Bill and explanatory memorandum presented by Mr Ruddock.
Bill read a first time.
I move:
That this bill be now read a second time.
This bill amends the Family Law Act 1975 to validate retrospectively the imposition of an unauthorised filing fee for divorce matters in Western Australia.
In July 2005, the filing fee in the Federal Magistrates Court for divorce applications under the Family Law Act was increased from $288 to $334. The fee in the Federal Magistrates Court for divorce applications applies to all divorce applications throughout Australia, except Western Australia. In 1976, under section 41 of the Family Law Act, Western Australia established the only state family court in Australia—the Family Court of Western Australia.
The filing fee for a divorce order in the Family Court of Western Australia is set by regulations made under the Family Law Act. Subregulation 11(1A) of the Family Law Regulations 1984 prescribes the filing fee for a divorce order in the Family Court of Western Australia, whereas the equivalent fee in the Federal Magistrates Court is set by the Federal Magistrates Regulations 2000.
To ensure consistency in the treatment of applicants across Australia, the filing fee for a divorce order in the Family Court of Western Australia matches the equivalent Federal Magistrates Court fee. However, due to an oversight, when the filing fee for a divorce application in the Federal Magistrates Court was increased in July 2005, a corresponding amendment to subregulation 11(1A) of the Family Law Regulations to increase the fee in the Family Court of Western Australia was not made.
The Family Court of Western Australia assumed the necessary amendment to the Family Law Regulations had been made and mistakenly began to charge the increased fee. It raised the fee from $334 to $352 on 1 July 2006 when the Federal Magistrates Court fee was subject to a routine biennial increase.
Steps were taken to rectify the oversight as soon as it was realised. As of 9 October 2006, subregulation 11(1A) was amended to bring the divorce fee in Western Australia into line with the rest of Australia.
It has always been the government’s intention to have a divorce fee which is consistent throughout Australia, and this was in fact the case from 1 July 2006 until 9 October 2006. During that period, the Family Court of Western Australia charged applicants the correct fees but did so without legal authority. The purpose of the present bill is to validate the fees which were charged during that period.
This is a straightforward, technical amendment to correct an honest mistake, and one which will ensure equality of treatment for all Australians who paid this fee during the period in question.
I commend this bill to the House.
Debate (on motion by Mr Crean) adjourned.
Bill and explanatory memorandum presented by Mr Ian Macfarlane.
Bill read a first time.
I move:
That this bill be now read a second time.
The Australian automotive industry is recognised worldwide for its innovation, its quality standards and its expertise in design and engineering. The government provides significant support to the industry through the Automotive Competitiveness and Investment Scheme, ACIS. ACIS is a transitional assistance scheme which encourages the industry to become internationally competitive through investing in its own future at a time of phased tariff reductions. Through these arrangements, the government has provided the automotive industry with another decade of certainty, building on the five years of certainty it received under the first ACIS plan.
The participants in ACIS number about 250 and they include the four motor vehicle producers, automotive component producers, automotive toolmakers and automotive service providers. ACIS delivers assistance to participants through the issuing of duty credits and it will provide over $4 billion in assistance during the period from 2006 to 2015. This is an unprecedented assistance program of over $7 billion delivered to the industry in a well set out tariff reduction program which only occurs every five years, as distinct from the program of the Labor Party, who had an ad hoc method every year.
Assistance is provided up-front—that is, duty credits are issued on receipt of quarterly claims by a registered ACIS participant. A subsequent audit process ensures that claims are legitimate and that they relate to eligible expenditure. If items of ineligible expenditure or other errors are identified, an unearned credit liability (UCL) is issued to the participant and this is offset against their future ACIS credits.
A recent decision of the Administrative Appeals Tribunal has important implications for the Commonwealth’s ability to issue UCLs under the ACIS act, other than in very limited circumstances. That decision has raised the prospect that claims of participants may have to be fully assessed as to their eligibility prior to any credits being issued.
It would be unacceptable from a financial management perspective for the Commonwealth to be issuing credits unless it is certain that it has the ability to recoup any credits issued to which a participant is subsequently found not to be entitled.
The up-front assessment of all claims would result in lengthy delays in the issuing of duty credits—delays which could impose significant financial hardship on members of the automotive industry.
The industry has long accepted that the approach of issuing credits up-front then issuing UCLs should ineligible expenditure be identified is the best way for them to receive credits in a timely manner and the Commonwealth is keen to ensure that approach can continue.
This bill will confirm the Commonwealth’s ability to issue UCLs. It will ensure that the industry can continue to receive credits as soon as practicable after they submit their quarterly returns and it will ensure that the ACIS scheme can continue to be administered in the manner agreed by all parties when it was first established.
In summary, the amendments I am introducing today are designed solely to restore to the Commonwealth the power to administer the ACIS scheme in a manner that best meets the needs of the Australian automotive industry.
Debate (on motion by Mr Crean) adjourned.
Bill and explanatory memorandum presented by Mr Brough.
Bill read a first time.
I move:
That this bill be now read a second time.
I have great pleasure in introducing the Human Services (Enhanced Service Delivery) Bill 2007.
As its name makes clear, this bill is about providing a better, simpler and more secure way of delivering health and social services and payments to the Australian people.
The Australian government provides over $100 billion worth of taxpayers’ money each year in health and social service payments. Australian taxpayers have a right to expect that their money is spent in a way that ensures that only those individuals who are entitled to benefits receive them—and that the individuals who receive them receive that money on time and in the correct manner.
The bill that I am introducing today will provide Australians with an upgraded Medicare card. This card will replace up to 16 other cards and vouchers and will make dealing with the government easier, faster and far less complex.
This bill is the first part of the legislative package to establish the framework to support the upgraded Medicare card—or access card. It will put some certainty around some of the issues that are of most interest to the community.
Later legislation will deal with the review and appeal processes for administrative decisions, further elements of information protection and legislative issues relating to the use of the card, including in relation to dependants.
In particular, this bill incorporates many of the recommendations that were made by the Access Card Consumer and Privacy Taskforce, led by Professor Allan Fels AO.
The government has, and will continue to adopt, a highly consultative approach in developing and implementing the access card and associated legislation. To date:
As part of the commitment to involve the public in this process, the government released an exposure draft of the bill for public comment on 13 December 2006. More than 120 submissions were received from non-government organisations and individuals, as well as from state, territory and federal government departments and agencies in response to the exposure draft. Every one of these submissions has been considered. Appropriate suggestions from the submissions have now been included in the bill that I present today.
Many of the comments received on the exposure draft related to matters that are proposed for subsequent legislation. Consultations are continuing on a range of these issues, such as the use of the card in dealing with dependants. The Consumer and Privacy Taskforce has been asked to continue its consultations and provide advice on a range of these issues, including in relation to appeal mechanisms.
This bill introduces a transformational change to the delivery of Commonwealth benefits. It proposes an evolution in Australia’s health and social services system. The changes proposed in this bill will take this system from the technology stone age to a modern, simpler and more secure way of delivering health and social services.
The scaremongers will say that the access card is an ID card. It is not a national identity card. And it is not the Australia Card that the Australian Labor Party introduced in 1986. Under the Australia Card Bill, you could not conduct your normal affairs without having to produce your card. You could not open a bank account, buy a house or get a job without producing your Australia Card. You could not withdraw money from your savings account, send money overseas or buy shares without producing your Australia Card. Labor’s Australia Card was a true national identity card and was rightly rejected by the Australian people.
The access card established by this bill has none of these features and has limited uses which are clearly described by the bill. The card:
What is being proposed in this bill keeps Australia aligned with developments in the rest of the world, where service delivery, using smartcard technology, is being used to improve the convenient, secure and efficient delivery of services to citizens and, importantly, to reduce fraud.
Over the next 10 years this government will be distributing almost $1 trillion in health and social services benefits. That significant sum of money provides enormous risks. To put it simply, Australian taxpayers can be ‘ripped off’. KPMG has estimated that the government will save three thousand million dollars over the next 10 years by introducing the upgraded chip based Medicare card.
Leading edge smartcard technology will be used in the access card. The current technology, including cardboard cards and simple plastic cards, is outdated and has proven highly vulnerable to improper copying in a way which exposes the system to fraud. Better and more advanced technologies are now available that can replace and improve the 23-year-old technology that our Medicare cards are built on.
Medicare cards were introduced almost a quarter of a century ago. Back then, cars did not have safety and security features like airbags or engine-locking systems. We upgrade our cars to make full use of modern security systems to protect ourselves and our families. We should now be doing the same with our Medicare cards.
The Medicare card is cheap and easy to fraudulently copy. Recently the Australian Federal Police estimated that Medicare cards are involved in some way in more than 50 per cent of identity fraud cases. In a recent speech to a counterterrorism summit, the Australian Federal Police Commissioner, Mick Keelty, estimated that identity fraud costs Australians anywhere between $1 billion and $4 billion annually.
To give just a few quick examples:
In each of these cases a false identity was created.
With the new access card, the registration process for the card will require people to provide robust proof of their identity through substantially improved procedures.
Unlike the current arrangements, the new system will detect people trying to register under two identities. We will be able to catch fraudsters before it costs Australian taxpayers large, and often unrecoverable, amounts of money.
While this bill may be opposed by some on the other side of politics—the ‘friends of fraud’, some would say—it will respond to the concerns of hardworking Australians who are sick of people cheating the system and getting away with it.
Apart from the clear benefits the card will provide in combating fraud, it will also play a significant role in streamlining the current cumbersome and time-consuming system for delivering health and social services benefits.
The new access card will mean that consumers will only need to register once for a service and only notify participating agencies once of changes in circumstances, such as a change of address. The services include those now provided by or through the departments of veterans’ affairs and human services, including the Child Support Agency, CRS Australia, Medicare Australia, Centrelink, Australian Hearing Services and Health Services Australia.
The measures in this bill will reduce the time spent filling out forms and waiting in queues and will provide customers with greater options to access their benefits. The new card may well represent the most significant reduction in red tape for individuals that Australians have ever witnessed.
One of the many benefits of the new access card is that it will be able to be used for emergency payments in situations such as those that occurred in March last year in Innisfail after Cyclone Larry left the town isolated and without electricity. Centrelink officers were required to work innovatively with banks and their customers to ensure that people had ready access to money to buy food and other essential items. The new access card will make it easier to assist people in such emergencies and it will enable them to use their new card to access government assistance immediately.
Some opponents of the access card have argued that the register that will be established under this bill will be a centralised megadatabase. The register will not be amalgamated with the databases of existing participating agencies. It will be established separately from participating agency databases and will not contain medical or health information. It will not contain transactional records. Detailed customer records will continue to be held separately by Centrelink, Medicare Australia, the Department of Veterans’ Affairs and the other participating agencies.
As to the card itself, it will only have limited information on display—less than all state and territory drivers licences currently show. The bill provides that the only mandatory information on the card will be a photo of the card owner, the owner’s name, his or her digitised signature and the card’s expiry date and number. A future government will not be able to require any further details to be added to the surface of the card without full debate in this parliament and an amendment to the legislation.
This is probably the first time that a card issued by the government will be owned by the cardholder. This gives greater choice to individuals about how they use the card other than for health and social services purposes. The card belongs to the card owner and he or she can use the card for whatever lawful purpose he or she chooses.
The bill sets out a number of offences to protect the card and card owners.
There has been some concern expressed about the possibility that businesses would be able to demand the production of the card as a form of identity. This bill creates new offences with significant penalties to ensure that this does not occur. The bill makes it an offence, punishable by a maximum penalty of five years imprisonment or a $55,000 fine or both, for any person and up to $275,000 for a company that requires a card owner to produce their card for any purpose except for the provision of Commonwealth health and social services benefits or to verify concessional status.
Similarly, it will be an offence, punishable by a maximum penalty of two years imprisonment or $13,200 or both, for a person to make a copy of or divulge a card owner’s photograph, signature or card number unless it is for the limited purposes of the act or with the owner’s consent. That amounts to up to $66,000 dollars for a company that commits this offence.
The measures in this bill will substantially reduce the opportunity to set up false identities; reduce fraudulent claims for benefits from Centrelink; reduce claims for Medicare and pharmaceutical concessions and the safety net based on inaccurate concession information; and prevent a person using someone else’s card to claim an entitlement.
This is significant and necessary legislation that will ensure future generations will be able to have access to a generous health and social services system.
The only people who will be opposed to the measures in this bill will be the vocal minority who take a blinkered view of the world and who will oppose any reasonable measure to stop people ripping off the system. These people do not represent the silent majority of Australians who expect their government to act on their behalf to ensure that their taxes only go to help those who truly need assistance.
I commend the bill to the House.
Debate (on motion by Mr Crean) adjourned.
Bill and explanatory memorandum presented by Mr Dutton.
Bill read a first time.
I move:
That this bill be now read a second time.
This bill is a related bill to the Tax Laws Amendment (Simplified Superannuation) Bill.
The purpose of the bill is to make consequential legislative amendments to implement the government’s simplified superannuation reforms.
The reforms will sweep away the current raft of complex tax arrangements that apply to superannuation, improve incentives to save, increase retirement incomes and strengthen incentives for older Australians to stay in the workforce. At the centre of the reforms is making superannuation benefits tax free, if paid from a taxed superannuation fund, to someone aged 60 and over.
The superannuation taxation law has also been rewritten from the Income Tax Assessment Act 1936 into the Income Tax Assessment Act 1997 as part of the reforms. The rewrite will streamline the law and provide a clearer picture of the taxation of superannuation savings. It will cut the number of superannuation related pages in the assessment acts by over a third.
This bill repeals the old superannuation taxation law, including reasonable benefit limits, and updates cross-references to superannuation taxation law contained in other acts.
Updating cross-references to superannuation taxation law contained in other acts will clarify policy intent in a number of areas going forward. This includes how superannuation will be treated in the event of bankruptcy, for child support purposes and social security purposes.
Amendments in this bill will also improve arrangements with respect to lost and unclaimed superannuation.
The Australian government will now take full responsibility for the management of unclaimed superannuation, which means that, in the future, unclaimed superannuation money will not be paid to the states or territories. This is consistent with the arrangements for lost superannuation and will provide a single access point for individuals searching for lost or unclaimed superannuation and a simpler national claims process going forward. As a result, individuals will be able to seek advice directly from the ATO, instead of having to contact numerous government agencies.
This bill also makes some minor additions to the simplified superannuation law to clarify policy intent and, in some cases, to address industry and community concerns raised.
These amendments include clarification of transitional arrangements for employers and individuals with substituted accounting periods and relaxed arrangements for people contributing amounts related to personal injury or small business capital gains tax concessions up until 30 June 2007.
As a package, the simplified superannuation bills represent a substantial investment by the government in the standard of living of Australians in retirement and the country’s future economic prosperity.
Full details of the measures in this bill are contained in the explanatory memorandum.
Debate (on motion by Mr Crean) adjourned.
Bill and explanatory memorandum presented by Mr Dutton.
Bill read a first time.
I move:
That this bill be now read a second time.
This bill is a companion bill to the Superannuation Legislation Amendment (Simplification) Bill 2007 and a related bill to the Tax Laws Amendment (Simplified Superannuation) Bill 2006.
The purpose of the bill is to make consequential amendments to the Income Tax Act 1986, necessary due to the simplified superannuation reforms.
Full details of this bill are contained in the explanatory memorandum.
Debate (on motion by Mr Crean) adjourned.
Bill and explanatory memorandum presented by Mr Dutton.
Bill read a first time.
I move:
That this bill be now read a second time.
This bill is a companion bill to the Superannuation Legislation Amendment (Simplification) Bill 2007 and a related bill to the Tax Laws Amendment (Simplified Superannuation) Bill 2006. The purpose of the bill is to make consequential amendments to the Income Tax (Former Complying Superannuation Funds) Act 1994 necessary due to the simplified superannuation reforms. Full details of this bill are contained in the explanatory memorandum already presented.
Debate (on motion by Mr Crean) adjourned.
Bill and explanatory memorandum presented by Mr Dutton.
Bill read a first time.
I move:
That this bill be now read a second time.
This bill is a companion bill to the Superannuation Legislation Amendment (Simplification) Bill 2007 and a related bill to the Tax Laws Amendment (Simplified Superannuation) Bill 2006. The purpose of the bill is to make consequential amendments to the Income Tax (Former Non-resident Superannuation Funds) Act 1994 necessary due to the simplified superannuation reforms. Full details of this bill are contained in the explanatory memorandum already presented.
Debate (on motion by Mr Crean) adjourned.
Bill and explanatory memorandum presented by Mr Dutton.
Bill read a first time.
I move:
That this bill be now read a second time.
This bill is a companion bill to the Superannuation Legislation Amendment (Simplification) Bill 2007 and a related bill to the Tax Laws Amendment (Simplified Superannuation) Bill 2006. The purpose of the bill is to make consequential amendments to the Income Tax Rates Act 1986 necessary due to the simplified superannuation reforms. Full details of this bill are contained in the explanatory memorandum already presented.
Debate (on motion by Mr Crean) adjourned.
Debate resumed from 6 February, on motion by Mr Robb:
That this bill be now read a second time.
upon which Mr Burke moved by way of amendment:
That all words after “That” be omitted with a view to substituting the following words:“whilst not declining to give the bill a second reading, the House is of the opinion that:
In summing up this debate, I thank the members who have contributed to the second reading discussion on the Migration Amendment (Employer Sanctions) Bill 2006. This bill addresses the government’s long-held concerns about those who seek to work illegally in Australia. Illegal work causes a number of problems for the Australian community. It takes job opportunities away from Australian citizens and from lawful migrants. The cost of protecting illegal workers is an unwelcome burden on the Australian taxpayer. Very importantly, some illegal work is linked to organised crime, particularly within the sex industry. The trafficking of people, particularly women and children, is a despicable crime. The government is determined to deal with anyone who knowingly participates in this kind of criminal activity, including employers who seek to exploit the victims of trafficking.
Despite the continued success of our immigration compliance activities, the government believes that additional statutory reforms are required. Experience has shown that there must be some method of imposing sanctions on the small number—and it is a small number—of employers and labour suppliers who deliberately engage or refer illegal workers. The bill introduces fault based criminal offences. Proposed offences will only be committed where the employer or labour supplier knew the person was an illegal worker or was reckless as to that fact. This ensures that the focus is on the employers and labour suppliers who are of concern to the government, without imposing any additional burden on businesses generally.
This bill also introduces higher penalties for offences where aggravating circumstances are present. These circumstances arise where the illegal worker is being exploited through forced labour, slavery or sexual servitude.
A number of members have suggested that not enough is being done to prevent 457 visa holders from being exploited. The offences in this bill will help, in fact, to reinforce existing sanction arrangements. For example, where an employer moves a 457 visa holder into a low-skilled or semiskilled position, the offence in clause 245AC of allowing a noncitizen to work in breach of their visa conditions may be committed. I also recently announced the government’s intention to introduce a sanction regime for employers who breach their sponsorship undertakings for subclass 457 and related visas.
In summary, this bill addresses some very serious issues in Australia. However, it strikes the right balance by ensuring that only those employers and labour suppliers who are of genuine concern to the Australian people will be caught by these offences. I commend the bill to the House.
The original question was that this bill be now read a second time. To this the honourable member for Watson has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. The question now is that the words proposed to be omitted stand part of the question.
Question agreed to.
Original question agreed to.
Bill read a second time.
by leave—I move:
That this bill be now read a third time.
Question agreed to.
Bill read a third time.
Debate resumed from 7 December 2006, on motion by Mr Dutton:
That this bill be now read a second time.
The Labor Party will support the Tax Laws Amendment (2006 Measures No. 7) Bill 2006. However, the opposition does have significant concerns in relation to schedule 2 of the bill, and I will shortly deal with how the opposition intends to address those concerns. Schedule 1 of the bill deals with an expansion of the small business exemptions for capital gains tax. These largely arise out of the Board of Taxation review of 2005 and are supported by the opposition. These recommended changes show the value of the Board of Taxation reviews and that they are a worthwhile process.
Item 39 of the bill proposes to replace the current controlling individual test, or 50 per cent test, with a new significant individual test, or 20 per cent, test. That is to say that an individual will no longer need to own 50 per cent of the enterprise to gain the capital gains tax concession but will now only need to own 20 per cent of that enterprise. The 20 per cent participation percentage does not need to consist entirely of direct holdings but can also include indirect holdings. These changes will increase the availability of the exemption and the small business concessions. The new significant individual test will enable up to eight taxpayers to access the small business capital gains concession. More people with a substantial interest in small business will be able to gain this concession, which is good for small business.
The bill also proposes changes to the maximum net asset value test to determine the eligibility for the small business concessions. This test is satisfied if the sum of the net value of all capital gains tax assets of the taxpayer, any entity connected with the taxpayer, any small business affiliate of the taxpayer or any entities connected with the person’s small business CGT affiliates does not exceed $5 million. The proposed amendments to the net asset value test mean that more liabilities can be included in calculating whether a business breaches the threshold.
I note that the government flagged in the last budget that they would be increasing this threshold from $5 million to $6 million, but they have not yet legislated to do this. I acknowledge that the government indicated that they would be introducing this change effective from 1 July this year, so there is certainly time to introduce this legislation. But I simply make the point that it would have been better, for simplicity’s sake, to include the increase in the threshold in the legislation currently before the House. The failure to do so increases the confusion faced by small business operators in relation to these changes.
This confusion was ably highlighted by Mr Peter Switzer in the Weekend Australian on 30 December last year. The article leads:
Recent federal government changes to help small businesses sell their businesses in a tax-effective way is leaving many accountants scratching their heads about how to interpret the reforms.
Mr Switzer, of course, was referring primarily to the changes in the 50 per cent test which I referred to earlier, on which businesses and accountants have been tested as to whether they should implement the law as it stands or the law which the government has indicated it intends to change. I call on the Assistant Treasurer to reduce any further confusion by introducing legislation to the House to change the threshold as soon as possible.
There are other changes included in this bill which make it easier to gain the small business tax concession. The definition of an active asset is clarified, and restrictions on the ownership of an asset for which a 15-year exemption is claimed are eased. Other changes will make it easier to roll over assets and make more asset rollovers eligible for the concession. This bill also introduces rules to deal with a deceased estate in relation to a small business where currently no rules exist. A legal personal representative of the beneficiary will now be allowed to access the same concessions that would have been available to the deceased. This is a suite of options which improve the availability of the small business capital gains tax exemption, and Labor supports all of them.
It would be a stretch to say that this is a simplification, because it is not. But it does clarify certain matters, which is welcome. Of course, small business is deserving of the support of the parliament, and the treatment of small businesses when they are sold, either to be rolled over or for retirement purposes, is an integral part of that support. The Labor Party has no hesitation in supporting these changes. My colleague the shadow minister for small business will be adding to these remarks later in the debate.
I now turn to schedule 2 of the bill, which is altogether a less happy enterprise. The schedule 2 amendments proposed change the Income Tax Assessment Act 1936 to supposedly clarify the types of financial instruments which are eligible to be exempt from withholding tax. The exemption exists to reduce the cost of Australian companies obtaining capital. The proposed amendments would modify sections 128F and 128FA of the act to restrict the range of debt interests eligible for this withholding tax exemption by specifying more closely the debenture or debt interests that are eligible by adding two conditions. Under the new conditions, to qualify for the exemption the interest must be on a non-debenture debt interest that is also a non-equity share or the non-debenture debt interest has been prescribed by regulation.
The ALP is concerned that this change is more than a clarification. These changes can be construed in a way which is substantive and substantial. I am also concerned that these changes will have a real impact on the benefit to and the availability of businesses raising finance for major projects including infrastructure projects. As a nation facing an infrastructure crisis or, at the very least, significant infrastructure bottlenecks, that is the last thing that we need. These changes go a long way to reversing the reforms that this government introduced in 2005.
The New International Tax Arrangements (Managed Funds and Other Measures) Act 2005 broadened the range of financial instruments available for withholding tax exemption by including debt interest. Previously, only debentures were included. The then Assistant Treasurer said in a speech in the House:
These changes will allow Australian businesses generally to take advantage of global opportunities to lower their cost of debt and to facilitate efficient business structures.
We now see the government substantially walking away from those reforms. The current Assistant Treasurer should come into the House when he sums up debate on this matter and explain why he believes his predecessor got it wrong. He certainly did not do so in his second reading debate speech. He needs to do so when he sums up the debate.
I am also concerned about the lack of consultation that has gone into this measure. The Assistant Treasurer knows, or he should know, that there is considerable anger in the industry and in the financial services sector about the lack of consultation which has gone into framing of this schedule of the legislation. The Assistant Treasurer should come into the House and withdraw this schedule for further consultation. In the absence of that happening, I foreshadow that the opposition will move to refer this bill to a Senate committee in the other place.
The Senate committee will need to examine, in particular, the impediments that these changes might have on the financing of major projects, particularly infrastructure projects. The government has done nothing to improve the tax treatment of infrastructure projects and is now proposing to potentially make this harder. This comes on top of the government’s complete failure to do anything about section 51AD or division 16D of the tax act. The government has admitted that these sections are a potential impediment to infrastructure financing. The then Assistant Treasurer, Senator Coonan, issued a press release on 26 June 2003, which said:
... the Government is committed to reforming the Income Tax Assessment Act 1936 provisions (Section 51AD and the associated Division 16D), which have particular relevance to financing arrangements in the infrastructure industry ...
The quote continues:
These provisions are in need of urgent reform ...
So the Assistant Treasurer of the day—not this Assistant Treasurer, not the Assistant Treasurer before him, but the one before that—said that the government would be moving urgently to reform this provision of the tax act. That was 2003. Since then, there has been nothing. Since then, no legislation has been introduced to the House and there have been no more press releases from the government. There has been nothing but stone cold silence—a gross negligence—leaving the infrastructure industry in this country hanging on a thread, with all they can rely on being a press release. This government has taken legislation by press release to a new level. But, of course, a press release does nothing to improve the taxation treatment of infrastructure in this country. Last year, this government introduced seven tax bills into this House—this is the seventh—and not one of them dealt with section 51AD or division 16D of the tax act. The government has done nothing about this important area of taxation reform, so the infrastructure industry has every right to be sceptical about the government’s approach in this matter.
The other thing the Senate committee needs to have a look at in relation to this schedule is the power of the Treasury to make regulations about which type of debt will be exempt from withholding tax. I am concerned that this has the potential to add even more complexity to the tax act. This has the potential to slow down major projects as proponents wait to see whether the type of debt they propose will be included in a regulation proposed by the Treasury. Of concern is not only the amount of time it will inevitably take Treasury to prepare the regulations but also the amount of time that the regulations will lie on the table of the House being able to be disallowed by the House—again, increasing the uncertainty and delays for financiers and proponents of major projects.
We say that, if you get the policy settings right, you do not need to give Treasury the power to make regulations. If this parliament gets it right, there is no need to give Treasury power to bring in regulations, in the national interest, to fix up mistakes which occur in this bill. But I fear that the parliament will not be getting it right if this schedule is passed in its current form and if this government does not allow this schedule to be referred to a committee in the other place to allow the Senate to conduct consultations that this government should have conducted—to allow the Senate to do this government’s job.
The explanatory memorandum makes no reference to any particular urgency in relation to this schedule. It does say that there is potential for people or bodies to take undue advantage of this provision, but it does not say that this is happening at the moment. In any event, this schedule, even if it is passed by the House today and by the other house tomorrow, will not come into place until 1 July, so I am not interested in unduly delaying the other positive elements of this bill; there will be no delay to those. However, if a government sits on its hands for four years and does nothing about tax reform in relation to infrastructure, I think it is perfectly reasonable for members on this side of the House to say that we want this schedule referred to a committee in the other place. The government could have avoided this measure if it had consulted more widely and better with the finance services industry and the infrastructure industry earlier in the process. If the government refuses this referral, it will be held to account for the results; it will be held to account for the potential impact on the infrastructure industry in this nation.
Labor stand ready to support genuine integrity measures, providing they have been properly aired in the community, providing there has been proper consultation and providing we on this side of the House can be reassured that there are no or minimal unintended consequences. That is not the case in relation to schedule 2 of this bill, and we will be moving in the other place to have it referred to a Senate committee for further investigation. We will, of course, be endeavouring to ensure that that investigation happens quickly so that the other measures in the bill are not unduly delayed and that there is certainty in the industry.
I will now move on to the other schedules. Schedule 3 proposes amendments to remove the requirement for certain deductible gift recipients—DGRs—to maintain a gift fund. It also aims to standardise and improve integrity measures for these DGRs. Further, schedule 3 proposes changes to the provisions in the Taxation Administration Act 1953 to enhance the DGR integrity arrangements. The proposed changes will give the Commissioner of Taxation the power to request information from both endorsed and listed DGRs, thus aligning the integrity arrangements applicable to both types of organisation. Currently, of course, the commissioner can only require this type of information from one of those types of organisations. These are sensible changes which meet with the support of the opposition. They both reduce the compliance burden on these charitable organisations and improve integrity. As I said before, this side of the House stands ready to support genuine measures to improve the integrity of the tax system, on which there have been proper consultations and which have no unintended consequences.
