where's the money?
As Senator Carr says, just throw a bucket of money at it and it will all go away. We are talking to the community. Interestingly, in Victoria, where the decisions have been known for some time, the community has had a chance to develop a plan. That process is only just starting in Tasmania. The Tasmanian Premier acted very quickly. He was quickly in Queenstown and quickly set up a task force to work with community members. The Labor Party think they can just impose themselves on the community. That is what they did with the carbon tax and that is one of the reasons industry in Tasmania has been doing it so tough. Simplot, for example, is a business which will be saved $4 million a year by today's action in this chamber. The previous government offered them money. They threw money at them. We can save them more money in four years than the previous government offered them just by throwing money at the problem. That is their only answer. They think throwing some money at the problem will sort it all out.
We are making regulatory reform which will reduce the cost to industry and business and allow them to flourish. It will give them the opportunity to grow. It is a very, very unfortunate circumstance on the West Coast of Tasmania and we all feel very much for the people. The Labor Party are playing base politics with this issue, in stark contrast to what we did when Caterpillar workers were being put off, when we worked alongside the then local member for Braddon, Mr Sid Sidebottom. We did not criticise the government because there were difficult decisions being made in the industry; yet, as soon as the tables are turned, the Labor Party return to base politics. They are not prepared to listen to what the community want. They just want to play dirty base politics with a very unfortunate circumstance. They are not interested in listening to the local community and are not prepared to chip in and play a sensible and responsible part in what is a very difficult situation. (Time expired)
It is extraordinary when an issue is affecting our home state of Tasmania that we have the so-called 'power senators' from Tasmania, who have all the senior positions in this government but they cannot get up to defend their decision to stand by and do nothing. They do absolutely nothing. To have people in this chamber today blaming the mining resource tax or the carbon tax for the closure of those mines is absolutely outrageous. When it comes to what Senator Colbeck has just said in relation to Labor's view of saving jobs, that it is about throwing money at it, that is unbelievable. We want an immediate injection of funds into that community and we want a long-term strategy to ensure that we can invest in the future and can invest in jobs.
Today in the House of Representatives we have Mr Brett Whiteley as the member for Braddon. We also have what are known as—they gave themselves the name—'the Three Amigos'. We have been waiting for the Three Amigos to ride into town in Tasmania and they have never arrived. What they should really be known as is 'the Three Stooges'. The problem is, they are not funny. The situation on the West Coast is not funny. On this side we have seen the action of Senator Urquhart and the shadow minister Julie Collins going on the front foot with this issue. Our representatives have been there talking to the community. We have been in contact with the unions.
I have regular contact with the Australian Workers Union, who are down there at the coal face listening to those workers. They have had to survive. They are not living on six months of half pay; they are trying to survive. We know and I would have expected that those opposite as Tasmanians would know their community and know how hard it is there in terms of unemployment. We have—
So what did you do for the pulp mill workers and the carpet mill workers?
We were there and investing in Tasmania.
They've gone.
They have gone. You had the opportunity, Senator Colbeck—through you, Mr Deputy President. Show us the way. Why are you not doing something? Why are you prepared, because one of your members goes on Q&A, to throw money into Geelong and have a coordinator there? Why is it that one of your members has to go on Q&A? I very much doubt that that is the way the Tasmanian community are going to have any respect for this government because we are not interested in invasion, which has been demonstrated here today. We are not interested in posturing, we are not interested in vague media releases where the local member says to the people who have lost their jobs, 'Go and see Centrelink,' when they know full well that they would not be entitled to the sort of support that they need now.
When we debate this, we have inaction from those opposite, but we want action. We want action now for an immediate intervention to help these people and then we need a long-term plan and strategy to assist that community. We do not want Queenstown to become a ghost. Those on the opposite side come into this chamber every week talking about small businesses. What are you doing to ensure those businesses in that region are able to succeed? What are you going to do to assist families trying to pay their mortgage? Today after questions in relation to the GST, Senator Abetz said, 'No, it is not government policy to support an increase in GST to 15 per cent,' but he did not say anything about not broadening that tax.
We have seen from this government through their budget that they are callous and heartless, and the Tasmanian Liberal senators and the Liberal members of the House of Representatives have proven once again that they are out of touch. They don't listen, and Senator Colbeck says, 'We go down there and we talk to the people.' That is right: you only do the talking. You never listen to the community. You never listen to the experts and you have not even been there.
Tell us what they want!
You should be there. They want action. They want some leadership. They want some vision, but we know that this government is incapable of showing leadership. We know they are incapable of having any vision and we know they are incapable of having a strategy and supporting the Tasmanian community. (Time expired)
The question is that the motion moved by Senator Urquhart be agreed to.
Question agreed to.
I move
That the Senate take note of the answer given by the Minister for Finance (Senator Cormann) to a question without notice asked by Senator Rhiannon today relating to overseas development aid.
The response from Senator Cormann representing the Treasurer was deeply disturbing. He failed to address the question which adds to the concern that has grown since we heard the comments yesterday from the Treasurer, Mr Hockey, when he was appearing on Sky News. He said:
… the most significant individual item in the Budget is a savings measure, it's a reduction in foreign aid.
We have seen the aid budget hit—it was hit under Labor. It has been hit and reduced substantially under the coalition, but this takes it to a whole new level of being very deceptive with the public. As we could see from the minister's response, he is avoiding saying it is a cut, not surprisingly—and they can probably get away with that, because they will drive down spending and then the money saved can go back into consolidated revenue.
We need to see this in context: the foreign aid budget makes up less than 1.5 per cent of the overall budget but it accounted for 20 per cent of the savings announced as part of May's federal budget. The aid budget has become like an ATM: the place where the government dips in when they are looking for some savings.
It was disappointing that the former foreign minister, Mr Carr, did this from time to time, and the new government has taken it up with gusto. This comes at a time when poverty and alleviation should remain a top priority with this government.
It is also very worrying that, when you look at how this is playing out, we have a reduced aid budget and then we need to consider what that money is spent on. More and more, it is being spent on programs that are primarily about benefiting Australia. What this government has pushed to the top of the agenda in terms of how the aid programs are determined is that it has to be in the national interest. This has been a problem that has been identified over many years. It was previously called tied aid. In the 1990s, it became highly discredited to the point that the OECD redefined what the definition was for overseas development aid.
Again, as we see so often, governments find a way to get around things. The primary focus of Australia's aid programs has been to support the national interest. While it may not always be locked in that it has to be Australian companies, public-private partnerships are talked about, programs need to be about economic growth and corporations need to be involved. So many of these low-income countries will not be able to tender for the projects. They do not have big companies that can tender for the infrastructure projects that the government is looking to be a major part of the Australian aid budget. So, more and more, we will see the tendering decisions going to Australian companies.
We have also seen in recent times some worrying trends in the aid program with an emphasis on helping the corporate sector expand in low-income countries, all on the basis that we will have economic benefits flow through to the poor people. That whole trickle-down argument was widely discredited 10 or 20 years ago, but that is where the government has well and truly gone back to the past.
Some of the programs that have got caught up in this way of conducting aid are very damaging to local communities. Some examples of that are the land reform programs in Papua New Guinea and parts of the Pacific; and the Mining for Development Initiative, which is about opening up low-income countries to the operations of mining companies.
Just to take that first one: in parts of Papua New Guinea and the Pacific land is being registered in the name of individual owners, which breaks down the very different way that these communities work where there is collective ownership of land. Land in many ways is likened to a superannuation policy: it is always there to give support to communities. (Time expired)
Question agreed to.
I present the government’s response to the 130th report of the Joint Standing Committee on Treaties and seek leave to incorporate the document in Hansard.
Leave granted.
The document read as follows—
Australian Government response to the Joint Standing Committee on Treaties' report: Report 130
Malaysia Australia Free Trade Agreement done at Kuala Lumpur on 22 May 2012
June 2014
Recommendation 1: That prior to commencing negotiations for a new agreement, the Government table in Parliament a document setting out its priorities and objectives including independent analysis of the anticipated costs and benefits of the agreement. Such analysis should be reflected in the National Interest Analysis accompanying the treaty text.
The Government does not accept this recommendation.
The powers to negotiate and enter into treaties are executive powers within section 61 of the Australian Constitution. Accordingly, formal responsibility for treaty making and negotiation lies with the Executive. The Government nevertheless considers that the Parliament has a significant role in scrutinising treaties prior to binding treaty action being taken and in passing legislation to give effect to them where necessary. The Joint Standing Committee on Treaties (JSCOT) plays an important part in fulfilling Parliament's role in this respect. The Government remains of the view that its capacity to effectively pursue the national interest while allowing for appropriate public consultation is best met by current parliamentary and consultation processes.
The Government currently provides information about treaties under consideration or negotiation in a variety of ways. The nature and extent of public consultation is determined by the scope and importance of the proposed treaty and can include statements to the Parliament, press releases, information published on agency websites, calls for public submissions and face-to-face consultations with industry and civil society representatives. The purpose of such consultations is to inform the public about the Government's priorities and objectives and to afford an opportunity for comment. In addition, regular consultations are conducted with the States and Territories through the Standing Committee on Treaties.
Notwithstanding its commitment to stakeholder consultation, the Government is constrained in what it can disclose about prospective and ongoing treaty negotiations. Making detailed information about Australia's negotiating position publicly available prior to the commencement of negotiations would limit Australia's room for manoeuvre in the negotiations. Adopting the Committee's recommendation could circumscribe the capacity of Australia's negotiators to secure the best possible outcomes for Australia in the treaty negotiations.
Any statement of negotiating priorities and objectives made at the outset of treaty negotiations would be of limited value in assessing the eventual treaty outcomes. Negotiating priorities commonly develop over the course of negotiations, and eventual treaty outcomes reflect compromises acceptable to all Parties. While negotiators operate within defined parameters, it is generally not possible to predict accurately the full range of commitments which will be incorporated into the final agreement until negotiations are concluded. Similarly, any advance assessment of costs and benefits would necessarily be based on a range of assumptions which may or may not prove correct. The Government considers the current practice of tabling treaties after they are concluded enables the Parliament to make a more meaningful assessment of their impact on the national interest, based on the actual rights and obligations they contain.
Treaties do not become legally binding on Australia until the Government formally undertakes to perform the obligations set out in the treaty by taking binding treaty action (ratification, acceptance, approval or other formal mechanism provided for in the treaty). Until binding treaty action is taken, Australia is only obliged to refrain from acts which would defeat the object and purpose of the treaty1. Other than in exceptional circumstances, the Government does not take binding treaty action, or introduce legislation to give legal effect to treaty provisions in Australia, until after JSCOT has reviewed and reported on the treaty and its advice has been taken into account. Existing treaty tabling arrangements therefore afford ample opportunity for the Parliament to express its views on treaties well before a final decision is made on whether they become binding on Australia.
The Government notes Recommendation 1 does not state what would constitute 'independent analysis' of the anticipated costs and benefits of the agreement. If it is intended that the Government commission econometric or other modelling on proposed treaty negotiations prior to their commencement, this could delay the start of negotiations and further impinge on the Government's negotiating flexibility. The Government further notes the recommendation does not make any allowance for urgent or sensitive treaties. Finally, adding another step to the treaty process would have resource implications for the responsible agencies, which the Government does not consider to be justified.
Recommendation 2: That after 24 months of the treaty coming into effect, an independent review of MAFTA be conducted to assess actual outcomes of the treaty against the claimed benefits and potential negative consequences noted in this report. The review should consider the economic, regional, social, cultural, regulatory, labour and environmental impacts. Such a review should serve as a model for future free trade agreements.
A period of 24 months after the entry into force of MAFTA is brief in the context of the implementation of such a treaty. Any conclusions drawn from such a review would necessarily be limited in terms of the overall assessment envisaged by this recommendation. A longer period following MAFTA's entry into force would allow for a more insightful review of the agreement. It would also be important for any review to take into account the fact that MAFTA was concluded in the context of the Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA), and that MAFTA complements and builds on the commitments applying to trade and investment between Australia and Malaysia in AANZFTA.
In addition, the Government considers that it is important that a review of the type proposed in the recommendation is used to provide input into the general review of the Agreement mandated by MAFTA within five years of entry into force and at least every five years thereafter unless otherwise agreed by the parties (Chapter 21—Final Provisions). This general review provides an avenue to identify and address any problems experienced by business in taking advantage of the Agreement and to seek to enhance MAFTA's contribution to increased economic integration of our two economies.
The Government will, therefore, undertake a review through the general review process provided for in the Agreement. The first general review of MAFTA will provide a basis for an initial assessment of the Agreement's implementation, which could be followed up at the subsequent five-yearly reviews. The Government will seek the views and input of stakeholders independent of the Government ahead of those reviews on the extent to which MAFTA is delivering expected outcomes, and seek input on areas where the Agreement's provisions could be enhanced. The nature of the review undertaken at each of these periods will be subject to discussion with Malaysia.
In addition to the general review, MAFTA contains other review mechanisms. For instance, MAFTA incorporates a requirement to establish an FTA Joint Commission. The FTA Joint Commission will meet annually, or as otherwise determined by the Parties, to review implementation and operation of MAFTA and, inter alia, to explore measures to improve MAFTA and to expand trade and investment between the two parties (Chapter 19—Institutional Provisions). Certain chapters in the Agreement also contain their own specific review provisions. For example, the Rules of Origin Chapter provides for review of the provisions of that Chapter within three years of the entry into force of the Agreement. The Services Chapter provides for a review of commitments on trade in services to be undertaken within three years of entry into force and thereafter every five years.
Additional review provisions are contained in side letters to the Agreement that provide for reviews on the inclusion of labour and environment provisions and on customs duties and other charges applied to certain alcoholic beverages no later than two years after the entry into force of the Agreement.
Recommendation 3: The Committee supports the Malaysia-Australia Free Trade Agreement done at Kuala Lumpur on 22 May 2012 and recommends that binding treaty action be taken.
This recommendation was implemented by the former Government and MAFTA entered into force on 1 January 2013.
1 Vienna Convention on the Law of Treaties (Vienna, 23 May 1969), Article 18
I present additional information received by committees relating to estimates and, further, I present additional information received by the Education and Employment References committee on its inquiry into the technical and further education system in Australia.
On behalf of the Chair of the Publications Committee, I present the seventh report of the Publications Committee and move that the report be adopted.
Ordered that the report be adopted.
Order! The President has received a letters from party leaders requesting changes in the membership of various committees.
by leave—I move:
That senators be discharged from and appointed to committees as follows:
Select Committee into the Abbott Government’s Budget Cuts
Appointed—Senators Canavan, McGrath and Smith
Legal and Constitutional Affairs Legislation Committee
Appointed—Substitute member: Senator Di Natale to replace Senator Wright for the committee’s inquiry into the exposure draft of the Medical Services (Dying with Dignity) Bill 2014; and Senator Wright be appointed as participating member.
Question agreed to.
A message has been received from the House of Representatives notifying the Senate of changes in the membership of the following committees: the Parliamentary Joint Committee on the Australian Commission for Law Enforcement Integrity and the Parliamentary Joint Committee on Law Enforcement.
I move:
That senators be discharged from and appointed to committees as follows:
Abbott Government’s Budget Cuts—Select Committee—
Appointed—Senators Canavan, McGrath and Smith
Legal and Constitutional Affairs Legislation Committee—
Appointed—
Substitute member: Senator Di Natale to replace Senator Wright for the committee’s inquiry into the exposure draft of the Medical Services (Dying with Dignity) Bill 2014
Participating member: Senator Wright.
Question agreed to.
I indicate to the Senate that these bills are being introduced together. After the debate on the motion for the second reading has been adjourned, I will be moving a motion to have the bills listed separately on the Notice Paper. I move:
That these bills may proceed without formalities, may be taken together and be now read a first time.
Question agreed to.
Bills read a first time.
The committee is considering the Asset Recycling Fund Bill 2014 and a related bill as amended. The question now is that subclause 13(2) and subclauses 34(4) to (6) stand as printed.
These amendments on clauses 18 and 24 on sheet 7486 are being moved together, and items (10) and (13) deliver transparency that is otherwise absent from the bill.
The CHAIRMAN: Would you like to seek leave to move them together and then move those amendments?
I seek leave to do so.
Leave granted.
I move these amendments on sheet 7486 together:
(7) Clause 18, page 17 (after line 23), at the end of subclause (1), add:
Note: See also section 21A.
(10) Page 19 (after line 24), at the end of Subdivision B, add:
21A Cost benefit analyses to be made public
If a direction is made under subsection 18(1) in relation to a grant for an infrastructure project, the Infrastructure Minister must:
(a) table in each House of the Parliament, within 14 sitting days of that House after the direction is made, a copy of the evaluation by Infrastructure Australia provided to the Minister under section 19; and
(b) within 14 days of the direction being made, ensure that the following information about the project is made available on the Infrastructure Department's website:
(i) a description of the project;
(ii) when the project is to start and is likely to be completed.
(11) Clause 24, page 20 (after line 26), at the end of subclause (1), add:
Note: See also section 28A.
(13) Page 22 (after line 28), at the end of Subdivision C, add:
28A Cost benefit analyses to be made public
If a direction is made under subsection 24(1) for the purposes of making infrastructure payments for an infrastructure project, the Infrastructure Minister must:
(a) table in each House of the Parliament, within 14 sitting days of that House after the direction is made, a copy of the evaluation by Infrastructure Australia provided to the Minister under section 25; and
(b) within 14 days of the direction being made, ensure that the following information about the project is made available on the Infrastructure Department's website:
(i) a description of the project;
(ii) when the project is to start and is likely to be completed.
These amendments are identical and require the infrastructure minister to make public the supporting information behind the project that is approved for a grant or payment. The infrastructure minister will be required to table the Infrastructure Australia evaluation in both houses of parliament within 14 days of approval. Further details of the project will also be required to be posted on the department's website. Consistent with Labor's approach in government and in other bills before the parliament, through these amendments Labor will ensure that the evidence before the minister's funding decisions is open to the public. This includes cost-benefit analysis. This is consistent with concerns raised by many stakeholders. It is also consistent with coalition policy. Items (7) and (11) are consequential references.
If there is one thing that has been argued consistently for some years, that is the need for openness and accountability in relation to big infrastructure projects. If you look at what is happening with WestConnex at the moment in New South Wales, you will see that decisions have been made to go ahead with a multibillion-dollar project without any Infrastructure Australia overview or any Infrastructure Australia agreement, and with no cost-benefit analysis in place. So this is to deal with that. This is to make sure that the public are getting value for money. This is to make sure that there is openness in the infrastructure development of this country. It is absolutely essential that these amendments ensure that what is being done is in the national interest—not in the interests of the National Party and not in the interests of the Liberal Party, but in the interests of the nation. These are important amendments and go a long way to ensuring that we have transparency and accountability.
Given that it is coalition policy, I assume the coalition government will be supporting these amendments. These are important amendments that the public need to have in place to ensure that the public purse is well looked after, to ensure that there is no pork-barrelling going on and to ensure that experts deal with these issues and we do not do as we are doing in New South Wales at the moment, and that is career forward with a project like WestConnex which has no clear benefit, no analysis of the problems, does not look at how the problems can be dealt with and has no cost-benefit analysis.
Mr Chairman, could you or Senator Cameron make clear which amendments Senator Cameron has batched together. The Australian Greens support the principle in the amendments that the Labor Party have brought forward that have been mysteriously omitted from the government's original bill. Senators will note that these amendments are entirely consistent with amendments we moved and successfully passed back to the other place a couple of weeks ago when we were debating Infrastructure Australia.
If provisions like these had been law before the last budget, it might have been possible to save the Commonwealth government from the expensive and embarrassing commitment of $925 million for the doomed Roe Highway extension in the southern suburbs of Perth and gargantuan budget commitments like that, particularly if they are screeching at every press conference that there is a budget emergency and that they cannot waste a cent of taxpayers' money, to these kinds of foolhardy projects that are very strongly opposed—and Senator Cameron named WestConnex and there is the east-west tunnel in Melbourne; they are right across the country. If we had these sorts of sensible provisions for transparency in place before the last budget was tabled we might have saved the government a lot of embarrassment and the taxpayer a lot of money. I am happy to support these amendments.
The CHAIRMAN: Senator Cameron, can you confirm which ones you moved.
It was amendments (7), (10), (11) and (13) on sheet 7486.
The government does not support these amendments. These amendments only add red tape with no additional benefit and they risk delaying the delivery of critical infrastructure that will enhance the long-term productive capacity of the economy. The opposition's amendments are about increasing duplication and are disruptive of parliamentary processes. They stand in the way of the government building a stronger, more prosperous economy and investing in new infrastructure.
The CHAIRMAN: The question is that opposition amendments (7), (10), (11) and (13) be agreed to.
I move opposition amendment (8) on sheet 7486:
(8) Clause 18, page 18 (lines 5 and 6), omit "Minister who recommended the specification of the grant (see section 19)", substitute "Infrastructure Minister".
This is a very simple amendment but an amendment that is simply common sense—that is, that we consolidate infrastructure approvals with the Minister for Infrastructure. There should not be too much of an argument on this. It simply says that infrastructure approvals are with the minister.
If the government were to put it to us that this is effectively a drafting error that is being cleaned up, I would accept that. I do not know whether this was intentional or not. It is a common-sense amendment that the Australian Greens will support.
I will be talking to opposition amendments (8), (9) and (12) together, and I thought that Senator Cameron might want to seek leave to deal with them together. It is up to him.
The CHAIRMAN: No, that cannot occur.
Okay. These amendments only add red tape with no additional benefit. This is an unnecessary additional process which will mean the states would have no confidence that the Commonwealth would make payments in accordance with already signed national partnership agreements. The government is confident that the current bill has robust accountability and governance arrangements. The coalition has already committed to Infrastructure Australia undertaking an assessment of cost-benefit analyses for our major investment decisions that receive Commonwealth funding of over $100 million. This includes the government's budget commitments. State governments will undertake their own cost-benefit assessments as part of decision-making processes to privatise assets and reinvest in new infrastructure. These are rightly matters for the states. It makes no sense to duplicate cost-benefit processes at a federal level. The proposal to use disallowance mechanisms against payments to the states would block or delay funding from the Asset Recycling Fund for critical infrastructure. This would dilute the incentives of the asset recycling initiative and set a precedent which would have serious impacts on Commonwealth-state relations. The Commonwealth government will assess whether asset sales and infrastructure projects are eligible for incentive payments based on the criteria in the national partnership agreement. These criteria were agreed by all state premiers and include that a clear net positive benefit can be demonstrated and that projects will enhance long-term productive capacity of the economy.
The CHAIRMAN: The question is that opposition amendment (8) on sheet 7486 be agreed to. The committee divided [16:17]
(The Chairman—Senator Marshall)
I seek leave to have amendment (9) on sheet 7486 and amendment (12) on sheet 7486 joined for this amendment.
The CHAIRMAN: To be honest, it would be easier for me to leave it the way it is, because both of those amendments are being sought to be amended and it would be neater if we could do them in separate batches. But I am in the hands of the committee.
Both of those are subject to amendments by me and I would be happy for them to be considered together, because the amendments relate essentially to the same thing.
The CHAIRMAN: As long as we get leave for you to move your amendments to the amendments together as well. Is leave granted?
Leave granted.
I move opposition amendments (9) and (12) on sheet 7486 together:
(9) Clause 19, page 18 (lines 7 to 16), omit the clause, substitute:
19 Recommendations about grants payments
(1) The Finance Minister must not make a direction under subsection 18(1) in relation to a grant for an infrastructure project unless the Infrastructure Minister has recommended that a direction be made.
(2) The Infrastructure Minister must not make a recommendation under subsection (1) in relation to a grant for an infrastructure project if:
(a) capital expenditure on the project is $100 million or more; and
(b) Infrastructure Australia has not done both of the following:
(i) given the Minister an evaluation of the project (see subsection (3));
(ii) advised that there are likely to be productivity gains from the project.
(3) Infrastructure Australia's evaluation of an infrastructure project mentioned in subsection (2) must:
(a) contain a cost benefit analysis of the project, including an estimate of the productivity gains from the project; and
(b) set out any other matter that Infrastructure Australia considers relevant to the project.
(4) The Infrastructure Minister must not make a recommendation under subsection (1) in relation to a grant for an infrastructure project if:
(a) the grant is for expenditure incurred under the National Partnership Agreement on Asset Recycling; and
(b) the grant does not relate to a transaction that the Treasurer has approved by legislative instrument.
(5) An approval under paragraph (4)(b) must specify the State-owned assets, or the parts of State-owned assets, to the sale of which the transaction relates.
(12) Clause 25, page 21 (lines 4 to 7), omit the clause, substitute:
25 Recommendations about payments
(1) The Finance Minister must not make a direction under subsection 24(1) for the purposes of making infrastructure payments for an infrastructure project unless the Infrastructure Minister has recommended that a direction be made.
(2) The Infrastructure Minister must not make a recommendation under subsection (1) in relation to infrastructure payments for an infrastructure project if:
(a) capital expenditure on the project is $100 million or more; and
(b) Infrastructure Australia has not done both of the following:
(i) given the Minister an evaluation of the project (see subsection (3)); and
(ii) advised that there are likely to be productivity gains from the project.
(3) Infrastructure Australia's evaluation of an infrastructure project mentioned in subsection (2) must:
(a) contain a cost benefit analysis of the project, including an estimate of the productivity gains from the project; and
(b) set out any other matter that Infrastructure Australia considers relevant to the project.
(4) The Infrastructure Minister must not make a recommendation under subsection (1) in relation to infrastructure payments for an infrastructure project if:
(a) the payments are for expenditure incurred under the National Partnership Agreement on Asset Recycling; and
(b) the payments do not relate to a transaction that the Treasurer has approved by legislative instrument.
(5) An approval under paragraph (4)(b) must specify the State-owned assets, or the parts of State-owned assets, to the sale of which the transaction relates.
Amendment (9) and amendment (12) are critical amendments that place proper processes around approvals given to projects by the infrastructure minister. These are preconditions to grants or payments from the Asset Recycling Fund, including under the Asset Recycling Initiative. That initiative proposes a Commonwealth contribution to a state or territory totalling 15 per cent of the reinvested proceeds from a privatisation. The bill provides no criteria for deciding how scarce Commonwealth funds will be prioritised to competing projects. Labor's amendment proposes to fix that. As the Parliamentary Library has noted in its Bills Digest, the strong selection criteria that Labor applied under the Building Australia Fund has not been replicated in this bill. As this bill proposes to empty out the BAF, these amendments will retain independent and transparent approval processes around project selection by requiring Infrastructure Australia to green-light projects of over $100 million in value. Good governance follows the money.
These amendments are also consistent with the Treasurer's intent to recycle privatisation proceeds into productivity-enhancing infrastructure. They are consistent with Labor's amendments to the Infrastructure Australia Amendment Bill and those we have moved for the Land Transport Infrastructure Amendment Bill. These amendments are also consistent with the broad call for independence and transparency of project advice from important stakeholders, such as the Business Council of Australia, Infrastructure Partnerships Australia, the Urban Development Institute, the Bus Industry Confederation, and the Tourism and Transport Forum. These amendments align with the Productivity Commission's recent finding in its interim report on funding of public infrastructure.
This is one of the Productivity Commission's findings I agree with. It says:
The overriding message of this draft report is the need for a comprehensive overhaul of processes in the assessment and development of public infrastructure projects.
In the case of either a grant, item (3), or a payment, item (6), to a state, territory or other entity in respect of a project greater than $100 million in value, the infrastructure minister must first have received an evaluation of the project from Infrastructure Australia and advice from it that the project is likely to produce productivity gains. IA's evaluation must include a cost-benefit analysis of that project.
Additionally, for a project involving the privatisation of a state or territory owned asset and recycling of the proceeds into another asset, the infrastructure minister cannot recommend a project unless the Treasurer has approved the privatisation transaction as eligible for a Commonwealth contribution from the asset recycling fund. The mechanism for this approval will be via a disallowable instrument for each transaction. This proposed change reflects Labor's view that there are good and bad privatisations. Labor believes that the Commonwealth should not reward states, for instance, for selling assets in a fire sale or without adequate regulatory protections.
by leave—I move amendments (1) and (2) on sheet 7532, together:
(1) Amendment (9), subclauses 19(4) and (5), omit the subclauses.
(2) Amendment (12), subclauses 25(4) and (5), omit the subclauses.
The effect of these two provisions, (9) and (12), in Senator Cameron's amendment on sheet 7486, is to put into legislation a requirement for evaluation of infrastructure projects by Infrastructure Australia—projects of $100 million or more that are funded from the asset recycling fund. That evaluation includes, in particular, cost-benefit analysis. I support that provision.
The agreement between the Commonwealth and the states already agrees that cost-benefit analysis be done, and both sides of politics have a view that Infrastructure Australia is relatively independent. That is a necessary condition, I think, for projects of $100 million or more. We are talking about taxpayers' money here. I have heard the government talk many times about the NBN and the absence of a cost-benefit analysis. It is very important that investments of this size have cost-benefit analysis. However, there is also a provision for Commonwealth funding for projects under the asset recycling fund to require approval by legislative instrument. I oppose this provision as funded projects should not be limited to projects approved by the Senate. That unnecessarily politicises it. My argument is that a cost-benefit analysis is required. I am concerned that, without that, the potential for pork-barrelling exists. Bringing it back to the Senate for approval is unnecessary politicisation.
I might speak to both of Senator Leyonhjelm's amendments since they have been put as amendments to Senator Cameron's amendments. I will indicate the Australian Greens position on them both at the same time, just to save a bit of time. With respect to Senator Leyonhjelm's acknowledgement that there needs to be transparency, and therefore agreeing with some of what Senator Cameron has produced, we strongly agree that there needs to be a much greater degree of transparency, but the Australian Greens go further. When we talk about transparency, it is not simply about tabling inadequate documents; it is about giving this chamber the opportunity to review some of those decisions, which come at enormous cost to taxpayers. Quite frankly, this is an expression, in my view, of distrust in the way that this government is handling infrastructure disbursements and the way that the former Howard government handled them—basically parachuting vast—
But the Gillard government was fine.
Senator Macdonald, that is a useful interjection. Ms Gillard and Prime Minister Rudd introduced Infrastructure Australia to prevent you and your colleagues, through you, Chair—
Honourable senators interjecting—
The CHAIRMAN: Order! I would ask senators not to interject and I would ask you, Senator Ludlam, to address your remarks through me.
People have been asking Senator Macdonald not to interject for hundreds of years!
The CHAIRMAN: Yes, I have drawn his attention to that too. You have the call, Senator Ludlam.
Best of luck with that! That, effectively, Infrastructure Australia place some of these investment decisions at arm's length from politics. We are now seeing, effectively, the reversal of that policy—an attempt to gut Infrastructure Australia's independence that was rebuffed, amended and returned to the House of Representatives by this place in a quite collaborative way. I strongly support these amendments. We will not be supporting the LDP amendments because, effectively, it takes the teeth out of the transparency. It is not good enough to come in here and just put a document on the table, because people talk all sorts of rubbish about benefit-cost ratios and so on. These amendments need teeth. So we will be opposing the LDP amendments. We will be supporting the opposition amendments so that this parliament does get the final say on investment decisions of this scope.
I have already indicated that we did not support the underlying opposition amendments because we do not believe that it is appropriate in the context of these projects to give parliament the authority to disallow investments in infrastructure because of the uncertainty it creates in the context of Commonwealth-state relations around very important and significant infrastructure projects.
I would just say to Senator Leyonhjelm that if he is under the impression that there would be no cost-benefit analysis undertaken if Labor's amendment does not get up, that is not right. There is actually a cost-benefit analysis that is taking place and it appropriately takes place at the state level. The Labor Party amendment is seeking to double up by essentially having a cost-benefit analysis at the state level and then another cost-benefit analysis at the federal level. We think that is unnecessarily doubling up. It seeks to usurp the responsibility of the states in relation to these sorts of projects, which is why we appreciate the intent of these amendments to the amendments, put forward by Senator Leyonhjelm. They would still leave in place opposition changes that would add to project approval times and administrative overheads. I might just flag that, when this bill goes back to the House of Representatives the government will not be in a position to accept the bill, as it is being amended by the Senate.
Labor opposes these amendments. The amendments effectively make this parliament indifferent to the assets sold by states in order to access the 15 per cent Commonwealth privatisation incentive. It does so by removing the oversight of the House of Representatives and the Senate proposed in Labor's amendment. Labor believes it is appropriate and an important protection to allow the parliament to scrutinise asset sales on a case-by-case basis before taxpayers' money is spent. Many state-owned assets should not be sold. Given that this then leads to an argument about what should replace these state-owned assets, you look at what is happening in New South Wales now. You see that there was simply an announcement by the coalition that WestConnex would be built. There has been no attempt to have any transparency with respect to the cost-benefit analysis on WestConnex. The more people look at what is happening with WestConnex in New South Wales and in Sydney, the more they are concerned that this was simply a case of trying to deal with an election promise from the state government and the federal government. At the last estimates hearings, I asked a specific question of the department: had a cost-benefit analysis been undertaken in relation to WestConnex? They said no and that it was an election promise.
So if anyone in here thinks that we should just simply allow state or federal governments to deliver on election promises without a proper cost-benefit analysis and proper scrutiny by this parliament, they are not acting in the interests of the parliament, the nation or proper infrastructure builds in this country.
We are sick and tired of the pork-barrelling that went on under the Liberal coalition government when they were last in power. There was no analysis as to what should be done. Billions of dollars were spent on pork-barrelling, when Engineers Australia, AiG and the Business Council of Australia were crying out for properly analysed infrastructure deals that would have improved the productivity performance of this nation.
It is so important to ensure that these amendments go through as they stand and not as proposed by Senator Leyonhjelm. This will simply water down our overview, oversight and capacity to act in the national interest.
As you have seen in the past, many times state governments do not act in the national interest, the state interest or the constituents' interests. We want clear and unequivocal overview that gives us an opportunity to test not only the cost-benefit analysis but whether this is a pork-barrelling initiative or an initiative that is in the national interest. If you are interested in the national interest, you will oppose Senator Leyonhjelm amendments.
I would be failing in my duty as a senator for the state of Queensland or indeed as a senator at all if I let the absolute and abject hypocrisy that you have heard from the last two speakers go unchallenged. Could I just remind those who were here—and for those who were not here, can I tell them—of the fact that after the 2010 election the Labor government, with the full support of the Greens political party, did pork barrel after pork barrel after pork barrel and went nowhere near Infrastructure Australia, let alone this parliament. They did not go anywhere near Infrastructure Australia. What hypocrisy of the last two speakers, saying that we need to do this!
I have come into this debate recently, but I think the coalition should support Senator Leyonhjelm's amendment in the hope that Senator Cameron's amendments do get up, because Senator Cameron's amendments are bad but they would be better if Senator Leyonhjelm's amendment to the amendment were carried so that you did not have to bring it back and have 76 senators deciding on which assets should be sold around Australia. It is just crazy.
In this rare instance I will do what the majority of our side is going to do, but I would urge them to think about Senator Leyonhjelm's argument—
Opposition senators interjecting—
You may well laugh. The Greens political party would never exercise a free vote on anything. Of course, as for the Labor Party senators, they know that, if they did that, they would be out of the Labor Party the very next day. That is one of the reasons I cherish my membership of the Liberal Party.
You're a great vote winner for Labor!
Senator, my result at the last election might tell you something different. Senator McLucas's team struggled to get two quotas. The team I led, the Liberal National Party, achieved three quotas in its own right and did better than any other state coalition group in the country.
Opposition senators interjecting—
The CHAIRMAN: Senator Macdonald, please resume your seat for a moment. The Senate should come to order. I would like people to cease interjecting, and I remind the Senate of the question before the chair. Senator Macdonald.
I personally think that Senator Leyonhjelm's amendments are good amendments—in the expectation that Senator Cameron's amendments might get up. I will be voting against Senator Cameron's amendments because they are the typical sort of rubbish and hypocrisy you get from the Labor Party. But can I just return to the two previous speakers. Immediately after the 2007 and 2010 elections, the Labor Party just pork barrelled and pork barrelled and pork barrelled. When challenged they said, 'We promised this in the election. That's why we're not sending it to Infrastructure Australia.' But to hear Senator Cameron and Senator Ludlam you would think that they sent anything to Infrastructure Australia or indeed to anyone else—except the people they were paying off. For Australia's biggest ever infrastructure project, the National Broadband Network, there was no cost-benefit analysis, no Infrastructure Australia, no anything. The gentleman who used to be in charge of Infrastructure Australia—I thought he was a very good man, and I am sorry he left the organisation—used to say time and time again at estimates: 'Yes, the NBN should have come to us. It's the biggest infrastructure project in Australia but we were specifically excluded from it.'
There is no point in rehashing old battles today except to say the abject hypocrisy of the two previous speakers needs to be yet again highlighted. But I would not be doing my job as a senator for Queensland if I did not expose that hypocrisy and indicate that I believe that the government in the state that I represent, Queensland—and I could say the same for the state governments of New South Wales, Victoria, Tasmania and Western Australia—will responsibly—
Senator Lines interjecting—
How would you know? I understand that you are from Sydney and you were parachuted into Western Australia. So what would you know about Western Australia?