Schedule 4 proposes amendments to extend the periods during which deductions will be permitted to certain DGRs. These include the Dunn Lewis Youth Development Foundation, the Rotary Leadership Victoria Australian Embassy for Timor-Leste Fund, the St George’s Cathedral Restoration Fund and the St Michael’s Church Restoration Fund. Labor supports these measures and wishes these bodies well.
Schedule 5 proposes amendments to insert a statutory cap of 6⅔ years for tractors and harvesters used in the primary production sector. The commissioner is currently reviewing the effective life of the primary production sector implements and, therefore, may increase the current safe harbour effective life of tractors and harvesters, which would be disadvantageous to taxpayers claiming the decline in the value of these goods over the current 6⅔ years. Taxpayers who choose to have the effective life of these assets determined by the commissioner will be limited to an effective life of 6⅔ years.
I note that this measure is not consistent with the Ralph recommendations, which this government accepted, and it undoes some of the reforms recommended by the Ralph review. The government has done this before and will no doubt do it again, increasing the complexity of the tax system. However, we do not oppose this measure; on the contrary, we support it. Farmers deserve all the support they can get in this difficult time. However, it needs to be noted that this measure is contrary to the recommendations of the Ralph review and, if the government goes on making changes to the effective life regime in this ad hoc way, it will be undermining the integrity of the Ralph reforms. We recognise that there are circumstances for case-by-case reviews, as in this case, where we support the reforms. But we are also keen to ensure in future that the Ralph reforms are respected and that their integrity is not undermined by an ad hoc approach taken by this government.
The bill proposes to make changes to the Farm Management Deposits scheme to increase farmers’ eligibility for this scheme. The bill proposes to increase the threshold of non-primary-production income from $50,000 to $65,000 and to increase the deposit limit from $300,000 to $400,000. The FMD scheme allows primary producers to, in effect, shift income from good years to bad years in order to deal with adverse economic events and seasonal fluctuations. The scheme allows primary producers to claim a deduction for farm management deposits made in the year of deposit. When the farm management deposit is withdrawn, the amount of deduction previously allowed is included in both their PAYG instalment income and their assessable income in the repayment year. Labor supports this proposal to allow more primary producers to become eligible for the FMD scheme and to assist in times of drought. I note that the income threshold and the deposit limit have not been increased since 1999; this is a timely measure.
The final schedule in this bill relates to the capital protected borrowings scheme. These changes would prevent a taxpayer from claiming a deduction for the part of the expense of a capital protected borrowing that is attributed to capital protection. Capital protected borrowings are a reasonably popular measure in which people borrow money to buy shares or other financial instruments, and they have the right to sell them back to the lender at no less than the price they paid for them. It is a transfer of risk from the borrower to the lender. Of course, the lender charges a premium to compensate them for taking this risk. The ATO has previously taken the view that this premium should not be tax deductible and that interest payable on capital protected borrowings used to purchase shares is not allowable to the extent that it exceeds the amount of the benchmark interest rate set out on the ATO website—that is, the premium charged for risk transfer is not deductible. Labor supports this approach.
However, this view was successfully challenged in the case of Commissioner of Taxation v Firth in 2002. The government announced that it would make changes to override the Firth case in April 2003. The interim methodology was announced by the then Minister for Revenue and Assistant Treasurer in May 2003. It is the same old story. I find it extraordinary that the government announced this legislative change in 2003 and yet we are in 2007 when it is finally introduced. We again have the situation that these changes were not announced by this Assistant Treasurer, were certainly not announced by the member for Longman, but were announced by Senator Coonan four years ago and yet it is now, in 2007, that we are finally debating them.
It is true to say that the government did flag these changes in 2003 and warned people that the government would be legislating retrospectively. Again, people are entitled to ask: do they comply with the law of the land as it is laid down by the courts or with a government press release? For the government to wait four years before bringing this legislation into the House is gross incompetence. This government has taken legislation by press release to a new level. Labor will be supporting this measure; though it comes four years too late, it nevertheless deserves our support. The amendments at last provide some certainty to tax payers in relation to the capital protected borrowing scheme.
All in all, most of the measures in this bill are sensible. As I have said, we will be seeking in the other house to refer this bill to a committee to more closely examine schedule 2. If the government chooses to block this referral in an arrogant manner, we will not be standing in the way of the significant benefits to small businesses which are contained in this bill, and we will support it. But it is the government that will be held to account for the adverse impacts of schedule 2 should these eventuate. It is the government that will be held to account for its lack of consultation. It is this minister who will be held to account for ramming it through the other house, if that is what he chooses to do, and for failing to adopt Labor’s approach of more consultation with the industry to ensure that infrastructure financing can continue in this nation to reduce the infrastructure bottlenecks we see across the country. It is the government that will be held to account for that. I hope the Minister for Revenue and Assistant Treasurer accepts Labor’s proposal to refer this bill to a Senate committee for some brief consultations. If he does not, the government will be held to account for that arrogance.
I rise to speak on the Tax Laws Amendment (2006 Measures No. 7) Bill 2006. I wish to make a few general remarks before commencing my examination of the details of the legislation. This is another bill which reforms taxation. The government has consistently decided that taxation has needed dramatic reform. In the 10 years of this government there have been reforms and changes beneficial to taxpayers in the areas of personal income tax, business tax and superannuation, in particular. This demonstrates that good management and a growing economy can provide benefits for the whole community. More jobs for Australians means there are more taxpayers. This reduces costs to the taxpayer because the government does not have to borrow but can store funds for rainy days. Less debt means there is less interest to be paid and the prospect of reduced taxation. So, by the process of good management and a growing economy, the government has been able to introduce significant changes advantageous to all Australians.
Most of the changes have been in two areas: reform and changes to existing taxation. The reform has been the introduction of a long overdue broad based consumer tax. This was first raised by the Prime Minister over 20 years ago as being a necessary reform for Australia. It was endorsed in 1984 by the then Treasurer Paul Keating, who said that he wanted a broad based consumer tax. He was never able to get it, of course. Instead, the budget of 1985 introduced a tax on superannuation and a tax on capital gains. We are dealing with capital gains taxes today. It has taken 20 years to undo some of the disastrous decisions of the Hawke government. Both the former Treasurer Mr Keating and Mr Howard agreed that the reforms introduced by this government were long overdue, yet for political purposes disastrous decisions had been made by the Hawke government.
Imposing a broad based consumer tax was a difficult decision for the current government, coming to an election, but the Australian people had a say on the issue, and they decided that they would back the good management of the government and the promise of benefits in the future from the reforms. Those benefits generally have been delivered. There has been lower personal taxation, massive changes to personal tax scales, greater benefits for families and support for families with children, better consideration for business and changes to superannuation, which mitigate the damaging and disastrous impacts of the introduction of a tax on superannuation in 1984 and 1985. The Labor Party had made ‘rock-solid’ promises that both of the changes that occurred in 1984 and 1985 would never occur. I remind the Australian community that ‘rock-solid’ promises in taxation areas requiring careful management are seldom observed by the ALP—one only has to look at its disastrous management of New South Wales.
After reform, the next objective of the incoming government in 1996 was to change those tax features which were most objectionable. Gradually those changes have taken place. The ALP had imposed damage and had indulged in thoughtless adventurism. Unemployment and sky-high interest rates, preventing people from becoming homebuyers; bankruptcies; and closures were the legacy of those days. Those decisions took 10 years to take effect, and it has taken 10 years to unscramble them. The changes made by this government were absolutely necessary. Today we are debating further change to a complex and difficult tax imposed by the Australian Labor Party back in those times—capital gains tax. A minor advice on capital gains tax, due to the complexity of the tax and its imposition on individuals and businesses, will cost a minimum of $6,000. No accountant will risk giving advice on capital gains tax without very careful consideration and consultation with specialists.
Today’s bill deals with capital gains tax and other issues such as the small business capital gains tax concession, the exemptions from interest withholding tax and integrity arrangements for deductible gift recipients. It deals with the deductible gift recipient status of certain organisations, with depreciation rules applicable to the life of tractors and harvesters, with non-primary-production income thresholds, with the total deposit limit for farm management deposits, and with the capital protected borrowing rules. Those seven different measures are diverse. I would like to deal, in particular, with the capital gains tax. The area of capital gains tax was referred to the Australian Board of Taxation. The very introduction of a board of taxation was an innovation of this government. The value of such an organisation, with the capacity to examine the details of tax, must on this issue alone be justified. Having taken evidence, the board stated that division 152 provides concessions but also restrictions. The board made a decision that there should be a change. It concluded that the finetuning of a small number of provisions relating to the application of the eligibility criteria was needed to improve the current outcomes of the legislation. It also decided that there was a need for minor legislative changes to address unintended consequences and for administrative changes to assist in the understanding of the law.
The board considered that the tax environment in which small business operates could be improved, providing ‘incentives to small business generally to invest their capital to maximise employment, investment returns and innovation’. A comment in the Canberra Sunday Times on 19 November said:
One of the most complex pieces of legislation pertains to the CGT small business concessions that apply when a business is sold. Originally enacted in 1999, that legislation has attracted criticism for its complicated matrix of rules that require a very clear head to decipher. This was nonsense because the Government wanted small business to be eligible to the concessions.
The CGT small business concessions cause a capital gain made on a sale of a business to be tax-free. But because of the many tests that must be satisfied, many small business proprietors tripped at the last hurdle and failed to enjoy the concession.
One would have to speculate whether it was the consideration of the tax office that there should be any real concessions to the capital gains tax, but the legislation went through. It was an effort to assist small business. The complexity, as I have said, has been massive and now there has been a rectification of that process as instigated by the Board of Taxation and its review.
To give the Treasurer full credit, immediately he had that report he announced in the following budget—last year’s budget—that the government would be proceeding to make changes. The government has adopted all but one, I believe, of the recommendations of the Board of Taxation. Today we are considering those changes to tax. The amendments will improve the operation of the small business capital gains tax concessions by making changes to the maximum net asset value test, the 15-year exemption, the retirement exemption, the small business rollover, and how the concessions apply to partnerships and deceased estates. The amendments will also replace the controlling individual 50 per cent test with the significant individual 20 per cent test that can be satisfied either directly or indirectly through one or more interposed entities.
These changes will apply to the current taxation year, 2006-07, and in years to come. One amendment that is transitional, however, ensures that the small business rollover operates as intended for the capital gains tax events that happened in the 1998-99 to 2005-06 income years, which is also a welcome change. Total cost to revenue is approximately $100 million per year over the next five years. The compliance costs are expected to be minimal.
On examining the bill it is interesting to observe in the explanatory memorandum useful advice that laypeople can browse. They can come to a conclusion about the applicability of these concessions to their own small businesses. I refer to explanatory memorandum pages 15 to 19, which give a series of examples about how these changes may apply to the ownership of discretionary trusts and companies, firms and operating companies. It is a very easily understood process. I want to congratulate the tax office on the way in which these are presented, because not everything in taxation can be simply explained. Complexity seems to be the order of the day on some occasions but not in this instance. It is a very useful and helpful addition to the understanding of the bill.
A comparison is also contained in the explanatory memorandum. It is a comparison of the key features of the new law and the current law. Some of the changes come under the headings of the controlling or significant individual test; the maximum net asset value test; the active asset test; additional requirements for shares or trusts—that is an innovation which I think is a good one; the 15-year exemption; retirement exemptions, which take into account the 55-year current provision and modify that in a sensible manner; the small business rollover; and the deceased estates applicability.
All of those are great improvements to the way in which this legislation can be understood. In particular, the maximum net asset value test is interesting in that, for the first time, it takes into account negative net asset values. Where a property or capital had lost value, under the old rules that negative value—the loss of asset or capital—was never taken into account. So it was completely unfair because everything was considered to be a positive gain or no gain. In this instance, if there has been a loss that is taken into account. The maximum net asset value test takes into account the assets and related liabilities. And some of those liabilities will include things like annual leave, long service leave, unearned income and tax liabilities, which always should have been considered as part of calculating what the capital value of an asset is, but are included here now only for the first time.
The new law in regard to a partnership applies to the individual partners and not to the partnership of the whole. That is another change that is welcomed by those people who operate in partnerships, as many small businesses do. Often a part of a dwelling is used as an office or a participating part of a business. Under the old legislation which is being replaced, the value test included the entire value of a dwelling, and that dwelling had to be totally used for income-generating purposes; whereas under this change only that portion of a dwelling that was used for income-producing purposes need be considered. So if there is a home office or something like that, and there has been a capital appreciation, it is only that proportion which is used for the calculation of the capital gains tax and not the whole dwelling. That is a much needed change.
With the active assets test, the asset does not need to be active just before the CGT event. That means that, again, for an asset—it may be a business—it need not be applied at the time of the sale or the realisation of the asset but can have occurred at some time in the past. The 15-year exemption required a controlling individual of a company or trust for the entire period of ownership. Things fluctuate and people can have controlling interests for part or some of the time as their circumstances change. The current proposal requires a significant individual of a company or trust only for any period or periods totalling 15 years during the period of ownership. I think the deceased estate changes and the rest of it are extremely good.
It just shows that, if governments are prepared to be sensible and make changes, big improvements can be made. This government has been reforming and improving taxation, again, in all the areas that we see today. I only hope that some of the challenges confronting my own state can be dealt with in the same way. There is negative economic growth, unemployment is worse there than in the rest of Australia, people are leaving the state for other states, there is greater competition coming from other states and there is the highest level of state and local government taxation in Australia. Taxation reform is a significant area where changes can produce an economic impact that is beneficial to all. There has been a massive growth in the payroll tax and land tax, and the business perceptions in New South Wales are that the state is underperforming.
There is a lesson to be learned from the legislation that is before us today on capital gains tax. If sensible management and economic growth can be established then you can give concessions that will encourage further investment, jobs and opportunities for people. I would like to see my state adopt that process. The state of Queensland, on the other hand, seems to be going in another direction. It was, I would have to contend, established by Joh Bjelke-Petersen. My colleague across the room, the member for Rankin, may not consider that right, but I have to say that Joh laid the foundations. Mr Beattie has been able to continue in some areas—not all areas; there are some dangerous areas in health and places like that where he is not going so well. The water infrastructure could do with a bit of attention also.
My own state needs to have a really good look at some of the issues that have been dealt with by us federally where we have unscrambled those terrible decisions of the mid-eighties on superannuation and capital gains tax and made other changes to the tax system because we have been able to develop the means to do so. That has come through reform and change, and that is the only way New South Wales is going to go ahead—by reform and change.
Another day, another taxation laws amendment bill. This legislation, the Tax Laws Amendment (2006 Measures No. 7) Bill 2006, makes a series of changes to the Income Tax Act, and we on this side of the parliament support most of those changes. We do have some questions that we would like to see resolved in relation to the exemptions from interest withholding tax. The rationale for what the government is seeking to do seems reasonable—that is, to ensure that there are clear definitions of what constitutes a debenture. In the world of modern financial instruments there is some ambiguity about that. But in clarifying that we would be very concerned if the consequence was that the cost of obtaining overseas finance, for example, for infrastructure investment in Australia were greatly increased. For those reasons, Labor would like to see this matter go to a committee so that everyone can have a say in relation to what is a complex area.
I will say, as a general position, that if the policy is reasonably clarifying an area of potential revenue leakage or averting massive revenue leakage then it would seem to have some merit. But the proof of the pudding will be in the eating here, and if on the other hand it has deleterious effects on the cost of raising finance then that certainly will need to be taken into account. That is why we argue for a committee or an inquiry that would allow relevant interests to have a say.
As the newly appointed shadow minister for the service economy, small business and independent contractors, I have great pleasure in commenting on the small business capital gains tax concessions. Labor supports those concessions. We take the view that small business is at the heart of entrepreneurship in Australia and that small business people and independent contractors make a conscious decision to go out on their own, take a chance, apply some hard work and ingenuity, and create prosperity for their families and for Australia at large. We pay tribute to the small business people of this country—interestingly, a group of people who were described after the Second World War by Prime Minister Menzies as ‘the forgotten people’. They obviously were remembered at that time, but I would have to say that, after 10½ long years of the Howard government, in many respects they have been once again forgotten. Nevertheless, Labor does support the arrangements for the clarification and extension of capital gains tax concessions for small business.
The overriding problem for small business, though, is captured in a survey that was released by MYOB just this month. It tells us a lot about how small businesses see the challenges that confront them, and how they perceive both the Commonwealth and state governments. I think it would be worth me reporting to the parliament on some of the findings of that survey. For example, nearly half of small businesses are dissatisfied with the federal government’s contribution and performance. The precise number is that 44 per cent regard the government’s performance either as very poor or as somewhat poor.
Looking at some of the industries that make up that total of 44 per cent, in the case of transport and storage 59 per cent consider that the government’s performance is very poor or somewhat poor, and in wholesale trade 53 per cent consider it poor or very poor.
What about the states’ performance?
We cannot just continue with the blame game, Minister.
But be honest. What did the survey say? Tell us what they think of the states.
Minister, I actually said, if you were listening at that time—it helps to listen all the way through my speeches rather than intermittently—if you keep signing your documents I will go to the state contribution—
Order! The honourable member will refer his remarks through the chair, and the minister will not encourage him.
because I did in fact say that I would go through the results of the survey for the states, and I will do that. And right on cue, in relation to the performance perceptions of state governments, again, in this case more than half are dissatisfied with state government performance. That is why, in part, Kevin Rudd, as newly elected Labor leader, has put federal-state issues and the rationalisation of programs and processes high on the agenda and appointed the member for Fraser as shadow minister with responsibility for that task. I look forward to working with the member for Fraser and the Labor leader Kevin Rudd on ensuring that we do everything possible, when elected to government, to rationalise the red tape and other business regulatory requirements on all businesses, but especially on small business. So that is my response to the minister. If he had waited another 30 seconds he would have had his answer.
As to the issues that are of specific concern to small business, right there at the top is interest rates. Thirty-six per cent nominated that as a very negative or a negative influence on their businesses. It would be very difficult to ascribe the problem of rising interest rates to the states, although I am sure the Prime Minister would be keen to pass that particular buck to the states. But this Prime Minister did say in the 2004 election campaign that a re-elected coalition government would keep interest rates at record low levels. He has done nothing of the sort. There have been four interest rate rises since that commitment was given, and now Australia has amongst the highest interest rates in the OECD. This is affecting small businesses, with 36 per cent nominating interest rates as a major concern.
They are the sorts of problems that confront small business, but at the same time as the release of this general survey the MYOB organisation also released a special focus report on the red-tape compliance burden. That makes for equally interesting reading, because in that survey, in ranking the red-tape issues that are a burden on small business, of those different issues that are ranked in the top three, the first two of those—by a long way—relate to the GST. The first is the BAS reporting requirements and the second is allocating GST to daily transactions. So overwhelmingly small business is saying its biggest headache, the greatest burden that confronts it, is the GST. The Treasurer and the Prime Minister have designated that the GST is an orphan tax; it is a state tax. When something is really unpopular in small business circles, and in fact anywhere else, they blame the states. But I was in this parliament, Mr Deputy Speaker, as you were and as was the minister at the table, when a very long and heated debate occurred about the GST. It was a Commonwealth tax then and it is a Commonwealth tax now. The Auditor-General has designated it as a Commonwealth tax; the Australian Bureau of Statistics has designated the GST as a Commonwealth tax. Small business knows the GST is a Commonwealth tax, and the GST remains a big headache for small business, as confirmed in this survey on the red-tape burden confronting small business released just this month.
The report goes on to tell us something very enlightening about the attitude of small business to the Commonwealth in relation to red tape. The question is about whether the government is doing enough to reduce the red-tape burden, and an overwhelming 73 per cent of respondents said no, that the government is not doing enough to ease the red-tape burden. In the area of accommodation, cafes and restaurants, a staggering 91 per cent of respondents said the government is not doing enough to ease the red-tape burden. Indeed, around three-quarters of small businesses do not believe anyone actually cares about the red-tape burden.
That brings me to the point that, although this government talks about easing the red-tape burden, it does precious little. Back in 1996, the government made a commitment that it would seek to reduce red tape by 50 per cent. It in fact got Charlie Bell, from McDonald’s, on board to do a review and then basically buried the report. It was only last year that the Productivity Commission produced a report with a very large number of recommendations about reducing business compliance costs and the regulatory burden, in response to the government finally accepting that it had not done enough—as evidenced in the report by MYOB released just this month. Small business does not believe that the government has done enough. I acknowledge that the government then committed to implementing a majority of the recommendations of the so-called Banks review; however, when you look through many of those commitments of the government, they constitute yet again another review.
The problem is that the government is regulating faster than it is reviewing. While it reviews regulations, it brings in more regulations. Its compliance with its own regulatory impact statement processes in the last financial year was the worst since that process was established in the late 1990s. The situation that I am describing is this: the Howard government talks the talk of deregulation, calls upon the Productivity Commission to do a major review of business regulation and says it will implement a majority of those recommendations, but in many cases what it is actually committing to is a review—and, at the same time as it is reviewing, it is introducing new regulation.
The impact of this enormous burden of regulation comes in two areas. One is the compliance costs. Compliance costs are big enough for larger businesses in Australia but, as a proportion of sales and certainly as a proportion of profits, compliance costs for small businesses are very high indeed. The government seems insensitive to the difficulties confronting small business in managing the red-tape burden and, most particularly—as expressed in this survey—the burden imposed by the GST and the BAS reporting requirements. The compliance costs are very high proportionately for small business compared with big business.
The second impact of this regulatory burden is to stifle the very entrepreneurship—that great spirit of having a go out on your own—that Australia relies on. We need our small businesses and our large businesses to get out there, have a go, take some risks, apply a few new ideas and innovate. That is what a market system is all about. But, if there are regulations left, right and centre, that basically sends a signal to business that if it makes a decision that turns out not to have been a good decision but at the time was a risky decision made in good faith—which is necessary in a market economy—then those businesses can legitimately be concerned that the regulators will come after them to see if the decision that was made in the commercial interests of a company was made in compliance with all these regulations. Here we have the Liberal-National Party government stifling entrepreneurship. It is stifling that spirit which is so valuable in Australia and has been displayed for decades by the people who were found by Bob Menzies so many years ago but who have been lost again by the Howard government. They are the forgotten people yet again.
All of this reminds us that it is incredibly important for small business to survive for this country to remain internationally and nationally competitive. But that is not what is happening. The skills crisis in this country has been emerging since the late 1990s. Labor spokespersons, including the member for Batman back in 1999, warned of it, yet the government have not done anything effective to resolve that skills crisis. The government should have known that problem was emerging, but they had clay feet when it did emerge and it is now causing inflationary pressures and difficulties for small business as they try to find trained and skilled staff. That is part of a bigger picture, and that bigger picture is an overall decline in Australia’s competitiveness, as reflected in declining productivity growth.
Ordinarily when we talk about declining productivity growth we refer to a small positive number, but, in the six months following the introduction of the Work Choices legislation, productivity growth has not been a disappointingly small positive number—it has been a negative number. In fact, in the three months to September productivity growth was minus 1.5 per cent. That should be sending alarm bells right through the community and certainly through the government. But the Treasurer, upon the release of revised figures on productivity growth, chortled in the parliament and said that productivity growth was now at or marginally ahead of that of the last cycle.
He was referring to the last productivity cycle, which owed a lot to the reform program implemented by the previous Labor government, where productivity growth boomed. The Treasurer believes that current productivity growth is at or marginally ahead of the record productivity growth figures of the late 1990s through to the early 2000s. And yet it is minus 1.5 per cent in a single three-month period—not in a year, but in a single three-month period. He seems to think that that is satisfactory. It is not satisfactory; it is disastrous for this country’s future. That is why the Reserve Bank has had to warn that Australians are going to need to get used to a GDP growth figure with a two in front of it; whereas we have been getting used to a figure with a four in front of it and sometimes even a five in front of it. But that is the warning of the Reserve Bank.
The Business Council of Australia is onto this. Today it released a budget submission for the upcoming budget. I will refer to a couple of the statements in this submission, because they are alarming. It says:
Australia continues to run a significant current account deficit; exports outside of resources are performing poorly; infrastructure bottlenecks are limiting activity; we are failing to manage key resources such as water; and significant pockets of entrenched community disadvantage remain. Add to these challenges the impact of an ageing population and slower productivity growth as the benefits of past reforms fade, and many conclude that slower growth in the future is inevitable for Australia.
They are referring, among others, to the Reserve Bank. They go on to say:
More worryingly, labour productivity growth has slowed sharply in Australia.
The BCA know what is going on, but the Treasurer pretends that we are still in the heyday of booming productivity growth. The submission says:
... deterioration in productivity performance is a very real concern.
So we do have huge economic challenges in this country. This is a reform-lazy government because we have a reform-lazy Treasurer. It is not only larger businesses and all those who are employed by larger businesses who will bear the consequences; small businesses in this country will bear the consequence of this government’s policy sloth and reform laziness. That problem will only be dealt with by the election of a Rudd Labor government.
I speak today in support of the measures contained in the Tax Laws Amendment (2006 Measures No. 7) Bill 2006. I cannot speak in favour of all of those measures, particularly those in schedule 2, as I feel that further consideration really is required to examine the full impact of those changes. While I believe that schedule 2 does require additional thought—and I think that the new shadow Assistant Treasurer adequately outlined Labor’s position in that regard—the provisions of the bill that I want to focus on, particularly in relation to the interests of people within my electorate of Werriwa, are those involving changes to the capital gains tax concessions for small business operators. Accordingly, I will make those the focus of my comments.
The rapid rise of small business operators over the last decade has resulted in quite a phenomenal transformation of the Australian economy and Australian society. As I have noted before, there are not many times that you can look through the classifieds in the Sydney Morning Herald on the weekend and see vacancies for plumbers, carpenters, painters, builders et cetera who do not hold ABNs. Essentially, those positions in those trade groups are very much in a small business category. My son is included in that. One of my sons being a carpenter, I know full well how he has to access his work as a small business person operating in my electorate.
Labor supports small business. While the Prime Minister and members opposite have gone to great lengths in this chamber trying to make out that Labor does not support small business and is its enemy, nothing could be further from the truth. That has never been the case and never will be the case. It is because Labor supports small business operators and because Labor supports real and genuine improvements to our system of taxation that Labor will support the amendments contained in schedule 1 of this bill.
There can be no doubt, when it comes to interpreting the existing capital gains laws in relation to small business, that you really do need a clear head and a willing mind, as you need to steel yourself against a battle with what can only be described as the most complex tax law. According to the view of an accountant operating in my area whose clients include many small businesses, capital gains concessions provisions on the sale of a small business, for instance, are the tax law equivalent of the Enigma code—virtually indecipherable.
While the code and the tax laws surrounding capital gains tax on the sale of a small business may have been unclear to all but the most expert in their fields, the impact of the law on small business operators is very real. As I mentioned earlier, over the last decade or so there has been a rapid and noticeable growth in the number of small business operators, particularly in the outer metropolitan areas, of which Werriwa is obviously one. Prior to these structural changes in the economy, these small business operators and independent contractors were largely employees. They knew their trades, they knew their jobs, and they worked hard. Their status, for various reasons, has changed, but their attitude to work has not. They continue to work hard to support their families. As their businesses grow, they quite possibly employ others. They do what most employees do—that is, build a retirement nest egg. Consequently, the impact of the capital gains tax levied on the sale of a business becomes extremely significant to these people, as often the proceeds of small business sales form a considerable part of the retirement savings of small business owners and operators. For this reason, among others, the changes before us today have a significant impact on the estimated 16,000 small business operators in the electorate of Werriwa and no doubt the many millions of small business operators throughout this country.
Changes that break the Enigma code, the complexities of our current regime, are particularly welcome. I would like to briefly refer to the comments made by the new shadow minister for service economy, small business and independent contractors. I believe that what the member for Rankin said about the recently released MYOB assessment of red-tape compliance is accurate. Quite clearly, when I talk to people in my electorate, two of the biggest things on the minds of small business operators are the BAS reporting and the allocation of GST on a daily transaction basis. These are very much the burdens which have been foisted upon small business operators to comply with and which have made life very complex for them.
It was only last week that one small business operator came to talk to me about issues of taxation in that regard. He has had some difficulty with the taxation office. He thought he was doing the right thing only to find that the way he was conducting his reporting was incorrect. Obviously I could not give him tax advice, but at least I could be sympathetic with this bloke. He certainly was making a genuine effort to comply, or he thought he was. This is a one-man operator in a small business looking after his family. He is taking significant time out simply to try to deal with the compliance issues now faced by that business.
The changes in the bill to the capital gains tax concessions for eligible small businesses include changes to the maximum net value assets criteria, the 15-year exemption, the retirement exemption, the small business rollover provisions, the changes to the active assets tests and changes to the significant individual test that will no doubt increase the availability of small business capital gains tax concessions. While the bill before us contains a number of good measures in relation to small business capital gains tax concessions, there is one notable exception. You will recall, Madam Deputy Speaker, that in last year’s budget the Treasurer announced that the value of the maximum net value of assets test would be raised from $5 million to $6 million. This is an important change for many small business operators because of the significant impact it could have on what an owner ultimately keeps from the proceeds of the sale of a small business.