The CHAIRMAN: Senator Macdonald, I would ask you to address your remarks through the chair and ignore the interjections. And I would ask those interjecting to cease interjecting.
I and most of my Senate colleagues have confidence in our state governments to deal with assets that are owned by the states and by the people of those states—through their taxes and through the governments they elect—without it having to come back to this chamber and have the likes of, with all due respect, Senator Cameron deciding whether it is a good idea for my state to sell something. I do not think Senator Cameron has ever even been to Queensland. What would he know about the decisions and the relevance of the sale of assets in my state?
The CHAIRMAN: The question is that amendments (1) and (2) on sheet 7532, which amend amendments (9) and (12) on sheet 7486, be agreed to.
Question negatived.
The CHAIRMAN: The question now is that amendments (9) and (12) on sheet 7486 be agreed to.
Question agreed to.
I move Australian Greens amendment (3) on sheet 7487 revised:
(3) Page 23 (after line 10), after Division 4, insert:
Division 4A—State-owned essential services
29A State-owned essential services
A grant or payment mentioned in this Part must not relate to a transaction that relates to the sale of State-owned assets that provide essential services.
This amendment effectively carves out essential services as being prohibited from the privatisation bender that the coalition appears to be embarking on. At the very least, with some of the accountability measures that the Greens, the Palmer United Party and other cross benchers have supported, we have raised the bar for some of the proposed privatisations that this government seems to be so obsessed with. I acknowledged in my contributions at the outset that we would not be supporting the bill. But we believe that, if the bill is to become law, some things should simply be off the table.
The amendment states:
A grant or payment mentioned in this Part must not relate to a transaction that relates to the sale of State-owned assets that provide essential services.
Under the Constitution, the states have responsibility for water, electricity, gas and other utilities. These are things that the private sector cannot easily provide. I have already outlined why the Greens and countless economists do not support the privatisation of state owned assets, particularly assets that provide essential services, and that is that they effectively have two characteristics: they supply essential goods and services and their core business is a natural monopoly.
One of the examples—which I think actually had cross-party support in the end, after Mr Turnbull, at the time as opposition leader, took the portfolio on from Senator Minchin—was that bringing the natural monopoly aspect of infrastructure, like the NBN, back into public hands is strongly in the public interest and then you let the market in at the retail level. At least the essential services can be accessed by a budget estimates committee and you can interrogate or cross-examine officers of these utilities and there are very clear lines of transparency and accountability. As soon as you privatise things, or even start outsourcing to a significant extent, things start disappearing behind blankets of commercial-in-confidence and you lose the ability to call people before budget estimates committee. In effect, you are giving up an important part of your democracy. When something goes wrong—when the lights go out; when water mains burst; when the file server goes down—what you really want underlying service provision are very clear lines of responsibility in the authority and democratic control and oversight over things such as upgrades and maintenance.
So the Greens, along with the majority of Australians, are completely opposed to handing over essential services—and that includes utilities and emergency services—to private operators. This amendment simply seeks to ensure that, in the event that this bill does pass this parliament, state-owned essential services like power, water, ambulances, firies and so on, are not services that can be privatised through this initiative. Some things should simply be off the table.
I indicate that the Labor will support this amendment. We have worked collectively with the Greens on this amendment. This amendment seeks to prevent grants of payments under the Asset Recycling Initiative—that is, the 15 per cent initiative in respect of privatisation that are for state assets that provide essential services. By definition, 'essential services' provide the essentials of life. It is most important that transactions involving these assets not be sold in a fire sale atmosphere. In this respect, Labor notes the comments by the ACCC Chairman Mr Rod Sims to the effect that it would be keeping a close eye on state privatisations in the face of this incentive.
The government does not support the amendment to prevent incentives being funded by the sale of essential services. The decision as to what assets to sell to fund new infrastructure is entirely a matter for the states, as it should be. State and territory governments are best placed to decide which infrastructure and services are most efficiently provided by the private sector. The Australian government does not wish to dictate this out of Canberra or believe that it is in a position to do so on an informed basis.
Question agreed to.
I move Australian Greens amendment (4) on sheet 7487 revised:
(4) Page 24 (after line 12), at the end of Part 2, add:
Division 6—Toll roads
30A Toll roads
Financial assistance granted as mentioned in this Part must not be expended on toll roads.
This is a very simple amendment that states the following:
Financial assistance granted as mentioned in this Part must not be expended on toll roads.
Having followed the Abbott government's directive and privatised everything that is not nailed down, state governments cannot then fold the money—effectively the bribery fund established by the Abbott government—to assist the private sector in taking the public good of the road network and privatising it effectively in the form of a toll road.
I mentioned before why it is so dangerous to put natural monopolies or essential services in the hands of entities that are more interested in private profit than public benefit. Toll roads are probably the keystone example of why it is a dopey idea. This is not coming out of some economics textbook; this is lived experience of people across the country. Fortunately, in Western Australia, Senator Cormann and I do not have to worry about finding ourselves on a toll road and not having the proper pass or the proper change or even the offensive idea of something as basic as a road suddenly being put into private hands. That has been kept out of Western Australia—and long may it stay so. Other states have not been quite so fortunate—for example, Sydney's Cross City Tunnel and the Lane Cove Tunnel.
Here are the greatest hits of the Cross City Tunnel. Here is why it is so dumb to privatise or effectively try to toll natural monopoly infrastructure. It does not work. They wrote into the contracts that the government would not construct competing public transport infrastructure. So much for the free market. If you try to privatise a natural monopoly you end up having to do profoundly anticompetitive things for it to remain profitable. So they wrote into the contracts that no-one could over-build a private road with public transport. What a disgrace! No wonder these things are so unpopular.
The traffic authority was forced to abandon its traditional job of servicing the public's need and instead they closed streets around the tunnel and forced traffic underground through the tunnels and the toll gates. Remarkable! That is what you have to do to make a toll road work. Private profit in the public interest can go to hell. The tunnel then went into voluntary administration, and, of course, the owners blamed the government—and then you go straight into litigation. It was a complete disaster. My New South Wales state colleague Mr David Shoebridge MP said at the time:
This is a classic case of a failed public-private partnership which was based on an anti-public transport, an anti-alternative transport model which was never going to be sustainable.
Even if you are not interested in buying into the public transport debate—and you think everyone should always drive everywhere—the idea that you would close alternate roads to force people into a private toll road is, I think you would agree, reasonably offensive.
So let's carve that out and ensure that, in the event that state governments do embark down this path that the Abbott government seems to be forcing them down, we do not end up subsidising private profit in toll roads. I commend this amendment to the chamber.
Labor will not support this amendment. We are not anti-roads. Road are important for so many communities around this country. Appropriately built roads with appropriate analysis are so important. This amendment seeks to prevent the 15 per cent incentive applying in the case of toll roads. Unlike the government, which stubbornly refuses to fund urban passenger rail projects, and the Greens party, which unreasonably rages against roads, Labor supports the mode of best fit. Labor believes that, if a toll road project stacks up under IA evaluation, it is potentially deserving of support.
One of Labor's amendments requires that major projects are evaluated by Infrastructure Australia as being productivity enhancing, so there should be no prior constraint on the types of new productivity-enhancing major projects that could be supported by the Commonwealth initiative. It is so important in many areas that roads are built. If they are toll roads, they have to go through the appropriate analysis and, if they meet that analysis, then we should give appropriate consideration to them.
The government does not support the amendment to prevent incentive payments being used to fund the construction of toll roads. It is for the states and territories to decide what arrangements they enter into to provide the modern infrastructure of the 21st century that they consider important to their economic growth. State and territory governments are best placed to make decisions about what arrangements for providing services and infrastructure represent the best value for money for those they represent.
The CHAIRMAN: The question is that amendment (4) on sheet 7487 revised be agreed to.
I move Greens amendments (1) and (2) on sheet 7487 revised:
(1) Title, page 1 (line 1), before "establish the Asset Recycling Fund", insert "encourage privatisation and".
(2) Clause 1, page 1 (line 7), omit "Asset Recycling Fund", substitute "Encouraging Privatisation (Asset Recycling Fund)".
For the benefit of senators not closely following the debate, this is the final amendment, which may or may not be subjected to a division. They are very simple amendments but very important ones. They are amendments of honesty. They change the title of the bill. The government discovered that Greens like recycling. So they invented the cute phrase 'asset recycling', which I think is hilarious. We are substituting in the name of the bill 'Asset Recycling Fund Bill' with the 'Encouraging Privatisation (Asset Recycling Fund) Bill, for reasons that will be fairly obvious to everybody by now. Setting up a fund to effectively bribe states and territories from a $12 billion infrastructure fund by using this 15 per cent incentive, as all senators would be aware by now, is not a particularly good idea. I think the very least the government could have done would have been to give the bill an honest title. I strongly commend this amendment to the Senate.
The government does not support amending the title of the bill as indicted. The proposed changes do not reflect the bill's objectives. Privatisation is only a means to an end where it is appropriate. Privatisation is not the primary objective of the bill or the initiatives it supports. The government is keen for states to release capital from assets better managed by the private sector and it wants to encourage the states to use the proceeds of those sales to build greenfield infrastructure, infrastructure in which the market would not necessarily invest without government participation but infrastructure which is nevertheless important to Australia's economic growth.
Labor supports the amendment.
Question agreed to.
by leave, I move Australian Greens amendments (1) and (2) on sheet 7496, together:
(1) Clause 1, page 1 (line 6), omit "Asset Recycling Fund", substitute "Encouraging Privatisation (Asset Recycling Fund)".
(2) Entire Bill: Omit "Asset Recycling Fund Act 2014" (wherever occurring), substitute "Encouraging Privatisation (Asset Recycling Fund) Act 2014".
Question agreed to.
The CHAIRMAN: The question now is that these bills stand as printed, as amended, and be agreed to.
Question agreed to.
Asset Recycling Fund Bill 2014 and Asset Recycling Fund (Consequential Amendments) Bill 2014 reported with amendment to the titles; report adopted.
I move:
That these bills be now read a third time.
Question agreed to.
Bills read a third time.
It was then Prime Minister Rudd who, in one of his more erudite moments, made the statement, 'No government should ever make a backward step in pursuit of the national interest.' It is in that light that I speak strongly in support of the repeal of the Minerals Resource Rent Tax Bill
It has hurt Western Australia. It has hurt Australia. We have now seen the repeal of the carbon tax repeal bill, and now is the time to do the same with the minerals resource rent tax
It was Mr Rudd who attempted to bring in the original resource super profits tax that did so much damage to Australia' reputation and constituted a sovereign risk around the world. He failed. In government, Prime Minister Gillard and her Treasurer, Mr Swan, negotiated with the three majors—BHP Billiton, Varley and Rio Tinto—to come up with what is now the minerals resource rent tax. It is interesting that they deliberately excluded Mr Martin Ferguson, a person who had far more knowledge in this field, I think it would be fair to say, than almost anybody else in the Labor government at that time with the possible exception of Mr Gary Gray. It is also interesting that in that discussion they deliberately excluded the small and the mid-cap miners, the exploration companies and, particularly, those involved in magnetite production.
What we ended up with was a tax which we in the coalition at all times said, and as industry said, would not make any money. Labor in government predicted that it would raise $3 billion in revenue in the first year alone and the remarkable figure of some $22.5 billion in the first four years. I will relate very briefly, given the amount of time, what actually happened.
As you and I both know, Acting Deputy President Sterle, it hurt Western Australia badly. It was directed at iron ore and coal, and some 67 per cent of the impact of this tax would have been on our state of Western Australia as indeed, because of the geographic size of our state, the carbon tax was so disastrous for us.
The unfortunate circumstance was that, far from yielding that figure of $3 billion in the first year, we in the coalition were right, industry was right—that is, that it was never, ever going to make any money. In its first year, it took a long, long time—it was like extracting teeth out of a crocodile—to get a statement as to how much it did yield, because we were told originally there would be quarterly reports. Of that $2 billion, it only yielded $126 million. When you take the fact that $40 million was spent in advertising and another $50 million was spent in set-up costs with an annual cost of some $20 million, there is the figure that says it made no money. Treasurer Hockey makes the comment now that once it is scrapped—imagine a tax being scrapped saving money; incredible—it will save some $13.4 billion.
It is a fact that only some 20 companies paid the tax. This was the point that the small and the mid-caps, the explorers and others continually made that it wasn't going to make money. Regrettably—and I think this is the important point—although 20 companies paid some tax, 145 companies invested some $20 million in administrative costs to be able to show the Australian tax office that they would not indeed be paying it. Imagine if that $20 million had gone into further exploration, further development, further employment of people and further opportunities for our mining industry. But, no, it went in administrative costs in the full knowledge that they would never, ever be paying the tax. One company alone paid somewhere between $3 million and $5 million of administrative, legal and other costs to establish that they would not be paying the tax.
The other night I heard Senator Wong, the Leader of the Opposition in the Senate, the former finance minister, go on at length about the various costs that the coalition was ripping out et cetera as a result of this. As we know, the worst feature of all of the predicted $2 billion of profit was that the Labor government then went and committed it and spent it.
All of us in households, residences and businesses would know that you can predict a year coming along: you might do well; you might make money. For farmers in my home state of Western Australia: things are looking pretty good for our cropping season but it is only July. Would any prudent home, business or residence ever go out in the hope that they might make $2 billion and spend the money? That is exactly what Labor did.
The regrettable thing was that the other night Senator Wong invited everybody who was listening to be upset and concerned about what the coalition was apparently doing by way of cutting back on that expenditure—the welfare expenditure that the Labor Party had committed itself to as a result of making money on a tax that they were never going to make the money on. In other words, the circumstances that Labor had put the funds towards themselves were probably laudable—I have no doubt they are—and one day when we reverse the negatives of budget, pay down the shocking deficit and get rid of that billion dollars a month of interest, it will be possible, as the minister finance said, in answer to a question this afternoon, to revisit these areas. When you are borrowing internationally and offshore, what right do you have to borrow money so that people—the children of today, the grandchildren of tomorrow—will have to pay that money back? That is exactly the circumstance.
The Leader of the Opposition in the Senate, Senator Wong, was talking about the superannuation guarantee scheme. She was talking about the effect of the small business instant asset write-off being removed. Let me tell you, Mr Acting Deputy President: the one thing small business is rejoicing about this afternoon is that the carbon tax has been removed—and all of those other concessions at one time in the future might be fantastic as indeed, when he was Treasurer, Peter Costello paid back that $96 billion of debt and relieved Australia of the annual interest debt of $5 billion a year and was able to give tax concessions.
We are paying not $5 billion; we are paying $12 billion—a billion dollars a month; a new primary school every 12 hours we are forgoing in this country at the moment, because we are borrowing offshore to pay interest on that debt. All of these concessions that Senator Wong was speaking about—many of them, I have no doubt at all, are laudable—are welfare issues. They are issues that you are able to devote funds to when you are in surplus, not when you have got to borrow overseas for that purpose.
I am absolutely amazed to see my colleague Senator Macdonald—I do not know whether you now think the need for the high visibility dress is the result of the fact that this has become a dangerous place occupationally—through you, Mr Acting Deputy President, to Senator Macdonald—but I assure you it is not.
Let me tell you very quickly about the impact on the mining industry as a result of the carbon and mining taxes. This amazing statistic has been given to me by the minerals exploration council. In 2011, 65 per cent of Australian Stock Exchange listed exploration companies'—these are our companies, our Australian exploration companies—expenditure for exploration activity was here in Australia. One year later, by 2012-13, 65 per cent of the exploration dollars of ASX listed companies was being invested away from Australia. You do not need any other statistic for the impact of the mining tax on Western Australia: one year there is 65 per cent investment here; a year later 65 per cent in west Africa, in Canada, in other countries. I could not give you a more explicit example. It has been a very unfair tax. It has cost some $20 million in administrative fees and $2 million a year for companies to tell the ATO that they will not have to pay the tax because of the way in which it was established.
Mr Acting Deputy President Sterle, I know you, like me, move about the state a lot. I was in the city of Kalgoorlie only two weeks ago. Kalgoorlie is on its knees. I know that is part of the cycle, the boom and bust cycle. Iron ore is important at the moment. The MRRT was only applying to iron ore and coal, but the threat was—and I think it was Senator Ludlam who spelt it out the other day—it was going to be on gold, it was going to be on uranium, it was going to be on other metals. But what it has done is this: each of the 12 or 13 big drilling companies based around Kalgoorlie—they operate around the world; these are massive companies that are very big employers when they are working—probably has eight or 10 drilling rigs and when I was there one of them had one rig working. And we all know that explorations today are the mines of 20 years' time. That is the sort of lag time we are talking about, and that is where the important element comes in.
Karratha, on our north Pilbara Coast, and Port Hedland: I have learnt in the past few days that each of those places has got more than 400 vacant homes at the moment. It is only 12 or 18 months ago, through you, Mr Acting Deputy President, to Senator Macdonald, that rental was $2,500 a week in those places—Karratha and Port Hedland. Both are reliant on the resources sector; both are obviously very severely hurt. That is the circumstance. We were advised yesterday that of all of the competing resource exporting countries, Australia ranked 133rd out of 134 when it came to our cost of production and cost of exploration.
I have been asked to be relatively brief. I am going to conclude with some information. We hear so often—Senator Milne, through you, Mr Acting Deputy President, I know you so often say that the mining industry contributes nothing, that the resources sector does nothing for our economy. Let me tell you this: the single biggest taxpayer in this country today is Rio Tinto. Mining has paid $117 billion in company tax and royalties since 2006-07. Last year alone they paid $21 billion, which was double the 2006-07 figure. It is in excess of 40 per cent, and the other ATO figure I was given is that the effective tax rate, according to the ATO, is now well in excess of 40 per cent. So by the time you take tax, by the time you take the royalties and then, on top of that—as Senator Lines would also know as a Western Australian senator—by the time you include local rates, by the time you include payroll taxes, by the time you include employment—the thing I was very pleased to report about Kalgoorlie was how robust and resilient a community it is. Although it is on its knees, when I asked how many vacancies there are in the schools in Kalgoorlie, I was told there is one vacancy in one school. So they understand the peaks and troughs of mining, and that is where we are. It was claimed the MRRT would somehow or other generate a revenue shortfall of $100 billion. That did not happen. Dr Ken Henry said it would not happen.
We have the circumstance of R&D. We heard the allegation again that mining is just digging holes in the ground and sending it offshore, and of course the industry would very strongly make the point—and I am quoting here from MCA—that 'Australian mining spends more than $4 billion per annum on R&D and that represents about one-quarter of all research and development in Australia.' That is far from the allegation about multinational companies sending it all offshore. We know they invested heavily here and that mining has spawned an Australian mining equipment, technology and services sector worth some $90 billion—I repeat that: $90 billion—and it exports $15 billion worth of goods and services. Forget this nonsense about mining only being a relatively small employer; in this country it directly employs some 245,000 people—a 20 per cent increase since the end of 2010—and RBA research shows that mining employs almost 10 per cent of the Australian workforce.