When the Minister for Revenue and Assistant Treasurer delivered his second reading speech on 7 December last year, he was silent on the extension of this threshold. I note that he did mention once the change to the maximum net asset value test as part of a list of amendments that were contained in the bill, but at no time did he seek to explain why the provisions announced about the threshold extension had not been contained in this bill. I can only conclude that this notable absence from the bill may mean that the government intends to go back on the promise it made in the budget. Along with the many business operators who have made the decision to delay the sale of their businesses until the passage of this bill, I hope that that will not be the case. I hope the extension of that threshold will be promptly dealt with by the government.
This government has often promised but seldom delivered when it comes to cutting red tape for small business. This is something that was recently asserted by the member for Rankin, our new shadow minister for small business. But this is not just a matter of political hype. You simply need to speak to any small business operator in each electorate to know that that is the case. That is very much their view, and the view comes from the impositions they have seen foisted upon their businesses. This government went to the last election promising small business that it would do a number of things to cut red tape. Apart from giving the green light on industrial relations to unscrupulous employers to cut take-home pay and conditions, it has not done all that much to improve the lot of small business operators. This government has made many high-level promises but, when it comes to reducing red tape, its performance has been lacking.
The Prime Minister has previously given a commitment to cut red tape by 50 per cent. He said that he would do it in his first term of office. I do not know the exact level of success in this endeavour but, if I can judge success through the prism of those who have to deal with the federal government’s paperwork and regulation on a daily basis or through the experience of the many business operators that I speak to in my electorate, I would have to conclude quite frankly that it looks like this government has not applied itself to what must be regarded as a core promise. It presented itself at a federal election, claiming that one of its key provisions was to motivate and develop small business by cutting red tape in the order of 50 per cent. That clearly has not occurred.
It has been some time since the Treasurer announced that the government would introduce the Simpler Regulatory System Bill. In a press release on August 15 last year, the government announced its response to the Banks task force report on reducing regulatory burden on business. The Treasurer went to great lengths to outline the government’s commitment to reducing regulatory burden on business. He said:
The Australian Government is leading the way in reducing the burden of red tape to improve the economic environment further so that all businesses, large and small, can prosper and grow.
It is disappointing that these big claims have yet to be backed by action.
The Simpler Regulatory System Bill, which is to introduce the changes aimed at decreasing the regulatory burden on business, is yet to be introduced, though I note that it is set down for introduction sometime this session. But I have to say that the fact that it is not here now indicates the order of priority that this government gives to reducing the regulatory burden on businesses. Once again it seems that the government is willing to talk tough on cutting regulation and is willing to promise much but, sadly for business operators, particularly small business operators, who are willing to do everything they can to produce for our economy and are waiting for their compliance burden to be eased, this government has been, quite frankly, very tardy in delivering. In fact, based on the track record of this government, much like it has done with tax, this government continues down the path of increasing regulation rather than cutting it, which adds impediments for businesses, particularly small business.
While the small business capital gains tax concessions contained in this bill are welcome, there is no doubt that, when it comes to the complexity of Australia’s taxation system, a lot more can be done. Angela MacRae—someone with whom I am sure that most members opposite would be familiar, as she was a member of the government’s task force on reducing regulations on business—said last year at a seminar for Standards Australia:
Our tax act is the second-worst in the world behind the USA.
They were very strong words. That view was expressed by someone who is well versed in tax issues, given that she was the former tax director of CPA Australia.
While many in the government continue to crow about the achievements of this government when it comes to tax reform, in truth it is much ado about nothing. This government continues to introduce taxes—including the ‘never, ever’ GST. The shadow minister for small business was quite correct when he said that that is a federal tax. There is no point trying to run the very tired argument that the GST is something other than a Commonwealth tax. It is a Commonwealth tax. This government has made itself the highest taxing government in Australian history. The GST has added to the burden of compliance and regulation that faces small business operators every day and has done nothing more than make every business operator—from the corner store through to Australia’s largest companies—tax collectors.
Labor knows how important it is to have a competitive business environment. Labor knows and understands how important it is to encourage efficiency in our business community and to make Australian businesses as competitive as they can possibly be both domestically and internationally. Labor also knows that a key part of creating a competitive business environment is creating an internationally competitive tax system. Going back to Angela MacRae’s comments, she—as a former director of CPA Australia—indicated that we have the second worst tax system in the world, second only to that of the USA. So it could hardly be the case that we have an internationally competitive tax system at present. Ongoing business and personal tax reform is important in improving the barriers to investment, boosting workforce participation and rewarding effort. Unlike the government, Labor knows that it is important to build a tax system based on long-term goals rather than rushing in and introducing ad hoc changes to tax law.
I welcome the provisions of this bill, particularly those that will improve the tax environment for small business operators. The Board of Taxation noted in its October 2005 report on the post-implementation review of the effectiveness of small business capital gains tax concessions that the tax environment for small business could be improved by providing ‘incentives to small business generally to invest their capital to maximise employment, investment returns and innovation’. I could not agree more. The fact that the government accepted all but one of the recommendations of the board’s report was welcomed by small business operators—particularly the recommendation in relation to capital gains tax concessions. As I noted earlier, it will have the dual effect of increasing the availability of small business capital gains tax concessions and reducing the compliance burden on small business.
It is disappointing, however, that the government has not seen fit to include in this bill the extension of the maximum net value asset test from a maximum of $5 million to $6 million as announced in the budget. (Time expired)
On behalf of the ALP and as the shadow minister for infrastructure, I rise to contribute to the debate on the Tax Laws Amendment (2006 Measures No. 7) Bill 2006. I am particularly concerned with provisions in schedule 2 and the consequences that they might have on the financing of Australian infrastructure. Schedule 2 concerns clarifications of exemptions from interest withholding tax. The bill proposes amendments to the Income Tax Assessment Act 1936 and seeks to clarify what is considered to be a debenture debt interest, which is eligible to be exempt from interest withholding tax. Currently the law provides an exemption for interest paid by companies on debentures that meet a public offer test. The exemption exists to reduce the cost of Australian companies obtaining capital.
The proposed amendments would modify the act to restrict the range of debt interests eligible for this interest withholding-tax exemption. In addition, the amendments introduce regulation-making powers to Treasury to exclude interest on certain financial instruments that would otherwise lead to an outcome that is not supported by the overall policy intention. The regulations would also list every debt interest other than a debenture and a non-equity share debt interest that is eligible for the exemption. It is possible that misinterpretation of the law as it currently stands has the potential to threaten the integrity of the tax system by widening the range of debentures that could qualify for exemption beyond the policy intention. However, it is contestable whether the provision of regulation-making powers to Treasury will improve the integrity of the system.
The stated aim of schedule 2 is to reduce uncertainty for taxpayers and tax administrators with the operation of sections of the act. In fact, the opposite outcome is more likely to occur for two important reasons: firstly, the policy grounds for excluding certain debt interest are far from clear. This will create uncertainty as to which financial instruments will be excluded from the exemption by the regulations in future, leaving taxpayers and financial practitioners in doubt. Secondly, the regulation-making power to exclude eligibility for the exemption is impractical if it results in long lead times in having debt interests prescribed in the regulations as being either excluded or eligible for the exemption.
From an infrastructure-financing point of view, rather than creating certainty, the amendments have the potential to create problems that could impede or inhibit the raising of debt finance. What does this mean in practical terms? Consider for a moment a company that wish to make an infrastructure investment in Australia. They have little or no certainty as to whether the type of debt they intend to use is covered by the exemption. This has the potential to slow down or prevent investment and major projects getting off the ground. While Treasury will have the power to change regulations to accommodate particular financing proposals, regulatory changes stand to further delay urgent infrastructure projects. The fact remains that regulation-making power is unnecessary if the policy setting is right. This government has done nothing to improve the tax treatment of infrastructure projects, and passage of this bill stands to make it harder to finance major infrastructure projects.
I also want to address, on a related tax issue, the issue of section 51AD and division 16D of the Income Tax Assessment Act 1997. Last year the government introduced not one, not two, but seven tax bills into this parliament, of which this is the last. But not one of them sought to reform section 51AD and division 16D of the tax act—both of which need urgent attention to address underinvestment in infrastructure.
Currently, the Income Tax Assessment Act 1997 restrains private investment in public infrastructure through the operation of section 51AD. Under this provision, certain infrastructure projects held by the private sector, controlled by government and financed through limited recourse debt do not receive tax deductions that would normally apply for capital expenditure of this type.
There is also the application of division 16D of the Income Tax Assessment Act 1997. This applies in the case of finance leases with tax exempt bodies. The lease is treated as a loan and capital deductions are disallowed. This illogical situation was first downplayed and then conveniently ignored by the Howard government. In September 2005 the then Assistant Treasurer, Mal Brough, finally conceded that the tax changes originally proposed by the government were unworkable. The minister promised legislative reform. More than a year on from that 2005 announcement, the government is yet to act.
The current tax regimes are bad for Australia’s long-term economic prosperity. Unfortunately, we have become accustomed to a government that changes policy for its own interests rather than the national interest, preferring to boost regulatory powers rather than enshrine sound policy and principles in law—policy that would boost productivity and ensure that the prosperity we currently enjoy lasts well into the future. Just last week Treasury’s own research stated that public infrastructure investment decreased from 2.5 per cent to 1.8 per cent of GDP between June 1987 and June 2006. In 2004, Australia ranked 20th out of 25 OECD countries in terms of investment in public infrastructure as a proportion of GDP.
With this bill before the House, we now are faced with the absurd situation where the federal government is not only happy to abrogate its responsibility to invest in nation-building infrastructure but also failing to address the issue that it is increasingly difficult for the private sector to invest strategically.
There is copious evidence illustrating the short- and long-term economic benefits of investment in infrastructure. The Committee for Economic Development of Australia points out that investment in infrastructure generates higher returns on investment than other areas. Treasury’s own research cites studies indicating that a one per cent increase in public infrastructure causes a 0.66 per cent increase in GDP. By overcoming the backlog in five key areas—electricity, gas, rail, roads and water—GDP would increase by 0.8 per cent, business investment by 1.2 per cent, housing investment by 1.8 per cent, exports by 1.8 per cent and improved living standards by 0.4 per cent. This spells improved employment, productivity, social welfare and international competitiveness.
The Business Council of Australia has estimated that Australia has a $90 billion shortfall in infrastructure. Now is the time for national leadership and investment in nation-building infrastructure. The economic prosperity afforded to Australia by the resources boom can be locked in to tomorrow by investment in infrastructure today. However, faced with a choice between squandering the opportunities presented by the resources boom or investing in nation-building infrastructure that will sustain our prosperity, the Howard government, sadly, has opted for the former.
Under this short-sighted, self-interested government, our national economic effort is limited by inadequate and insufficient infrastructure. The BCA, the Reserve Bank of Australia, the Australian Council for Infrastructure Development and Engineers Australia have all warned that infrastructure bottlenecks are constraining our exports and our economic growth. But, rather than show national leadership, the Howard government has been quick to shift blame to the states, pointing the finger at state and territory governments as it does in every area of its policy failure. You can be certain that, wherever there is a lack of national leadership from the national government, it will resort to blaming the states and territories.
Let us be clear: the Howard government is happy to have its coffers filled with tax returns from resource rich states, but it will not invest these returns to upgrade critical infrastructure to sustain Australia’s economic prosperity. The tax windfall for the federal government from the resources boom is not insignificant. In fact, ANZ Chief Economist, Saul Eslake, has estimated that, over the last four budgets alone, the federal budget has received an extra $263 billion in tax revenue above its original estimates because of parameter variations caused by the resources boom.
Federal budget surpluses attest to the strength of Commonwealth revenue, but we all know that accumulating infrastructure assets can make better sense than just accumulating a surplus. The Howard government has sold more assets over the last 10 years than it has built. Having massive surpluses to the exclusion of long-term investment makes no economic sense and is bad policy. The economic and social advantages of prudent investment in major infrastructure are irrefutable. Infrastructure investment and national leadership is needed now. Available infrastructure capital must be put in touch with our nation’s infrastructure priorities.
Labor has a longstanding commitment to providing national leadership for Australia’s infrastructure needs. We argue that a coordinated approach involving all three tiers of government and working in partnership with the private sector and key shareholders is the way forward. Labor has committed to establishing ‘Infrastructure Australia’, a Commonwealth statutory authority to coordinate the planning, regulation and development of infrastructure. It will report directly to the Council of Australian Governments and through COAG to state and Commonwealth infrastructure ministers. It will include representatives from the private and public sectors, academia and the relevant professions.
Infrastructure Australia will be charged with analysing, monitoring and reporting on the delivery and operation of major infrastructure projects. A coordinated and objective approach to long-term planning of and investment in nationally significant infrastructure is essential. There is too much overlap and duplication between different tiers of government. There are too many regulatory bodies, with overlapping regulation. John Howard, the Prime Minister, observed more than 10 years ago:
I’ve been struck by the need to improve the coordination of infrastructure policy at the Commonwealth-State level.
More than 10 years later, Australians are still waiting for this improvement.
As a matter of urgency, Infrastructure Australia will conduct an audit of Australia’s infrastructure to assess the adequacy, quality, capacity and condition of Australia’s infrastructure assets and to identify the gaps. Put simply, it will be a list of what we have got and a list of what we need. This list will be used to develop a national infrastructure priority list. After more than 10 years in government, the Howard government has no official, up-to-date record or database on the state of the nation’s economic infrastructure assets. If the government does not know what assets exist and where the priorities lie, how can it plan future investments or establish a sound policy framework?
Labor has also committed to using the income stream from the Future Fund for infrastructure investment. On this side of the House we have a flexible approach to infrastructure financing, recognising that both capital and expertise may be efficiently sourced from the private sector, the public sector or a combination of both. Also, superannuation investment strategies point to the opportunities for private savings to be invested in low-risk infrastructure projects. That is why getting the right policies in place that provide potential investors with certainty and minimal complexity is so important.
It is also why the tax environment created by bills such as the one we are debating today must be built on sound policy principles—sound policy principles that will ensure that, whether Labor draw on capital and expertise from the private or public sector or both, we will be driven by the community’s interest, boosting productivity and locking in Australia’s prosperity. Unlike the Howard government, the Labor Party will not be boosting productivity by asking working Australians to work even longer hours with less pay and under even worse conditions. Investing in nation-building infrastructure, not wage and condition slashing, are the building blocks of the national economy.
The opposition will move in the Senate that schedule 2 of the bill being debated here today be referred to a Senate committee for further consideration. It is critical that the Senate committee undertakes comprehensive consultation with relevant interest groups—something that has been clearly lacking in the drafting of this bill—and that it ensures that the final bill that is passed through this parliament does not include amendments that impede the financing of major projects, including infrastructure projects. No company’s ability to raise finances should be compromised by these tax laws. Australia simply cannot afford to lock out investment capital if we are going to have a prosperous future.
I am happy to follow the shadow minister, the member for Grayndler, in regard to the Tax Laws Amendment (2006 Measures No. 7) Bill 2006. The member for Grayndler has quite rightly pointed to the fundamental inadequacies over the past 10 years in this government’s approach to national infrastructure. It has been almost entirely absent during that whole period of time. Throughout the first and second parliaments from 1996, I was the chair of our caucus regional committee. I travelled the length and breadth of the country and I spoke to local councils in depth about their fundamental problems in terms of infrastructure.
Over that six-year period, the government simply did not address—except in the most partial way—any of their fundamental problems. Why they chose not to do so is very simple, and it is laid out in their first audit in 1996. The government do not see themselves as an active interventionist government trying to fix our fundamental infrastructure problems. They do not see themselves as a participant in that. It is always someone else’s problem, someone else’s activism—all they have to do is audit or benchmark it.
For more than 10 years, country Australia has been crying out for the kinds of funds that would boost its local infrastructure on a sustainable and sensible basis. The member for Grayndler is absolutely right: we need this kind of long-term investment to continue to bolster Australia, and that capacity should be there through not only direct investment in infrastructure but also support through our taxation system. What we find is that the government that came to power in 1996 have a mindset that their only job is to be like a mob of accountants from KPMG: just tick and cross things that are done and not done and whack the back of the hand of state governments or councils because they have not been undertaking their fundamental responsibilities. That mindset has linked in with the general mindset that has taken hold at state level—that, in order to get anywhere at all, you have to make cut after cut after cut in expenditure. We know the disciplines that had to be imposed on the states; they were imposed by the last Labor government. That actually changed the approach that many states took to their expenditure, and we did get some fundamental efficiencies out of that.
But it has become effectively a mindset in which an ideological approach virtually drives it. Coming from New South Wales, I have seen the disasters that have been caused by public-private partnerships. Travelling Australia, I have seen the disasters that will have an impact over the decades to come because state and federal governments and local councils have walked away from their fundamental responsibilities. It is not really bright not to maintain your infrastructure. It is not just about water infrastructure in the capital cities—something that has happened because of the impress of budgets at state level—but also about the manner in which this Commonwealth government has withdrawn support from the states and the notion that it is somebody else’s problem to fix up this area or that the whole thing should be privatised and then the problems will go away.
Our national infrastructure has been falling to bits or simply sold off into the care of someone else to be broken up into whatever constituent elements they like, and this federal government has led the way in abrogating its responsibilities with regard to it. The next Labor government, in setting up Infrastructure Australia, will understand that you cannot have a piecemeal approach to this. You cannot have an approach where you walk away from fundamental responsibilities and desert the Australian people in terms of things that no-one else will do—not even at what people might take to be a reasonable profit; they would want big profits to do a number of these things.
The simple fact of the matter in terms of public-private partnerships is that they are generally not a really good go. Why? Because governments can borrow at extremely good rates; there is not all that much premium. We have a AAA rating, and the economy has been running extraordinarily well. Why? Because a fundamental foundation was laid by the former member for Blaxland, my former boss Paul Keating, who had the courage to confront problems and deal with them. We faced cataclysmic change in 1985-86, and modern Australia is built on the foundations of the fundamental, bold and brave changes that Labor made. This mob have slid along on the top of them and taken the benefit of those fundamental changes, but they will not make the core ongoing changes that are needed. They will not invest in Australian infrastructure, and they will not encourage state governments to do the right thing and renew their water infrastructure properly—they will not even think about addressing the problem. But if you look at water you need to look not just at the irrigators down in the Murray-Darling; you need to look at water usage Australia wide in our capital cities and at the infrastructure in Sydney. It is not just road and rail; water infrastructure needs a dramatic amount of money to be expended on it if we are to get the efficiencies we need in order to survive.
I turn now to the more specific matters of this bill. It is an omnibus bill. Assistant treasurers always come in with a whole stack of things that need to be done. What is the motif of these? Most schedules of the bill reduce compliance costs for taxpayers, increase certainty for taxpayers—two things that we say would be reasonable to do—increase the availability of capital gains tax concessions for small business and increase the integrity of the tax laws. There is nothing there that you could gainsay, nothing where you could not say, ‘Those things are reasonable aims.’
Let us look at some of the practicalities in terms of what is being done. In general, in particular with the first one, one of the areas I am interested in is what is being done in small business. Almost all the schedules involved here arise out of a 2005 review by the taxation board, and all but one, I think, of their recommendations have been taken up by the government. What they have suggested, particularly in the small business area, is to look at small businesses and their capital gains tax treatment, in particular in the first schedule, in a different way. Instead of looking at just a mum and dad business, where currently you have to prove a series of different things, one of the things you have to do in order to gain the concessions is to have a 50 per cent controlling interest. Normally this is a partnership of two; there are two people who have 50 per cent. That is the model in front of us in the current legislation. The only area where you can have less than that is if you have a controlling partner with 50 per cent. A spouse can simply have a one per cent interest in the entity and that spouse will be covered by it.
These changes recommend a 20 per cent significant interest instead of a 50 per cent controlling interest. When you first look at that, you may think: why, if it is a small business where it is a straight-out partnership—that is clear and reasonable—are we down to just a 20 per cent participation made up of indirect and direct percentages? If you put the spouse aside, why are up to eight people going to be part of this? I think it is recognition that the nature of a lot of small businesses has changed. It is not just traditional partnerships; there are a number of entities, including in my electorate of Blaxland, where there is multiple ownership. Within the current law, they are not able to access any of those concessions whatsoever; it is reasonable that they should be able to do so. This is not only a clarification of the law but also a sensible set of steps.
Small business is not the engine room of change in the economy, because, as my former boss was wont to say, although it is 60 per cent of the economy, it exists on the margin of that engine room. The economy’s engine room will always be our major businesses, and the small and medium enterprises will come in after that; that is the core of the activity. But employment in Australia is largely within those small businesses. Running them effectively and properly under the aegis of the taxation law is something we can do efficiently. If we look at this generally, the amendments are supportable; they finetune the application.
These amendments do not raise the net asset threshold, though, from $5 million to $6 million. That is something that has been announced and will have to be done later. As the shadow Assistant Treasurer, the member for Prospect, pointed out, there was a bit of press release stuff in here. It was announced that in the 2007-08 income year there would be an increase in that threshold. That will have to be dealt with in some other way, but there is no fundamental problem with that. Likewise, the other tests—the 15-year test and the rest of them—have been adjusted.
I want to broaden this debate a bit to look at the impact of this on small business. It is a very significant sector of our economy. It is extremely important and, despite the admonitions from the member for North Sydney over many years, it is one in which a number of people on this side have experience—either themselves directly or, as with the member for Hunter, in their families. In my family, there is a history and a combination of people either managing or giving their labour to others primarily in a small business context. For 25 years, my mother ran the Bambi Day Nursery, a child-minding centre in Bankstown. She had worked for others previously and she has a wealth of experience. I have a fair amount of experience—I was unpaid labour when I would help out after school.
I have a fairly good insight into not only the compliance problems but also other issues. As one of the very early settlers in the area, my grandfather on my father’s side had a small business selling fruit and confectionary in Bankstown before 1920. He then changed to a very significant business supplying building materials—concrete, coal, ice runs, you name it—post World War II. Throughout my family there is small business experience. Virtually all of my uncles are involved in small business. My uncle John is a carpet layer. My uncle Eris owns his own furniture shop in Armidale; it is a very significant business there.
Hear, hear!
It is a good place; the member for New England knows Eris well. Apart from being mad on rugby, joeys and all that stuff, he is a very substantial person in Armidale. The member for New England knows just how significant Eris is. My uncle Tom and most of my uncles are in their own businesses. It is very important to understand that Labor Party people do understand the pressures on people in small business. From my family experience, I certainly do. They let me know what pressures are on them or the impact of what the government is doing. It is also key that people in small business are marginal in the same sense as people who simply give their labour and work in factories, shops and so on. It is tough in small business, as it is tough on those who do not have resources other than to expend their labour.
However significant these measures in themselves may be for small business, we should look at the general things they want to do. Reduce compliance costs? Fine. Increase certainty? Fine. Increase the availability of the concessions? Fine. Increase the integrity of the tax laws? Fine. As I said before, you can actually do a great deal more for small business in this country if you change the GST laws. If you want to reduce compliance costs for taxpayers and reduce the compliance burden and significant on-costs for small business—if you want to make it easier for people to do their business and easier for them to report—you do not just look at the reporting mechanisms and say, ‘They have to report four times a year and we make things a bit easier for them by way of what they have to put in.’
If you wanted to make things easier, you would actually grab the GST by the throat—given that it exists in all its coalition glory as a result of this Prime Minister breaking his word and giving us that GST—and make it a retail sales tax. You would make it a tax that was not a 1960s paper-driven behemoth. You would make it a tax that was a 21st century retail sales tax where the only point in the cycle where the tax would be imposed would be at the final retail point. You would not have the inanity of a 1960s British and European model where every scrap of paper from the very start of the process to that very end—generating mountains of paperwork and work for people involved in every level of the chain of activity in business—had to be there for audit and reporting.
The current system is to cover the fact that you impose a tax at one level and pass it on to the next level. Having imposed it at the very first level, you can claim it back and get your inputs back. So there is a direct cost to business at every step of the GST chain. You say, ‘Business is fine, because although this tax has been imposed, they get their input cost back.’ That is given that the business is big enough and that its turnover is great enough.
The compliance costs of running this whole GST behemoth—the reporting and the paperwork that have to be done—are enormous. The big winners from the GST are Australia’s accountants; they have done extremely well. Anyone in small business who wanted to do their own books—unless they are accountants themselves—has had to give that work to someone else, because the load on them is enormous. The load on small business, which is being reduced by these measures, will be infinitesimal compared with the load on them now and on the community at large as a result of having this really dumb GST—a 1960s version, before fundamental computerisation, before mainframes could contain all the information needed to run and audit a system on the basis of real activity within an industry.
Whatever the industry—be it statistics or education—as with everything else, there is a simple thing called a bell curve. In a bell curve you get 10 per cent of activity up the top, the next 20 per cent of activity below that, 40 per cent of activity in the middle, which is the dominant range of activity, a further 20 per cent of activity below that and 10 per cent of activity down the bottom. You get that pattern of distribution; it is very simple. You do not need a million pieces of paperwork shuffled backwards and forward. You do not need the imposition of a GST 10 or 20 times during the process. You do not need the nightmare administrative load. You can audit businesses by saying, ‘Let’s look at the average activity, income and costs of a business. We can work that out, not just on an individual business basis but industry wide.’ The Tax Office certainly has the capacity to do that. Once you do that, and you set those standards, the auditing process becomes simple. Anyone who wants to rort the GST system will stick out easily. If you want to closely monitor people who are doing that, you will see that they are outside the norms of a particular industry, region or area—taking account of all the possible variables. What a dumb government we have to impose on the whole country, on every small business person, the enormous weight of an old and dumb GST, with all of its capacity to bury innovative activity.
This has not been taken up as Labor policy, and I am probably the one person in the joint who really believes in the utility of this, but I will continue to argue for it. In 1985, Paul Keating put up ‘Option C’, a central part of which, as recommended by Treasury, was a retail sales tax. Why? A retail sales tax was recommended because they did not think a full-blown GST could be brought in within a term. I have spoken to Ken Henry about this at length. I used to work with him. We have a dumb system in place. We could release Australian productivity if we dramatically changed our tax laws, got rid of the GST overburden and replaced it with a retail sales tax, which would be efficient, direct and effective. Small business and everybody else would benefit as a result.
I listened to the comments of the previous speaker, the member for Blaxland, Mr Hatton, about the goods and services tax and I would be interested in having a discussion with him on the issue. The Tax Laws Amendment (2006 Measures No. 7) Bill 2006 is, essentially, an omnibus bill. I will be supporting the legislation.
Schedule 1 of the bill amends the capital gains tax concessions for small business. I would like to raise, under the auspices of the bill, the implications of current government policy on capital gains tax and income tax in relation to groundwater users in New South Wales. The Prime Minister has a 10-year, $10 billion water plan. Some issues were raised a few years ago regarding the process of adjusting to a sustainable level of groundwater use in six valleys across New South Wales. Those issues are pertinent to the ongoing debate about the over-allocation problems and the Murray-Darling. More importantly, they are pertinent to the credibility of the current government as to how those problems are to be addressed and how those who do have current water entitlements will be treated.
Yesterday I raised this matter by way of having a historical look at the operations of the current government in the cooperative processes with the states regarding the National Water Initiative and other intergovernmental agreements and blueprints that have been in place. In that context, the New South Wales government and the federal agreement agreed to a compensation package. It was a three-way split—$50 million from the Commonwealth, $50 million from the states and $50 million in kind from the irrigators for the loss of their entitlements. At the time I congratulated both governments because I thought, ‘Here we have the resolution of a difficult problem where no-one is really to blame.’ Water had been allocated by a range of state governments over many years, over-allocation in the groundwater systems had been recognised and there had to be an adjustment process to bring it to a sustainable level. I will cite a number of documents in regard to that.
Suffice to say that the irrigators—the water entitlement holders—agreed to this plan for sustainability. There are certain parallels between that and what the Prime Minister is saying now on other areas of water reform where there has to be an agreement between the entitlement holders and governments or jurisdictions to come to a sustainable level of environmental and other uses.
As part of that process, and on agreement between the farmers, the irrigators, and the state and federal governments, this $155 million package—I think there was $5 million for other matters—was put together. It was applauded as a first in terms of the Commonwealth and the states working together. In fact, it was not a first; there had been a not dissimilar scheme for a pipeline in South Australia, I think, some years earlier. As part of that process irrigators were told that there would be a compensation package made available to them, and some months later an absolute shock was sent through the system: on receipt of those compensation moneys—the $50 million from the state and the $50 million from the Commonwealth—it would not be considered as loss of a capital asset. I am pleased to see the minister here, because he is very aware of this issue and very slow in rectifying it.
Irrigators were told that, on receipt of the compensation, those moneys would not be considered as being for loss of capital assets, although everybody in this place, including the Prime Minister, agrees that it is the loss of capital assets. And the Premier of New South Wales, at the Prime Minister’s water meeting last year, said that it was, in his mind, the loss of a capital asset, but the Commonwealth is still treating the payment of those moneys—the $100 million to groundwater irrigators across the six valleys—as income in the year of receipt. Obviously, individuals have different taxation arrangements, but theoretically it is possible for 47 per cent of that money to be clawed back by the Commonwealth. So the Commonwealth can actually make a donation in a compensation package and then take a considerable amount of it back in the year of receipt as income.
Looking at the capital gains arrangements in this legislation, the government seems unable to deal with this issue and has been unable to explain to me—in the parliament on a range of questions—and, more importantly, the water entitlement holders why it cannot do anything with this particular issue. The Prime Minister has a 10-point plan and says, ‘We’re going to go out there.’ I agree with removing the state borders as impediments to water reform—I think most people would—but there is a severe lack of credibility in terms of the historical context of what the government has done when it has gone out to embrace water entitlement holders and the sustainability issues of groundwater and surface water systems and in the way it is treating those people who have to make the adjustment—the water entitlement holders.
So there are great concerns out there, Minister, given its poor performance on this particular issue, about whether the government can be trusted in the takeover of water entitlements. There has been a blame game played in this place. I have raised it a number of times and you, as minister, have been in receipt of some of those issues and questions. Time and time again the Commonwealth says: ‘They are the states’ problems; the states have caused the problems. If they had written the document a different way the tax office would have been able to consider it as capital rather than as income and that would have an impact on cash flows to those people in receipt of compensation arrangements.’ And the states say, ‘No, they have been the Commonwealth’s problems; they are in charge of the tax office, and they have the tax act et cetera.’
So this continual blame game has gone on for nearly two years while these people out there were trying to make these adjustments and trying to do what the Prime Minister is now talking about on a broader basis and come to grips with sustainability. They have been doing it in a voluntary way and then, when the agreement was made, no-one told them that they could lose up to 47 per cent of it through the tax act as income in the year of receipt.
I approached the then parliamentary secretary, Malcolm Turnbull, last year in about November and said, ‘Malcolm, we’ve really got a dilemma here.’ I thought he was having a real go at trying to solve the problem. I said, ‘We have this continual blame shift and the victims are left out there wondering what is going to happen. If I organise a meeting with the Premier of New South Wales, will you attend and sit across a desk from this guy and let us find out who is to blame?’ At the same time, and even previous to that, I had an FOI request in for the documents, to find out who was to blame—but that is a story in itself.
I approached the then parliamentary secretary and asked him that question. He seemed almost petrified about the politics of doing that. I would have thought, particularly given his utterances over the last few days, that he is about bringing people together to solve some of the sustainability issues. So I was quite disappointed when he said that he would not meet with the Premier because he believed it was under control. We have not heard the control levers being pulled here. We have not seen this issue resolved with the tax office. I am delighted that the Assistant Treasurer is here because he might be able to make the announcement that there has been some active work done at a government level to solve this dilemma.
In the absence of Malcolm Turnbull—I neglected to say a moment ago that the Premier agreed to that meeting between himself, Malcolm Turnbull and me as the broker of the meeting—I had that meeting, not with the Premier but with the New South Wales Minister for Primary Industries, Ian Macdonald, only last week, and I received a couple of documents. I have an FOI request in with the New South Wales government now for those documents and I am told they will be forthcoming. I am told that the intergovernmental agreement—and the minister might like to comment on this—was driven by the Commonwealth Solicitor-General. I will be waiting eagerly to see who is to blame in relation to the writing of this document that has essentially classified it as income rather than as capital.
I would like to take the opportunity to read into Hansard two things—one in relation to the freedom of information request. I made a request to the government, particularly in terms of the former federal minister John Anderson and his conversations, letters et cetera with former state minister Craig Knowles. I think they did a good job because the two of them actually sat down and tried to work out a process which would lead to sustainability and compensate those people who were going to be impacted by the change or allow them to adjust. There was no mention of being charged income tax. It was the loss of a capital asset that was in everybody’s mind.
I made a request for the various communications in my quest to find out who is to blame. If it is the state, let us flog them to death; if it is the Commonwealth, they deserve the same fate. The FOI request went in and, strange as it may seem, the morning before I met with New South Wales minister Ian Macdonald last week, I received a letter. Before dealing with that, I will read out essentially what my FOI request was:
Correspondence (letters, faxes, emails, memos) between Federal Minister John Anderson and NSW State Minister Craig Knowles and their respective Departments with regard to the “Achieving Sustainable Groundwater Entitlements” ... Program jointly announced by the Prime Minister and then NSW Premier Bob Carr on June 9 2005. Further, I seek any correspondence about this matter between the Department and the Prime Minister’s office and the Treasurer’s office. Dates between 2001 and the present are requested.
The decision that has come back to me reads:
Section 24A – Requests may be refused if documents cannot be found or do not exist
Section 24A of the FOI Act ... provides that:
24A Requests may be refused if documents cannot be found or do not exist
An agency or Minister may refuse a request for access to a document if:
Section 24A of the FOI act provides that a request for access to documents may be refused where those documents are in the department’s possession but cannot be found. Before coming to the conclusion that the documents cannot be found, the department must take all reasonable steps to find the documents. The steps taken to locate the documents to which you are seeking access have been interrogations of all files on which the documents may have been located, including searches of electronic filing systems, searches of desks, filing cabinets, drawers, safes, cupboards, files by staff in the Western NSW Regional Office Regional Partnerships Branch and Strategic Projects Division, searches of backup tapes of electronic records by Ms Marie Cooper, Western NSW Regional Office and Mr Roger Fisher, Strategic Projects Division, searches of all archived documents from the Western NSW Regional Office and Strategic Projects Division and searches of the registry. Despite the searches undertaken, no documents could be found.
The document actually says ‘no documents could not be found’—there might be more truth in the actual wording of it. It goes on:
I am satisfied that all reasonable steps have been taken to locate the documents in question and that no documents can be located in the department at this time, and I am unable to provide you with any documents as per your request.
Strangely enough, that afternoon I happened to meet with the state minister. Somewhat contradictory to what was being said in terms of the FOI request, he was able to give me a few documents in relation to this process, the discussions between the Hon. John Anderson and Craig Knowles. As I said, I have subsequently put in an FOI request for all the documents, including the intergovernmental agreement, because I think it has great significance in terms of what the Prime Minister is trying to do with the Murray-Darling.
One of those letters is from the state minister, writing to the Treasurer. I seek leave to table the letters so I do not have to read them out.
Leave granted.
I thank the minister in the chair. The first letter is from Ian Macdonald, the state minister, written on 20 March 2006, nearly a year ago. I will quote it a little bit:
The purpose of this letter is to seek your urgent reconsideration of the proposed taxation of the payments to be made under the program—
that is the Achieving Sustainable Groundwater Entitlements Program—
To eligible licence holders for a reduction in their irrigation water assets.
… … …
I believe that it would be against the spirit of our original agreement—
that was the agreement between Knowles and Anderson—
for the Australian Government to retain up to $47 million, or almost 85% of its total support as a result of income tax, when the clear intention was for the program to be equally funded by both the NSW and Australian Governments.
There is also a letter from the Hon. Peter Dutton MP written on 14 June. I will table this as well, if I can.
Leave granted.
The Hon. Peter Dutton responded on behalf of the Treasurer to this particular issue, where he raises the issue of a grant. There was no mention of it before. The letter reads:
Under the income tax law, a grant received in relation to carrying on a business is assessable income.
It goes on to say that these people are carrying on a business, and even though it was never mentioned on prior occasions that it would be taxed up to the rate of 47 per cent, the government, in his view—representing the Treasurer—believed that they should be taxed.
A number of issues have been raised since then, and the parliamentary secretary Malcolm Turnbull, now Minister for the Environment and Water Resources, has been playing a role and there have been a number of people at a state level. I will be waiting with interest, because I think I will receive the documents within the next few days, to see how that intergovernmental agreement was actually put together and why these water entitlement holders have been subjected to this massacre of their capital asset and then a massacre of their income base or their income-earning capacity. If the government is serious about the Murray-Darling, and really serious about putting in place policy rather than politics on coming to grips with this issue of over-allocation, it has the ideal way to display that here and now: recognise those who are going to give up their entitlement and bear in mind the property rights arrangements in the original COAG agreement back in 1995. Those who are going to give up these entitlements for the greater good of the nation should be encouraged, and not penalised in the way in which the current government is perpetrating this act of bastardry upon them.
in reply—Can I start by thanking those members who have taken part in the debate on the Tax Laws Amendment (2006 Measures No. 7) Bill 2006. In particular, can I thank those who have provided some comment or input on the measures that are actually contained within the bill. I am happy to address some of those concerns now.
Firstly, I wanted to address some of the concerns raised by the member for Prospect. The member for Prospect commented that the ALP may seek to refer this bill to a Senate committee for consideration. I want to make the point very clearly to him and to the House that the government actually offered to refer the bill to such a committee. I am not sure how the handover went when he took up his current position; I am not sure if he is in the same faction as Joel Fitzgibbon or not. I do not know what happened, but the decision from the ALP at the time, along with the other minor parties, was that this bill did not need to be referred to a Senate committee. He has put himself forward as the bright star of the ALP and come up with this wonderful revelation that it should be sent to a Senate committee; well, the government has offered it. The ALP rejected it, so if they are now reproposing that then that is for the ALP. But one has to wonder: is it merely a political stunt, or is the real reason that the ALP are still at a complete loss on these matters of taxation and generally running the economy, as they were in the late eighties and early nineties?
The government cannot now agree to the referral of this bill at such a late stage. The government does not want to delay businesses from accessing the benefits, and if the ALP are serious about their support of business, as they are currently saying they are, then I would have thought it would be in their best interests not to pursue this political agenda to the cost of business.
The member for Prospect has raised concerns that the government announced an increase of the net asset value threshold from $5 million to $6 million. That has not been included in the bill and does not apply from 1 July 2006, similar to the amendments in schedule 1. To that, I say these amendments are in response to the Board of Taxation’s recommendations coming out of the review of the small business CGT concessions, and these amendments apply from 1 July 2006. The government is separately introducing a new small business framework. The framework will align the small business thresholds throughout the income tax law. Due to the significance of this reform, the relevant changes will commence as announced on 1 July 2007 to allow sufficient time for the new framework to undergo appropriate consideration and consultation.
The member for Prospect was also concerned that the government did not consult on the amendments to interest withholding tax contained in schedule 2. Of course, again, that is not true. The government in fact consulted widely with a number of industry parties and stakeholders before the measure was introduced. The government also appointed an independent consultant. I note for the benefit of members that the government is not reversing its reforms to this area of law but is simply ensuring that the law reflects the parliament’s intent. These amendments correct an inadvertent error of short duration and would not be expected to cause any detriment to Australian companies who access offshore capital.
What should be noted as part of this debate is that this government cannot be accused of not consulting with business, engaging with business or engaging with the stakeholders on these policies that we propose. In fact, the feedback that I get as I move around the country talking to businesses both big and small—and I am sure the same message is being conveyed to my shadow minister opposite—is that this government is operating its consultative process as well as we ever have. If there are issues that arise in relation to bills, we will continue to consult and make appropriate amendments where we need to. But the government is serious about consulting, and we will continue to embark on that path. We are not going to be pushed to one side by a political agenda run by a Labor Party desperate to make itself relevant to the business community.
While supporting these amendments, the member for Prospect noted in relation to the statutory cap on the effective life of tractors and harvesters that these amendments are inconsistent with agreed Ralph recommendations. The government continues to support the Ralph recommendations on effective life, but as noted by the member this is an exceptional circumstance which required acknowledgement of the dire circumstances faced by our farmers, who around the country are encountering the worst drought in our country’s history. This government is committed to continuing its assistance to people in the bush, and the member for New England, who is here to contribute to this debate, would be the first to acknowledge, surely, that this government has provided exceptional circumstance assistance to farmers in a time of exceptional need. When you compare it to the states, you see it is an appalling situation that the states have put themselves in. They have deserted farmers in their hour of need at a time when the Australian federal government is providing phenomenal support to people who are very worthy of it.
The measure in relation to capital protected borrowings drew more whingeing from the member for Prospect about how long it has taken to implement an announced measure. But this is at the same time that he says that we should be consulting more. The opposition cannot have both short consultation times and long consultation times. They cannot have measures introduced tomorrow that require lengthy consultations. That needs to be a message that is sent to Labor and to the business community, when we have Labor running around saying that they will consult but saying at the same time that they will introduce legislation the next day. Both cannot happen. One has to give way. Although we are committed to introducing legislation in a timely fashion, we are committed to consulting with business to make sure that we provide the best outcomes not just to business but to consumers and to stakeholders in this portfolio and to make sure that we as a government continue to manage the Australian economy well so that the prosperous times in this country continue to roll.
This bill makes a number of important changes that will assist small business. The changes will support primary producers and will improve certainty for taxpayers. Firstly, the bill amends the capital gains tax concessions for small businesses to increase the availability of these concessions and reduce the compliance costs of small business. The amendments are in response to the recommendations of the Board of Taxation and will improve the operation of the small business CGT concessions by making changes to the maximum net asset value test, the active asset test, the 15-year exemption, the retirement exemption, the small business rollover and how the concessions apply to partnerships.
The bill also clarifies the interest withholding tax exemptions by more closely specifying the types of financial instruments the parliament intended to be eligible for the exemption. These amendments will reduce uncertainty for taxpayers and the tax office by confirming the policy intent in relation to dead interest. The intent, though, is broadly that Australian business should not face a greater cost of capital due to interest withholding tax. I repeat my statement that the government is committed to continuing our process of consultation on this aspect of the bill and other aspects, both those that are before the House at the moment and those that are under consideration by government. We will continue to make amendments where we need to. We will continue to listen to business. We will continue to act in the best interest of the nation and of our economy. Today, we recommit ourselves to doing that.
The bill also gives effect to the government’s 2006-07 budget announcement that it will enhance philanthropy by streamlining the integrity arrangements and reducing the compliance burdens that apply to deductible gift recipients or DGRs. The gift fund requirement for certain DGRs will be removed and the consolidation of multiple gift funds will be allowed for others. However, all DGRs will be required to maintain adequate records to show that the deductible public donations they receive are used appropriately and indeed how they are used. The amendments also align the integrity arrangements across all DGRs by allowing the Commissioner of Taxation to review whether an entity listed in the law continues to be eligible to receive deductible gifts, in the same way that the commissioner can review the eligibility of those entities that require the commissioner’s endorsement. Additionally, the bill amends the list of deductible gift recipients in the Income Tax Assessment Act 1997 by extending the time period for which four particular entities can receive tax deductible donations. Extending the deductible gift recipient status will assist those organisations to continue to attract public support for their activities.
The Howard government is committed to helping Australian farmers struggling under this drought. This bill makes two important changes to the tax law to help farmers. The bill preserves the depreciation rate that applies to tractors and harvesters used in the primary production sector. With the drought affecting farmers and their families across Australia, the last thing that they need is a change in the tax treatment of their valuable farm equipment. That is why the government has implemented a statutory cap which will mean no change to the income tax treatment on harvesters and tractors. The government is also amending the Farm Management Deposits scheme to increase the non-primary production income threshold from $50,000 to $65,000 and the total deposit limit from $300,000 to $400,000. Increasing these thresholds will assist primary producers to cope in this time of hardship.
This bill will provide certainty as to the tax treatment of capital protected borrowings. Under a typical capital protected product the investor is protected from a fall in the price of the shares, as the loan facility includes a capital protection feature that gives the investor the right to transfer the shares back to the lender for the amount outstanding on the loan. The full Federal Court of Australia ruled that the component of interest applicable to the cost of the capital protection feature is deductible when paid. The amendments will ensure that part of the expense on a capital protected product attributed to the cost of the capital protection feature is not interest and is not deductible where this cost is capital in nature. The measure restores the general principle underpinning the current law: that any revenue loss or outgoing in producing assessable income is deductible, while a capital loss or outgoing is not deductible. The measure also ensures that all borrowers who utilise a capital protection feature are treated in the same way for taxation purposes, whether or not the capital protection feature is purchased separately or included within so-called interest on the loan.
I recommend this bill to the House.
Question agreed to.
Bill read a second time.
by leave—I move:
That this bill be now read a third time.
Question agreed to.
Bill read a third time.
Debate resumed from 7 December 2006, on motion by Mr Hardgrave:
That this bill be now read a second time.
The Australian Technical Colleges (Flexibility in Achieving Australia’s Skills Needs) Amendment Bill (No. 2) 2006 appropriates funds on behalf of the Commonwealth parliament to vocational and educational training, to the government’s so-called Australian technical colleges. As a matter of principle, any expenditure by the Commonwealth to enhance vocational education and training and skills, whether that is in the senior secondary school level or in the tertiary level, is to be welcomed. However, we have such grave reservations about the effectiveness of this allocation of Commonwealth revenues that, whilst we will support the legislation and not oppose it, our reservations will be detailed in a second reading amendment which I will formally move at the conclusion of my remarks.
This is not the first occasion that the House has been seized with legislation in respect of the government’s Australian technical colleges; indeed, it is the third occasion. The position which Labor adopts on this occasion is the same as it did on the previous two occasions, which is to not oppose implementation by the government of its 2004 election commitment but to express, both by way of debate and by second reading amendment, its very grave reservations about the effectiveness of the government’s election commitment and the government’s measure.
The government announced the creation of its Australian technical colleges during the 2004 federal election campaign. That announcement was a political response during a political campaign to a political problem that the government had, and therein lies the basis for our very grave reservations about the effectiveness of this program and the effectiveness and value of the approach that the government has taken and the money that it is expending. Because it was a political response to a political problem, it is not necessarily the best public policy solution.
We know, because it has been detailed regularly in this place—most importantly, detailed by the Reserve Bank of Australia—as one of the reasons why there was and is upward pressure on interest rates, that there is in the Australian community a serious skills crisis. A serious skills crisis does not come along just because we might have a boom in the minerals and petroleum resources industry which people were not necessarily expecting to be of that magnitude or extent; it comes along because of neglect and complacency over the long term. Unquestionably, this government has been both neglectful and complacent when it has come to the skills, education and training of our workforce.
It is acknowledged, belatedly, by the government that there is a skills problem in the Australian community. As is so often the case with this government, the only time that it chose to act was when it was under political pressure. This is another illustration of the government seeking short-term political cover for a long-term economic or social problem, an issue which goes to the long-term international competitiveness of the Australian economy, an issue which goes to our long-term future prosperity as an economy and as a nation. It was a short-term political fix, and therein lies the reservation about the effectiveness of that fix.
I think it is important to make some general remarks about the nature and the framework of vocational education and training in Australia. In my view, the only effective approach to take to enhancing vocational education and training is by the Commonwealth taking a leadership role and acting in cooperation with the states and territories and with industry. That is the most effective way of ensuring that we cater for our long-term skills needs and requirements. The essential starting point for the deficiency in the government’s program is that, having neglected and been complacent and having, over its 10 long years in office, not funded skills training and vocational education and training enough—on the contrary, having removed funding from that area—when it came to effect a political fix, it did so by riding roughshod over the states and not playing a partnership or cooperative role with the states.
Therein lies one of the economic, financial and administrative inefficiencies of the government’s approach. The Australian technical colleges are stand-alone facilities. They are not integrated with nor do they bear any relationship to what the states are doing through the traditional TAFE sector or indeed through TAFE colleges now, working in partnership with industry either at a state or at a local level. So an essential deficiency and criticism that Labor has of the government’s approach in this area is its ignoring of the states and ignoring of the TAFE sector. I do not think even the states or the TAFE sector argue that the states themselves or TAFE have been perfect in this area, but that is not to say that you ignore the instruments which remain effectively responsible for about 70 per cent of the delivery of skills training and vocational education and training in this country. So one fundamental deficiency of the government’s approach is that it is not working in cooperation with the states.
The best way of ensuring that we meet our skills and training needs into the future is by the Commonwealth working cooperatively, through the government of the day, with the states and territories and working cooperatively with industry. This is the best way of ensuring that the Commonwealth’s priorities, the Commonwealth’s needs—those areas which the Commonwealth regards as priorities—are the focus of our vocational and educational skills and training. The approach that the government has taken of a short-term political fix, ignoring and riding roughshod over the states, is a political solution that it fell upon in the course of the 2004 election campaign. What preceded that was a long period of time where it had failed or refused to cooperate with the states and failed or refused to invest in technical and further education.
Let me now move to some of the detail of the legislation. The Australian Technical Colleges (Flexibility in Achieving Australia’s Skills Needs) Amendment Bill (No. 2) 2006 is the second such amendment to the Australian Technical Colleges (Flexibility in Achieving Australia’s Skills Needs) Act 2005 in as many years. The first amendment bill brought forward the funding of the proposed 24 Australian technical colleges from 2008-09 to 2006-07. The bill before us today seeks to increase the total funding appropriated under the act by $112.6 million from the $343.6 million to $456.2 million over the period 2005 to 2009. It does this by amending column 2 of the financial assistance table under subsection 18(4) of the act. The government says it needs this extra money because of cost increases associated with the start-up of the colleges. As I have indicated, the $112 million is on top of the $340-odd million already allocated to the start-up and running of the colleges.
The fact is that this money represents a significant cost blow-out of the government’s program. This should not be surprising because, by the government’s own admission, it has embarked on a costly project to essentially duplicate vocational education and training infrastructure that exists elsewhere across our vocational education and training system. Instead of looking at joining with vocational education providers already established, in particular the state TAFE systems, and tapping into the existing expertise there to maximise training outcomes, the government has embarked upon a course of setting up its own stand-alone system. That is where the inherent inefficiency comes from and that is where the additional costs are found. The government’s rationale behind the creation of the ATCs program has been twofold: firstly, to isolate and attack the states and territories in an area that has traditionally been one of the responsibilities of the states and, secondly, to try to find a political fix to a policy problem that the government has complacently neglected over a long period of time.
Since the government came to office, over 325,000 people have been turned away from TAFE as a result of a lack of investment by the Howard government. The Australian Industry Group recently estimated that we would require 270,000 more trained people to fill the current skills shortage. A snapshot of the state of our skills shortage is found in the January skilled vacancies index, which shows that it is clear that our current skills crisis is not abating. Skilled vacancies in January rose by 1.4 per cent over the already high December reading. Compared with January 2006, vacancies in the automotive industry in January 2007 rose by 12.5 per cent; for cooks, by 5.3 per cent; for the food industry, by 10.5 per cent; for the printing industry, by nearly 60 per cent; and, for hairdressing, by over 10 per cent.
We have a shortage of skilled and trained workers for two reasons: firstly, the government has actually cut public investment in vocational education and training and, secondly, it has complacently neglected the crisis coming down the track. You only have to look at the OECD figures and analysis to find that public investment in tertiary education, in both universities and technical and vocational training, has declined by seven per cent over the period that the government has been in office compared with competitor OECD members, whose public investment has increased by nearly 50 per cent. In 1997 the government cut funding to Australia’s principal vocational education system, TAFE, with Commonwealth revenues in vocational education decreasing by 13 per cent from 1997 to 2000 and only increasing by one per cent from 2000 to 2004. Vocational education and training funding has also fallen relative to other areas of the education sector.
In effect the amount of vocational education and training funding per student has decreased, with the result of adversely impacting on the quality of vocational education those students receive. The AiG identified in its Manufacturing futures report released in the second half of 2006 that real expenditure per hour for vocational education and training has declined in recent years. Today funding is lower in real terms than it was in Labor’s last year in office. The National Centre for Vocational Education Research shows that real expenditure per hour declined by 16 per cent between 1997 and 2001 and increased only fractionally between 2001 and 2003, leaving a net real expenditure decline. The latest financial data released just last week by the NCVER shows that the Commonwealth’s contribution to overall vocational education and training revenue has declined as a proportion of total revenue down from 22.4 per cent to 22 per cent. TAFE Directors Australia have also identified the fact that, in terms of revenue expenditure, vocational education has fallen behind other education sectors in both aggregate terms and on a per student basis, despite it being the area that will bear the greatest responsibility for the skills, vocational education and training development of our workforce.
I have outlined some of the important reasons why Labor has very grave reservations about the application of these funds. Let me now read to the House my second reading amendment to reflect some of the detail of those reservations. I move:
That all words after “That” be omitted with a view to substituting the following words:“whilst not declining to give the bill a second reading, the House recognises that the present Government has been complacent and neglectful about the Australian economy by:
I dealt with some of those issues in the course of some of my earlier remarks, so I will now move to some of the areas that I have not covered.
The creation of expensive stand-alone colleges without seeking to cooperate with the states and without seeking to contemplate the use of the existing vocational education and training framework has led to a cost blow-out in the program. On any measure, the creation of a stand-alone facility is expensive. Instead of cooperating with the states and instead of seeing whether existing facilities could be enhanced or refurbished, the Commonwealth has decided to go it alone. That is at the heart of the cost blow-out and the expenditure here.
I note remarks from the new Minister for Vocational and Further Education yesterday indicating some optimism about an acceleration of enrolments, the number of colleges up and running and outcomes. Even on a good day, it will not be until 2010 that the first qualified skilled workers will emerge from the ATCs, in the face of a skills crisis and the demands—some of which I have detailed from the Australian Industry Group. There are 24 to 25 colleges throughout the Commonwealth, which does not go anywhere near meeting the needs in all of the states, regions and local areas so far as vocational education and training is concerned. Anecdotal feedback on and experience with these expensive stand-alone colleges indicate a vast spend on physical infrastructure, and that their creation has been costly and has not been done in a way which is either coordinated with or integrated with the state system.
There is also anecdotal evidence and reports that enrolments in many of these facilities are quite low. As late as yesterday, I noticed in the Illawarra Mercury a short article under the heading ‘College fails to fill classes’ which read:
The Illawarra’s newest technical college is still looking for students one week after classes started.
So far, 38 students have enrolled in the region’s Australian Technical College, which officially opened last Monday.
And that is just one illustration that I have had drawn to my attention. So we have low enrolments, no graduation of skills until 2010 and waste and expense by riding roughshod over the states and going it alone.
It may well be that some of the individual colleges are actually successful. Frankly, that would be more by accident than design and because the moons happen to be in alignment rather than through good public policy, good public administration or good planning. One of those colleges may well be the ATC in the Pilbara, which is aimed at the minerals and petroleum resources industries of Western Australia. That one may work because the moons happen to be in alignment. A minerals and petroleum resources boom in exports to China has seen Western Australia—on the last set of state final demand figures I saw—with economic growth of 14 per cent. The relevant industry chambers in Western Australia—the Chamber of Minerals and Energy and the Chamber of Commerce and Industry—have put their very strong support behind the need to expand the capacity of Western Australia in skills in the minerals and petroleum resources area generally. And, despite reservations at the state government level that the cost of the project was massive when compared with how it could be done more efficiently, very grave reservations, the state government has got behind that project. That college may be a success, but largely because the moons are in alignment, not because of good thought, good public policy or good planning.
I have made the point recently that, since I became shadow minister for education and the Labor Party’s spokesperson on education, my analysis of the ATCs and my starting point so far as the future of the ATCs goes was to sit down with my state colleagues and have a conversation about whether a better approach might be to fold the ATCs into the state system so that we would at least have some coordination, some integration and some cooperation with the states. That is certainly something that I am having a conversation with my state ministerial colleagues about. I do not believe there is a sensible public policy rationale for the Commonwealth to be starting off its own system without having a conversation with the states. That is precisely what the government did on this occasion—in the heat of an election campaign where it had been exposed politically, as a result of complacency and neglect, as the cause of a skills crisis.
The states have had longstanding responsibility in this area. In my view, the sensible way of moving forward is to do this in cooperation and in conjunction with the states, so that the Commonwealth, in cooperation with the states, can apply its own priorities through an integrated system. So my starting point of conversation with the states and my state colleagues is to see what the reaction of the states might be to folding the colleges—those that are up and running after the election—into the state system as a measure of cooperative partnership in the areas of skills and training, not the Commonwealth riding roughshod over the states and waving a big stick.
I was in the House yesterday at question time when the new Minister for Vocational and Further Education, Mr Robb—the member for Goldstein, who recently replaced the former Minister for Vocational and Technical Education, the member for Moreton—argued and asserted that, if the colleges were to be folded back into the states, employers involved would be shown the door. He went on to say:
As a consequence, the unique and innovative role of training students with skills that are highly tailored to the needs of local employers will collapse. The colleges will disappear if they are handed back to the states. If Labor were to hand back these colleges to the states, history would repeat itself and the status of technical training would be reduced once again to that of a second-class career.
Firstly, I do not believe that vocational education and training or a technical career is a second-class career. Just look at any technically qualified person who is currently working in Western Australia. They are handsomely remunerated and they have very fine careers.
Secondly, that analysis by the minister defies the existence of very strong partnerships with local TAFE colleges, in harness and in conjunction with industry. In my own state of Western Australia, the Challenger TAFE, in Fremantle, south of Perth, is a very good example. It is a strong TAFE college, very conscious of the needs of local industry and working hand in glove with local industry. So to take the view that it is not within the capacity of the Commonwealth, working with the states and through the current TAFE system, to have vocational education and training requirements—whether that applies to secondary school students or to those at the tertiary level who have completed secondary school—working hand in glove with industry is, frankly, a nonsense.