As I bring my contribution to a conclusion, I am obviously a very proud Western Australian—a state that contributes so much through its resources sector to the national economy. It provides the opportunity for states like Tasmania and South Australia, and after the natural disasters in Queensland, to be able to share that wealth nationally. Yes, we get a very low percentage of the GST; yes, we do want a lot more back; and, yes, we do want other states to endeavour to put their shoulders to the wheel more—and we know they will into the future. I just urge that people strongly support the repeal of the MRRT bill.
Boy, what a spray we have just heard from the government—isn't it amazing? If they are successful in repealing the minerals resource rent tax at some point I am wondering what they will blame then. Everything they have talked about today they did so in such broad sweeping statements—lots of figures coming from the government but nothing in evidence about the minerals resource rent tax. It was all just a big spray like the big spray on the carbon tax—untruths and generalisations. On and on it goes. If they are successful in repealing this bill they are going to be exposed for the mean-spirited, no-new-ideas, backward-looking government that actually are.
The Australian public have already woken up to that fact. We have the harshest and most cruel budget on record I would suggest before us and all they can do is look backwards and take away every single positive, forward-looking idea and policy that Labor put into place. The truth is heading towards them, because suddenly they are going to be in the glare of the spotlight and they will not have anything to blame Labor on anymore. They will have to start to stand on their own two feet—unlike the spray that we heard just then from the government with big numbers all apparently related to the MRRT but nothing specific.
What this repeal by the Abbott government confirms is that the government are introducing a retrospective tax grab on millions of Australia's low-paid workers. Just for once I would really like to hear the Abbott government sticking up for ordinary, everyday Australians. They stick up for their rich mates, their rich mining mates, they stick up for the big banks. Last night we heard them sticking up for the big shipping companies. I have yet to hear them actually stick up for Australian workers—from low-income earners. Not from this government. Their mates, we know, are at the big end of town, raking millions and millions off Australians through the resources boom that has been going on that apparently Australians should not be allowed to share in.
It is a retrospective tax grab on Australia's low-paid workers. Not words you would hear from the government, though. The reason for doing this—and from a government who pledged to govern for all Australians? I heard our Prime Minister, Mr Abbott, say that the night he won the election: 'I'm here to govern for all Australians.' Australians are still waiting. Australians are not going to be fooled anymore, because what the Abbott government is doing is simply governing for big business in this country. It has nothing to do with 'all Australians'. It is taking directly from the poor and giving to the rich. How is that governing for all Australians?
It is also taking money from school students. When the Abbott government tells us it has a commitment to education, those are just weasel words. As the government has confirmed, it will rip payments of $410 per primary school students and $820 per high school student from a 1.3 million Australian families who will have children starting school in January next year. I can tell you as a parent who, when my children were at school, was on a single income that I struggled in January to find money for books and school uniforms to make sure that my kids were the equivalent of other kids they attended primary and high school with. It was a struggle because it is a time of the year when you have just had Christmas and children are holidays. Every cent of my income was taken up and it was a struggle to find $200 or $300 for books and uniforms. That is what this government is doing. That schoolkids bonus money assisted families with school fees, textbooks and uniforms. The government will simply take that away when it abolishes the schoolkids bonus.
What dishonesty we have heard around the schoolkids bonus. It will be interesting to hear if the government mentions it today or whether they will just continue sticking up for their big mining mates. This payment is not linked to the MRRT. There has been this dishonest statement from government from day one that somehow it is. It is not. The Australian public will not be fooled, despite the government's rhetoric that somehow the schoolkids bonus is linked to the MRRT. When families have to scrimp and save, as I had to, and miss out on events or on going out with their children because of this slash and burn to the schoolkids bonus, those Australian families—1.3 million of them—will know that it is the Abbott government who put a hole in their pockets. It will be the Abbott government who has forced them in December and January to wring their hands, to worry, to scrape money together to make sure that when their kids start school in late January or early February they and have the same books and uniforms as the other children they are attending with.
Taking away the schoolkids bonus is a big slug on top of the Prime Minister's already harsh and cruel budget. It is absolutely targeted at ordinary, everyday Australians. They are hit with a GP tax; they are hit with a whole range of increases. On top of that, come January, there will be no additional money for families to support them to get their kids to school. The loss of the schoolkids bonus will add pressure on families at a time when families can least afford it. Finding that money to get kids ready for school, after Christmas and the school holidays, is a stressful burden on families. I can speak of that from firsthand experience. The loss of that bonus will hit 1.3 million families because the Abbott government wants to look after its rich mining mates.
It has not taken long for the Abbott government to show its true colours; it has not taken long at all: taking from the poor, taking from Middle Australia and giving to the most wealthy, whether they be mining companies or rich Australians—as long as they are rich, the Abbott government will look after them.
The Abbott government will not just stop at the schoolkids bonus. There is superannuation. It is a time when all sensible governments—which the Abbott government likes us to think it is—should be encouraging Australians to save for retirement and doing what they can to support those savings. But what does the Abbott government do? It slugs low-income Australians again—Australians earning just $37,000 a year. Perhaps the Abbott government has never met a cleaner, a hospital worker, a hospitality worker or a low-paid manufacturing worker. There are many hundreds of thousands of Australians out there who scrape by on $37,000 a year—mere pocket money for their rich mates in the mining industry.
If only the government cared to do a little research to establish some facts—something it does not do. It never has any established facts that it can share with the Australian community to show that, perhaps, 'We need to pull our belt in here or there.' No, it just goes on in a broad generalised spray about how evil everything Labor put in place was and how everything we put in place that supported Australian families and low-income earners somehow has to be ripped away. The Abbott government wants to pull that rug from underneath the feet of low-paid, ordinary working Australians. And for what? To reward its rich mining mates in this case. That is what it is doing.
Let us have a look at superannuation. The Abbott government is quite happy to deliver to the rich, boosting the superannuation of just 16,000 people. Sixteen thousand people—you could almost count them! These are people who have staggering super balances—balances of over $2 million in super. If you put aside for just a moment the fact that the Prime Minister promised to implement no adverse change to superannuation—yet another broken promise on the long, long road of broken promises—the removal of the low-income superannuation contribution is a telling move. This move will increase super taxes in one out of every three of Australia's lowest paid workers—not a bad move from a party which purports to be a low-taxing government.
This bill, if it gets up, sees the government scrapping the low-income superannuation contribution, which sees the equivalent of the superannuation tax up to $500, which is not very much, paid by a low-income earner earning up to $37,000 per year, which is a very low income, and paid into their balance. This measure was important for a number of reasons, and if the Abbott government had stopped and looked at the facts, it would have worked this out for itself. For high-income earners—the rich mates of the Abbott government—superannuation can be concessional. For low-income earners, there are no effective incentives for them to contribute to their superannuation. This measure, Labor's measure, addressed that very issue. It tried to just make the field a little more even.
The removal of the low-income superannuation contribution hits women particularly hard. Our Prime Minister purports to be some new-wave male equivalent of a feminist. He is the Minister for Women, and this is what he does to low-income earners—2.1 million of them against his 16,000 rich mates that he wants to reward. He is going to punish and make life difficult for 2.1 million low-paid women. If he just stopped and had a look at the balances of the cleaners, the hospitality workers, the care assistants, the hospital orderlies and all of those low-income earners, he would see that their balances are very low. If it was a government that was, as it says, sensible and methodical, and was committed to looking to the future instead of spending its time looking in the rear-vision mirror, it would see that these are the very people it needs to support. But, of course, it does not because it is too busy supporting its rich mates at the top end of the town.
What about those 2.1 million workers that our Prime Minister—our Minister for Women—seems to completely ignore? A significant percentage of those women are mothers working part-time and looking after young children—our future generations of Australians. It is this time that is exactly the part of a woman's career where an additional $500 a year going into super will be the most benefit for building savings for their retirement. Everyone knows that you need to put the money in early to allow it to have the opportunity to earn interest over a very long time.
Of course, our other major concern with the bill's removal of the low-interest super contribution is that it is an example of a retrospective tax measure—a fact confirmed by the Parliamentary Budget Office's checking of the coalition's election costings. Low-income earners—2.1 million of them women—entered the 2013-14 financial year with a different understanding. It was an understanding that they would be refunded their super tax. Part way through the financial year, the government has changed the rules on taxpayers. Luckily, we are where we are in the cycle. But the benefit that ordinary low-income Australians, many of them women, were budgeting for and looking towards the future for, will be ripped away from them again if this bill is repealed. Again, the Abbott government rips that rug from under their feet.
What does Industry Super Australia estimate? It says that when combined with the proposed delay in increasing the super guarantee to 12 per cent—we know our Prime Minister is not going to increase that—the removal of the LISC will reduce national savings by $53 billion by the year 2021-22. That is a truly staggering amount of money. Again, a sensible and forward-looking government would say, 'This is exactly where we want to be; this is exactly what we are building for the future.' But, no, we have a government that is always looking in the rear-view mirror, a government that has no idea how to plan for the future. All it ever talks about is a debt burden on young people into the future. Well, what is it doing? It is ripping potentially massive savings, billions of dollars of savings, out of our combined wealth without a care in the world. It has no idea and no plan. It is not saying, 'Labor's plan wasn't bad but we thought we could build on it.' No, it just wants to rip it down and pull that rug out from under everyone's feet. What does that mean? It means there will be a reduction in the available capital for infrastructure investment of about $5 billion, based on current industry-wide asset allocations. This is at a time when the Abbott government says it is looking around for new funding streams to finance new infrastructure projects. Here are some funds it could have called on, but it does not want to. Why? Because it has an ideological hatred of any plan that Labor put together. The Abbott government is certainly not governing for all Australians.
Let me put Labor's view on the record. Labor's view, and it is a fundamental view, is that Australians deserve to share in the benefits of the minerals we own. This is not something we heard from the government opposite. All we heard was: 'No, it's the mining companies' and they pay a bit of tax and we should all be grateful and thankful.' The minerals belong to Australians collectively, therefore Australians should share in the overall benefit from them. The MRRT is a profit based tax. This means that when profits are high, revenue is up, and that mining wealth can be shared by all Australians. The MRRT was not put in place for the next six months, it was a long-term approach. Labor was a forward-looking government, looking at what was going to set Australia on a good solid path that would build for our future and make sure our children and our grandchildren continued to benefit. That is what Labor was, a forward-looking government. This government is a backwards-looking government. It has just taken us back to the dark age with its repeal of the carbon tax today and it will continue to take us back to the dark age. Its other message to Australians is: 'Hey, you're on your own. Don't expect anything from the Australian government.' It is not the Australian government's job, according to the Abbott government, to help you along the way. No, you have to get there yourself. You have to scrape and beg and borrow and work two or three jobs if you are a low-income Australian to make your own way in the world, because everything Labor put in place to support our community the Abbott government is ripping up.
The MRRT was there for the long term, as I said. It was put in place for the next generation. That is something the Abbott government goes on about, but a smart government would not abolish the MRRT. A smart government that did more than look after its rich mates would be keeping it in place so that future generations could share in the wealth generated through mining, not just a handful of rich mining companies. But, of course, the Abbott government wants to continue to deliver to its rich mates. We know the MRRT will work into the future. That is how it is designed; it is not about 'let's get it done now'. The Abbott government is attempting to repeal yet another forward-looking, progressive policy.
I rise this afternoon to oppose the repeal of the minerals resource rent tax and to reflect on where we have been on this issue of raising revenue from the mining industry over recent years. It is extraordinary that on the day that the Treasurer stands up and says there is a revenue crisis in Australia and then lambasts the Senate for not passing his cruel budget measures, this is the biggest giveaway of a government that you could ever have seen. In one day they want to give away more than $20 billion worth of revenue over the forward estimates: $18 billion on carbon pricing and between $2 billion and $3½ billion—so you could get it up to $21½ billion—on the mining tax. How extraordinary. It is the best example yet of cost shifting, of saying to the big end of town, the big miners, the big polluters: 'Wink, wink, nudge, nudge, you gave us the money through your donations, you backed us in opposition, we are in government and now you can maximise your profits and send it out to your shareholders'—the overwhelming majority of whom, 83 or 84 per cent, live overseas—'Send that profit to them, don't you worry about it. We will go and take the money out of the pockets of the Australian community to make up the shortfall.'
That is what is going on here, the most mega shift: robbing the pockets of the community to put it into the profits and give it to the overseas shareholders of the big polluters and the big mining companies. That is exactly what is going on here. I find it extraordinary that a Treasurer would have the temerity to say to Australians: 'We want to hit the unemployed even harder, we want to make people pay more to go to the doctor, we want to deregulate universities and make life harder for university students who have to pay more, we want to make it really bad for women in the workforce who have no superannuation—all of that because we want to give Gina and Clive and Twiggy and all the rest of them as much as we possibly can.' That is what is going on here. It is extraordinary that we get a 'budget emergency' talked up when we have the big give-away in town: 'Here're the dollars, boys. We got elected for you and we're giving them out to you.' That is what is going on here.
Let's have a look at the history of this. How did we get into a situation where, at a time when the mining companies are making mega profits, so little is being returned in this mining tax? And why has there been such a reluctance, to fix it? Let's go back. There has been a bit of looking back, today, with respect to the carbon price. People with a bit of political memory might recall that coming into 2010 the expectation was that the then Prime Minister Kevin Rudd would call a double dissolution election on the back of not getting the emissions trading scheme that he negotiated with the coalition. He had negotiated it so that it was browned down to the point of being useless, with mega dollars again going to the coal industry and mega dollars going to trade-exposed industries—mega dollars all round.
But, never mind, coming into 2010, the Greens put on the table a compromise position on carbon pricing. On 21 January 2010, a compromise position on carbon pricing was put on the table, where we asked, 'How about a fixed price period of two years, and a price of $23?' We put that on the table and we met with Senator Wong at that particular time to ask, 'What about that?' We were told that, no, there was no compromise to be brokered, at all. It was only then that we found out that Labor had decided to abandon carbon pricing, and instead go with a mining tax—the super profits tax.
That occurred in the first quarter of 2010. Kevin Rudd, the then Prime Minister, went out and launched his super-profits tax, but the big miners were not going to have a bar of it. They got together with their mega advertising campaign. They put millions of dollars into that campaign. But it was millions of dollars to save billions of dollars, so the advertising campaign was a worthwhile investment. But the focus of the miners was not only to knock off the super-profits tax but to show the Rudd government—it was a message clearly picked up by the Gillard government and relished by this one—that the mining industry will destroy you with a populist advertising campaign unless you do as you are told. And so they did. They destroyed Kevin Rudd, who was seen to be indecisive and unable to sell his super-profits tax.
Then Prime Minister Gillard took over. With the most extraordinary play-acting—if you look back you can see it for what it was—a deal was done. Prime Minister Gillard and Treasurer Wayne Swan at that time negotiated in a room with the mining industry to give them what they wanted on the tax. What was the deal? The deal was that the Gillard government would get the political win of having negotiated with the big miners to deliver a mining tax, and the miners would get the win of not having to pay the tax. It was a beautiful thing! They got the money and the Gillard government got the credit in that political deal.
At the time, we said, 'This is wrong. There's a huge loophole in this, which will mean that the federal government will have to pay.' The loophole was that the states could increase the mining royalties, and any increase in royalties would be given back, and be made up for, by the federal government to the mining companies. So the mining companies did not have to pay; the taxpayers effectively made up the difference. That was a mega hole in the tax, and we moved an amendment, at the time that the legislation was put through this parliament, to close that loophole. Of course, it was rejected. It was rejected by the government, because they had done the deal with the miners. And it was rejected by the Liberals, who were then in opposition, because they wanted to make sure that the miners did not actually have to pay the tax.
So the flaws in this tax were there from the very beginning, and the Greens have said consistently throughout, 'We should be fixing this mining tax to get the revenue for the community in order to be able to spend on education, health, and all of the things we need for the future.' That is why we said, 'Let's fix the tax and set up a sovereign wealth fund so that we can use the benefits of something which is a one-off.' Let's face it, when the ore is gone, it is gone. The Norwegians made money from their minerals. They set up a sovereign wealth fund, and out of that sovereign wealth fund they have managed to fund the transition in their economy and new jobs.
The upshot of all of that is that there is no sovereign wealth fund. The government of the day did not do as the Greens wanted. Nor would they fix the mining tax. Ever since then we have argued for it. That is why I want to foreshadow a second reading amendment. Rather than repealing this tax we should be fixing this tax. Mr Hockey says he wants revenue. Well, I am ready to give him revenue. I was ready to keep $18 billion worth of revenue but he wanted to give it away. Let me try again: I am prepared to give him more revenue by fixing the mining tax—taking it out of the pockets of these super profitable mining companies.
I would like to fix the mining tax by applying a 40 per cent rate to all minerals. That is the first thing. If you look at the oil and gas industry you will see that they already pay 40 per cent. Why shouldn't the rest of the mining industry pay the same 40 per cent? It stands to reason that you would do that. The second thing we are saying is that we should rebate only those royalties that were in place at July 2011. We should close the loophole on the state governments. If the state governments want to raise royalties the Commonwealth is not going to rebate that after July 2011.
The third thing we have said is that we should only allow depreciation on the book value of the amounts spent on mining infrastructure. The issue here is that the mining industry has again ripped us off disgracefully, claiming everything that they possibly can in order to get their depreciation maximised. We do not want to allow the mining companies to be able to depreciate what ever they like. It is a key flaw in the existing tax
So I am foreshadowing a second reading amendment because an amendment is already before the chair.
I want to go to why it is essential we do this and how disgraceful it is that Rio Tinto, Xstrata and BHP managed to rip off and hoodwink the Australian Prime Minister and Treasurer of the day. You will recall we have had revelations since that there were the Treasury officials outside the room, no doubt absolutely appalled by what was going on inside the room—not even invited in—as the mining companies negotiated this with people around whom they ran rings. I want to indicate the extent to which they did run rings around them and I want to talk about Glencore for a minute. Australia's largest coalminer, Glencore, formerly Xstrata, paid zero tax over the past three years, as at 27 June this year. I have an article from The Sydney Morning Herald. Glencore paid zero tax over the past three years:
… despite income of $15 billion, as it radically reduced its tax exposure by taking large, unnecessarily expensive loans from its associates overseas.
… … …
As it was claiming tax breaks in Australia on these inflated interest payments, the secretive Swiss-based multinational actually increased its lending to other related parties interest free. This may include its executives. Nobody from Glencore, which used to be called Xstrata, was available for comment despite repeated requests.