The government has been exposed here. The government, in the 2004 election campaign, tried to effect a political fix. It may well have had some short-term political benefit, but we have been left with a long-term public policy problem that will only be resolved by a much greater investment in education generally; it will only be resolved by a much greater investment in further technical and vocational education and training, but making that investment on behalf of the Commonwealth, in conjunction with the states, using facilities that are currently available—refurbishing and enhancing them. We need agreement between the states and the Commonwealth about priorities and agreement with industry about what the skills needs will be down the track. That is the only sensible way forward in this area, and that will be the approach that Labor adopts in opposition and, subsequently, in government. I formally move the second reading amendment that I have detailed to the House and which has been circulated:
That all words after “That” be omitted with a view to substituting the following words:“whilst not declining to give the bill a second reading, the House recognises that the present Government has been complacent and neglectful about the Australian economy by:
Is the amendment seconded?
I second the amendment and reserve my right to speak.
The original question was that this bill be now read a second time. To this the honourable member for Perth has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. The question now is that the words proposed to be omitted stand part of the question.
From the day that the concept of a new approach to trade training and trade education was discussed by the government—beginning with Brendan Nelson, who at that stage was the Minister for Education, Science and Training and raised the significance of technical education—those thoughts have been rejected by the ALP. They have consistently knocked the concept of any change. They have said that the states know how to provide technical and further education. The fact is that they have all been failing to do that. There are a reduced number of apprentices and trainees, with skills that are sorely needed by Australia. They have failed to recognise this. There has been consistent denigration by the ALP of any proposal for change. There is no doubt that that rejection of any change in or improvement to technical and further education has been shown today, here in the House, by the opposition spokesman.
As I understood it from his speech, here is what the Australian Labor Party intend to do. In government they consistently failed to support technical and further education. So will they do the same thing again if they ever have the chance to govern? Of course they will. The opposition spokesman said today that they would close down the Australian technical colleges and that he is negotiating the process by which that would be done. So a whole band of new and alternative education, a challenge to the status quo, a challenge to the way in which things are done—a combination of industry and education working together, possibly for the first time, in an effective, cooperative arrangement with the flexibility of delivering education programs that are attractive to young people and that provide an opportunity to move quickly into trades when they leave school—will be rejected by the ALP. A rejection of that will, I believe, bring on a conflict that will mirror the current conflict between government and non-government schools. It will also highlight the continual backing of the teachers unions by the Australian Labor Party.
Instead of working out what is best for our students, for our families and for Australia’s needs, and having participants cooperate to get a result, it seems that the Australian Labor Party, by these pronouncements today, have stuck with the old framework. Their attitude is: ‘The states will deliver it, and whatever they want to do will be okay with us because we have no real priorities.’ From the policies repeated today, the intention of the Australian Labor Party seems to be that the states will deal with technical and further education and that we will give them more money to do the same thing over and over again. I think that is a crazy and wrong approach.
One only has to read about the priorities in my own state to see what should be happening there. One only has to look at the way in which New South Wales residents have been let down by their government on these issues. There are 47,000 job vacancies in New South Wales. The demographic changes will cut the size of the workforce in the coming years. There are significant skills shortages in the public sector and in regional New South Wales, despite its poor economic performance. There is an apprenticeship completion rate of 45 per cent in New South Wales.
Victoria and New South Wales have a heap to answer for for the failure rate of their TAFE students. It is about the way in which they present their courses. It is about the way in which they charge. It is all about cost recovery. The system is rigid and incapable of change. Unfortunately, in both of those states, the completion rate is low compared with other states. I think that is a let-down not by the federal government but by state governments incapable of delivering programs in trades and further technical skills that are attractive to young people, who are sorely needed in those areas. Australia has a proud, world-class training system. When our students go to compete at the trades ‘Olympics’ they score extremely well. They beat many other countries time and again. Students from my own electorate have topped their trades in the world.
The Australian government, since about the year 2000, have been trying to discuss with the states how we can do things better. The frustration of Brendan Nelson, the current Minister for Defence, day after day at the dispatch box trying to persuade, cajole, argue with and threaten the states into doing more was just not bearing fruit; in fact, the number of apprenticeships that this government was able to produce by 2004 had grown to approximately 400,000, nearly three times the number of apprentices who were in training in 1995 under the Australian Labor Party. The number then, in 1995, was only 140,000. By the year 2000 this government had successfully raised the numbers but realised we needed to go further. What were the results of those discussions? They were a flop. The states would not shift. They were too locked in. They were too rigid and too controlled by the trade unions and by the teacher’s federation, in my view. The rigidity was there.
A new approach was needed, and the Australian technical colleges are a new approach. Will it be the ideal pattern for the future? Maybe it will; maybe it will not. But it is a brilliant start, because both the young people whom I have spoken to and the tradesmen who will be employing them when they finish are excited by the changes. Let me give an example of what is occurring in Western Sydney. It was difficult to start something in Western Sydney. There are a number of reasons for that, but it is up and running. It was only in January this year that the New South Wales government agreed on what the courses should be. For goodness sake, if anybody is dragging the chain and trying to prevent young people from entering trades, it is the government of New South Wales. I think that its approach has been deplorable. There has been no interest in trying to meet some of the challenges of the future.
If the New South Wales government were to look at what needs to be done, they would continue to support the COAG national reform agenda. They would want to be in there, having a say, instead of being dog in the manger with the future of young people and the needs of New South Wales. They need to work with the Commonwealth and the other states, and they need to have nationally recognised qualifications. But, no, New South Wales wants to have its own way of doing things and its own courses, structured in a certain way. So, when the federal ministers, both Dr Nelson and Mr Hardgrave, spoke to New South Wales people, a blank wall went up. There are destructive disincentives for Australian apprenticeships being practised by the government of New South Wales. Long hours of training—long years of training, in many instances—relatively low wages and the attractiveness of learning while you earn is being offset by hesitancy in making a rigid four-year commitment. Greater flexibility, which the Australian technical colleges offer, is not available.
So there is a need for states to change. They have not changed, and so the Australian technical colleges are working like this: between year 11 and year 12 students work a full day. They start study at eight o’clock in the morning and finish at five o’clock. They have roughly seven months of school. They have a couple of months on the job and they spend the remainder of the year learning skills in their technical trade. What is this producing? At the end of two years, in the time a student achieves their higher school certificate, they have the first year of their apprenticeship completed. They have trade skills, they know about the workplace and they are a very desirable employee. And the changes that have been brought about by the introduction of the Australian technical colleges are going to produce massive effects in the workforce right across Australia—one only has to look at the take-up rate.
The reason for this amendment, this appropriation of additional funds being required, is that the take-up rate during 2006 has been greater. Five colleges commenced in 2006: East Melbourne, Gladstone, Gold Coast, Northern Tasmania and Port Macquarie. A further 16 are to commence this year. North Queensland, North Brisbane, Adelaide South, Gippsland, Bendigo, Perth South, Hunter, Geelong, Northern Adelaide, Sunshine, Illawarra, Spencer Gulf, Warrnambool, Darwin and Western Sydney have all commenced, and Pilbara will open in mid-2007. There will be a further three opening during 2008. They will be Central Coast, Dubbo and Queanbeyan. Two thousand students across Australia will attend Australian technical colleges this year. The Australian Labor Party has knocked this program as having a slow start. It has not been a slow start. From a rapid introduction, there are 2,000 students in colleges this year and the expectation is that around 7,500 will be attending colleges each year once they are fully operational in 2009.
It is an extraordinary achievement, and one that challenges the states, in my view, to do more. I think that the states, particularly New South Wales, need to be providing support for school based career advisers to encourage students to consider professional advice about their careers and about education, training and opportunities for their future. And the trades must be part of that process. There needs to be a ministerial council in New South Wales to work out what needs to be done in vocational education in schools. There needs to be recognition of prior learning. But all that seems to be happening in New South Wales is that they are jacking up fees and saying that they need more migrant tradesmen. They do not appear to be capable of approaching the job and doing something worthwhile themselves. So I really feel that there needs to be a change in outlook.
Let me give the House a couple of examples. Recently I had a discussion with a young man, a mature student, who wants to take up plumbing. He has done his first four years, which I understand qualifies him for certificate III, and he needs to do certificate IV, which is all theory. He is going to do two subjects a year and will attend college one night a week. During this time he will study advanced plumbing to equip him to become a master tradesman who is able to do anything. After four years he is licensed but he needs these additional qualifications, so he needs another two years of study. The cost of study for one night a week for six months is $1,150. I am told that, only two years ago, this course was a fraction of that price. Some centres are even charging up to $2,200 per segment for these last two years of a plumbing course. If one looks at some of the further subjects, which are not compulsory but which need to be added to these single subjects, one is looking at a possible total cost of about $6,000 for the additional two years to get the final trade licensing that a plumber needs.
I think this is so wrong. What they are doing is milking people in need. This young bloke has two kids. He is changing careers. He has a proven career of the past, and he is a mature student. He said, ‘I’m going to battle and find that money because I need to change my career. But I don’t know about the young blokes who are in their twenties with a couple of kids and in the final years of their course. They’re out on the job and need to get that final licence to establish themselves one day as a licensed plumber operating on their own, as a contractor or a subcontractor, but they’re never going to do it.’ Is it any wonder we have such a failure in completion rates? Not only that; what is even more ridiculous is that, of the four subjects that are supposed to be completed in those years, only three are compulsory and they need not complete the fourth.
Let me give you an idea of what they are. There are four components, including advanced gas, water and sanitary drainage. The one that is optional—which is probably the most important of the lot—is plumbing contracting principles. That is the thing that equips a bloke to go out and do the job in a responsible manner. That is optional in New South Wales. You do not have to do it; you can just do the three. You pay for the four and you can do the three, but you do not have to complete the most significant one; it is not mandatory. It is no wonder that we have a dropout rate of such significance in New South Wales. The Financial Review of 9 June said that in Victoria the completion rate for 1998-2002 was 64 per cent, falling to 57 per cent for 2002-05. The figures provided in the recent publication of the New South Wales business chamber indicate that it is down to a 45 per cent completion rate. This is the way it has changed in the two states.
The flexibility offered by the Australian technical colleges is terrific. A lot of students want to go into the trades, but they have not had decent maths or decent English early in their education. However, they can get remediation. A technical college has to take everybody and enrol them and then apply the remediation. The Australian technical colleges can assess students on the way in, design personalised courses for them and give them additional hours. They have the flexibility of employers being involved in the design of courses and they have tradesmen on the boards of the Australian technical colleges, as well as educators. The Australian government has produced a magnificent result, an amazing success that will contribute mightily to Australia’s needs in technical and further education. It is an attractive opening in which students and employers can become involved in a high-calibre career—they can all participate—and the Australian government is spearheading change in this area. Under the current state arrangements operating in New South Wales and Victoria in particular, it is too closed, too inflexible and too difficult. Other states may be more flexible. I believe that the TAFE teachers are trying hard and the institutes are trying hard, but the policies overriding those make it almost impossible to meet the goals of Australia. We need a unified approach to trades. We need to have objectives which are flexible and which allow people to take up trades—objectives which are encouraging and offer people a wonderful opportunity.
My electorate is full of young families, and the heads of those families are self-employed tradesmen. They are in building trades of all sorts, and there are mechanics and people in a whole range of other trades such as pneumatics, hydraulics and all the rest of it. They are very successful people. They work extremely hard, start early in the morning and work long hours. They may be running only small businesses—one or two people or just a single tradesman and his missus running the books—but they are some of the best people in Australia, and they are really committed to Australia’s future. They want to see Australia succeed, and they are committed to their homes and their families. They want to produce the best results for them as well. I believe that any government that restricts, limits or hobbles that process is not worth keeping and not worth feeding. Unfortunately, it appears that only too often Victoria and New South Wales are obstructive rather than supportive of our brilliant, young, new tradesmen.
I rise to support the amendment to the Australian Technical Colleges (Flexibility in Achieving Australia’s Skills Needs) Amendment Bill (No. 2) 2006 moved by my colleague the member for Perth. When the Leader of the Opposition took that job, he gave high priority to the task of ending the blame game and getting rid of the attempts by one level of government to explain away their failure by blaming the activity on the other. Australians are sick and tired of the blame game—and if the speech by the member for Mitchell had been broadcast, they would understand why. I have never heard a more old-fashioned, tired exposition of the blame game than that which we just heard. There was not one step forward in what he had to say. It was a straight 1990s exposition of the modern Liberal Party. In the 1970s, he would have been kicked out of the Liberal Party for saying all that, but these days it is the modern Liberal Party version and it is sad.
The question of our skills crisis is a very serious one, but the most remarkable thing about the skills crisis is that everybody knew it was coming. Nobody has been taken by surprise, but nobody thought that the federal government setting up a parallel system of vocational education and training colleges was a sensible solution—not even the Howard government in 2003. They did not think about it in 1997, 1998 or 1999. Everybody who has ever been engaged in the political process knows what happened. In the run-up to the 2004 election, the people in the policy think tank said, ‘The research says we have a problem with skills. The public has perceived we are not doing enough, so we have to dream up a policy for the election.’ Because a proper solution would have required lengthy discussion with the states and an agreed program of reform, it was incapable of being done in the time available. In the eight previous years, no effort had been made to do that. That option was not open, so they dreamt up this nightmare of a parallel system of Australian technical colleges.
Think about this analogy: what would people say if the federal government said, ‘We have a clever idea. We are going to set up federal government hospitals in Bundaberg because of the problem the Queensland government has with health’? No sane person would have thought that was a good solution. Everybody knew there was a problem at Bundaberg hospital, but nobody thought that the Commonwealth should set up some hospitals and then it would all be solved. We could have it run on AWAs—that will solve the problem! That is just a very sad example of what is worst about the management of federal-state relations. The Business Council of Australia articulated their concern about the profound crisis in our federal system and released a report that said the shortcomings in our federal system—the waste and the duplication—are costing Australians $9 billion a year. What was the example they used to highlight the worst of it? It was the Commonwealth’s attitude on vocational education and training—and that is before we had this mad system! The report stated:
The Commonwealth/State agreement on Skilling Australia’s Workforce provides a good example of where funding ... in fact provides perverse incentives and opens the way for the imposition of overly prescriptive requirements on the States ... The agreement:
That is dead right. So what is it that we are trying to achieve? Any sensible person who sought a reform of vocational education and training would talk to the states. It would not be easy, but the previous government did come to an agreement, which this government abolished. I am not advocating that we go back to that model. We need to go forward, but we need to go forward to a new sort of agreement that is about outcomes and not about inputs. This government is about regulating the inputs in schools and not worrying about the outcomes.
All the contemporary literature and the good analysis, both Australian and international, about the efficient operation of federations say that the central agency—in Australia it is the Commonwealth government—should primarily be about funding in the areas that are best done locally. That is not everything; it is not defence or economic management, which should be done centrally. The advantage that federalism brings in vast countries like Australia, the United States and Canada is that it allows the delivery to respond to local variation. But if you have that in an unfettered way, what you get is widening differentiation between the states and regions in the country because the strongest have the capacity to do the most. The federal body can have an equalising function and a standard setting function to say, ‘We have a national interest in what is going to happen with regard to skills.’ Ten years of neglect have created a profound national crisis in schools. We need to address it by setting outcomes that we require the states to achieve and providing an incentive system so that those who achieve it get rewarded, and those who do not achieve it do not get rewarded. That is the way we go about getting reform.
If you tried to imagine the worst possible mechanism for getting a broadly based enhancement of Australia’s skills training regime, you would invent a parallel scheme. We have three out there: there is private vocational education and training, there is the TAFE system and now there is the Commonwealth system. Even if the Commonwealth system were magnificent, its scale is totally trivial compared to the scale of the problem we face. The minister, in his first answer in question time yesterday, made it clear that the system is not going to achieve the specified outcomes. If his ambitious outline of what is going to happen this year were to come true, we will still only be getting to 2,000 students by the end of this year—far fewer than the Prime Minister promised at the last election. But that is very convenient, because it means that he can promise it again at the next election—and he will. It is typical. This problem arises on a triennial basis, just before every election, but in between nothing happens.
This system is entirely trivial compared to the scale of the national skills problem. Its dollars would be much better spent on incentives for the improvement and reform of the state system, where most of the training is going to take place, even if this scheme comes to its full and comprehensive fruition as promised—and I do not believe it will. As the title of this bill says, we need to ‘achieve Australia’s skills needs’. As Dr Peter Kell from Wollongong University said:
A skills shortage is no accident when you under invest for 10 years.
That is absolutely right. All the international data says that Australia has been falling behind the pack in investing in post-secondary education. The government cannot say that it did not know this was coming. It was advised on a number of occasions by the Reserve Bank. The Reserve Bank warned that declining skills in the workforce was a looming problem:
Localised prejudices are certainly evident in some official wage measures as well as through business liaison which points to substantial increases in wages for skilled employees.
The Productivity Commission was also warning the government as follows:
The challenge for Australia is to further strengthen and improve the national training system so it delivers what Australian business communities and individuals need to build their own personal, and our collective, economic and social prosperity.
All the proposals for reform in our federation look across a range of issues, and high up on the agenda is doing something better about our federal-state relationships as they relate to skills. There is more to do about preschool—a very big issue. It is a question of long-term investment in enhancing the economic performance and social equity of this country. The neglect of preschool education has been a scandal. Investment in preschool education is not going to do much to address our current skills crisis, but it is an investment that needs to be made. More needs to be done in schools, particularly in the area of maths and science, which has been highlighted by the conference being held here in Canberra today. More needs to be done about university, where the international data is humiliating for Australia. Our performance is so bad compared to all those with whom we hope to compete. It is flying in the face of the data that says that investment in that area of education is critical to modern successful economic performance. Central within those three areas where our performance is lagging and where reform is needed is the need to do something about skills.
We all welcome the fact that under this bill there will be an increase in spending on the training of Australians, but the way that it is being done is a scandal—a waste, a duplication and a scandal. Everybody knows this policy has not been a success. The poor previous minister carried the can and got dumped. I am sure a lot of people blame the department, but neither the minister nor the department are responsible. I did not think the previous minister was one of the stars of the government in any of his previous positions, but it is not his fault. This policy is a dog. It could not work. The best will in the world could not make it work. And, if it succeeds, it makes no significant contribution to solving the problem. Everybody knows that. They knew it on the day it was announced. The Prime Minister knew it on the day he decided to announce it. Everybody knows the policy has not been a success. It could not have been a success.
By the end of last year only five of the promised colleges were functioning. The new minister said yesterday in question time that, while more colleges would be coming online this year, the total number of students will still only be 2,000—absolutely irrelevant to the broad sweep of the challenge facing Australia. We have been experiencing strong economic growth. The world has been driving demand for what we want to produce, and we have been riding on the back of that boom. There are now all sorts of long-term issues about the sustainability of that boom and the lack of investment in other areas of the proceeds of the boom to guarantee our future prosperity. Nowhere is it more stark than in this area. The very failure to invest some of the proceeds of that boom in skills is putting the boom itself at risk because the skill shortages are contributing to pressures on the labour supply in particular industries and regions, particularly those booming the most.
The Prime Minister, as we all know, is a very clever politician. He saw in the lead-up to the last election that he had a political problem. One wishes he had seen that the nation had a social and economic problem. But we all know he is very clever with these political quick fixes. He saw a political problem and he came up with a political solution. He announced on the day, to the incredulity of everybody who knows anything about the area, that the Commonwealth would set up its own system of technical colleges. It would have been funny if it were not sad.
I empathise with the challenge faced by the department in implementing this extraordinary policy. It is an example of the worst sort of federal-state relations—a knee-jerk reaction to solve a political problem for the Commonwealth—which involves duplication and inefficiency.
What did the BCA say when, with the very comprehensive economic analysis that they commissioned, they assessed the $9 billion cost to the Australian economy of the waste, inefficiency and duplication? They said that the lines of responsibility are not clearly defined. How could that be more clearly illustrated than here, where we have a conscious decision to duplicate a federal system? It is not a takeover—I do not think I would have agreed with that, but at least it would have clarified the line of responsibility—but it is a duplication. It is a classic example of waste and inefficiency.
The establishment of Australian technical colleges in parallel with the TAFE system cuts across all good principles of how a federation should work. We need a new round of economic reforms. All the analysts—driven by the Business Council of Australia but including independent advisors such as Professor Garnaut—say that the next big wave of micro-economic reform is going to have to come from, or include within it, reform of federal-state relations. And there has been no more adverse step in the reform of federal-state relations than the decision to establish a needless duplication in the training system to meet our national skills crisis.
I am a great believer in the benefits of competition, and I think that opening the forces of competition in our training system is worthwhile, but I am not a fan of different levels of government duplicating the same area of activity. The system loses cohesiveness and the duplication outweighs any potential advantages. You get a misalignment of priorities.
At its best, federalism suggests that needs will be better met at a local, regional or state level, through the principle of subsidiarity: carrying out the function at the lowest level at which it can be most effectively delivered. That is certainly not exemplified by the Commonwealth’s setting up of a parallel system of technical colleges. The Commonwealth should be focusing on training outcomes and on incentives to the states and the other suppliers to meet those outcomes. They should have an incentive based model—as in all the best federal-state relations reform models—that will encourage participants to meet that requirement, be an incentive for innovation and get the best benefit out of competitive federalism.
The Commonwealth should focus on setting priorities that ensure Australians have access to more training, better training and more appropriate training. Money currently being wasted on the pointless duplication of the TAFE system by the Australian technical colleges should be invested in our skills sector by providing incentives for innovation, reform and better outcomes.
I repeat what I said in opening: I welcome the increase in funding for skills education but I call on the Howard government to stop playing politics with this issue that is so vital for Australia’s future. We need to be smart in how we spend our money. We need to develop our human capital and, through this, maintain the momentum that will eventually build a better future for all Australians by finding ways for all to participate and achieve in our economy. And we need to focus on reform of our federal-state relations. There is no worse example of bad practice in this area than the duplication inherent in the system of Australian technical colleges.
I am pleased today to speak on the Australian Technical Colleges (Flexibility in Achieving Australia’s Skills Needs) Amendment Bill (No. 2) 2006. It gives me the opportunity to say a number of things about the technical college system, and particularly about the technical college that is going to be in the region of my electorate of Canning in Western Australia.
Before I speak about that I am almost obliged to respond to some of the things said by the member for Fraser. He is obviously out there trying to brush up his credentials on federal-state relations and to demonstrate that he needs a guernsey on it. This is the person who said, in his speech, ‘Let’s stop the blame game and let’s stop playing politics.’ But what did he do throughout the whole damn speech that he just gave? He spent the whole time pouring scorn, in a snide and cynical way, over this whole process. That was his contribution: firstly, to try and showcase his federal-state relations credentials; and, secondly, to try and rubbish the whole system.
He knows that this system was in need of greater funding and in need of an alternative system, because the state TAFE training system is broken—and I will later give you some evidence about why the state TAFE system is in such bad shape. The member for Fraser is not somebody I take a lot of notice of because he is the man who misled this parliament on the ethanol issue. As a result of that we do not take what he says for granted; it needs to be examined very carefully. Mark Latham was right about him when he sacked him. Amazingly, the Labor Party wanted to go ahead with new blood but they went back and got a timeserver and put the member for Fraser in place. Putting a timeserver back on the front bench is a strange way of taking the party forward.
The Australian Technical Colleges (Flexibility in Achieving Australia’s Skills Needs) Amendment Bill, which is before us today, is very important because it is aimed at providing additional funding of $112.6 million over the years 2005 to 2009 for the establishment and operation of Australian technical colleges. We know that the original initiative was funded at $343.6 million for 24 colleges. That was increased to 25 colleges, and, when you add $112.6 million, we now have $456.2 million, almost half a billion dollars, that the federal government is committing to further training, particularly for our young people in upskilling them for jobs.
You cannot have it both ways. You cannot have the member for Fraser and those on the other side saying this is—what were his words?—‘needless duplication’, a funding mechanism which is a waste and a scandal, when the federal government is putting in place a world-class training regime for young people to upskill our workforce. We know that Australia at the moment is going through one of the biggest booms it has ever had, and it is going to keep running for some time. To all the naysayers over there that say, ‘You should have seen this coming years ago,’ and all that sort of stuff, I say that we have seen it coming and that is why we have put in place a mechanism to try and upskill our young people.
But in the meantime we have to import skilled labour through the 457 visa program and other regional and state government sponsorships to fill the void of this hugely growing economy. In this hugely growing economy we need skilled workers, and you do not just invent them overnight. The TAFE system has been a dismal failure in providing this. To give an example, one of the TAFE teachers in my area came to me and said: ‘Mr Randall, I can’t believe what goes on at this TAFE that I teach at. There are more administrators and teachers than there are students.’ The administrators all have a car and a fuel card and spend most of their time being bureaucrats, and the teachers are underemployed because there are not enough students there.
In Western Australia, as Mr Deputy Speaker Haase would know, in the north-west, for example, it is very difficult to attract students into training when they can go out and earn the sort of money that they are earning as trades assistants, for example, without any skills. My nephew, over Christmas lunch, happened to tell me that he earns $1,200 a week as a trades assistant in Karratha. Why would he now take up an apprenticeship or a skill training regime when he can leave school early and go and get that sort of money? That is the challenge—to try and get enough people into this system.
The proof of the pudding is in what is happening today, and that is that these Australian technical colleges are receiving very good enrolments. It is patchy in some areas. In my state, at the Perth South Australian Technical College, there are enrolments before they have even opened their doors—that demonstrates how popular it is. The young people are voting with their feet. They want to join Australian technical colleges that actually teach skills.
The Prime Minister put in place the mechanism of Australian technical colleges because TAFEs were not teaching skills. They were teaching everything but skills. You could go and do courses in aromatherapy, flower arranging or transcendental meditation, but could you get a real course in upskilling automotive electricians? It was very difficult. Because the state governments absolutely slugged through fees and charges students going into these courses, they were not interested. They were not interested because, firstly, it did not provide them with the course that they wanted and, secondly, they were getting slugged in the neck.
The state governments cannot have it both ways, and neither can the opposition by saying, ‘At the end of the day we have a very good system in place.’ The TAFE system is largely broke all around Australia. Then we get the member for Perth—the opposition spokesman who has been dumped as industrial relations spokesman because he could not sell it; now he is going to try and sell this—saying that if Labor were to come to power they would dump the college plan. An article in the Financial Review on Monday the 5th by Sophie Morris said:
The federal government’s new trade high schools are likely to be handed over to the states if a Labor government is elected.
He is their spokesman, so obviously it is Labor Party policy. Once these technical colleges are established, he would take them and hand them over to the broken and dismantled system of TAFEs in the states.
We are going to fund them properly. With half a billion dollars in the initial set-up plus the ongoing recurrent funding, we will see that this is done properly—properly staffed and properly resourced in terms of educational facilities and tools. But you cannot say that about the TAFEs. In fact, the TAFE system in my state in particular is almost laughable because people who try and get into it, as I said, do not get the meaningful courses that they want and the charges are exorbitant. The article goes on to say:
As Labor tries to make education an election issue, education and training spokesman Stephen Smith said that a Labor government would probably dump the policy, which was the coalition’s skills centrepiece ...
Mr Smith told The Australian Financial Review that he saw no good reason for the government’s Australian Technical Colleges for senior high school students.
“I don’t see a sensible public policy rationale for the commonwealth trying to start up its own technical system when you’ve got the states having primary responsibility for secondary schools and for the TAFE system for many years ...
“My starting point would be: is it possible to fold these ones which are already up and running, is it possible to fold them sensibly into what the states are doing, and in the course of that reflect our own priorities?”
That is the danger. I say to the parents of all the students out there in Australia who want to get into this system: the Labor Party, should you put your student into one of these colleges, will shove them back into the state TAFE system, with all its ramifications. It is scary to think what a Labor government in the future would do with training.
What is their history on training? What did the previous Keating-Hawke Labor government do in terms of training? The member for Hotham was their minister charged with the responsibility for training and employment. They started these beautiful things called Working Nation training centres, where you could do a brickies course in three weeks. I went out to some of these when I was the member for Swan. I have to tell you: I would not want them building my house. They were not put up by a plumbline, I can assure you. They were probably put up by somebody who was not too good at putting an eye down a bead. I would not want these people doing these quick fix, mickey mouse courses putting up my brick house, thank you very much, because it would not stay up for long.
But there they were. They had Bill Hunter—remember him?—standing there in those expensive ads saying, ‘We’ve got these people job-ready to go into the workforce.’ The only one who made any money out of it was Bill Hunter. He got an enormous amount of money for running the ads. He was probably the only one who got well remunerated. It was in effect a way of taking all these unemployed young people off the unemployment list and putting them in a short-term fix to alter the stats so they did not look too bad. It did not last long, because in reality with some of these jobs it was costing something like $60,000 per person to train them on these short, mickey mouse courses and to put them into some sort of training regime which did not last long. At the end of the day it was an absolute failure. So that is Labor’s past. That is what they have done in the past, and in the future their only alternative is, rather than try and put into place a decent skills training regime, that they are going to fold these colleges back into TAFEs, in the broken state that they are in.
I can point out quite clearly that the Perth South Technical College—which the member for Hasluck, Stuart Henry, and I have fought hard for—is going to be a success. One of the reasons I am very proud to be associated with working hard and making a strong argument to have it located in Perth South is that the eastern corridor of Perth in particular has been bereft of skills training and tertiary training. When the previous education minister, Brendan Nelson, was in place I was able to get him to agree to provide 20 university funded places for the Armadale region. That was most welcomed by the city of Armadale and the whole community of Armadale, and the Curtin university provided the facilities and the linkage to the local schools. In fact, they got more than 20 places, because they were able to maximise their funding to fund more than 20 students. This was a first step. We had the former member for Hasluck, Sharon Jackson, out there saying, ‘Ah, there’s nothing in the eastern suburbs,’ and all she was doing was criticising. Well, she is trying to come back again, but I think she will have a bit of trouble against the current member for Hasluck, Stuart Henry, because he is actually out there working and he knows a lot about skills training. He used to run this sector in Perth himself. I do not know if he is down to speak on this bill, but if he is then it will be an eloquent speech because he knows the subject like the back of his hand.
Anyway, Sharon is going to have a job ahead of her trying to do this, because at the end of the day there she was, bemoaning the facts. It is a typical Labor thing: yelling and screaming and saying, ‘Shock, horror,’ but not providing any alternative. We are providing the alternative. As soon as we provide the job training places out there, what do the Labor Party do? What did the member for Fraser say? He said they are ‘a waste, duplication and scandalous.’ This was a man who said, ‘Let’s not get involved in the politics of it.’
The Australian Technical College, Perth South is going to be located on two sites, one at Maddington and one in Armadale. Maddington is in the electorate of the member for Hasluck, just up the road from me. It is probably only about three to five kilometres from my electorate office, and the Armadale campus is just a couple of kilometres up the road. So the two campuses are very close. They are actually going to be involved in real, meaningful skills training. The Armadale campus will concentrate on the construction industry—that is brickies, plumbers et cetera—which is going to be fantastic, and the Maddington campus is going to be providing automotive training: for car electricians, upholsterers, panel beaters et cetera. That is going to be fantastic, and the young people in that region are taking hold of this straight away, as I will indicate in a moment in terms of enrolments.
In fact, I will indicate it now. Let me point out that the first-year intake for both campuses has been targeted for 90 people, and you will ask in a moment, ‘Why is it so low?’ Well, you will see in a moment that, as a lead-in to the construction and facilities available, 90 is quite appropriate. Currently, even before they open, the enrolment is 61. Enrolments are expected to jump once classrooms are finished, and there will be over 300 by the third year. At the moment the temporary classrooms for the students in Armadale are almost ready, and until then the students will be housed at Maddington. Industry is now enthusiastically joining the party, and enrolments for this year will be 90 within the next few weeks.
One of the keys to the Perth South college is flexibility. For example they are outlining the curriculum and the courses available, but it came to pass that steel fixing was an area that they need further support with. Steel fixing was not planned, but since the industry became interested there have been 14 enrolments for the steel fixing course. Given the fact that you can earn about a thousand bucks a week as a steel fixer no matter what age you are, is it any wonder that young kids want to get involved in the steel fixing side of the construction industry?
Interestingly, the Armadale campus will cost $4.75 million plus $1.5 million for the land—not inexpensive—and the Gosnells campus is going to cost $5.5 million. Can I say at this point—and I digress—that I am really aggrieved about the process, in that it missed out on an opportunity. The RAC had a magnificent site on the highway in Maddington which could have been had for something like $2.3 million. The previous minister was aware of this and wrote to the state department and to the Australian Stirling Skills Training group, who are running this institution, and said, ‘Look, even though you haven’t received all the paperwork yet, I’m telling you that you will be awarded this and you should go and get that centre.’ But they did not, and there was not enough courage from the board at that stage. A whole range of incidents came together so that they did not go and buy it, and they got beaten by Silver Chain. I do not know why Silver Chain would want a facility like that, but at any rate it is a magnificent facility. They could have got it for something like $2.2 million or $2.3 million, and now building a purpose-built one is going to cost $5.5 million. So I am pretty annoyed that they did not show enough initiative to go and do that.
One of the reasons this process has been slow is that they have had a lot of difficulty getting approvals from the state department of DEST. Thank goodness the new minister has intervened over the last few days and has made sure that DEST got on and signed their approval to lease, because what they wanted was the leasing arrangement for this rather than the purchase. As a result, this is going to happen now. The builder was waiting to build—the footings were poured and everything was ready to go—but DEST wanted so much compliance and further information, and there was duplication and a wrong form. But when Trevor Williams, from Stirling Skills Training, wrote to Margaret Cameron and said, ‘If you don’t hurry up, we are going to lose our builder,’ that was a cause of concern to me. So I got straight onto the new minister and made sure that we saw this happen. That is one of the reasons why there has been some lag time.
In fact, there has been a deliberate intervention by certain people to try to slow this process. A school principal, when we actually turned the first sod there, said to me, ‘Look, the Perth South district education has made it clear to me as a school principal that they want to see this process go slow.’ That is the state government again trying to put a bit of heat on with nefarious behaviour and trying to cause grief to a federal government initiative. He said: ‘I will not have a bar of it. I am just letting you know that that is the direction I have seen from the Perth South district office on this.’
In finishing, I would say that this is a great outcome. There have been frustrations and delays. DEST requires information about a three-year lease, which is not very attractive to someone who wants to involve themselves in a lease. It should be for a longer period than that. But the whole community is grateful for this federal government initiative. The young people are grateful for this initiative on training and educational opportunities, particularly out in the eastern corridor of the Perth area. I know that it will be welcomed in the Pilbara in the north. We are actually fixing something that the states dropped the ball on. We are going to make sure that young people get opportunities, which they have been deprived of, to be upskilled in the future workforce of Australia. (Time expired)
I have made several contributions in the House on the government’s Australian technical colleges program. I have consistently questioned whether the expenditure on these 25 colleges is in fact good public policy and to what extent the program would play any meaningful role in addressing the skills crisis which is now facing our nation. As we know, it is a skills crisis that is a severe obstacle to Australia’s economic fortunes.
It is very easy for the member for Canning to again play the blame game and try to transfer the responsibility to state governments. But, under the watch of the Howard government, for years a range of credible organisations, including their friends in the business community, have been alerting the government to our growing skills crisis. Rather belatedly, the government had to confront this reality and admit that such a shortage actually existed. However, rather than accepting their failure to deal with the crisis after 10 long years in government, they came up with the rather spurious rationalisation that Australia’s skill shortages were a manifestation of a buoyant economy.
I have to challenge that assertion and I do so on the basis of the region that I represent. One would have to ask how it is that, in a region like the Illawarra—where we have unemployment rates at around 10 per cent, together with record levels of unemployment among teenagers looking for full-time work, at around 40 per cent—side by side with these horrendous indicators of unemployment we have skills shortages. So this rationalisation that somehow you have to expect skills shortages because we are travelling so well economically certainly does not hold up in the area that I represent. In fact, it is a very potent mix to have high unemployment rates, especially among young people desperately wanting to get into an apprenticeship, coupled with business crying out for labour to fill their shortages now, not in 2010 to 2012 when we would expect the first graduates to be emerging from these colleges.
The government has only itself to blame for allowing the skills crisis to develop on its watch. It has been asleep at the wheel while this crisis grew around it. A small indication that it has been asleep on its watch is the response to some questions on notice to the former minister about what was happening to apprenticeship training in the Illawarra from 1996 onwards. By the government’s own admission, the number of apprentices in training in the traditional trades in fact fell from 880 young people in training in 1996, which was the first year of this government, to 870 in 2004. So the number of young people in training for an apprenticeship was in fact declining at a time when the alarm bells should have been ringing for this government.
Despite all of the knowledge and warnings about the skills crisis, fewer people in my region were training in the traditional trades in 2004 than in the first year of this government. When you look at the early 2000s, you see that the number of apprentices in training in the Illawarra had fallen to 630. So you cannot say that this is a problem that developed overnight. The warning bells were ringing loudly for a considerable period of time. As we know from all of the reports that we had from the TAFE directors, this was at a time when cuts were being made, there was a lack of investment in vocational education and there was huge unmet demand in the system. Young people who would have made excellent apprentices and trainees were in fact being turned away from the gates of our local TAFE colleges.
When we first heard the proposal about these Australian technical colleges as an election promise, the Prime Minister said at the time, ‘The technical colleges are the centrepiece of our drive to tackle skills shortages and to revolutionise vocational education and training throughout Australia.’ In my view, it was the case then as it is today that that statement was one of extreme hyperbole. The 25 colleges, as we know, will at best train a maximum of 7½ thousand tradespeople who will graduate between the years 2010-12. How on earth is that a solution to tackling the skills crisis that is here with us today and that is growing every day? I cannot say to the businesses in the Illawarra, ‘Wait for the 315 young people who will graduate between 2010-12 to fill the skills shortages that we know exist today.’ So the solution was a mere drop in the ocean when the estimated skilled labour shortage today is in the order of 100,000 people. The government’s announcement was, in my view, a political fix to the policy problem of Australia’s crisis in skilled labour—a problem that continues to grow and that still needs to be urgently addressed by the new minister.
On behalf of the people I represent, I think it is quite reasonable to query whether the expenditure on these colleges is good public policy and to ask the question: would not the same outcomes be achieved without duplicating the existing provisions for school based apprenticeships, the provisions that are available for apprenticeship training in the TAFE sector and, indeed, the increasing interface between the VET stream in schools and local TAFE institutes? We are asked in the bill before us today to increase the funding allocation for these 25 colleges by another $112.6 million. The total allocation would grow from $343.6 million to $456.2 million over the period 2005-09. You have to ask: why is this increase in funding needed? We were told by the minister—who obviously did not satisfy the Prime Minister about his capacity to implement an urgent response to Australia’s skills crisis and who now finds himself on the back bench—in his second reading speech that the additional funds are needed because:
... the continued success of the Australian technical colleges ... program reflects the better than expected progress that has been achieved to date in implementing this Howard government initiative.
Nothing could be further from the truth.
By the end of last year, just five of these colleges had commenced operation. Some two years after the grand announcement was made, the minister at the time was claiming satisfaction with the hundreds of enrolments. There were five colleges up and running last year—on the Gold Coast and at Gladstone, Port Macquarie, Eastern Melbourne and Northern Tasmania. Between these five colleges, there were 340 enrolments. Even that minimal figure was skewed by the fact that, at Port Macquarie, the newly labelled Australian technical college with 205 enrolments previously operated as the long-established St Joseph’s vocational college. So there were 205 students at a college that already existed. It was relabelled and rebadged as Port Macquarie Australian Technical College. If you subtract the 205 enrolments from the 340 total enrolments, it is a pretty pathetic performance. I recall at one stage that the Australian Technical College Gladstone had only one student enrolled.
So some two years after the announcement, after we spent about $50 million of taxpayer funds, we had 350 students, minus the enrolments that were already there in Port Macquarie, in only five colleges. You have to ask: is this what the minister claimed to be a great success? I do not think so. Now we are being asked to approve an additional $112.6 million. We were told—and I quote again from the former minister, the no longer minister for vocational education and training—that ‘the operational cost necessary to get each college up and running is far higher than originally expected’.
Let us look at the situation in the Illawarra where we do have one of these colleges. Last Friday night, I attended a very pleasant function in Wollongong to meet the parents of students enrolled at our college. The comments I make in my contribution about the government’s program do not reflect at all on the parents, the students, the staff or the board members who have all worked enthusiastically and tirelessly to get the Illawarra college operational. My comments are directed at the failure of government policy and the continued tardy implementation of real programs to address real problems insofar as our skills crisis is concerned.
I talked to a number of parents at the function and they were, naturally enough, excited at the prospect of their child’s enrolment. Nearly all I spoke to referred to the load and the pressure for these students because, as we know, they are supposed to be studying for their HSC, undertaking apprenticeship training and working two days a week. For a 16- or 17-year-old, I think that is a sizeable load. I do not think any of the projections on the part of the government for the maximum output of the 7,500 students ever factored in the possibility of drop-out and attrition rates because of that quite sizeable burden on 16- and 17-year-olds. In fact, the TAFE directors of Australia also pointed to this problem. Their executive officer, Mr Riordan, said ‘The Australian technical college model asks a great deal of 16- and 17-year-olds’ and that ‘the prospect of drop-out rates is high’.
When I raised the specifics of the Illawarra college with the minister, I was told that enrolments at our local college were to be 50 students at the start of this year. This is some two years after the announcement. Our students are currently in leased facilities and, not surprisingly, are going to undertake their training at the local TAFE college just down the road. But instead of using the facilities that TAFE can provide, the government proposes to build a brand new building, which will be constructed and operational from 2008.
I think it is reasonable for me to ask the government: do these students really need a brand new building when the majority of their week will be spent in employment with their employer? When they are not with their employer, they will be at the local TAFE college doing their apprenticeship training. By 2009, it is anticipated that enrolments will reach 315 students, and that will be the maximum. During that period we will have spent $19.6 million of taxpayer funds. If you work that out on a per capita basis—divide $19.6 million by 315 students—you have got to ask whether that investment is really justified. That raises the question that numerous people have referred to: why have we gone to the extent of duplicating the existing TAFE system which has for decades provided outstanding vocational training, particularly for young apprentices?
I also ask: could the skills crisis in the Illawarra have been addressed in a more cost-effective manner? I believe it could have been. I chair a committee called the Illawarra and Shoalhaven Apprenticeship Program. Over the past several years we have managed to place 250 unemployed kids into apprenticeships. All we have ever asked of this government is an ongoing commitment of about $100,000 a year to make that project ongoing and viable. Just think about it. Over the last couple of years, at a cost of something less than a quarter of a million dollars from the federal government, 250 young unemployed people in the Illawarra have been placed in apprenticeships and yet, at best, we are going to have 315 students coming out of our local Australian technical college—with a brand new building—and we are going to spend $19.6 million on that program. Not one question has been asked about whether that is a wise investment of taxpayer funds. But every time we go to the government to get an ongoing commitment of $100,000 a year to employ a project coordinator to continue to place young people into apprenticeships, we cannot get any firm commitments from this government. I think that is unjust and inequitable. I ask again: is this expenditure a wise investment of the funds bequeathed from the taxpayers to government and is it good public policy?
There is no doubt in my mind—and it was pretty obvious when the former minister who had responsibility for this program ended up losing his portfolio in the last reshuffle—that the Prime Minister also came to the same judgement that many people in the community have, and that is that the program has been bungled. We are told now, according to a recent headline in one of the national newspapers, ‘Mr Fix-it has the tools to restore colleges.’ We now have a new minister, and he points out in this article that one of his first tasks will be ‘getting the technical colleges program back on track’. I wish him all the best, because the government has raised expectations and it is failing to deliver. My views about this issue are confirmed by people who know even better than I do what happens in TAFE and the vocational system. Martin Riordan, the Executive Director of TAFE Directors Australia, said recently, ‘We think it’s important to reassess the Australian technical colleges because, despite the best intentions in the world, they are a failed model.’ Mr Riordan wants the Commonwealth to review the progress of the technical colleges program at the COAG meeting in April.
I want to put a number of questions to the minister, and I do so in all sincerity, because I think the time has come for a serious re-examination of this program. I ask: is the expenditure of $456.2 million on 25 colleges that will train a maximum of 7,500 students, who will not graduate until at least 2010, good public policy and a sound investment? Could this investment have produced better outcomes in dealing with skills shortages, and in a shorter time frame, through the existing school and TAFE programs and interface? What programs does the government have in place to deal with the shortages that exist right now—estimated at around 100,000 in terms of the needs of skilled labour? Of course, I want to know when I am going to get an answer to a very modest request for an ongoing commitment of $100,000 a year to ensure that young unemployed people in the Illawarra region continue to have access to apprenticeships. I do not think that is too much to ask when we have in our region a youth unemployment rate of 40 per cent—among the highest in the nation.
We have had a successful program working on the ground. We are not asking for $19.6 million, much of which is going to creating a brand new building that is not really required; but we are asking for some contribution to an innovative local program. Investment in vocational education and apprenticeship training is an issue of serious national importance, as is the crisis in the availability of skilled labour. The electorate is tired of quick political fixes which are based on spin rather than on substance. I think there are serious deficiencies in the Australian technical college model. My views are confirmed by the directors of the TAFE institutes throughout Australia, and I think that the matters that I have raised today warrant serious consideration at the highest levels of government.
I will only be addressing the House for a very short amount of time with respect to the Australian Technical Colleges (Flexibility in Achieving Australia’s Skills Needs) Amendment Bill (No. 2) 2006. I was somewhat disappointed by the honourable member for Throsby in the way she condemned the Illawarra Australian Technical College. If she does not want this facility in her electorate then I would be happy to have it transferred to the Sunshine Coast, which was a serious omission from the first 25 technical colleges announced around Australia. If Labor members do not want the technical colleges which have been allocated to them then I am quite sure that coalition members will be very keen to have young people in their electorates given the additional opportunities which will obviously flow from the establishment of these colleges. This, of course, was an initiative announced by the Prime Minister in his policy speech prior to the 2004 federal election.
The purpose of this bill is to ensure that the infrastructure required to help develop a future workforce with the necessary skills required by Australian industry is available. All of us receive many complaints from employers who spend an inordinate amount of money advertising with a view to obtaining people who are able to be worthwhile employees and earn an income for their families but, in doing so, make a contribution towards the growth and success of a certain industry. There is no doubt that in Australia one of the major problems we have in 2007 is the skills shortage. This was the reason that the Australian technical colleges were announced by the Prime Minister prior to the last election.
The Australian government is well underway with the development of 25 technical colleges around Australia. The majority of these already have finalised funding agreements right through until 2009 with the Australian government. This will ensure that their operations can continue at least until that period. It is expected that some 21 colleges will be operating by the end of this year.
A college is to be established at North Brisbane, and it is anticipated that it will open in 2007. While it was the intention that the North Brisbane college would service the Sunshine Coast—and no doubt it will to a certain extent—given that the road system between the Sunshine Coast and Brisbane is not quite what should be, it becomes in my view a matter of pressing urgency that the Australian government should look at an Australian technical college for the region. If the government is looking at expanding the number of Australian technical colleges, it should consider that the Sunshine Coast is the 12th largest urban conurbation in Australia and perhaps the fastest growing area in the country.
These colleges, despite criticism in the contribution made by the member for Throsby, are wonderful institutions that will make a big difference for young people who are looking to secure trade qualifications. These institutions will also make a substantial contribution to the success of Australian industry and to the growth of our economy because they will be able to turn out qualified people who will be able to help businesses grow and boost their local economies. Despite the criticism directed towards the Australian technical colleges, I think they are a wonderful thing for Australia and we need more, not fewer, of them. It is quite wrong to criticise the former minister, as the member for Throsby did when she spoke a little while ago.
The bill currently being debated amends the funding amounts available to these colleges between the years 2006 and 2009 from the $343.6 million allocated to $456.2 million. This necessary increase in the amount of funding available will help these colleges achieve their goals. The Australian technical colleges are successful and popular, and this funding increase reflects this success. In fact, the support for the colleges has been so strong that a number are now opening earlier than initially envisaged.
These colleges are unique and sensible in that they allow students to begin their studies towards gaining a trade qualification while they are still at school. This means that they are on the road to getting real qualifications earlier than would have been the case in the past, which in turn means that they will complete their training earlier. It is a system that meets both the needs of students and the requirements of the country. Over time the presence of these ATCs will mean businesses that require electricians, plumbers, carpenters and workers with other related skills will have a greater supply of such workers, and eventually some 7,500 work-ready young people annually will emerge from the colleges. Some 2,000 young people will already be enrolled in the colleges by later this year.
These institutions will make certain that students are taught the latest methods using the latest equipment. These young men and women will emerge as well-trained individuals with the types of skills required by contemporary business owners. In what is a sensible facet of the colleges, they are tied closely to the local communities in which they are located. Instead of having operational decisions made from a remote head office, the local boards that manage each of the colleges are able to make managerial decisions that ensure that the institution meets the specific needs of that region. This is a sensible move because the skills needs of one region will be quite different from the skills needs of other regions. By addressing the specific needs of each area, the network of colleges will address the overall skills needs of the nation.
This bill will make sure that these colleges have the necessary financial backing from the government to enable these goals to be met. This bill outlines the additional funds that will be disbursed in the following amounts over the following years: 2006-07, $27.848 million; 2007-08, $42.628 million; 2008-09, $32.647 million; and 2009-10, $9.509 million. These ATCs will provide students with viable career paths into worthwhile employment. Trade qualifications are rewarding, worthwhile having and provide a potentially lucrative alternative to a university degree.
The only plea I make to the government is that an Australian technical college be established on the Sunshine Coast. If Labor members who are quick to stand in the chamber and criticise their local Australian technical college are prepared to pass that college onto other regions, I am sure those regions would welcome the establishment of a college. The former minister said he would like one, and I hope he gets one as well.
I am pleased to be able to speak to the Australian Technical Colleges (Flexibility in Achieving Australia’s Skills Needs) Amendment Bill (No. 2) 2006 and will elaborate on the points I would like to make after question time.
I thank the member for Lingiari. Order! It being 2 pm, the debate is interrupted in accordance with standing order 97. The debate may be resumed at a later hour and the member will have leave to continue speaking when the debate is resumed.
My question is to the Prime Minister. Does the Prime Minister recall his Minister for Industry, Tourism and Resources saying just six months ago, ‘I am a sceptic of the connection between emissions and climate change?’ Does the Prime Minister support this statement?
Yes, I do recall that, and I refer the Leader of the Opposition to the correction I made to the answer I gave yesterday. I acknowledge again to this House that I mistook the question asked yesterday by the Leader of the Opposition. I wrongly thought—and I do not mind saying I am wrong when I am wrong, and I have no grounds for complaining about him—he was asking me about the connection between drought and climate change, where I do believe the jury is out. I have to say that I think the evidence of the connection to which he referred is very strong. That is my view, that is what I said yesterday and I repeat it today.
My question is addressed to the Prime Minister. What is the purpose of the issues paper on emissions trading released earlier today?
I thank the member for Hasluck for his question. Can I say very directly that the purpose of this paper is to promote an intelligent debate on the issues of what form an international emissions trading system might take, how that would impact on Australia, what form a national emissions trading system in this country might take and the circumstances in which it might be introduced. I want to make it clear that the formation of this group, which brings together senior members of the federal bureaucracy as well as senior business figures, is a very intelligent and sensible way of trying to get the right outcome in relation to the environment. In joining the business community and the government, I have very much had in mind the dictum of the member for Batman, whom I find a ceaseless source of encouragement and inspiration on this subject, when he said:
It’s time to abandon the political correctness espoused by the green movement. Let’s be real: without getting business on board we cannot achieve anything.
I happen to agree with that. I think the most intelligent way of looking at an emissions trading system either here or internationally is in fact to join the business community to the process, and that is exactly what we have done.
I do make it clear again that we have no intention of introducing an emissions trading scheme which damages Australia’s international competitiveness. We are not going to sacrifice the jobs of coalminers in pursuit of some kind of knee-jerk reaction. We need a measured, sensible, consistent and intelligent reaction to the problem of climate change. Of course, in determining whether a national system might cause damage to our international competitiveness, we must necessarily pay regard to the responses of other nations to the issue of emissions trading.
I think all members of the House would recognise that the people on this group do represent those business interests that would be very directly affected by the introduction of an emissions trading system. I am very grateful to those people for joining it, and I commend the issues paper to all members who are interested in a measured response that protects the jobs of Australians and looks after the interests of the Australian economy.
My question is again to the Prime Minister and refers to his answer to the previous question. Did the Prime Minister receive government reports on emissions trading in March 1999, June 1999, October 1999 and December 1999? Did the government say no to each of these reports and then disband the emissions trading team in the Australian Greenhouse Office? Given that the Prime Minister has ignored all the climate change warning bells in the past, why should Australians believe him on climate change for the future?
The reason why I believe the Australian people will believe me is that I have a track record of putting the jobs of Australians ahead of anything else, and that is what I will continue to do. Quite frankly, I wonder at the view taken by many on the other side—not all; not the member for Batman or the member for Hunter, who also has a very distinguished record in relation to these matters. The member for Hunter has been astute enough to point out that if you introduce a national emissions trading system, you have to abandon the MRETs. I wonder if that is a view shared by the member for Kingsford Smith. I wonder if it is a view shared by the Leader of the Opposition.
Back when the energy white paper was introduced, we looked at whether we would increase the MRETs. We decided against that because we thought it was better to invest in low emission technology. The investment in that low emission technology has led not only to an investment in clean coal technology but also to an investment near Mildura, Victoria, which represents the largest investment in solar energy anywhere in the world, and that is a product of the policies of this government. I can say to the Leader of the Opposition that we will put the jobs of Australians ahead of ideology in responding to this issue.
I inform the House that we have present in the gallery this afternoon the Honourable Ahmad Shabery bin Cheek, the Malaysian Parliamentary Secretary for Foreign Affairs. On behalf of the House I extend to him a very warm welcome.
Hear, hear!
My question is addressed to the Treasurer. Would the Treasurer update the House on developments in the housing credit markets? What are the implications for economic policy?
I thank the honourable member for Braddon for his question. The Australian property market, which showed substantial growth in the early part of this decade, has shown considerable moderation in recent years, with the exception of Perth and, to some degree, Darwin. The 12-month change in the Sydney property market, according to Australian Property Monitors, was a 0.5 per cent increase, in Melbourne a 3.1 per cent increase, in Hobart—which I know the member for Braddon would be interested in: southern Tasmania, not northern Tasmania—a 6.6 per cent increase, and overall in Australia quite a considerable slowdown in the growth we saw in the early part of the decade. The exception to that is Perth, which showed a 31 per cent increase in average prices over the 12 months, making Perth the second most expensive city in Australia.
In addition to the moderation in the property market we have also seen a moderation in credit markets, with housing credit increasing one per cent in December to be 14½ per cent over the year. Taken together with the adjustments as a result of fruit and petrol prices, we saw a lowering of the consumer price index in the December quarter, with the underlying measures around about 0.5 per cent for the quarter or two per cent for the year.
The good news is that the consumer price index seems to have ticked down a bit, and that is good news for stability in interest rates. Interest rates were left unchanged at yesterday’s Reserve Bank board meeting in recognition that moderation in the property market, in the credit market and in the consumer price index seems to have moderated to some degree the inflationary build-up that we saw in the latter part of last year.
If the Australian economy can continue to grow, with unemployment at a 30-year low of 4.6 per cent and inflation moderate, that will be a very good interest rate outlook for homebuyers and for business. To have a two to three per cent inflation rate in an economy where we have nearly full employment, at 4.6 per cent, is something that we probably would not have dreamed of 10, 20 or 25 years ago. Still, the task is to ensure that economic management is consistent with growing the economy, finding job opportunities for young Australians and keeping inflation low in a stable interest rate climate. That is what this government is committed to doing.
My question again to the Prime Minister is on climate change. Did the Prime Minister actually is say on Lateline two days ago that a four to six degree temperature rise would ‘be less comfortable for some than it is now’? Given that CSIRO states that a three degree rise will result in the decimation of the Great Barrier Reef and the dengue fever transmission zone reaching Brisbane and possibly Sydney, what exactly did you mean when you said that Australians would be less comfortable?
Order! In calling the Prime Minister, I would ask the Leader of the Opposition not to use the word ‘you’.
Perhaps when addressing the Leader of the Opposition I should use different language. Let me simply say again what was the substance of my comments on the Lateline program the other night—that is, this government did recognise that climate change represented a challenge, but I also made it clear that, in responding to it, we did not intend to embrace knee-jerk reactions that are going to damage the Australian economy. At the end of the day, the first responsibility of this government is to secure the welfare of the Australian people in all their various dimensions. One of those dimensions is to make sure that our public policy responses on all sorts of issues do not damage the job security of Australians and do not damage the international competitiveness of this country. In our responses to the challenge of climate change we do not intend to embrace every gloomy prediction about the future of the planet. We intend to respond in a measured way, but we intend to respond in a way that does not damage the Australian economy or destroy the jobs of hardworking people such as Australian coalminers.
My question is addressed to the Deputy Prime Minister and Minister for Transport and Regional Services. Would the Deputy Prime Minister outline to the House the importance of infrastructure investment in my Riverina electorate and to regional economies across Australia? What measures is the government planning to increase jobs and prosperity by securing our water supplies?
I thank the member for Riverina for her question. I recognise her very keen interest in infrastructure investment across regional Australia and particularly in her electorate in the Riverina. I might add that she has been a great supporter of more action in terms of securing Australia’s water supplies, particularly for industry and the irrigators in the Riverina. The recently announced government package to deal with the challenges of managing our water better in Australia is due in no small part to a lot of the work that has been done by the member for Riverina. I certainly acknowledge her for that.