The aggressive tax avoidance tactics of Glencore Coal International Australia Pty Ltd have been identified in an independent analysis of the company's accounts—
and so on and so forth.
At the end of the story it says:
Glencore is an extreme case: founded as it is by US tax exile Marc Rich, controlled from a tax haven, and with a colourful history as a corporate maverick.
It is chaired by Swiss-based Ivan Glasenberg, who ranks No.5 on BRW's rich list … after lifting his wealth by $1.01 billion on the back of Glencore's rising share price.
In the past two years globally, this company has presided over 53 workplace deaths, a worse safety record than BHP and Rio Tinto.
This is one of the companies who sat down with Prime Minister Gillard and Wayne Swan and negotiated a price, a carbon tax, which had within it at the start the problems of its failure.
And you supported them. What a rewrite of history!
Senator Macdonald apparently is hard of hearing, because I just said a minute ago that we moved an amendment to fix this at the time.
Did you vote for the bill?
Order! Senator Macdonald, you will be heard in silence, I know.
Thank you, Mr Acting Deputy President. As I said, here is a company making $15 billion, absolutely involved in tax avoidance extraordinaire, and now it is to be rewarded by abandoning the tax altogether instead of fixing it. So do not bother going to the G20 later this year and rabbiting on about how Australia wants to get some changes in tax laws and tax evasion, because this company is already making billions out of Australian resources, owned by the people of Australia, and what are we getting back for it? Practically nothing. But, rather than actually fixing the tax so they pay, we are going to see the government insisting that the Senate should pass all these cruel budget measures. If you can afford to give away $21½ billion to your mates, who have donated massively to you, who advertised on your behalf and who are sitting back waiting for the cash to roll in, do not expect this Senate to go and say to the Australian community, 'Sorry, Mr Hockey gave away all that money, so now we have to go and get it out of the pockets of the community.'
I want to quickly go through some issues here around the effect on the mining industry as such. Add to that the fact that not only are we talking about the loss of carbon pricing but, by repealing the mining tax and the carbon price, we have a total of $5.4 billion taken out of government revenue and given specifically to the mining industry, and that is because, as a result of the repeal of the carbon price, they will get their full fuel tax credit given to them. They actually will get 6c a litre more as a result of today, as well as picking up an end to the mining tax, as well as not having to pay for the pollution they cause and never having to accept their responsibility for climate change. They are driving this—they are driving more intense storms and more extreme weather events that are going to kill people in Australia and lead to loss of infrastructure. How did we feel when their coalmines were filled with water during the Queensland floods? And then, no doubt, they were out there claiming all kinds of insurance benefits and the rest, as a result of having driven the climate crisis in the first place.
Do not think the community are not waking up to that. The community are going to feel very short-changed when they find that all that has happened in the last few days is not money flowing to them, because it is a joke that they are ever going to get anything like a $550 per average family return. They are going to find that not only are they not getting that but all these hits on their pocket are so that the big end of town can get these mega-profits through an end to the mining tax and an end to the carbon price. Now they can pollute and use our resources to their heart's content and fill up the coffers of their overseas shareholders. That is exactly where we are going.
What about all the advertising about how many jobs they create? Oh, yes, the mining industry is the backbone of jobs—joke. That is not actually happening. Mining currently employs 2.4 per cent of the Australian workforce. So let's get real about this talk of jobs. Now that it is transitioning from the capital intensive phase to the production phase, this is when the super-profits will occur, because their revenue from production will be rising and they will be less able to deduct it against their capital investments. In the production phase, I would hazard to guess that they are not going to employ even the lowly 2.4 per cent of the Australian workforce, because a lot of these mines are going to be automated. That is the next thing. All these people who think all the jobs are going to be up there in the mines—no, they are not going to be there. They are moving to automation and computerised control of their trucks and the rest of it. What we are seeing is even a reduction in the jobs, even if you thought 2.4 per cent was worth giving them a massive windfall gain.
What we are seeing in Australia is a megaindustry which has advertised itself into a position where governments are too afraid to take them on as they rip off the Australian community, take the profits overseas and engage in tax avoidance on a grand scale. What sort of deal is that for the Australian community? Where is the leadership? We need to be transitioning from an economy that is overly dependent on the resource-based sector to one that is based on a future vision of a country that is knowledge and information based. It is about services, education and training, new technologies, renewable industries and decarbonising our electricity sector.
Unfortunately, what we are seeing are the vested interests of the old order in terms of those big mining companies, big polluters, and the Liberal Party and the National Party which represent them to the hilt—to which they donate. That is the old order looking backwards to the old fossil fuel age and stealing from the future, because instead of a sovereign wealth fund to fund the future, the benefits of the boom have been squandered. That is why we should fix the mining tax. I am standing here ready to help Mr Hockey to put money into the coffers of this government, not to facilitate him giving away money from the budget in order to make life hard for the unemployed, the sick, the old and the student community. That is not where we are going and we most certainly will not be taking away the low-income bonus for superannuation. Why should not those people get something to give them a decent old age?
I contribute to this debate proudly in solidarity with the thousands of men and woman of Australia who work in Australia's mining industries and with the tens of thousands of my fellow Australians who benefit from, and whose mere existence depends upon, a strong mining industry in Australia.
I am a proud supporter of the Australians for coal industry. I remind senators that where I operate, in Townsville, we are near the Bowen coal basin, where there are hundreds of jobs and billions of dollars of wealth for all Australians out of the coal industry. There are some 54,900 direct jobs in the coal industry. There is some $6 billion paid in wages in the coal industry. The coal industry alone pays $25.5 billion in royalties to state governments in the five years from 2006 to 2012. Seventy-five per cent of the electricity that we use comes from Australia's black and brown coal. A contribution to the GDP is measured in the order of $43 billion with some 90 megatonnes in export value.
The coal industry—and the mining industry generally—is particularly important in my state of Queensland where there are 37 projects proposed or under development in the coalmining industry. Coal exports have contributed something like 15 per cent of Australia's total export over the last five years. The coal industry alone has contributed $260 million to an industry fund supporting low-emission technologies. Some 82 megatonnes of coal have been sent to Japan over the years. Importantly, to defy the arguments of Senator Cameron, Senator Lines and Senator Milne, the coal companies alone—this is not all mining companies, this is just coal—paid $17.7 billion in company tax over the five years. This bill that we are debating today is getting rid of a tax that inhibited our mining and mining exploration in our country. It was a tax that not only discouraged investment and therefore discouraged jobs but also did not raise any money. We know for all the projections of the Labor and the Greens that it was going to raise $49 billion, in the first year or so it raised only $340 million and most of that was spent in trying to administer the act and the collection of those moneys.
As we went—these are the Labor government figures—the $49 billion projection came down to 26 and then came down to 11, then came down to 9, then came down to 7, and then came down to 4. This was a tax that, in spite of what you heard from Senator Milne, the Greens political party supported the Labor government in introducing this useless, worthless and job destroying tax. Senator Milne would have you believe that the Greens were against it. They were totally involved and I am glad that Senator Milne mentioned the three big companies. It was the three big companies that Senator Cameron was disparaging—Senator Cameron forgot but Senator Milne obviously did not—that did the secret deal with Prime Minister Gillard and Treasurer Swan. Remember they went into the little room, came out of it and, as a result of that, everybody paid the mining tax except Xstrata, BHP and Rio Tinto. They must have thought all of their Christmases came at once when they walked into the room to negotiate with Wayne Swan and Julia Gillard. They just could not have possibly believed their luck.
I have heard the class warfare arguments from both Senator Milne and Senator Cameron. If they are so against all of these big mining companies, why didn't they get up and support me when I suggested, just a week or so ago, that the debt levy should not apply only to individuals but should apply to the big corporate people? I think I particularly mentioned Xstrata and BHP and Rio. And yet did the Greens support that? No. They let them go. And they talk about the government being the friends of the big end of town! 'The friends of the rich people'—how many times did we hear that? Yet here is the Labor government negotiating with those 'rich people at the big end of town' to get this mining tax in operation. What absolute hypocrisy of the Greens political party and the Labor Party!
Order! Resume your seat, Senator Macdonald. Senator Ludlam, you have acted in the most disorderly manner by using a prop, as a stunt during a senator's speech. Return to your place, Senator Ludlam. What you have done is completely inappropriate. It is disorderly. It has no place in this chamber. Senator Macdonald, please resume.
Again, Mr Acting Deputy President, it shows the lengths the Greens political party will go to to try and stop people making a point. Why? Because they know that everything I am saying is the absolute truth, and there is one thing the Greens political party cannot handle, and that is the truth.
We have been told that the mining companies pay no tax. Indeed, the truth is very different. Mining has paid $117 billion in company tax and royalties since 2006-07, and it has paid some $21 billion in 2011-12 alone—that is double the payment it made several years previously. Australian Taxation Office statistics show that mining's effective tax rate was 28 per cent in 2010-11, but, if you include the royalties that are paid to state governments, the effective rate of tax was 40 per cent. So Senator Cameron, Senator Milne and Senator Lines would have you believe that the mining companies pay no tax, but there it is: the ATO's statistics say some 40 per cent effective tax is paid by mining companies.
Mining companies do make profits and they do send them overseas—which makes me wonder why the Greens did not support my call for a debt levy on them. But the Greens can answer to that.
Mining companies do pay a considerable amount of tax through mining tax and royalties. They are a major contributor to the Australian economy directly, accounting for eight per cent of GDP, and directly employing some 250,000 of my fellow Australians. That is why I proudly stand in solidarity with all of those people who work in the mining industry that the Labor Party and the Greens would throw onto the scrap heap. I know that, since the mining tax has come in, there has been a pause, a concern, a hesitation in investing in Australia—due to sovereign risk as well as the mining tax and the carbon tax. As a result of that pause in investment, a lot of jobs have been lost in the Bowen Basin area in my home state.
Australian mining spends more than $4 billion each and every year on research and development, which is about 22 per cent of the total business expenditure on research and development in Australia. Mining has spawned an Australian mining equipment technology and services sector worth around $90 billion, and it exports some $15 billion worth of goods and services.
We have been asked to be brief. There are a lot of other facts and figures I would like to submit—and perhaps that will be something for the future. But, before I leave the debate, I just want to contribute by referring to some of the things that others said in this debate. We heard Senator Lines refer to the 'big end of town' and 'big mining mates', carrying on the terminology of Senator Cameron, and I pointed out: who are the mates of the big mining companies? The Labor Party that got into bed with the three biggest of them, and then had the hide to come in here and accuse everyone else. And don't let the Greens fool you. They were in it up to their necks with the Labor government. They worked and worked with the mining companies to bring in a tax which affected many mining companies but not the big ones.
I would refer you to a publication of the Association of Mining and Exploration Companies, who clearly said that the legislation was an:
… ill conceived, anti competitive, complex, distortionary … and … irrefutable bad tax.
They say a lot more things about it, but time does not allow me.
We heard Senator Cameron railing against the three big companies that his government got into bed with and did the deal with, and using all of the old-fashioned class warfare arguments. I want to say something to Senator Cameron—and I hope he is listening. In this chamber we should be debating the issues, playing the ball and not the man. Senator Cameron—and I do not know if he has got something against women—cannot let a day go past without attacking personally and viciously—
Mr Acting Deputy President, I rise on a point of order. I draw your attention to the standing order about reflecting on other members of the chamber. I think Senator Macdonald is coming very close to making allegations against Senator Cameron which are indeed reflecting on his character.
Senator Moore, there were no allegations made. I think what Senator Macdonald was doing is part of the robust debating process.
Mr Acting Deputy President, I rise on a point of order. I would like to express my strong objection to the conduct of this chamber and the production of this bloody commercial message without my permission. This is a protocol issue—
Senator Heffernan, resume your seat. That is not a point of order.
I refer Senator Moore to Senator Cameron's speech in this chamber—and the Hansard is here—where he attacked Ms Rinehart. At least Senator Milne attacked Ms Rinehart and Mr Palmer. We do not hear that from Senator Cameron. He does not attack Mr Palmer. I wonder if that could have something to do with the fact that Mr Palmer's own political party has the balance of power in this chamber now. Let us not attribute those motives to him. Let us wonder why it is always Gina Rinehart he attacks in a vicious and personal way. Senator Cameron, if you are going to start playing the man instead of the ball then we can all contribute. I ask Senator Cameron: what was your association with my namesake—the bad Ian Macdonald, the Labor Party Ian Macdonald—from the New South Wales parliament? If you want to get into personalities, Senator Cameron—
Mr Acting Deputy President, I rise on a point of order. Again I am concerned about Senator Macdonald making a reflection on another member of this parliament.
Senator Moore, I am absolutely conscious of your concern in this regard, but Senator Macdonald was simply positing a question.
That is exactly what I was doing. I was asking Senator Cameron what his association is with Ian Macdonald the bad, the New South Wales Labor politician, who I understand was in his faction and whom he supported. Perhaps he can tell us. I want to also ask Senator Cameron about his role as a board member of a very big superannuation company. We always hear about how these big companies, the big end of town, do all these bad things. Perhaps we should look in the mirror. Senator Cameron can attack me as much as he likes, but if he wants to attack people who are not in this chamber—like Ms Rinehart, who is one of the great Australians, one of the great entrepreneurs and a person who has contributed so much to the Australian economy—he should remember it is a two-way street. I will not raise those things again unless he continues to attack people who are not in this chamber to defend themselves. Regardless of his opinion of her, many other people, including me, think she is one of the great Australians.
I will complete my speech there because we are wanting to have a vote on this bill. I want to emphasise that all of the mining companies in Australia already pay a substantial amount of company tax and, importantly, royalties to state governments. That is why when a group of coal companies—and coal, as I have indicated, is just so important to my state of Queensland—initiated Australians for Coal then I proudly became involved in it. Unlike my good friend Senator Heffernan, who I know has an objection to the fact that they printed his name on these jackets, I was tickled pink and very proud to see my name embroidered here. Senator Heffernan—to his own respect, and it is his issue—did not like it, but I was so proud of it. So I proudly wear this high-vis shirt in the chamber today as a demonstration of my support and my solidarity with all of those workers involved in the mining industry right throughout Australia and in all of the towns and communities, most of which are in northern Australia, that exist only because of Australia's mining industry.
I look forward to a big future for the mining industry in Australia. If the Greens are so concerned about carbon emissions, I look forward to a time when the Greens political party will join me in supporting uranium production for energy in Australia. No, the Greens want it both ways. They do not want any carbon and they do not want uranium, yet they like their air conditioners, their fires and the creature comforts of human beings. I proudly support all of those involved in the mining industry, many of which are in northern Australia and in my home state of Queensland. My home state of Queensland is a substantial beneficiary of the Australians for Coal campaign and of the coalmines and jobs created there. Communities in my state are supported by the fabulous mining industry we have in Australia.
Senator Heffernan, you are not on my list of speakers. Do you have a point of order?
Yes, I do.
I give you the call to make a point of order, but you are not to make a speech, Senator Heffernan.
Righto, I will not make a speech. I would like some guidance through a point of order as to the protocols in this parliament and in this chamber about the endorsement of a commercial product without my permission and the wearing of advertising material in the chamber. I thank you for your indulgence, Mr Acting Deputy President. I support the mining industry too but my point of order is it sets a precedent and the next thing we are going to have is 'Bill Heffernan: friend of marijuana' or 'Bill Heffernan: friend of Coca-Cola' without my permission. I have told the minerals and mining council to shove this and everyone else should too.
Thank you, Senator Heffernan. I will take your concerns under advisement and I will refer them to the President of the Senate. But when it comes to the attire in the chamber, I have noticed on occasions in my time here that people have worn scarves, they have worn T-shirts—
Kilts.
Kilts, indeed—and I have noticed that Senator Macdonald does at least have a tie on.
Mr Acting Deputy President, on the same point of order. I would seek some advice from the chair on the wearing of a garment with advertising material on it. I support Senator Heffernan's question on that and I would like to get some guidance.
Senator Moore, I have undertaken to refer this to the President, which I think is appropriate and he can make an appropriate ruling in the circumstances.
Mr Acting Deputy President, on that point of order. But you have ruled on that, so I will raise another point of order. This is a very colourful and well-fitting outfit I am wearing. As for advertising, perhaps I am advertising myself here where it says, 'Ian Macdonald'. Here on the other side, it says in very, very small letters, 'Australians for coal'. I am not sure which company that is that is being advertised. When you are referring this to the President, could you please alert him to the fact that there is no advertising on this wonderful garment I am wearing.
Senator Siewert, on this point of order or a new one?
On this point of order. Perhaps when you refer this issue to the President, you could also refer the fact of where these shirts came from and whether they were specifically given out so that senators could wear them during the debate on the mining tax, please.
I take your point and that will be up to the President to consider.
Senator Ian Macdonald interjecting—
I am not going to continue with this, I am going back to the bill. Senator Urquhart has the call.
I rise to speak against the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013 No. 2. I will be kinder on people's eyes by not wearing a very bright jacket and I will also be kinder on people's ears by not blowing their ear-holes out.
This bill clearly demonstrates the policy differences between this cruel government and the Labor opposition. This bill gives a $3.3 billion tax cut to Australia's largest mining companies over the forward estimates while at the same time cutting payments and tax relief to families, small businesses and low-income earners—tax cuts for mining companies, tax hikes for small companies; tax cuts for mining companies but benefits cuts for everyday families; tax cuts for mining companies but retirement income cuts for low-income earners; tax cuts for mining companies but cuts to capital works in regional communities; and tax cuts for mining companies but tax hikes for those participating in geothermal exploration.
At its core, this bill is not about defining a taxation regime for mineral resources in this country. No, at its core, this bill clearly defines this government's cruel agenda, an agenda to end the so-called age of entitlement, an agenda laced in disdain for working Australians, disdain for the families of Australia, disdain for Australians living in the regions and disdain for Australians seeking to expand the renewable energy industry. It is an agenda we see on display in this place every day, where the language of many of those opposite shows an utter contempt for Australian workers and Australian families.
This bill clearly demonstrates the cruel nature of the Abbott government. This bill cuts assistance payments to families, to small businesses, to low-income earners and to our communities while at the same time providing a $3.3 billion tax cut to the owners of Australia's biggest mining companies over the next four years, mining companies who are well and truly majority foreign owned—80 per cent, in fact, of the owners of Australia's biggest mining companies are foreign nationals. This bill hurts Australians while providing a tax cut to foreign nationals.
This minerals resource rent tax is a tax, a fair tax on superprofits—yes, the superprofits realised from coal and iron ore mining in this country; a fair tax that has and will continue to realise significant revenue for the budget at a time when this Liberal government seeks to introduce a tax on visits to the GP and wants to increase the company tax on Australia's biggest companies to pay for its unfair, unaffordable Paid Parental Leave Scheme. This company tax increase will lead to increases in the prices Australian families pay for groceries, for fuel, for power, for clothes and for all goods and services supplied and provided by Australia's biggest companies. It is a tax that will be applied regardless of the profitability of the company and it will not even raise the required amount to pay for their overly generous, poorly targeted Paid Parental Leave Scheme. This company tax increase and the Paid Parental Leave Scheme are further evidence of this Liberal government's desire to hit the hip-pockets of low- and middle-income Australians and line the pockets of the wealthiest in this country.
The minerals resource rent tax is a fair tax that only impacts mining companies when its profits less deductions are over $75 million in a year—a tax that is only imposed on coal and iron ore producers in times of profitability. When this tax was introduced in 2011, Australia was experiencing an unprecedented boom in our resources sector, specifically in iron ore and coal, which delivered record profits to mining companies year after year. During the last tenure of those opposite, royalties as a percentage of mining profits decreased from around 40 per cent to about 15 per cent. It works out at about $35 billion that could have been invested for the benefit of all Australians if captured by a superprofits tax.
These mineral resources are nonrenewable. The resources and a large share of the profit are actually shipped off overseas—resources that can only be dug up once, resources that can only be sold overseas once. All Australians should benefit from the sale of our resources not just the few who are directly involved in the mining industry. It is vital that the community who owns the resource 100 per cent gets a fair return on these resources to strengthen our whole economy for the future. Of course, the fact that this tax does not deliver on forecast revenue in its first few years does not make it a bad tax. It is a tax designed to work in perpetuity. When profits are high, the tax will pull in significant revenue. Or when capital works are high and therefore deductions are high, as has been the case for the past few years, the revenue is reduced. Or if profitability is low and a mining company makes less than $75 billion from a mine in a particular year then no superprofits tax is paid.
The tax actually provides an incentive to invest in iron ore and coal mining operations relative to a pure royalties taxation model.
As the mining industry is extremely capital intensive, it actually employs only around two per cent of Australian workers. While profits in the mining industry grew by over 250 per cent over the last decade, the mining industry contributed only seven per cent to Australia's jobs growth over that period. While the manufacturing industry continues the decades-long trend of employment decline, it still employs over four times as many people as the mining industry. The metals manufacturing industry, which includes smelting, refining and producing metal products, has not been a significant beneficiary of the mining boom. Increased competition from Chinese smelters and refineries, high-energy prices and the appreciation of the Australian dollar saw value added in the metals manufacturing sector flat through most of the last decade. The export volume of processed metals fell over the decade with weakness across a wide range of refined metals. This trend will only continue as smelters continue to close. Despite this, there are no proposals from those opposite to assist manufacturing businesses to deal with the high Australian dollar, which has been stuck over 90c for the better part of four years. Where the former Labor government sought to assist non-mining industries through rational, interventionist, government industry policy, this government has a fanatical approach to free-market economics.
This government has turned its back on Tasmania. The coalition government was full of talk before the election about jobs, jobs, jobs in Tasmania, but since the election has been nothing but a complete failure. Last week, the member for Franklin and Shadow Minister for Regional Development and Local Government, Ms Julie Collins, released a report card on the Abbott government's Economic Growth Plan for Tasmania. Of the ten major proposals in Prime Minister Abbott's Economic Growth Plan for Tasmania, only one has been completed. All of the others are well off track. The Abbott Tasmanian file shows that the status of the Tasmanian Major Projects Approval Agency is 'announced', but it only began meeting with stakeholders last month and no board appointments have been made as yet.
The next project is the Tasmanian jobs program. The status is that 60 positions have been created since 1 January 2014. The coalition government's target was 2,000 positions over two years and there has been a cut in funding from $6,050 over a six-month period to only $3,250 over the same time. The next project is the Hobart International Airport, with a $38 million runway extension and the promise of 200 jobs. The status of that is that there is no start date, no international carrier and no details around the design of the runway. The next project is a centre for Antarctic and Southern Ocean research funding boost. The status: 18 CSIRO jobs have been lost in Hobart. The next project is the fruit and vegetable industry task force. The status is that it was announced in March, it was to have had its first meeting in April, and a similar organisation already exists in Tasmania.
The next project was a the Productivity Commission report into Tasmania's shipping costs. The status of that is that the coalition government has yet to formally respond and has had the report since 7 March 2014. The next project is support for the forestry sector. The status is that only eight projects have been announced from Labor's $100 million Jobs and Growth Plan. The eight projects total only roughly one-third of the total amount allocated. Meanwhile, businesses are waiting to co-invest hundreds of millions with government to create jobs in Tasmania. The next project is the Midland Highway $400 million upgrade. The status is that $100 million was cut from Labor's plan and construction work is yet to start. The next project is Sense-T. The status is that funding was announced on 12 June 2014. This is one project where the commitment has actually been met. So that is good news. The project to revitalise Work for the Dole was started on 1 July 2014 without any coordinator in place for Tasmania. All of Braddon, all of Bass and a good proportion of Lyons are to be covered under the one Work for the Dole program.
It is clear that this government has turned its back on Tasmania. The coalition was full of talk before the election about jobs, jobs, jobs in Tasmania, but since the election we have seen nothing. A recent article in the Burnie Advocate highlights the discontent from a senior Tasmanian entrepreneur and key Tasmanian jobs adviser to Prime Minister Abbott. The coalition's Economic Growth Plan for Tasmania also included the creation of the Prime Minister's Joint Commonwealth and Tasmanian Economic Council. The Prime Minister's co-chair, Mr Dale Elphinstone, has said that the council's processes are running a little slower than he would have liked—as in: it has not even formally met yet. The council is also meant to include the chair of the Tasmanian Major Projects Approval Agency, but the chair has not yet been appointed. The council is due to meet next week and I hope that the senior ministers who are listed as members, including Prime Minister Abbott, Treasurer Hockey and Industry Minister MacFarlane, all make the trip to Tasmania and attend this meeting. It is interesting to note that the Minister for Employment, Tasmanian Senator Abetz, was not included in the council.
While the senior ministers are in Tasmania, I hope they reflect on their cruel and unfair budget. In particular, I hope they reflect on this debate and on the cruel and unfair measures that they are proposing in this bill—cruel measures that will actually leave many Tasmanian families much worse off. I call on the government to reflect on the impact of their proposal to repeal the schoolkids bonus—a cut that will cost the average family $15,000 over the period of their children's primary and secondary education and a cut that is not related to the mining tax as it was not enacted by the MRRT bill. Further, it existed as the education tax refund before the MRRT was introduced. The government now plans to scrap the schoolkids bonus and not even reinstate the education tax refund. This secret cut will impact over 32,000 Tasmanian families. Around 60,000 Tasmanian children will go without the payment.
The schoolkids bonus delivers parents some extra help to meet the large costs associated with sending their children to school. When the schoolkids bonus was introduced, those opposite opposed it because they claimed it was not specifically targeted to education. They called it a cash splash and they did not trust Australian families to spend it on educational needs. They said the education tax refund was a better way—despite the fact that millions of families were not getting their full entitlement—and promised to increase it. The mums and dads that I talk to spend the money that they get through the schoolkids bonus on essentials: on uniforms, on excursions, on footy boots, cricket bats, guitars and recorders. It is clear that those opposite do not care about supporting families. I am heartened to learn that there might not be enough support for this measure in the Senate.
I call on the government to reflect on the impact of their proposals to stall the increase in the superannuation guarantee and to scrap the low-income superannuation co-contribution, backdated to July 2013. It is clear that the government does not care about support for low-income Australians who are saving for their retirement. The Minister for Finance, Senator Cormann, recently told ABC Radio:
For somebody who stays on the lowest income tax bracket for their whole working life, all the way through, I think you'll find that they will have the ultimate safety net. They will be supported by the aged pension once they reach retirement.
Minister Cormann just does not get it, because the measures they are imposing through the budget will actually reduce that income for pensioners.
The coalition government, and particularly Minister Cormann as finance minister, want to push the retirement age to be the oldest in the world, at 70. I challenge Minister Cormann to look a cleaner in the eye and say that his government is ripping money out of their superannuation to give to big miners. I challenge Minister Cormann to look an early childhood educator in the eye and say that he thinks the pension is the ultimate safety net. I challenge Minister Cormann to look current pensioners in the eye and tell them that cutting the indexation will keep the pension as the ultimate safety net.
The purpose of superannuation is to provide relief to the age pension system and to provide all Australians with options in their retirement. If the coalition get their way, people earning $37,000 or less will lose the tax incentive to make personal contributions to their superannuation. This measure effectively reduced the tax rate on personal superannuation contributions to zero. The coalition do not just want to reintroduce this tax on low-income earners saving for their retirement; they actually want to back date this measure, hitting the 3.6 million Australians, including 2.1 million working women, with an increase in their tax this year if they made personal contributions to their superannuation. These people entered the 2013-14 financial year on the understanding that they would be refunded their superannuation tax. This goes against all standards of responsible economic management. Again, I am heartened to learn that there is not enough support for this measure in the Senate.
This bill would also abolish the income support bonus, a tax-free payment to people on payments—including Austudy, Newstart, the parenting payment, and the children of our veterans who were killed or injured in action—to help with unexpected living costs, such as medical expenses or car repairs. If the proposed abolition is successful, around 1.1 million low-income Australians will lose the payment. It was introduced in early 2013 'in recognition of the fact that the current rates of income support allowance payments are manifestly inadequate'. The bonus provides $210 a year to single recipients and $350 a year to most couples, where both partners are eligible.
The Australian Council of Social Service has estimated that 57 per cent of parenting payment recipients and 28 per cent of Newstart allowance recipients could not afford to pay their utility bills on time, compared with 12 per cent of all Australians. That is what this government is about: in every way possible, unashamedly attacking Australians who are doing it tough. Once again, this has failed the fairness test in the Senate. I am proud to stand with the senators who will not be supporting this measure.
This government is even attacking its supposed base—2.7 million small businesses—by slashing the instant asset write-off from $5,000 to $1,000. The 'other measures' component of the bill will also close the loss carry-back scheme utilised by up to 110,000 businesses to smooth their tax over the good and bad years. Just like the 'other measures' in this bill, it has no friends outside of the coalition party room, with the Australian Industry Group and the Council of Small Business speaking out against the removal. The AiG said that the existing arrangement provides a very important boost to a company's cash flow 'at a time when they need it most and at a time when it is going to be most critical in ensuring the survival of that business'. Further, the AiG warned that the Australian economy faced a 'large gap in investment, particularly outside the mining sector' and that removing the instant write-off facility for small business would have a material effect on them and would 'decrease investment at the time it is needed most'. It is disappointing that it appears that not enough of the crossbenchers will vote to support small business in this way.
The 'other measures' in this bill also impose extremely negative effects on geothermal energy exploration. Under current arrangements, geothermal energy exploration and prospecting expenditure is deductible in the income year that the asset is first used or the expenditure is incurred. Under the new legislation, this expenditure would not be immediately deductible. The Australia Institute has observed that 'if this measure is repealed geothermal exploration will not have the same incentives as any ordinary explorer looking for fossil fuels'.
I conclude my remarks by restating that the MRRT has seen and will continue to see the benefits of mining shared across our community. I am pleased to speak against a bill that clearly demonstrates the policy differences of this cruel government and the Labor opposition. It is not an indecent proposal to provide transitional support for businesses and workers in industries hampered by the sustained strength of the Australian dollar. It is not an indecent proposal to impose a superprofits tax on coal and iron ore mining companies and to use that revenue to assist families, low-income earners, small businesses, regional communities and those exploring for commercial geothermal energy. This bill gives a $3.3 billion tax cut to Australia's largest mining companies over the forward estimates while at the same time cutting payments and tax relief to families, small businesses and low-income earners. (Time expired)
It is ironic, isn't it, that on the same day that the government moves the second of its measures to cut revenue, revenue that would create billions of dollars, the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013 [No. 2], the Treasurer is on the radio in the morning, saying, 'We're going to have to bring in more cuts; we might avoid parliamentary processes for that.' This is on the same day that we see two measures going through this place that take billions of dollars out of our revenue stream.
One reason the Treasurer says that the government has to bring in more cuts is that this place is not going to support and has already sent back to the other place measures that it does not accept, because we are listening to the community and we know the community hate the cruel budget the government has brought down. It is a budget that affects young people, students and single parents. Health payments affect pensioners, disability support pensioners, and Aboriginal and Torres Strait Islanders. You name it, this government has a go.
Because the community are saying no, standing up and making their voices heard and being listened to, the government, once again, go behind the back of parliament and say they have to bring in more cuts. And on the very same day the Treasurer is talking on the radio, they want to repeal another revenue-raising measure.
Coalition senators have said how this is a job-destroying tax. Senator Macdonald was in here, saying, 'It's a job-destroying, profit-destroying tax.' BHP increased its profits last year by 83 per cent, to US$8.1 billion. BHP WA alone increased its profits by 20 per cent, paying very little of the mining tax. So much for the job-destroying, profit-destroying tax! We are talking about revenue from the resources that all Australians own.
But of course the government, as usual, are protecting their big business mates at the big end of town. Yes, this tax could operate better and I will come to that in a moment. The government are looking after the big end of town. The three biggest mining companies in WA made profits of over US$17 billion. They paid no MRRT on that. But that is not enough for them, though. They want to make more, more, more and not pay their share. And the government want to protect those people, while making young people, students, single parent families, pensioners, people with disabilities live in poverty. That is what they are doing when they kick young people off the income support and make them live on nothing for six months. 'But it's okay, we've looked after the big end of town and the mining companies. Cross off the billions of dollars of revenue we could make from our own resources.'
Yes, this tax does have some flaws as Senator Milne pointed out. And Senator Macdonald, if you are listening, no, we were not there. You keep having a go at the Greens and saying, 'You were there and you supported the government.' Well no, we were not in the room—and, let me tell you, if we had been, the mining tax would not have been this bad! It would in fact have been fixed. It would actually be generating the billions of dollars that if you had actually listened—and even had the original one—you would now be making money from to provide the revenue that we know is needed to ensure that our community is a fair, just and compassionate community.
But no, you are running to the orders of the mining industry, who have graciously provided certain senators in this building with nice high-vis tops with their names on them. Senator Macdonald wore his into the chamber to do another little bit of advertising for the mining industry. That was clearly around Senator Macdonald trying to advertise for the mining industry. It sends a really clear message about who is giving the orders and calling the shots in this place. That is what it does. It sends a really clear message about who is calling the shots in getting rid of this mining tax that provides Australia with a fairer share of the super profits from the resources that they mine. I continue to remind people that they are Australia's resources. It is only fair and reasonable that Australians get a fair share of the super profits from those resources—and this mining tax is about providing that.
Proceedings suspended from 18:50 to 19:30
I will start where I left off before we had that interlude for dinner. I was making the point that members of the coalition were in here 'vested up' by the mining industry, who quite clearly had vested interests. So it is appropriate that they provided vests for certain senators to wear in the chamber while they are doing the mining industry's work by getting rid of the mining tax for them. To make it even better for the mining industry in this country, and to ensure that the superprofits from their digging up of our resources are not shared with the community, those on the other side of the chamber make the most vulnerable Australians pay the price for their supporting and looking after the big end of town.
As I pointed out before, we do know that there are holes in this mining tax. We tried to fix them—and what this government should be doing, instead of scrapping this mining tax, is improving it so that it genuinely delivers a revenue stream that, according to the government, we need in this country. The government is saying that there is a budget emergency but, with gay abandon, they get rid of the carbon tax that would have generated billions of dollars for our country. Now they are in the process of trying to get rid of the mining tax—that would, again, generate billions of dollars for our country.
The Greens supported the original proposed tax on mining superprofits recommended by the Treasury in 2010, because it did make sense. It made sense because it was a tax only on those companies earning gargantuan, huge profits. It was fair because it ensured that Australians benefited from their exploitation of publicly-owned resources. The principle of the tax was that the superprofits were made by the mining companies when they were digging up mineral resources—which, I repeat again, are owned by all of us—and selling them. Originally, the tax was meant to be 40 per cent on superprofits above $50 million and applied to all minerals. It got watered down to an effective rate of about 22½ per cent on profits above $75 million. In its original form, it would have raised $4 billion last year alone.
As I said, you have got to keep in mind the fact that the three big iron ore companies, to which the mining tax applied, increased their profits by 81 per cent last year. In Western Australia alone, BHP's profits were up 20 per cent. Let's put to bed this myth, perpetrated by coalition, that this is a profit-killing tax. It simply is not true. We should have fixed the original proposal. We should have made sure that we put in place the original proposal. The current MRRT takes only 1.5 per cent off the companies' profit margins, but the government thinks even that is too much. Instead of fixing it—and making sure that we do get a fair share of revenue from our resources and a proper revenue from superprofits made from the mining tax—the government wants to hand back billions to the mining companies that should be put into our revenue stream so that we can look after the most vulnerable, so that we can provide a universal health system, so that we can make sure that we index our pensions and our Newstart payments and our income support payments properly so that we do support the most vulnerable members of our community. But no. Instead, the government is looking after their big business interests mates.
I come from the state of Western Australia. I have heard told many times that this is killing jobs and killing profits in Western Australia. But as I just articulated, funnily enough, profits from mining have gone up in Western Australia. Yes, Western Australia has benefited from mining and we have benefited from the boom. I will come back to that in a minute. We do employ slightly more people in mining in Western Australia than we do in the rest of the country. However, about 92 per cent of Western Australians are not involved in mining in Western Australia—as opposed to about 98 per cent for the rest of the country. But in Western Australia we have had a two-speed economy. I had some work done on this a while back in my office and it clearly showed that if you are working in the mining industry, you are doing okay and getting higher wages. But if you are working in hospitality or retail or in the public sector, for example, you are not doing as well as those in the mining industry. But you are still expected to pay the high house prices that we have in Western Australia. You are still expected to pay the high rent prices we have in Western Australia—because, I will tell you, trying to find a house to rent in Western Australia is like finding hens' teeth. You are still expected to pay the higher cost of living in Western Australia. You still have to be part of a health system that is cracking at the seams. You still have to live in an economy that is geared towards those high-end earners and pay the prices they are paying. If you are in aged care, you still have to be finding workers to work in the aged care, because they are all going off to work in the mining industry. If you are working in farming, it does not take very long before people working in agriculture realise that they can make more money out of working in the mines. After they have been trained, off they go to the mines.
If you fall out of mining, then—because you have been used to the high payments in mining—it is very difficult to make those hire-purchase payments and things like that. Also, a lot of younger people who have gone into mining have not completed their technical training, because they have been enticed into mining, and then, when they fall out of mining, it is very hard to get a job without any other qualifications—I know that because I have spoken to a lot of people who work with people who have come out of mining without the adequate training and skills to find work elsewhere.