It goes without saying that water is the lifeblood of regional Australia. Irrigated agricultural production in Australia is a very significant contributor to regional economies and our exports, with $9 billion worth of agricultural produce produced in irrigation areas. That is 25 per cent of agricultural production produced in irrigation areas on one per cent of the agricultural land in Australia. It is very important that we recognise the significance of irrigated agriculture in the overall Australian economy. Most importantly, we need to recognise the critical role it plays in those regional communities in which it exists. For too long we have tended to take too much for granted the management of the water systems and what that delivers in terms of wealth to our regional communities.
I know that the member for Riverina recognises the significant nature of the announcement that the government has made—a $10 billion announcement—to invest in the water systems of Australia to secure that sustainability for those communities, some of which the member for Riverina represents. It is a once in a lifetime opportunity to invest in securing those water supplies for those areas. It is not just about the industry in those areas; it is about the communities that survive in those local economies. It is terribly important that we recognise the significance of this.
We have seen the debate that has taken place in and the commentary coming back from some of the states—some of it positive; some of it not so positive. But this is an issue that we must look at in the interests of the nation. This proposal—a $10 billion proposal—can save 3,600 gigalitres of water. That is almost six times the volume of Sydney Harbour. That can be saved without one more drop of rain falling. That is the smart aspect of this package that we have put forward. We ask all the stakeholders involved to work with the government to achieve those savings. We have said that 50 per cent of those savings will go back to industry—go back to those regional economies. That is a significant gesture of our faith in the economic worth of those economies to the national economy and to their local communities.
It is also important to note that what we are proposing is going to build on a lot of the hard work that has already been done. We recognise the efficiency gains that have already been achieved in our irrigation systems and our irrigation areas across Australia, both on-farm and within the systems. We want to build on those savings. We want to add to them and aggregate greater savings in that area. We are smart enough to fix our river systems. We are smart enough to manage and balance the competing interests of industry and the environment and maintain the sustainability of industry in our regional economies. It is incredibly important. The majority of the feedback that we have received since the Prime Minister announced this policy a couple of weeks ago has generally been, ‘Thank goodness someone at last is prepared to do something of a practical nature to address this problem.’ We certainly intend to go on and do that.
The last point I want to make on this is that this is a $10 billion package and the only way that we can afford to do this is because of the good economic management that has been deployed in Australia over the last 10 years. We do not have any debt. We are running the economy much more efficiently and much more competitively and the nation can afford to do this. If we had had to borrow this money, as previous Labor governments would have had to do, it would have been a much more difficult decision. We should never forget that we can do these things in Australia today because of how well the economy is run and how well the economy is doing.
My question is to the Prime Minister. Will the Prime Minister now formally repudiate the industry minister’s statement in which he said, ‘I am a sceptic of the connection between emissions and climate change’?
No, I will not formally repudiate it. People make different statements about different things over a period of time. I seem to remember the Leader of the Opposition a little under two years ago saying that he was not experienced enough to be the leader of the Labor Party. He now thinks that he is experienced enough to be Prime Minister.
My question is to the Treasurer. Given the strength of the Australian economy, would the Treasurer update the House on Australia’s private sector wealth and the level of growth in the last year?
I thank the honourable member for Blair for his question. On Friday of last week, the Treasury released their annual estimates of net private sector wealth for the year up until 30 June 2006. It showed that the market value of Australia’s net private sector wealth grew by 19 per cent over the course of that last full financial year. Although a main influence on wealth is family dwellings, they were not the largest contributor to this rise because of the moderation I talked of earlier to the House. The main influence was the increase in business assets, which has coincided with the Australian Stock Exchange moving to the highest levels ever recorded in its history. Millions of Australians are sharing in that wealth, either directly or through their superannuation funds. Australia’s net private sector wealth in nominal terms now stands at around $7.4 trillion dollars, or more than seven times our annual GDP. This is a consequence of the fact that more Australians are in work than ever before, their wages are higher than ever before, their investments in savings—particularly through superannuation—are higher than ever before and Australian business is more profitable than it has ever been.
The Leader of the Opposition, who has no experience of economic policy other than as a staffer in a state government, which is his main claim to economic experience, has gone so far as to try and describe the Australian economy as a—and this is a word that I am not familiar with; it sounds like a pharmaceutical of some kind or another—‘brutopia’, something that the minister for health could put on the PBS list, I think, and subsidise. He says that brutopia is ‘economic neo-liberalism’ with ‘unrestrained market capitalism’ sweeping all before it. Brutopia—also available at health shops near you as an alternative or complementary medicine!
Otherwise known as Work Choices.
And the member for Melbourne—the Socialist Left—comes in on cue with his complaints about Work Choices. What a shocking piece of legislation that was!
Mr Tanner interjecting
Order! The member for Melbourne does not have the call.
We have only had 245,000 jobs as a consequence, in the aftermath.
Mr Speaker, I raise a point of order. The Treasurer was asked to update the House on the level of growth last year, and I ask you to draw him back to the question.
I have been listening carefully to the Treasurer. I believe he may well have been responding to an interjection, and he certainly is in order—but I would not encourage anyone to interject.
We have had the largest accumulation of wealth in Australia’s history. We have had more jobs created than we have ever had before in a single year. We had Work Choices legislation—and this genius from the Socialist Left says it is all a failure. We have the other member whose last big day out, on Sunday, was on a joint bill with ‘Jihad’ Jack Thomas, down in Melbourne—the member for Wills on a joint bill with Jack Thomas. Not quite according to the script, that one. Anyway, let me go back to economic policy. We are now experiencing our ninth—
Opposition members interjecting—
Well, it is a little less interesting than ‘Jihad’ Jack Thomas and the member for Wills! We are now experiencing the ninth surplus budget under this government. We have now retired every single dollar of the Labor Party’s $96 billion debt. We are now funding unfunded superannuation liabilities, which were never touched by any other government in Australian history. There have been two million jobs created since this government came to power. There is $7.4 trillion of private sector wealth. And the Leader of the Opposition calls that ‘brutopia’. One can only wonder what would happen if he were to get his hands on the levers of economic power. But let me tell you—
Mr Tanner interjecting
Order! The member for Melbourne is warned!
it is something that we will protect the Australian people from at all costs.
My question is to the Minister for the Environment and Water Resources. I refer to the minister’s comments on 3 February:
There’s a lot of very exaggerated claims ... and because of the geology or the [topography] of the east coast ... much of that is adequately elevated to deal with a one-metre sea rise.
Will the minister confirm that University of Sydney research shows that rising sea levels could lead to erosion extending—
Mr Speaker, I raise a point of order. That question was asked yesterday and fully answered by the minister concerned so it is out of order.
The member for Kingsford Smith is still asking his question, and I ask him to continue.
Thank you, Mr Speaker. Will the minister confirm that University of Sydney research shows that rising sea levels could lead to erosion extending up to 70 metres inland from the promenade at Bondi Beach?
I am impressed that the member for Kingsford Smith has so quickly picked up the techniques of the Leader of the Opposition that he too is misrepresenting the remarks that I made on AM, which, for honourable members who are interested in reading them, are set out relevantly, in full, in my speech on the MPI yesterday. What I said was that much of the east coast—not most of it, not all of it; much of it—is adequately elevated. The fact is that I went on to say that the response to rising sea levels—
Opposition members interjecting—
Order! The minister will be heard, and I will deal with anyone who continues to interject.
I went on to say that the response to rising sea levels will require both planning measures and engineering measures. It can be adapted to in some cases. There are a range of measures that will be used to deal with rising sea levels—and, of course, as I mentioned in the AM interview, the consequent storm surges, because it is not simply a question of the sea level rising but of the consequent storm surges.
This is the strategy of the opposition: they are seeking to create a massive scare campaign. We are talking about, at the higher limit, a sea-level rise of 58 centimetres over 100 years; at the lower level, 18 centimetres. In the course of the last century, we have had a rise in sea level in Australia of 20 centimetres already, so rising sea levels are not new. We have dealt with them. We have adapted to them.
We are working closely with state and local government. Indeed, the National Resource Management Ministerial Council in November 2006 agreed to fund a first-pass national coast vulnerability assessment to be coordinated by the Australian Greenhouse Office. The Australian Greenhouse Office, the Bureau of Meteorology and the CSIRO have published extensively on rising sea level issues. There is an immense amount of literature out there on it. The techniques for dealing with it are very well known. Local councils up and down the coast—on the east coast, the west coast, in South Australia and all around Australia—are aware of this issue and adopting planning measures to handle it. Those measures will no doubt be recalibrated and adjusted as better science becomes available.
But it is no answer to the challenge of climate change to be frightening the Australian people—to be out trying to panic the Australian people—with threats of a massive Al Gore style, The Day after Tomorrow style inundation. That is a scare campaign. It is calculated to do enormous damage to public confidence. I would say this to the member for Kingsford Smith: I do not believe that the constituents of the electorate of Griffith, or the constituents of any other electorate on Australia’s coast, will thank him for this sort of panicked scare campaign. What the member for Kingsford Smith has left out of his question is: what do you do about it? We are aware of it. We are dealing with it. Labor is full of scare—
Opposition members interjecting—
I again remind members that when a minister has been called to give an answer he will be heard.
My question is directed to the Minister for Foreign Affairs. Would the minister update the House on developments regarding the military coup in Fiji?
I thank the honourable member for Bowman for his question and for his interest in this issue. I think the House is well aware that the Australian government has been amongst those which have strongly condemned the Fijian military’s unconstitutional coup d’etat. As time has gone on since the coup, we have become increasingly concerned about the way the Fijian military force is exercising power without any real restraint and without accountability. Honourable members will be aware that there have been reports in recent times of a number of human rights abuses in Fiji by members of the Fijian military force. In the government’s view, there have been endeavours by the Fijian military to suppress any form of dissent from or disagreement with the actions that the military have taken. They have done that through extreme intimidation of critics. There have been reports that, in some cases, critics and opponents of what has happened have been taken down to the Queen Elizabeth barracks in Suva and beaten and assaulted. Not surprisingly, many ordinary Fijians are dismayed that the military has not honoured a pledge that it originally made to uphold human rights, the rule of law and, for that matter, freedom of the press. That simply has not happened.
The Australian government are disturbed by reports we have heard that the Fijian military is continuing to try to divide the community by encouraging Fijians to spy on each other and report any private criticisms—which must, presumably, be manifold—of the military administration. Furthermore, we are very concerned that the rule of law is being undermined through compromising the independence both of the judiciary and of the police force. On 1 February the Fijian military disbanded the tactical response division of the Fijian police. In December the Chief Justice of Fiji was summarily dismissed by the military. There is no doubt that there is a great deal of opposition in Fiji to what the military have done and to their heavy-handed tactics since the takeover. There is also no doubt that the military commander, Commodore Bainimarama, underestimated the degree of public opposition to his actions and underestimated in particular the degree of opposition that there would be amongst non-government organisations.
In conclusion, an eminent persons group—which was established at a Pacific Islands Forum foreign ministers meeting which I attended in Sydney during December—has now visited Fiji. It did so last week. The group contains Peter Cosgrove, a former Chief of the Defence Force in Australia, and a number of other eminent figures from the Pacific region. Its report is in the process of being concluded, and we look forward to seeing that report. I hope that, before too long, a meeting of Pacific Islands Forum foreign ministers will be able to consider that report and hear from the eminent persons group. That will help the region, not just Australia and New Zealand but the region as a whole, chart a way forward in terms of dealing with what has happened in Fiji.
I make no apology for raising today the question of human rights abuses in Fiji. It is a serious problem and a serious matter. When the military take over control of a country in this way, which was completely illegal—and of course we in Australia and those in New Zealand, around the Pacific and elsewhere regard it as an unacceptable way to behave—the problem is seriously compounded by the human rights abuses that ensue.
My question is to the Minister for the Environment and Water Resources and follows on from his answer to a previous question. I refer to a recent speech by the British Foreign Secretary on climate change where she said:
One study suggests that a sea-level rise of just 50 centimetres ... will displace two million people from the Nile Delta. A one metre rise will displace 25 million in Bangladesh.
Minister, what implications will a one-metre sea level rise have for Australia and for our neighbours in the South Pacific?
The rule of thumb with sea level rises, and this is very much a general rule of thumb—it is based on Dutch work; they know quite a bit about sea level rises, as you can imagine, Mr Speaker—is that sandy beaches can retreat 50 or even 100 times as much as the sea level rise due to erosion. So if the sea level rises as estimated in the fourth assessment report, the degree of erosion on sandy beaches in Australia—absent any other engineering action: groynes, artificial reefs or anything like that—could be somewhere between nine and 50 metres. That plainly has consequences for communities that are built on low-lying sandy soil. Obviously, portions of south-east Queensland and Cairns have been identified as being at risk.
The measures that will be deployed if or when those sea rises become apparent vary enormously from place to place. As the Leader of the Opposition would know from his very careful study of the fourth assessment report, the sea level rise is not even forecast in the fourth assessment report to be uniform around the world. In fact, there are some parts of the world where the sea level may actually fall. So it is a very variable proposition. And, of course, the land can change too. If you get more precipitation, you get more sediments being washed down, and that can offset or even exceed the rise in sea level.
That is the context in terms of Australia. Globally, of course, it is an enormous problem. It is particularly problematic in places like China, Egypt and Bangladesh, where there are large cities and populations that are built in river deltas on sediments which have a tendency to sink anyway. They will be particularly prejudiced, and the dangers are enormous. We are all familiar with New Orleans, which is a city that is largely below sea level. Jakarta, which has recently been flooded, is 40 per cent below sea level.
It is plainly a big issue globally but, in Australia, it is something that everybody, every level of government, is well aware of. The Australian government is well aware of this issue. We are working closely with the states and local government through our scientific agencies to make sure that we have the science and that we take the practical measures—not the panic, scare slogans—to deal with the consequences of a further rise in sea level. I repeat: in the last century, we experienced a 20 centimetre rise in sea level. Rises in sea level are not new. We have adapted to them in the past and we will adapt to them in the future.
My question is addressed to the Minister for the Environment and Water Resources. Would the minister advise the House of the global importance of clean coal technology in reducing greenhouse gas emissions, especially in rapidly developing economies such as China?
I thank the member for Dobell for his question. China is the world’s second largest emitter of greenhouse gases. Only a few years ago it was forecast to overtake the United States by 2020. China’s growth has been so rapid that it is expected to overtake the United States by 2010 or even 2009. So it is growing extraordinarily quickly in terms of its greenhouse gas emissions. That is because China is heavily dependent on coal. It consumes more coal than Australia does. In 2005 we consumed about 124 million tonnes of coal; the Chinese consumed over 2,200 million tonnes of coal. So our coal consumption represents a little over five per cent of China’s consumption. China is commissioning the equivalent of a 1,000 megawatt coal-fired power station every five days. Its additional growth in emissions equals Australia’s annual total every eight months. That gives an idea of the scale of the problem.
Only this morning, both in the press and on the radio, Mr Qin Dahe, the Chinese scientist who was co-chair of the United Nations scientific panel that produced the fourth assessment report, stressed China’s dependence on coal. He said that it was 69 per cent dependent on coal for its energy needs and that that would continue. He also stressed the need for technology solutions to clean up its coal.
Australia is leading the world in clean coal technology—be it through the Low Emissions Technology Development Fund, where over $200 million of projects that are relevant to clean coal technology have been announced; through the AP6; or through the Australia-China Joint Coordination Group on Clean Coal Technology, which the Prime Minister announced in January. Across a wide range of programs, Australia is, and has been for many years, working actively to develop clean coal technology—practical measures, demonstration projects, scientific research.
This is often correctly presented as being in our national interest as a great coal-exporting nation—it is a vital part of protecting our coal industry, as the head of the CFMEU said only this morning—but it is also in the world’s interest. We recognise that, no matter how much we reduce our greenhouse gas emissions, the critical reductions have to take place in the countries that are the largest emitters. China is saying today—as it has said again and again—that, in order to reduce its greenhouse gas emissions, it needs affordable technologies that enable it to clean up its coal. Australia is working to provide that technology. It may be that, in the years ahead, the greatest contribution we will make to the reduction of greenhouse gases is giving the Chinese, the Indians and the other coal dependent countries of the world the means to clean up their coal-fired power stations and deliver their people the energy they need, but in a manner which does not exacerbate greenhouse gas emissions and climate change.
I inform the House that we have present in the gallery this afternoon His Excellency Dr Al-Alawi, Minister for Labour and Social Welfare in the Kingdom of Bahrain.
On behalf of the House I extend to him a very warm welcome.
Hear, hear!
My question is directed to the Treasurer. Can the Treasurer confirm that the Department of the Environment and Water Resources and the Department of Agriculture, Fisheries and Forestry were advised of the intention to spend $10 billion on the National Water Plan on 8 January—10 days before the Treasury was advised of the proposal and 12 days before the Department of Finance and Administration was informed?
No, I cannot confirm that.
My question is addressed to the Minister for Health and Ageing. Would the minister inform the House of recent additions to the Pharmaceutical Benefits Scheme that will improve the health of older Australians, in particular those with osteoporosis?
I thank the member for Canning for his question. I know that he takes a very personal interest in this. It is very important for thousands of people in his electorate, as it is for millions of people—some two million people—around Australia who suffer from osteoporosis. The PBS is one of the three pillars of Medicare. Thanks to the PBS, Australians gain affordable access to life-saving and life-enhancing drugs. Thanks to the Howard government, more Australians have more access to more medicines than ever before.
Since August there have been new and expanded PBS listings. Herceptin, for early stage breast cancer; Lantus, for insulin-dependent diabetics; and statins, for people with cardiac risk factors, have added some $1 billion to our PBS investment over the forward estimates period. As well, there is now good news for people over 70 with osteoporosis. From April, up to 73,000 new patients each year will gain access to osteoporosis drugs such as Fosamax under the PBS, before they have fractures—because prevention is better than cure. Along with the associated bone mineral density testing, this latest measure will add some $225 million to our health investment over the forward estimates period.
While this government gets on with the job of making a good system even better, members opposite just cannot let go of something called Medicare Gold. The new shadow minister was asked on 3AW, just before Christmas:
But Medicare Gold has gone, hasn’t it? It’s dead, buried, never to be resurrected.
Listen to what she said on the record, on 3AW. The member for Gellibrand said:
Well, I think that there are some components of it—
that is, of Medicare Gold—
that are really important for us to consider in any rethink about the health system.
We know that Barry Jones called Medicare Gold a turkey. I ask the member for Gellibrand: which bits of that old stuffed bird does she want to serve now? I say to the Leader of the Opposition: inexperience is no excuse. If you do not have a health policy, you have no credibility as a candidate to lead this country.
I inform the House that we have present in the gallery this afternoon a group of young people who are winners of the Heywire competition, an ABC Radio award scheme for regional and rural youth. On behalf of the House, I extend to them a very warm welcome.
Hear, hear!
My question is to the Prime Minister. Is the Prime Minister aware of a confidential cooperative research centre report by five CSIRO scientists which reportedly states that solar thermal technology has the capacity to produce Australia’s entire current electricity demand and could be cost competitive with coal within seven years? Given that the Newcastle company Solar Heat and Power has been forced to move to the US to obtain development support for this technology, can the PM explain whether this report will be placed on the energy options table? Don’t its findings that solar thermal is poised to play a significant role in baseload generation in Australia contradict your assertions that clean coal and nuclear are our only feasible baseload energy options?
I do not know the detail of that particular study, off the top of my head, but I am perfectly happy to have it examined and put into the mix. I have to say to the honourable member that the view that solar can produce baseload power would be at odds with the overwhelming bulk of scientific opinion.
My question is addressed to the Minister for Employment and Workplace Relations. Would the minister advise the House what impact the removal of unfair dismissal laws has had on small business? Are there any alternative policies?
I thank the member for Moore for his question and note that unemployment in his electorate is now 2.2 per cent. I say that not just because it is a good figure; I say it because it is great that people have jobs. The coalition believe that the best welfare that you can provide to the nation is the opportunity for members of the family to have a job. We believe that is vitally important. When Mr Keating, as Labor Prime Minister, and the then head of the ACTU did a deal in 1993 to introduce the unfair dismissal laws, they had no regard at all—
Mr Martin Ferguson interjecting
Were you involved? He was!
The sheepish Martin!
He is going red. I think he was involved. They had no regard at all for the impact on jobs. The coalition warned of the impact that it would have on small business and the creation of jobs—and it was not just the coalition. A 1996 Morgan & Banks survey showed that one-quarter of all small businesses were affected by Labor’s laws and 14 per cent of small businesses had hired fewer staff as a result of the unfair dismissal laws. In 1998 the Council of Small Business Organisations of Australia, COSBOA, estimated that 50,000 jobs would be created in Australia if we could abolish the unfair dismissal laws as they applied to small business. In 2002 a Melbourne Institute of Applied Economic and Social Research study estimated that the laws introduced by the Labor Party and the ACTU cost a staggering $1.3 billion. It predicted that if we removed the laws it would create 77,000 jobs. There was an ACCI survey in 2003, and so on.
Mr Speaker, you might ask: since we introduced the Work Choices laws in March last year, what has been the impact? In the March to December period of 2005, 90,000 jobs were created. In the same period in 2006, after we removed the unfair dismissal laws in their application to small business, 245,000 jobs were created. So, from having 90,000 jobs before then, when the Labor Party and ACTU unfair dismissal laws were in place, in the same period in 2006 it went up to 245,000 jobs. Certainly, not every one of those jobs can be credited to the abolition of unfair dismissal laws. But, fundamentally, we are about putting in place the infrastructure, putting in place the laws, that create well-paid jobs that give people careers in the modern Australian workplace.
Not only do the Labor Party and the ACTU have an agenda to rip up those laws, but current ACTU policy says that the new laws that the Labor Party will have in a Rudd Labor government will go further, to cover casuals at all levels and a whole range of other workers who previously did not have the unfair dismissal laws. We are about job creation. We are about well-paid jobs. The Labor Party, in partnership with the ACTU, is about destroying jobs, particularly in small business.
My question is directed to the Prime Minister. Is the Prime Minister aware of new mortgage repossession figures from the Supreme Court of New South Wales for 2006 which show mortgage repossession actions have increased by 75 per cent since 2004? Does the Prime Minister accept that the four back-to-back interest rate rises since 2004 have contributed to this massive 75 per cent increase?
Facts are facts. If there has been an increase in the repossession rate then it has occurred. But the Reserve Bank’s September 2006 financial stability review noted that the housing loan arrears rate has increased from a low of 0.17 per cent of loans outstanding in June 2004 to 0.3 per cent now. It stands to reason that, if at a time of very low interest rates people borrow a great deal more than they did during high interest rates, some people will borrow more than they can afford. It also stands to reason that if you have a state government that imposes penal rates of exit tax—
Opposition members interjecting—
Order! The member for Lilley has asked his question.
Let me say to the member for Lilley—and I know he was rather disappointed that interest rates remained on hold today, so he is dredging up a question about repossession rates—that I can assure him that the homebuyers of Western Sydney regard the circumstances in which they are now living as infinitely superior to the circumstances in which they lived in the early 1990s when interest rates were only just coming off the levels of 17 per cent or 18 per cent that they had got to.
My question is addressed to the Minister for Education, Science and Training. Would the minister outline measures to improve school governance and teacher quality? How might this improve academic standards, including for schools in Cook?
I thank the member for Cook for his question and I particularly thank him for organising a meeting with school principals from schools in his electorate last year so that we could talk about issues of concern to them. Teachers are a precious national resource. After parents, teachers are the single most important determinants in a child’s educational outcomes. That is why we must focus on quality teaching.
For schools to be able to provide quality education, principals must have greater autonomy. Principals must have greater management control over staffing and over budgets. Principals in our schools must have the power to hire and fire staff according to performance, like any other head of an organisation or enterprise has. How else can a school principal guarantee a quality education, if they have no control over the quality of the staff?
What we must do in order to attract and retain the very best, high-quality teachers is to provide more flexible and more attractive workplace conditions, and that includes offering rewards and incentives based on performance. Today I announced that I will be taking to the next state education ministers’ meeting a number of proposals relating to greater principal autonomy and ensuring that we have an element of performance based pay for teachers. We must attract, retain and reward the very best teachers. They are professionals. Let us treat them as professionals.
I note that the new Labor education spokesman, early on, ventured into this issue of teacher performance. He made a few noises about teacher performance. But, immediately, he was hauled back into line by the Australian Education Union, who even threatened to withhold campaign funding from the Labor Party unless they toed the line. Federally, Labor will never be able to deliver on education reforms because they are captives of the all-powerful teachers’ unions.
Opposition members interjecting—
Order! The level of noise is far too high. The minister has the call.
As was stated in a report released this week by the Centre for Independent Studies, public schools in this country will only flourish when we break the nexus between teacher unions and state governments. The Howard government will continue to put the interests of students and parents first in our quest for quality in education in Australia.
My question is also to the Minister for Education, Science and Training. I refer to her previous answer and to her suggestion earlier today and in the House about teacher quality, teacher salaries and increasing teachers’ salaries and incentives on the basis of performance. What additional Commonwealth funds will the minister and the government provide to support such a proposal?
I would first ask whether federal Labor supports the Australian government’s proposal to award teachers—
Opposition members interjecting—
Order! The minister will resume her seat.
Ms Macklin interjecting
Order! Members should be aware that when the Speaker is standing any interjection is highly disorderly. The minister has been asked a question; the minister will be heard. I call the Minister for Education, Science and Training.
I look forward to bipartisan support from the Federal Labor Party—
Ms Macklin interjecting
Order! The member for Jagajaga! The minister has the call.
I look forward to the bipartisan support of the federal Labor Party on our proposals to reward teachers on performance—to provide incentives for the performance of our teachers in our schools—because that underpins quality. In answer to the question about funding, I remind members opposite that the Commonwealth provides supplementary funding to state governments that provide the majority of funding for state government schools.
Ms Macklin interjecting
The member for Jagajaga is warned!
The percentage of funding that the Australian government provides to state governments is based on the investment that state governments make, and that has been the case for decades. So, if the state governments increase their investments in our schools—
Ms Owens interjecting
The member for Parramatta is warned!
the Australian government’s component increases automatically. Over the 2005-08 funding period—that funding arrangement—the Australian government is already providing $33 billion to state governments for our schools. I hope that at the state education ministers’ meeting in April I receive bipartisan support to recognise that our teachers are professionals and that they should be respected and rewarded as such.
My question is addressed to the Minister for Vocational and Further Education.
Mr Snowdon interjecting
The member for Lingiari is warned!
Would the minister inform the House how the Howard government is helping young Australians to reach their full potential through Australian technical colleges? Also, how will this provide a highly skilled workforce for Australia’s future?
I thank the member for Bass for his question and acknowledge the wonderful work he has done to help get the Australian Technical College, Northern Tasmania off the ground. This government has been working to a multibillion dollar plan to tackle labour and skills shortages. It is a plan that has already made a major contribution. It is an important part of the continuing success of our economy, and it is a success already. I will give you some examples. In 2006, four times as many young people started a bricklayers apprenticeship than in 1996. In 2006, nearly four times as many young people started a plasterer’s apprenticeship than in 1996. The list goes on and on through dozens of trades. In fact, last year, in 2006, 142,000 people completed apprenticeships compared with a paltry 32,000 in 1996.
Importantly, the government’s plan, which has delivered so much already, is also a plan for the future because demand for skills will continue. It will continue because of the strength of the economy, amongst other issues—the year-on-year uninterrupted growth that we have had. The 30-year low in unemployment will continue to put significant demands on skills. So this plan for the future not only includes a raft of initiatives to give us the capacity to train more people but also, very importantly, is about elevating the status of technical training so that people can be justly proud to pursue a career in a trade. Elevating the status of technical training is necessary because Labor—those opposite—have spent more than 20 years telling parents that unless their children go onto a university education they have failed them.
Mr Adams interjecting
The member for Lyons is warned!
Young people must be encouraged to follow their strengths. We want a nation where a good technical qualification is as prized as a university degree. The 25 technical colleges are an important initiative in, among other things, restoring the status of technical training in Australia. Not only will 2,000 young people this year directly benefit, and 7,500 by 2009, but these Australian technical colleges will stand as a wonderful symbol in local communities of the importance of a technical career. The government has a plan to address skills shortages and keep the economy strong. Labor’s plan is to hand the technical colleges back to the unions.
Mr Speaker, I ask that further questions be placed on the Notice Paper.
Mr Speaker, I seek the indulgence of the chair to add to an answer.
The Prime Minister may proceed.
I was asked a question by the member for Calare about base power load generation and I expressed the view that I thought the bulk of scientific opinion was against the proposition he was putting. I would like to quote from a letter—and I am quite happy to table the letter; I think it has been made public already—that was written to me on 21 December 2006 by the Chief Scientist, Dr Jim Peacock. He says, amongst other things, in the letter:
At present there are only two modes of power generation capable of base-load power production which can be operated without serious consequences for climate change emission.