So, in Western Australia, yes, we benefit, but we also have the downside, which is a two-speed economy. And that issue has not been adequately dealt with.
Of course, as we have touched on, and as some other members in the chamber contributing to the debate have touched on, this bill also repeals some very important supports for families, for communities and, particularly, for people who are on lower incomes. For example, the Income Support Bonus is gone. I acknowledge that it is not a lot of money; it is about $105.80 if you are single, and it is paid twice a year. As I pointed out, I think we worked out that it was a cup of coffee a week. But when you do not have much money, every dollar counts. And that money is important when you are on a low income.
Then there is the schoolkids bonus, and that is extremely important to people on low incomes. It is extremely important to single parents, because—and we have traversed the debate on this issue a number of times in this chamber—the successive cuts that have impacted on single parents make it even harder for them to survive. The schoolkids bonus provides a little fill-up, just when they need to get their kids into school or to buy them new school uniforms or buy them necessities, and I have had single parents talk to me about the fact that it has actually helped make ends meet after school holidays, or just as their kids are going into school—because we all know that that is a very expensive time. Also, remember, they threw single parents onto Newstart, and, when they did, a number of single parents told me that they were advised by people at Centrelink to use their schoolkids bonus as a top-up, because they had lost so much money through being dumped from single parent payments onto Newstart.
Then of course you have the low-income superannuation contribution, the loss of which is going to disproportionately impact on women. It is outrageous of this government. It has not fixed the high-end super contribution issues. It picks on the most vulnerable members of our community. Great job! While you look after your top-end-of-town mates, you impact on the most vulnerable members of our community. The low-income superannuation contribution was designed to help those on low and fixed incomes of under $37,000 a year, to help them build up even a modest retirement income. This is from a government that wants to make those same low-paid workers work until they drop, until they are 70, with no adequate super. And they are not doing enough to help them find work, either, when they fall out of work as older workers because they are being discriminated against. They cannot take a trick, these people. They are impacted every single way you look at it, and now you are going to add another hit to them. This cut disproportionately affects women, and Industry Super Australia has said that axing the rebate will affect around two million working women, including 80 per cent of female part-time workers. Older workers—in particular, women—already face discrimination in the workforce, and they have a variety of obstacles to improving their superannuation. It has been well known for a long time that there is a group of women who have very significantly low superannuation, and now you are going to give them another hit; now you are going to give them another cut. Well done! I hope you feel proud of yourselves! While you are looking after your vested interests and your mates at the big end of town, you are impacting on the most vulnerable of Australians. It is outrageous.
This government is clearly running to the calls of the mining industry. We supported the concept and the principles of a strong, effective mining tax, because we know that it is important that the resources of Australia help to contribute to the wellbeing of all Australians. We will not be supporting the repeal of this mining tax. It should be improved, not taken away. And we will not, as I said, support it. We have amendments before the chamber to make sure that these important components of the mining tax are retained. We will not be voting yes to get rid of this mining tax.
We will not help the Treasurer to undermine the budget—because that is what he is doing. The ridiculousness of him going on radio this morning and saying, 'I'm going to have to make more cuts because the Senate has torn holes in our budget,' when he himself is proposing to get rid of two effective generators of revenue for this country, the carbon price and the mining tax! Billions and billions of dollars he and his government are cutting. Well, we will not be aiding and abetting that. We will not be supporting the repeal of the MRRT.
I rise to speak on the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013 [No. 2], and to draw attention to Labor's embarrassing economic credentials and its history of overpromising and underdelivering. When it was first proposed, the minerals resource rent tax was expected to generate some $49.5 billion in revenue, encouraging the Labor government to lock in some $16 billion in expenditure over the current forward estimates. Instead, it has generated just $340 million in net terms. But, more than that, it has created an economic and regulatory environment which spurns investment.
But I want to take you, Mr Acting Deputy President, to my home state of South Australia. The Labor government has based its entire state budget on what went on to be the abandoned expansion of the Olympic Dam mine, which was supposed to deliver huge employment numbers and growth for a languishing South Australian economy. That was not only a blow to the economy but, significantly, a blow to the confidence of all South Australians. Like its federal counterpart, the state Labor government spent its money before it earnt it, and it is of great concern to me that that same Labor government is still in office today.
The minerals resource rent tax was another poorly constructed, poorly executed Labor tax that constrains businesses and shuns investments. Without the investments private enterprise makes, we will not have jobs in Australia and we will not have much of a future. As such, I support this bill that will repeal this useless tax.
The government has shown its true colours with the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013 [No. 2]. The minerals resource rent tax is an efficient tax designed so Australians can share in the wealth we all own. We have a fundamental view that Australians deserve to share in the benefits of minerals we all own.
The repeal of the associated measures will hit Australians right across the board, especially those who can least afford it. It is an attack on all corners of society. Low-income earners, and women disproportionately, will suffer with the removal of the low-income superannuation contribution. Then there are the children of ADF veterans. Small businesses will suffer from increased taxes and compliance costs. Over 50s on the Newstart allowance who require income support to deal with unexpected living costs will not get assistance.
Another associated measure—and the list does not stop—is the discontinuation of company loss carry back. On that one alone I really cannot understand where the Liberal free enterprise spirit is. They do not want to assist small business; they do not want to help small business. In fact, they have said that a good tax and a good system, such as discontinuing company loss carry back, is plain dumb. This will hurt small business. You should be ashamed of yourselves.
Then there is the reduction of the instant asset write-off threshold from $5,000 to $1,000. Why do you hate small business? It does not make sense. Why do you hate small business? They want to discontinue vehicle accelerated depreciation. Again, why do you hate small business? There are many small businesses that could use the loss carry back and higher threshold for accelerated depreciation. Do you think small businesses ride bicycles? That is the only solution I can think of.
Then there is amending the geothermal exploration treatment, rephasing the superannuation guarantee increase and abolishing the schoolkids bonus. There is not a corner of society that they have not attacked in this repeal legislation. We oppose this repeal because it is economically irresponsible and hurts most those who can least afford it.
I was interested to read in The Australian this week that the Reserve Bank Governor, Glenn Stevens, has echoed concerns that we on this side have about the minerals resource rent tax. I think the heading says it all: 'The resources boom should have delivered more'. We benefited from the upswing of the mining boom and welcomed foreign investment—well, not all of us; some of the Nats in the corner over there probably did not welcome it as well as they should have. As we know, they are doormats to the Liberals. They rolled over with the Korean FTA, they really did. Thank goodness they did. We benefited from the upswing and welcomed foreign investment and jobs for construction of railway lines and infrastructure. However, we can draw a line here. The investment phase of the mining boom is coming to an end and the extraction phase is beginning in earnest. So the rivers of iron ore and coal are flowing but, unlike in the investment-construction phase, there will be fewer returns for Australians and more of the returns will flow overseas should this bill pass tonight.
That does not change investment decisions because investment decisions are long-term. They were made five, eight or 10 years out. We all follow that when you have a construction phase you then have a production phase. We are now entering the production phase where there will be opportunities for a return on the investment. This bill is going to squash that just when it should be working.
Economists are in agreement that most other taxes are less efficient than a rent tax. Cutting the minerals resource rent tax just increases the reliance on the more inefficient and less equitable taxes. But I am not surprised. This government has embraced taxes. It loves taxes. It used to say that we should lower taxes. If you look at the range of work that they are doing now, they are embracing taxes. We will get an opportunity to see their outcomes.
Let us turn to the associated spending measures. The Reserve Bank Governor is notoriously reserved. For example, he said in his monthly report about challenges for the Australian economy, 'Public spending is scheduled to be subdued.' Statements like this are perceived by the market to mean that the government's budget cuts will impact growth by reducing overall demand in the economy. It is not such a subtle message. I think the Reserve Bank has overreached itself in making things plain. It normally resorts to more subtle language. In plain language, in language we would understand: taking money out of the economy as the mining boom changes from investment to extraction puts Australia's growth at risk. That is what it does, short and simple.
I was also interested to read an article by Moody's Analytics about the effect of the government programs on the economy in the US. Tax cuts to high-income earners has little effect on increasing the GDP. There is only 35c extra GDP for every $1 of high-income tax breaks. Again you are using bad opportunities when you have good ones in front of you. However, the American child tax credit resulted in $1.38 increase in GDP for every $1 spent. The Washington Post said of this effect:
… tax cuts for lower-income Americans have a much larger multiplier effect on the economy … as they're more likely to spend their tax savings immediately rather than tuck them away into savings accounts.
We, on this side of the chamber, know this is true from our lived experiences. It is a pity some of those on the other side do not have the same lived experiences.
The money from the schoolkids bonus is not squirrelled away for a rainy day. It is needed for the expenses of children at school. The schoolkids bonus is designed to go to people when they need the extra money. When the schoolkids bonus is removed for the purposes of this bill, low- and middle-income families will be hit to the tune of $410 a year for primary school students and $820 a year for high school students. The expenses for parents of school-age children are great—new shoes, schoolbooks, maybe a laptop, maybe an iPad, new uniforms, and the list goes on. That money that is spent by parents goes straight into the non-mining economy. It is also worth noting that the non-mining economy needs some help after the hit to consumer confidence from the budget and the pressures on the Australian manufacturing industry caused by this government.
What about the over-50s who require income support to deal with unexpected cost of living increases? We know this allowance also goes straight into the economy. The over-50s will not get assistance if this repeal is successful. It is a modest payment, that is recognised, of just $210 extra per year for singles and $350 extra per year for couples. The abolition of this payment is opposed by National Seniors Australia. Who would doubt that the seniors need this payment? Who would doubt this payment goes straight into the economy, paying for the emergency plumber or those unexpected medical costs? You do not see seniors squirrelling the money away for a rainy day; it goes into the economy.
The mining companies may squirrel money away. Where will the majority of their gift from the government go? The gift from the government of $3 billion from the resources that we own will go to the owners of the mining companies, which are predominantly overseas owned. This is money that lost to our domestic economy. The Australian Institute states:
... this package as a whole transfers income from something like 10 million Australians, including the poorest ... The main beneficiaries … are a handful of foreign owned corporations that are collectively worth $200 billion.
So when it comes to cuts and increased taxes, where does this government look primarily? It does not look to the big mining companies—it does not there at all. It looks to those on low and middle incomes. This is bad for the economy.
Let me make a prediction. We can expect a negative effect on the GDP for every dollar taken out of their pockets. The cuts associated with this bill and the other cruel cuts in the budget target those who can least afford it. Not only is this cruel to those on low incomes and those with children; it damages growth and damages business confidence. But hurting the economy is just one reason not to remove the measure associated with the minerals resource rent tax. The repeal of these measures will cause real hardship for hardworking Australians. I have ready touched on the hardships that families will feel from losing the schoolkids bonus, a hardship at a particularly tough time. I have also touched on the income support bonus, a payment of little over $200 that goes to Australians who are most in need. Children of veterans aged under-16 who are homeless or living away from home, or those under 25 who are unemployed or studying full time would have been entitled to receive this payment. It is a small thing to recognise their service, but the coalition have decided that these people do not deserve our country's support. Quite frankly, that is a shame.
The removal of the low-income superannuation contribution, despite a promise by the Prime Minister to not implement adverse changes to superannuation, will affect individuals by cutting the super of millions of Australians earning up to $37,000. But it will increase the super for the 16,000 people who have over $2 million in super balances. I think that says it all. That represents the modern coalition government. They will take from the poor and make sure the rich get richer. The MRRT repeal will increase superannuation taxes on one in three of Australia's lowest paid workers. This is a very strange move from a party that claims to be the party for lower taxes. No wonder Senator Cory Bernardi thought they had lost their way!
It is those on low and middle incomes, especially those in rural and regional areas, who will be disproportionately affected by the removal of these measures. Twenty-four of the 25 electorates that will be hardest hit by the removal of the low-income super guarantee are in—guess where?—rural and regional areas. They will be impacted the hardest. I have no doubt that the National Party will go out and tell them that! They will walk out of this place and go to their electorates and say: 'By the way, we've got rid of the MRRT and in the meantime we are also taking super from you. Isn't that fantastic!' I would have expected the National senators to have opposed this and to be up in arms. But we all know their histrionics. They like to play the game in here, but they go back to their electorate and there is not a whisper.
It has been a long time since the Nationals have stood up for working people in rural and regional Australia. One surprising proposal is their cuts to local government. That will hurt local communities.
Senator Mason interjecting—
Senator Jacinta Collins interjecting—
That's fantastic! I had a letter from the mayor of Cowra telling me that cuts to the financial assistance grants will hurt the shire—$38,000 out of their budget in the first year that will not be spent on local roads and community bridges and infrastructure. And you wonder where the Nationals are when it comes to their local communities in regional areas Nowhere. They may be here, but they are not there supporting their regional communities. Cuts to superannuation hurt infrastructure. Superannuation invested in super funds drives investment in infrastructure in Australia. Industry Super Australia estimates that, combined with the proposed delay in increasing the superannuation guarantee to 12 per cent, the removal of this superannuation will reduce national savings by $53 billion by 2021-22. That is $53 billion less invested in projects like Australian infrastructure. The reduction in available capital for infrastructure investment is forecast to be $5 billion based on current industry-wide asset allocations. This is at a time when the government is scratching around for funding streams to finance new infrastructure projects. Rural communities especially need this vital infrastructure.
Low-income superannuation contributions are important for many reasons while, for high-income earners, superannuation does have tax advantages. However, for low-income earners there are effective incentives to encourage superannuation contributions. That is why they structured the low-income superannuation contribution, because it addresses this very issue and stops low-income earners being at a disadvantage when it comes to savings. The Financial Planning Association of Australia was clear on this point. They said repealing the low-income superannuation contribution will disproportionately affect already disadvantaged members of Australian society and dissuade low-income earners from engaging with their superannuation. The removal will particularly hit women; 2.1 million women will be affected. Many are mothers working part-time while looking after young children. This is exactly the part of a woman's career where an additional $500 a year going into superannuation will be of the most benefit for building savings now and into the future for her retirement.
The 20 big miners are going to get a gift of $3.3 billion, and Australian businesses and taxpayers will lose out. The budget—and the approach that the government has adopted since taking office—says a lot about the values of this government. A tax grab on millions of Australian low-paid workers to give a tax refund to large mining companies seems to now be Liberal Party values. The minerals resource rent tax is not paid by a young family; a pensioner does not pay this tax; a truck driver, a farmer and a shearer do not pay a cent of this tax. The only group that pay this tax are mining companies with profits over $75 million. Only those with profits over $75 million begin to pay this tax—fewer than 20 companies in 2012-13. However, the people who suffer from the MRRT repeal are more diverse: small businesses, parents, school children, people saving for their retirement, those on low incomes, those exploring for geothermal energy, and the children of veterans.
The coalition rails against class warfare. However, when you look at the coalition and this bill, they practice class warfare to a tee. They are taking from small businesses, retirees, pensioners, parents and school children to increase the rent extracted from a shared resource by a select few who are earning profits over $75 million. That is the stark difference between the coalition—supported, surprisingly, by the Nationals—and us. The removal of the associated measures will impact on those members of the community who can least afford it. And you only have to look at the results of this. Again, I go back to where I started: I cannot fathom why you hate small business so much that you will not give them the tools to be able to have loss carry-back, to have accelerated depreciation, to have an asset write-off at $5,000—it does not make sense to me. Those on the other side have always said that they embrace small business and that they support small business. They are certainly not showing their colours now.
For many months, we have been told by this government that we have a budget emergency. We have been told by the government that we have a debt crisis and that we are going to run out of money. Indeed, I think the Treasurer, Joe Hockey, went so far as to say that we were running out of money and the cupboard was bare. He effectively declared the country bankrupt. You would think that, faced with a crisis of such herculean proportions—conjuring up images of the soup kitchens of the Great Depression—a government would be looking very hard at potential revenue measures and savings. It might look at the huge savings that could be gained from the enormous fuel subsidies given to industries like the mining industry. It might look at all of the depreciation benefits given to those same industries—worth billions of dollars. It may even look at things like superannuation tax concessions—things that benefit, disproportionately, people on very high incomes over those on low incomes. It might even look at something like negative gearing. It might look at revenues and it might say, 'Well, maybe there is a case, given that our big four banks are so profitable and that we in fact underwrite their success, to say that they should be obliged to provide a fair return.' It might look at the current mining tax and say, 'Well, why not strengthen it? Why not look at how we can ensure that we get a fairer share of the revenue from the mining industry?'
It might even look at the industries that are ensuring they pay very little tax here, looking for tax havens overseas and involved in one of the greatest corporate tax avoidance schemes that we have seen. You would think that might be a rational, reasonable reaction when faced with this budget crisis that lies ahead of us, but what is their reaction? Our budget emergency is so extreme, so severe and so catastrophic that, faced with that enormous challenge, one of the first acts of this government is, on this day, to get rid of $20 billion of government revenue. Sit back and think about that for a moment. This is a budgetary crisis of such enormous proportion that today we are wiping $20 billion from the budget bottom line. If there were ever proof that this budget emergency, this debt crisis, is simply a fabrication—something concocted in a coalition backroom today—you have seen the evidence.
The debates today have not just been debates about the mining tax and, earlier, the clean energy laws and the carbon tax. They are not simply debates about those taxes in isolation. They are debates about the sort of country we want to be. They are debates about priorities. They are debates about whether we can provide the things that the Australian community wants. We have choices. We can choose to keep the revenue from the mining tax. We could have chosen to keep the revenue from the carbon tax and we could have invested billions of dollars in health care, education, science, research and development, and vital infrastructure. We could have done that. We could have chosen to invest that money in the things that the Australian community say, time and time again, they want their government to do.
The other choice is this: we abolish those taxes and we slug the sick, the poor and the young in an effort to implement our agenda, which is a harsh agenda, that says, 'Get out of the road, Government. If you're sick, if you're poor or if you're young, we're no longer going to look after you.' It is a great tragedy because we had an opportunity today to not just save the mining tax but improve it, strengthen it and return to the original tax proposed by Kevin Rudd, backed by Treasury, to bring in billions of dollars more of revenue. It is a fair tax. It is a tax that says: 'If you're making extraordinary profits, most of which go offshore, you owe the country a fair share,' because the resources, the minerals, underneath our feet belong to every one of us. That is what we should have been doing today.
How do you reconcile where we have got to? How do you reconcile the mismatch between the rhetoric and the actions of the government? How can you understand, at a time when we have this enormous budget emergency, that we are slugging the people who can least afford it and we are abolishing sensible sources of revenue? I think the answer represents everything that is wrong in Australian politics. I think that is where it comes from. It is a testament to the power of lobbyists and vested interests who have unprecedented access to the decision makers in this country. Every day you see them walking through the corridors, knocking on doors, inside and outside of ministerial offices—people who are here to advance their own interest ahead of the national interest. The line between what is a lobbyist and what is a decision maker has become more and more blurred in this place. We are now seeing people from industry becoming employed as members of staff and, indeed, in some cases, becoming members of parliament, doing the bidding of big business rather than putting the national interest first.
It is not just a story of the power of special interests; it is also a story about the lack of political courage and conviction. It is the lack of political courage and conviction that gives the special interests in this place their power. We no longer believe enough in a cause to take a stand and say, 'We will fight this and see it through.' We have seen it with a number of other reforms. We saw it with poker machines; we saw it recently with junk food advertising and junk food labelling; we saw it with alcohol—we have seen it with a number of areas where the interests of a few are put ahead of the national interest. We need to realise that those groups only have their power because we give it to them, because we are not prepared to take up the fight. We are prepared to cave-in in the face of cashed-up advertising campaigns. We need to ensure that we put the interests of people who want a decent education, decent health care and, if they are down on their luck, welfare support. We have to put their interests first.
It is also a story about the huge disconnect between our politicians and the community. There is an emerging disconnect. When a government chooses to abolish sensible revenue measures and implement a budget so harsh, so brutal and so severe—a budget that effectively destroys the social contract that was built over decades—you know something is wrong.
We have heard a lot of discussion about mandates and this government's mandate to implement these policies. But these choices were never put to the Australian community. We now have a government that is governing not because it was honest enough to put these choices to the Australian community but simply because it is not the current opposition. That is what the last election was about. The election of 2013 could have been summarised in this way: vote for us because we're not them. That is your mandate: to govern because you are not the opposition. It was an election campaign that was devoid of any vision, ideas or policies of substance. So do not mistake your election victory as a mandate to abolish these sources of revenue and, instead, tax the sick, the poor and the young. Do not make that mistake. The truth is that you were too frightened to put those choices to the Australian community. And do you know why you were frightened? Because you knew you would lose.
Faced with the choice: do we want a fair mining tax, a decent education system, a decent health system and welfare support for people when they are down on their luck? We know what the Australian community want. They have said it time and time and time again. Most Australians want decent health care. Most Australians want to be able to go to the doctor and not have to think about their bank balance before they do. Most families want to send their kids to university and not have to think about what the legacy of that education will be for their children.
Most Australians want adequate investment in infrastructure. They want fast, frequent and reliable public transport. They want investment in science. They do not want cuts to CSIRO. They want to see that institution expand and grow. They want investment in research and development. And they would support a stronger mining tax if they knew that that was the choice in front of them. But you did not give them that choice, because you lacked the courage to do it. You knew your vision was so brutal, so unpopular, so lacking in support that you were afraid to put it to the Australian community. Instead, we have a government that uses the word 'mandate' as though it has some meaning. You are only governing because you were dishonest and because you are not the opposition. That is why you are here.
So I simply say this to Prime Minister Abbott: 'If you are determined to scrap these taxes and shred the social contract that we fought so hard over so many decades to establish, understand this—you do it at your peril.'
I too rise tonight to speak against the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013 [No.2]. Labor believes that all Australians own a share of our mineral resources. Labor believes that all Australians should share in the profits that come from extracting our natural resources. That is why Labor, when in government, introduced the MRRT.
Those opposite are seeking to repeal this tax. The Abbott government is happy to see all these profits go straight into the pockets of just a few people. This government is beholden to the special interests of big business and the super rich. This government, by its first budget, has clearly shown that it does not understand the pressures facing low- and middle-income Australians.
To justify the repeal of this tax and the so-called related measures in this bill, those opposite rely on two contradictory arguments. Firstly, they argue that this tax is hurting industry. Secondly, they argue that it is not raising any revenue. They cannot have it both ways. In addition to repealing the MRRT, the bill before us today axes a variety of government payments, support bonuses and tax breaks that benefit Australians. These are initiatives, introduced by the Labor government, that make life a little easier for families, schoolchildren, retirees and businesses. But now those opposite want mining companies, making superprofits, to pay less tax and they want small businesses and the lowest paid workers to pay more tax. This legislation is a retrospective tax grab, which will hit millions of Australians—low-income earners, families and small businesses—and will give a tax refund to large mining companies. That is why Labor will again oppose this bill, the removal of the minerals resource rent tax and associated measures.
I wish to speak further about some of the associated measures. The first of those measures in the bill is the schoolkids bonus. Many in this chamber will remember that the Treasurer, Mr Hockey, put out this legislation to the public late last year, on a Friday. Attached to this piece of legislation, to many people's amazement, was the repeal of the schoolkids bonus.
This payment currently benefits over 2.2 million school-aged children across the nation. It is a payment that is not linked in any way with the MRRT, despite the government's rhetoric. This is a vital payment that helps low- and middle-income families ensure that children are equipped and ready to engage in school. According to evidence given by ACOSS to the Senate Economics Legislation Committee inquiry into the Minerals Resource Rent Tax Repeal and Other Measures Bill, one in six children in Australia is living in poverty. That is over half a million children whose families may be unable, without the schoolkids bonus, to buy them school shoes or books. These are the very same families that have been hardest hit by the vicious cuts in the Abbott government's budget.
Evidence has been provided to me by the President of the Tasmanian Association of State School Organisations, Ms Jenny Eddington, who has indicated quite strongly how important and effective this particular payment is to families to enable them to provide the necessities that children need to be able to go to school.
Earlier this month about 1.3 million families welcomed the July instalment of the schoolkids bonus. This instalment of $205 per primary school student and $410 per high school student will help families—and it has been shown that it has been effective and is helping families—with the cost of school uniforms, shoes and sports equipment. In my home state of Tasmania more than 35,000 families received this payment. Many of these families have contacted me to tell me how important this payment has been to them, and just recently we tabled a petition in the Senate asking that the schoolkids bonus be spared from the Abbott government's axe.
The Tasmanian Association of State School Organisations President Jenny Eddington told me that the surveys they have conducted show that families rely heavily on this payment to properly equip their children for school. She said: 'It's important we keep this bonus. It's one of the single most valuable payments that has been made in recent years.' School associations have told me that, since the schoolkids bonus was introduced, there have been more children arriving better-prepared to start the school year and there are fewer parents taking out payment plans to pay off their levies.
I know that those opposite do not understand this. They do not understand the financial pressures facing families, or they would not be taking this measure. They do not understand how important this payment is to help families meet the cost of their children's education. It is a fair and reasonable payment that has helped many Tasmanian families, especially those on low and middle incomes. But as we have seen in the Abbott government's first budget, they do not understand or do not care about—I prefer to believe they do not understand—the financial pressures facing low- and middle-income families. We need to ensure that our kids are as well-equipped as possible to be able to get a great education. It is a real kick in the guts for hardworking families putting their children through school.
Scrapping the schoolkids bonus means the average Australian family with two kids will be $1,230 worse off every year and $15,000 worse off over the life of their child's education. It is a cruel and underhanded move by the Abbott government which will hurt families who are already struggling. Not only is this government ripping off Australian families, it is trying to fool them about the reasons why. Those opposite claim that the schoolkids bonus was paid for by the MRRT. It was not. It has nothing to do with the minerals resource package, and those opposite know it. The schoolkids bonus replaced the education tax refund. The education tax refund was introduced in 2008 to help families cover the cost of educating their children. However, more than 80 per cent of families did not claim the full amount they were entitled to and 20 per cent did not claim anything at all. Some families lost their receipts, or simply did not keep them, or were unable to afford to pay for their children's school uniforms or other education costs first up and then wait months, or even up to a year, for a reimbursement on their tax. The schoolkids bonus simplified the process by making two up-front payments to parents when they needed it most. This government is trying to play Australian families for fools by repealing the schoolkids bonus as part of this package and as part of this bill.
This government seem intent on misleading the Australian people by blaming the minerals resource rent tax for cuts that have absolutely nothing to do with the tax. When the Prime Minister visited Tasmania he said regional development funding would be scrapped because it was paid for by the minerals resource rent tax. Here is what he said at his press conference in Wynyard in north-west Tasmania when asked about a Regional Development Australia Fund grant budgeted in May for the redevelopment of the Royal Hobart Showgrounds at Glenorchy in the electorate of Denison:
[It was] associated with the mining tax. Because we are abolishing the mining tax, we would abolish the programs and funding associated with it, unless we specifically committed to it ourselves. Sure, the [Labor] government announced the money for the showgrounds out of those funds. We didn't match it, so we are not committed to it.
So Mr Abbott is trying to use the minerals resource rent tax as a front to scrap vital infrastructure funding for Tasmania—a job creating project. It showed the Prime Minister clearly had not done his homework and clearly had no regard for jobs in Tasmania. The money for the showgrounds was not a part of the minerals resource rent tax. Labor put this money in the budget under the Regional Development Australia Fund. Despite the fact that Mr Abbott had his wires crossed and had not done his homework, his statement clearly shows that he would rather line the pockets of big mining companies than help communities like mine create jobs and growth.
I would now like to talk briefly about the low income superannuation contribution. The low income superannuation contribution, which helps one-third of the Australian workforce, is also on the chopping block here tonight—and Mr Abbott's government plans to implement that retrospectively. The low income super contribution currently benefits almost 3.6 million Australians who earn up to $37,000 per year by refunding their superannuation tax by up to $500 each year. We should not penalise the lowest-paid workers in our society for saving for their retirement, and certainly not retrospectively. Those hurt most by losing their low income super contribution are those who can least afford it.
Analysis done last year showed that 87,000 Tasmanians would benefit from the low income superannuation contribution. And now checkout operators, office cashiers, childcare employees, hairdressers, hospitality workers, midwives, receptionists and many others will lose this support. Part-time workers, young workers, older workers and half of the female Australian workforce will be hit by this move. Women face many challenges when saving for their retirement. We are paid less on average, often leave the workforce temporarily to have children, are over represented in lower-paid jobs and face barriers later in life. It is sickening that Minerals Resource Rent Tax Repeal and Other Measures Bill, which puts more money in the pockets of the big miners, penalises half of the female workforce in this country. It goes completely against the Australian values of equality and fairness.
The ABC has reported that, according to Industry Super Australia, this action by the coalition, those opposite, would cut as much as $27,000 from the retirement savings of almost 3.6 million Australians, and mostly—I will repeat for the benefit of those opposite—women and young workers. This is according to the body representing industry funds, Industry Super Australia. Industry Super Australia's chief executive David Whiteley says the changes are unfair and unsustainable. The ISA's submission also says the changes will disproportionately affect four in 10 regional and rural Australians. Mr Whiteley said the changes leave low-income workers without a tax concession on their superannuation, while those on high incomes already receive concessions. To quote Mr Whiteley: 'We would be very keen to see that this committee recommends to the parliament that every option is exhausted to make sure that all Australians are getting access to tax concessions on their super.' The ISA warns axing the rebate will undermine efforts to improve half of working Australian women's retirement savings, including 80 per cent of female part-time workers—all this as Mr Abbott's government plans to roll back the proposed 15 per cent tax on superannuation earnings over $100,000 a year.
As our population gets older, how on earth can it make sense to gut the superannuation savings of ordinary, working Australians? Surely the government would want retirees to prepare for an independent retirement? But here Mr Abbott is hacking away at the superannuation savings of low-income earning Australians to line the pockets of big miners. It is bad enough to ramp up taxes on workers who can least afford it, but making the new rules retrospective is cruel.
The Liberals have never supported the superannuation guarantee. Mr Abbott is on record as saying to parliament as far back as 1995:
Compulsory superannuation is one of the biggest con jobs ever foisted by government on the Australian people.
And in 2012 he stated:
We have always as a Coalition been against compulsory superannuation increases.
This is a government that is against helping out hardworking Australians on lower incomes—all the while shovelling money back onto the pile of money the big miners are already in possession of. It is not how the resources of our country should be used. The benefits they bring should be shared by all of us, especially those in our workforce. But this sort of mean-spirited move is, after just a few months, already becoming Mr Abbott's government's trademark.
I will take a few months to comment on the changes to the instant asset tax write-off and the loss carry-back tax incentives. These changes show that it is not just workers who are in Mr Abbott's sights; the leader of the Liberal Party, the so-called friend of small business, plans to make life tougher for small business as well. The Prime Minister plans to axe Labor's increase to the instant asset tax write-off, which saved businesses thousands of dollars at tax time. Under Labor's initiative, small businesses were able to write-off depreciating assets that cost less than $6,500. Those businesses have now been given until 1 January to make their purchases before the figure reverts to the former Howard government figure of $1,000.
The loss carry-back tax incentives allowed businesses to spread up to $300,000 as a refundable tax offset via the carry-back provision for the previous two years. Mr Abbott's cutting of the loss carry-back will hit more than 100,000 companies and will tear more than $900 million from the Australian economy. This was a law that allowed businesses to adapt to changing business and economic conditions. Similar schemes are in place in other developed economies, including the United Kingdom, France, Germany and the United States. These 100,000 companies have been given less flexibility, making it much harder to do business. How can that be good for businesses? It does not seem to matter to this government or Mr Abbott—as long as those big miners get their money.
Mr Abbott's push to strip back the minerals resource rent tax and to cut tax concessions, payments and bonuses is not only unfair but is also unpopular. In an article in the Australian on 4 November the headline rung out 'Business takes aim at MRRT repeal'. The article by Sid Maher said:
A TOP business group has attacked Tony Abbott's plans to scrap nearly $4 billion in tax concessions for mainly small businesses as part of the axing of the mining tax, arguing that it will permanently increase compliance costs and cut investment returns at a time when business is struggling.
The Australian Industry Group has told the government that its plans to reduce the thresholds available under the small business asset write-off regime from $6,500 to $1,000 'will add complexity and compliance costs for eligible small businesses'. Ai Group chief executive Innes Willox said in a submission:
It will subtract from their cash flow over the next few years at a time when many small businesses are struggling and it will reduce the return on new investment at a time when there is weak investment outside of the mining-sector.
The Liberal Party, the so-called friend of business, is so clouded by its determination to give money to the miners that it will hurt businesses. At a time when this country needs to be encouraging small business and diversifying the economy, Mr Abbott simply wants to rip money out of the economy and place it back in the pockets of the big miners. Schoolchildren, families, workers and business all will cop it so the miners get their money. It is a growing list of people who are unhappy with the Abbott government's move. But there is more. Australians on a raft of allowances are also set to suffer, with the loss of the income support bonus. This payment provides $210 extra per year for singles and $350 extra per year for couples. I have not much time left to me, but I will repeat: this bill before us is set to hit workers, families and businesses. It is an unfair bill. It is a bill that only benefits the big miners and it rips money from those that can least afford it to give back to the big mining companies.
What a week! We have seen the government really deliver in spades, so to speak, to the mining industry. They are right out there, you would have to say—sycophantic, pandering. It is going to be tough, because, when you do not have such a revenue stream coming in, somebody has to pay. What we are seeing here is a very clear reason why the coalition has earnt its name as the party of the one per cent. The government is actually propping up a dying industry, particularly when it comes to the mining of coal and the use of coal. The world is starting to turn its back on this industry—and that is why, at this moment, when Australia does have these resources that are being mined, and sections of the world do want them, rather than repealing this tax, we should be strengthening it. That is something that the Greens have long worked for and that is what should be happening tonight—but we know in fact it is going in a very ugly direction.
We will lose this very rich revenue stream. It is very simple, what is going on here tonight. Mining companies make massive profits, huge amounts of money, out of digging up the resources of this country. Surely much more of that money should come back to Australia, because by far the bulk of the profits go overseas. And we are talking really big profits. Just take three of the big mining companies—BHP, Rio Tinto and Xstrata. They are on track for $30 billion in after-tax profits for one year. That is not unusual. That is what has been going on year in, year out. I certainly acknowledge they are not just the profits from digging up our mineral wealth—they come from around the world—but a lot of the profits come from Australia. And, like they are ripping off Australia, so many of these companies are ripping off other countries, particularly many of the low-income countries.
I think we also need to ask ourselves: when we lose this revenue stream, who will pay? It will be the disadvantaged, who are copping it as we have seen set out in the budget. People who have been really targeted in this budget include the sick, Indigenous people, the elderly, students and people who are unemployed. They are the people who will carry the burden. Also it will be working people, because the taxes, the money, will have to come from somewhere. We again need to remind ourselves that the mining tax could be and should be a rich revenue stream. That was what was originally envisaged by the Henry tax review. It could have brought in $35 billion in the original form, with some of the loopholes plugged. That is where we should be heading. That is what big business should be paying for.
I think it is worth reminding ourselves what that money could and should have been spent on. This is the Australia that I think most of us envisage. It is just that, unfortunately, the policies of this very conservative, neoliberal government cannot deliver it for us because of the mean, greedy way they operate. We should have dental care. It is an extraordinary aspect of our medical service that the health of our teeth is not covered in a free universal health scheme. We should have high-speed rail—something the Greens have worked on for so long, along with so many in the community—along the east coast. The jobs boom that that would bring is so exciting. But, if we do not have the revenue there, it is certainly off for a long time. There are issues to do with disability, with welfare, with public education. With regard to our higher education system, so much of Europe still has a free higher education system. This is not just light talk. This is not just something that is a dream of a past era. It is achievable. The revenue is there. We need a government with the political will to raise the money. Then there is the all-important area of overseas aid. We heard just yesterday that the government has come up with another way of taking money out of the overseas aid budget. Again, this is where we should be on track to get to 0.7 per cent of GDP, and we could be if the government had the political will to stick with and improve the mining tax.
I congratulate Senator Christine Milne and the Greens MP for Melbourne, Adam Bandt, who have consistently worked to strengthen this tax and save this important legislation. We have to acknowledge that this legislation has had an unfortunate history, with Labor watering it down from what was originally envisaged. That certainly was a setback. There has also been the problem with the loopholes. A deal was negotiated with the big miners, and they won hands down and the Commonwealth lost out. We lost out at a federal level in terms of funding, because every time the state premiers raised royalties it was a hit to Commonwealth revenue. The Greens worked, with a private member's bill, to try and tighten up those loopholes and eliminate them. Again, there were so many possibilities with this legislation, and this was a big setback.
We also need to remember that a part of this story that we are dealing with tonight is the power of the mining companies. That is why Labor went for a weaker form of the tax and the coalition have delivered in spades. The coalition and Labor have benefited. Considering the wealth of the mining industry, I do not think it is that much, but, since 1998, the political donations to the Labor, Liberal and National parties run at more than $11 million. That is the amount of political donations to those parties over the period of time since 1998. These companies probably think it is just a bit of petty cash for them, considering the profits they make and what they get back. But they have got a lot more than just this weakening of the tax. I am from New South Wales, and what I have seen, year in, year out, from successive state Labor and coalition governments is a weakening of laws and a level of corporate welfare to the mining industry that is really quite staggering.