Fossil fuels will be used in Australia now and in the next several decades in power plants. These power plants should be operated with minimum emissions and we have technologies to retrofit most existing power stations so that emissions are reduced. New power stations can be designed to operate with low emissions.
He then goes on to say:
Nuclear power stations are the other clean and mature mode of electricity generation.
In the interests of balance in this debate, they are the words of Dr Jim Peacock, the Chief Scientist. Can I also point out to the House that the company referred to by the member for Calare in his question, Solar Heat and Power Pty Ltd, was successful in gaining a Renewable Energy Development Initiative grant of $3,254,000 in December of 2005. To date—and that was a few weeks ago—the government has paid $2.1 million, or 64 per cent, of the grant and the company has stated that it will retain the intellectual property developed so far and continue with Australian management.
Mr Speaker, I refer to page 552 of House of Representatives Practice, which is about the procedure that the Prime Minister just went through. It says:
Ministers may seek and be granted the indulgence of the Chair after Question Time or later in the day, to add to or correct an answer given to a question without notice asked on that day ...
I note that yesterday in question time the Prime Minister committed what he said was an error and came in to correct the record. Can I also state that yesterday in question time the Prime Minister stated the following:
Can I remind you that the former minister for the environment, Senator Campbell, called about three summits on climate change. The most recent one was held back in 2003 ...
Given that Senator Campbell was Parliamentary Secretary to the Treasurer until 7 October 2003, then minister for local government—
Mr Speaker, I rise on a point of order. Questions to you, as to other people in this House, should be succinct. This member is abusing the forms of the House. It is a debating point in the form of a question and he should be sat down.
The Leader of the House raises a valid point of order. The Manager of Opposition Business will come to his question. He will not continue to debate.
Could you please check the Hansard and confirm this error by the Prime Minister and ask that it be corrected?
I believe the member is asking me about more than something that was in Hansard. It is not the role of the Speaker to check the facts of every member or minister’s answer.
Mr Speaker, I seek leave to make a personal explanation.
Does the honourable member claim to have been misrepresented?
Yes, Mr Speaker, in two newspaper articles.
Please proceed.
Monday’s Australian stated that I had addressed a dinner held at the Coburg Town Hall on Saturday night. I attended the dinner in my electorate. I was surprised by the appearance of Jack Thomas, whose attendance I had no prior knowledge of. I had not attended to provide moral support to Mr Thomas. I left the dinner soon after—well before the speeches—and I did not address the audience. It also follows that a newspaper article in the Daily Telegraph alleging I was associating with Mr Thomas is also incorrect.
I present the Auditor-General’s Audit report No. 24 of 2006-07 entitled Customs’ cargo management re-engineering project: Australian Customs Service.
Ordered that the report be made a parliamentary paper.
Documents are tabled as listed in the schedule circulated to honourable members. Details of the documents will be recorded in the
That the House take note of the following documents:Finance—Mid-year economic and fiscal outlook for 2006-07.Tobacco Advertising Prohibition Act 1992—Report under section 34A for 2006.
Debate (on motion by Mr Albanese) adjourned.
I have received a letter from the honourable member for Kingsford Smith proposing that a definite matter of public importance be submitted to the House for discussion, namely:
The Government’s decade long scepticism and inaction on climate change, placing at risk Australia’s economic and environmental future.
I call upon those members who approve of the proposed discussion to rise in their places.
More than the number of members required by the standing orders having risen in their places—
Yesterday and today at question time the government was finally in the situation of being able to clarify to the Australian people whether or not it understood the implications of climate change. Today the government released an emissions trading scheme discussion paper of some nine pages.
Nine pages!
The Leader of the Opposition is showing it to us now.
I am sure the member for Kingsford Smith does not need any help.
The Minister for the Environment and Heritage explained to us what China was doing to deal with its greenhouse gas emissions and made the argument, if I understand him correctly, that Australia’s robust addressing of reducing greenhouse gas emissions needs to be seen in the light of the fact that China—a country much bigger than ours—actually produces more. I notice that the minister for the environment did not mention that China has a very significant mandatory renewable energy target, and it is true, as he said, that they are investing significantly in clean coal. But the final point that the minister for the environment did not make is that China is doing more than Australia.
Interestingly, the electorate of Kingsford Smith, which I represent, includes the University of New South Wales, and that is where Dr Zhengrong Shi completed his PhD in solar energy. His technology was clever and the future looked bright. After all, he was living in a country which receives more radiated solar energy than most other countries. But Dr Shi, unable to get support for his company in Australia, ended up taking his business to China. He is now China’s third- or fourth-richest man. He is not a climate change sceptic; nor is Dr David Mills, as the member for Calare identified in his question. Dr Mills is a world leader in solar research who, after 30 years of research and development in Australia, has to take parts of his company offshore to California because Governor Arnold Schwarzenegger—‘Arnie’—has vowed to cut greenhouse emissions by a massive 80 per cent over the next 45 years. Arnie Schwarzenegger is not a climate change sceptic. As Dr Mills said—
Did he speak to you?
This is the quote. He said:
The Australian Federal Government refuses to put in place strict emissions targets, strict legislation to enforce those targets, and reliable long-term market valuations for carbon emissions avoided. We can find all of those things overseas
That is the direct quote from Dr Mills.
Mr Turnbull interjecting
The minister is warned!
That is inaction, as identified in the subject of this MPI, by the Howard government. Australian business is being forced to go overseas to continue to produce greenhouse-good technologies. The mums and dads of Australia are realists. They know about climate change. They are educating themselves about its implications and they are feeling concerned and anxious about the future for their kids. And why wouldn’t they, given the time lines and the scale of this issue? But they are not climate change sceptics.
The Prime Minister and his government have had an uneasy and confused period in dealing with climate change. Their position has shifted significantly, but for the last 11 years one consistent theme has emerged from the Howard government: that is, climate change is not a real, present and future danger to the Australian way of life, to our economy, to our ecology and to our society. In the last week, with climate change awareness at an all-time high, we again heard some extraordinary assertions by the Prime Minister and his environment minister on this issue. Last Monday night, four days after the release of the fourth Intergovernmental Panel on Climate Change report, the Prime Minister was asked, on ABC TV’s Lateline program:
What do you think living in Australia would be like by the end of this century for your own grandchildren if the average mean temperatures around the world do rise by somewhere between four and possibly more than six degrees Celsius?
As we know, the Prime Minister answered by saying, ‘It would be less comfortable than it is now.’ That is something of an understatement. A four to six degree increase in temperature is dismissed by the Prime Minister as potentially uncomfortable. That potential increase carries a burden on future generations to try to manage highly stressed ecosystems, with our natural icons under siege and with health, security and social implications of an order hitherto unseen. The Prime Minister went on to challenge the accuracy of the IPCC report by saying:
I think it is very, very hard for us in 2007 to try, with that kind of mathematical accuracy—with great respect to the scientists—to sort of extrapolate what things might be like.
The nub of the problem lies in the Prime Minister’s own misconceptions about climate change and in his refusal to take responsibility for a decade of inaction by his government. This IPCC report was produced by 600 authors from 40 countries, including 42 scientists from Australia. There were 620 expert reviewers and 113 governments involved. The Prime Minister says that it is very hard for them to try to work out with some kind of mathematical accuracy to ‘sort of extrapolate what things might be like’? They have done exactly that—perhaps not with mathematical accuracy, but with enough accuracy to give prudent governments a clear identification of the nature of risk that lies at the heart of this climate change issue. This is an issue about managing risks, and this is where the policy approach of the Howard government is deficient.
Let us quickly revisit what the report tells us. It tells us that, if there is business as usual, temperature increases are likely to be in the range of two to 4.5 degrees Celsius. It is very unlikely to be less than 1.5 degrees Celsius. We have already had an increase of 0.76 degrees up to now. It tells us that snow cover is projected to contract and that the thawing of the permafrost is expected to deepen. It tells us that it is very likely that hot extremes, heat waves and heavy rain events will continue to become more frequent. And it tells us that the number of tropical cyclones may decrease but, at the same time, their intensity will increase. It predicts more rainfall in high latitudes, with decreases in rainfall across subtropical regions by as much as 20 per cent. Importantly, the report also tells us that how we respond, and how quickly we respond, will determine how hot the planet gets. This report makes clear that ‘business as usual’ will see climate change and global warming continue to build over time until the task of managing and mitigating against the impacts will be greater than anyone in this chamber can imagine.
In the House yesterday, the Prime Minister again sought to dismiss the global threat posed by climate change by referring to the opposition as climate change purists and climate change fanatics. What an extraordinary assertion. When it comes to naming climate change purists, perhaps the Prime Minister should also include the Australian Medical Association, who have very great concerns about the impact climate change will have on the nation’s health. He should include companies like Visy, Origin Energy, Westpac, BP and the Australian Insurance Group, who have been demanding that the Prime Minister address this issue with the seriousness it deserves in order to give them some security in their business arrangements as they go forward. The Prime Minister could also include the National Farmers Federation, who argue that climate change is a very real issue for their members. More worryingly, he should also consider including some of Australia’s most eminent security analysts, like Dr Alan Dupont, who suggested that climate change is fast emerging as the security issue of the 21st century.
But what is the government’s response to their concerns and the concerns raised in numerous reports over the last 11 years? It is a discussion paper of nine pages on emissions trading. That is the substance of the response. The 2001 IPCC climate change report warned of temperature rises without precedent over the last 10,000 years. In 2003, the Australian government report Climate Change: An Australian guide to the science and potential impacts warned that temperatures could rise by two degrees and that rainfall in southern Australia could fall by 20 per cent by 2030. In 2005, the Australian government report Climate Change: Risk and vulnerability warned of direct threats to Australia from climate chance, including prolonged drought, a 20 per cent reduction in rainfall in southern Australia, increased high bushfire danger days and more extreme cyclones. Why did the government ignore all these reports? Why did the government ignore all these warnings? Those are the questions that the Australian people want answered, and those are the questions that the Prime Minister has to address.
Finally, while the Prime Minister sneeringly dismisses the Kyoto protocol as totally ten minutes ago—as last year’s fashion—Australian business continues to be locked out of $30 billion in carbon trading, and Australia is, once again, asked to leave the room when the real climate change negotiations start.
Some of us in this chamber have spent a long time campaigning on issues like climate change, and we have watched and witnessed the scientific evidence accumulate which tells us that if we continue to increase the production of greenhouse gas emissions into the atmosphere, the likelihood of an ever increasingly-warm world will jeopardise our way of life and will certainly create an additional range of problems, obstacles, hurdles and challenges for our kids to deal with.
I think it is really a question about duty of care, because we owe a duty of care to the people who we serve in this place. The lawyers in the House, including members opposite, will recognise that the definition of duty of care and an understanding of duty of care involves consequences that can be foreseen. We now have the best scientific brains in the world telling us that we can foresee with some degree of certainty—in some instances with a 90 per cent degree of certainty—what the consequences will be. We need to exact a duty of care now, instantly, to recognise the scale of the threat that we face.
No amount of dissembling, spinning or debating and no number of reports, recommendations and the usual business that goes on when we watch the Howard government in action will satisfy the Australian people that they are responding in a fair dinkum way to climate change. I have absolutely no doubt that this issue will preoccupy every member sitting in this House. I have absolutely no doubt that, unless you have a policy suite which recognises the need to urgently and immediately reduce CO and other greenhouse gas emissions now, the task will get harder and harder as we go forward.
Labor are not climate change sceptics. We are not sceptical about climate change. We have looked at the science, we have taken note of the reports and we recognise the need to act. Labor will take action to protect Australian communities from the ravages of climate change and enable Australian businesses to maintain their competitive edge in the international arena. We will ratify the Kyoto protocol to give Australian businesses access to the world’s carbon trading markets and allow them to compete on a level playing field.
We will aim to reduce Australia’s greenhouse gas pollution by 60 per cent by 2050 because the best minds in the world tell us that that is what is needed to avert the worst excesses of climate change. We will build a robust renewable energy sector because that is what is needed to draw on our great natural inheritance of sunlight—and with a technology that is not 20 years away, expensive and with a raft of unsolved problems of radioactive waste, exposure to terrorism and management of nuclear proliferation. That is what a Rudd Labor government would do about climate change. It is about having the solutions and being willing to put them into place.
The jury is in and the science is clear: the planet is heating. The time for action is now, and our children and our grandchildren deserve nothing less. The challenge for the Prime Minister and the challenge for the Minister for the Environment and Water Resources is to recognise that the policy suite that we have identified here has virtue and merit. Why debate the business of cuts? Every single person who looks at this issue with any degree of seriousness recognises that you have to cut greenhouse gas emissions. What better way to do it than to say you will and to establish a target and a time line in order to do that?
Why have a paltry two per cent mandatory renewable energy target when renewables are one of the fastest-growing businesses in this world and we can build Australian businesses that produce and provide energy? Why not, as a matter of course, stand up and say, ‘Now that the Australian public is speaking to us about climate change in a way that says they understand the enormity of that issue it is time that the government listened’?
This morning the member for Kingsford Smith was interviewed on the Today show. Karl Stefanovic said to him, ‘If we do everything that Labor is suggesting with regard to the environment and climate change, will that definitively stop global warming?’ The member for Kingsford Smith replied, ‘Karl, it won’t.’ It will not!
The Labor Party’s policy on climate change is to impose a 60 per cent cut in emissions by 2050. That is the core part of their policy, other than ratifying the Kyoto protocol, which we all understand will not reduce Australian emissions to any extent because we are committed to and will meet our Kyoto target. The substance of their climate change policy is a 60 per cent cut in emissions by 2050.
Three times yesterday the member for Kingsford Smith was asked what it would cost. Three times he could not say. At one point he said he did not know what ‘pay more’ meant. The consumers of Australia, the industries of Australia—look at my friend the member for Throsby—and the workers of Australia know what ‘pay more’ means: it means making industries uncompetitive and it means losing jobs. If Labor want to impose a 60 per cent cut in emissions by 2050 then they should at least do the Australian people the courtesy of telling them what it will cost. How can you responsibly embark on any measure of this scale without knowing what the cost is? You cannot.
This demonstrates once again how unfit the Labor Party is for government, how reckless it is; how ideologically driven it is; and how obsessed it is with symbols, slogans and saying things. It is as easy to proclaim your commitment to the environment as it is to proclaim your piety. We judge people’s actions and their beliefs not by what they claim to say or what they plead but by what they do. How can we judge what they will do if they will not tell us what the consequences are?
The Howard government has recognised for more than a decade the consequences of climate change and the risk it poses to Australia. I believe every single one of the reports—with the exception of the fourth assessment report, which, as the member for Kingsford Smith said, was contributed to by Australians—was actually published by the Australian government. They were published because of initiatives by the Australian government to create greater awareness and to engage the community, business and citizens in dealing with climate change.
If they think that is not an important agenda, I would refer the honourable member for Kingsford Smith and those interested in these issues to the Stern report, which recommends as one of the key objectives the removal of barriers to behavioural change, stressing that it is important to foster a shared understanding of the nature of climate change. What has the Greenhouse Office done but that? What has all the work of the CSIRO and the Bureau of Meteorology done but that?
Again and again the facts have been put on the table, and they have been matched with action. Over $2 billion has been invested to tackle climate change, and that is just to tackle mitigation—not adaptation; I will come to that—and to ensure that we are on track to meet our 108 per cent emissions target under the Kyoto protocol. Five projects have been approved under the $500 million Low Emissions Technology Demonstration Fund, including a large solar concentrator in regional Victoria, a $420 million project to which the fund is providing $75 million. There is a whole series of projects which, as I said in question time, are designed to promote and advance clean coal technology—technology without which the world will never be able to reduce greenhouse gas emissions.
The member for Kingsford Smith reminds me of a person who thinks that they do their bit for the environment by putting a bumper sticker on their car or exercising some personal saving or recycling activity in their own home: ‘Don’t worry; I’ve done my bit for the water challenge. I’ve got a water tank.’ Many of us have water tanks. It is all very commendable, and I commend everyone who has a water tank, but it is not going to fix the problem by itself. The member for Kingsford Smith’s solution is to say Australia should impose on itself a massive reduction in greenhouse gas emissions, which will have an enormous effect on the Australian economy, the extent of which he either does not know or will not tell. He knows, as we all do, that that self-inflicted restraint will have no effect at all on global warming unless it is matched by a similar reduction around the world.
What will the member for Kingsford Smith do if massive reductions in emissions are imposed on Australia way beyond those of our competitors? What will he do when there are thousands of Australians out of work, when instead of adding two million jobs—as the Howard government has done—two million jobs are swept away and when the cost of energy intensive industries goes through the roof? What will he say when nothing changes, when nothing happens to climate, when it is still getting warmer and still getting drier? Will he say: ‘I console you, you poor, unemployed people. I console you from my pillar of virtue. I console you because you have done the right thing. We have sacrificed you in the interests of our ideology. You, your jobs and your livelihoods have been sacrificed, and, by the way, nothing has been achieved.’ That is the Labor Party philosophy.
Our approach is to mitigate greenhouse gases, to meet our international commitments and to work constructively internationally to ensure that we can achieve what we all know is the only answer to an effective reduction in greenhouse gases: a global agreement. That is the reality. It has to involve China, India and the United States. If we go it alone and clean up our own backyard, as I think the member for Kingsford Smith said the other day, that may be commendable and admirable, but it will have no impact unless it is matched by global action.
We could pay a very heavy price and make a very heavy sacrifice indeed—a sacrifice on the altar of an ideology that has no interest in the livelihoods of Australian workers or in the Australian economy and is prepared to sacrifice the interests of Australia, the competitiveness of Australia and the jobs of Australians for nothing more than an ideological slogan. So intensely do the Labor Party hold this slogan dear that they are not prepared to accept any questions, any doubt; hence we have, as I said yesterday, the new heresy of scepticism. You cannot have a doubt; you cannot question anything; you cannot doubt anything; you have to be a total believer. It is as though we are returning to the Spanish Inquisition. I read that at one point the member for Kingsford Smith said the Prime Minister ‘had been’ a sceptic for many years. Apparently, even if you change your mind that is not good enough; you will still be punished.
Let us consider what some other leaders around the world are saying. I am not just quoting the Prime Minister here. Mr Tony Blair has said that it is:
a completely unrealistic debate to say that you could have a climate change agreement that doesn’t involve China and then America obviously, and of course India which is also a country of over a billion people ...
He pointed to the limitations of the Kyoto protocol and said we have to build towards ‘a more realistic framework—
Mr Garrett interjecting
Order! The member for Kingsford Smith.
that gives us a real chance of being able to reduce emissions’. We need to look to the future now. He said:
There will be no resolution without a clear, disciplined framework for action, with measurable outcomes.
Mr Garrett interjecting
The member for Kingsford Smith is warned!
And if it is doubted that Mr Stern is under any delusions of the kind that afflict the opposition, what did he say? ‘Every country in the world has to get involved,’ he said on ABC radio on 3 November: ‘I don’t think we have to insist on everything being done the same way all around the world. Even if we wanted to we could not do that successfully. Australia is good at technology. They’ve got wind, they’ve got coal and they’ve got uranium. There are so many ways in which Australia could bring so much to the table, we’ve got to get all countries involved.’
That was the message: it is global engagement that will provide the reduction in emissions that we need. But the interesting part about the opposition is that they go on and on about climate change as though we are debating a theological issue: ‘Does he believe in climate change? Does he believe enough? Is he a purist? Is he a sceptic? Is he a believer of whatever gradation?’ And no doubt different punishments will be awarded by the inquisition run by the members for Griffith and Kingsford Smith, depending on the degree of doubts. No credit, apparently, will be given for conversions. But no mention is made of the key consequence of climate change to Australia, and that is water scarcity. And that, as I said yesterday, is a matter where John Howard has been prescient those are not my words; those are Paul Kelly’s words.
The Prime Minister has been prescient on the issue of water. He has provided $2 billion over five years to establish the Australian government water fund, which is promoting research, innovation, recycling projects and sustainable water management. In the Wimmera Mallee, 16,000 kilometres of leaky, open drains are being replaced by 8,000 kilometres of pipes. Over 100 gigalitres of water will be saved, a great benefit for the environment and a great improvement in water security for the people of that region. That is the type of practical measure that we are undertaking all over Australia.
And then, only two weeks ago, the Prime Minister announced his $10 billion 10-point plan to take charge of the Murray-Darling Basin for the first time, to do what everybody has said should be done but was impossible: give the federal government responsibility over the interstate rivers—which, we all know, cannot be managed other than by the national government because the four states involved, whether they have the best will in the world or not, are essentially in competition with each other. This planned proposal, which appears to be receiving a high degree of support from the premiers, to take over the interstate rivers—the Murray-Darling Basin—is revolutionary. It is historic, and it has had the support of the member for Kingsford Smith. As he said only this morning: ‘We have always said we support a national water plan. That is something that was part of Labor policy.’ Well, I would ask the member for Kingsford Smith where in the Labor Party’s policy it says that the Commonwealth government should take control of the Murray-Darling Basin. You know it does not.
You know we have always supported it.
The minister will not use the word ‘you’.
I call on the member for Kingsford Smith to produce the Labor Party policy document which says the Commonwealth government should take charge of the Murray-Darling Basin. It will be interesting to see whether that is produced.
That plan will revolutionise the management of water in a region which uses most of our water. Most of the water that is consumed in Australia is used in the Murray-Darling Basin. Why? Because that is where 80 per cent of our irrigated agriculture can be found, and irrigated agriculture uses about 70 per cent of all the water that is consumed. That plan will transform the security of irrigators and the security of communities, and it will restore the sustainable balance and sustainable allocations between agriculture on the one hand and the environment on the other. Things that people have been saying must be done but which were frustrated by an antiquated and inappropriate governance structure can now be resolved, and they will be resolved in this climate because of the leadership that the Prime Minister has shown. This is leadership from the coalition. The Labor Party never proposed this. They never canvassed this, and indeed we do not know whether all the Labor Party premiers will yet support it. But it is the answer to the biggest environmental challenge in Australia: the management of water. It is the one that affects most people and most communities. It is the answer to that challenge in our largest area of rivers and groundwater systems, where over three million people depend on the water from that system and about 40 per cent of our agricultural produce is delivered. (Time expired)
I will return to some of the comments made by the newly appointed minister, the Minister for the Environment and Water Resources, but in speaking on this matter of public importance let me just say that denial, scepticism, delay and inaction are the words that best describe the Howard government’s response to the most serious issue confronting humanity—that of climate change and global warming. For the minister’s benefit, I think it is worth reminding him of the level of scepticism that was allowed free rein. I will refer to a couple of quotes from a very senior minister on your benches, the Minister for Industry, Tourism and Resources. He had this to say not so long ago:
... carbon dioxide levels go up and down, and global warming comes and goes.
When interviewed by Laurie Oakes, he confessed:
... I am a sceptic of the connection between emissions and climate change.
All this was being said, Minister, at a time when our own scientific reports and global reports were telling us of the enormous consequences of inaction on this most serious issue. This is the same minister who arrogantly dismissed Al Gore’s movie An Inconvenient Truth as ‘just entertainment’. This government cannot keep on dismissing the growing concern of our communities about the impact of global warming. They see it and live with it every day.
I picked up our local paper this morning and the editorial screamed ‘PM sniffs the wind’—and doesn’t that say it all? There is an increasing cynicism out there in the electorate about the quick political fixes when this government is under political pressure. To understand that, you only had to talk to the people who saw the graphic description of the impact of global warming in that most memorable movie, An Inconvenient Truth. The release of the most recent UN climate change report tells us all about the grave and serious consequences of increasing temperatures that could rise in the vicinity of three to four degrees Celsius.
The days of denial, Minister, must surely be over. With the PM sniffing the political wind, I was looking forward to a more enlightened approach with your appointment. I have known you for a considerable period of time, and thought that you would bring a more reasoned and rational approach to this very serious issue. I was profoundly disappointed yesterday, because I think that you have a real identity crisis. On the one hand, you are openly supporting a redefinition of the word ‘scepticism’ by implying that scepticism really means just being open-minded. It was not clear whether you were now on the Prime Minister’s track of being a realist on the issue of climate change. So what are you? Are you a sceptic? Are you a realist? Are you open-minded? Are you an environmental purist? Might I suggest, Minister—with due respect—that you sound just like Malcolm in the middle: not sure of where to turn on this very important national and global issue.
Your Prime Minister now describes himself as a climate change realist. There is one simple reality he needs to comprehend, and that is that right now—this very day—the Australian people are feeling the impact of a 0.8 degree temperature rise. We see that with our horrific drought, with water shortages and water rationing, with mega bushfires and with storms of increasing intensity. This has happened on your watch. You and your government are culpable. The seriousness of the situation becomes even more urgent with the latest scientific report from the United Nations, which points to temperatures rising in the order of three to four times more than they have to date. This would be a catastrophe for our economy, our agricultural sector, our environment and our children’s future. There is no justification for inaction.
If, Minister, you wanted to portray this debate as one being led by just environmental purists—people who are only concerned about the environmental impacts and who do not understand anything about the economics or the impact on working people—let me draw your attention to the Stern report, the most compelling analysis of the economic costs of not acting on this issue. The report concluded:
... it is already very clear that the economic risks of inaction are very severe—
and that failure to act would cost between five per cent and 20 per cent of annual global GDP. For someone who professes to understand the workings of the market, Minister, let me say that the Stern report said that climate change was:
...the greatest market failure the world has ever seen ...
The report’s response was not just to argue the importance of technological development—no-one dismisses that; it is critical for the future—but a lot more than that is needed. What is needed is an effective global response on the pricing of carbon, not just the deployment of low-carbon technologies and energy efficiencies. The central issue was the pricing of carbon. The responses recommended in the Stern report are all actions that the Labor Party has long advocated.
I am pleased to see that, even if your identity might be somewhat confused and you are adopting a ‘Malcolm-in-the-middle’ approach, at least your Prime Minister is now saying that he is a realist on this issue. Let me quote from Tony Jones on Lateline. I nearly fell off my chair with what I heard. Tony Jones asked this:
Prime Minister, what do you think living in Australia would be like by the end of this century for your own grandchildren and for the grandchildren of and great grandchildren of others, if the temperatures, the average mean temperatures, around the world do rise by somewhere between four and possibly even more than six degrees celsius?
These are the actual words of John Howard, the Prime Minister of our nation:
Well, it would be less comfortable for some than it is now ...
Prime Minister, it is certainly not a question of some people being less comfortable; it would be an absolute disaster for our communities. Let me refer the Prime Minster and the minister to our own reports undertaken by the CSIRO. A three degree rise in temperature would have grave consequences. Eighty-six per cent of Kakadu wetlands would be lost to sea level rises, our iconic Barrier Reef would be destroyed through coral bleaching and with it its associated tourism industry and jobs, there would be up to a 70 per cent increase in the number of very high fire danger days in the south east, there would be a southward spread of malaria receptive zones, there would be up to 5,000 heatwave deaths a year, there would be more severe cyclones and higher incidence of flooding from king tides and storm surges, and developed coastal areas would be at risk of inundation. And the Prime Minister tells us that some people would be less comfortable. We expected a far more judicious response from the leader of this nation to the most serious and critical issue facing the planet.
In sorting out the position of the Minister for the Environment and Water Resources on these very important issues, let me just say that his own words reveal him to be a sceptic, absolutely, about the issue of rising sea levels. Let me quote again from his comments on the AM program—and I quote in context. He said:
There’s a lot of very exaggerated claims, and you have to bear in mind that most of our coastal population lives on the east coast of Australia, and because of the geology or the topography of the east coast, that isn’t ... you know, much of that is adequately elevated to deal with a 1 metre sea rise.
With due respect, Minister, it seems that you have completely missed the point. Using a range of projected sea-level rises of between nine and 88 centimetres—let alone a metre—scientific modelling at the University of Sydney, not far from your electorate, already shows that, by 2050, the beach at Narrabeen could disappear; within 100 years, the harbour could advance by as much as 43 metres from the eastern side of the Spit, covering the southern approach to the bridge; there is a 50 per cent chance of the beach at Manly Wharf eroding 11 metres, cutting off access to the ferry terminal; and erosion at Nielson Park—very close to home—would threaten the foundations of the pavilion there, a heritage listed building. And the minister at least confessed today that, for every one-centimetre rise in sea level, you get one metre of coastal erosion. Just go and visit Belongil Beach. Have a look at Clifton Beach in North Queensland. That will show you graphically the impact of coastal erosion and the totally inadequate response by all levels of government to these very serious issues. (Time expired)
This debate is not, as it has been presented by the opposition, a debate about a choice between action and inaction; it is about a choice between policies, and it is a choice between the right way to deal with this, the right way to deal with a real and genuine issue, and the wrong way. The wrong way encompasses saying no to any serious attempts to clean up power stations, because of a theological opposition to coal and gas; no to dealing with 16 per cent of the world’s energy through nuclear energy, because of a theological opposition within the party that would aspire to governance; and no to further renewable power through hydro energy—or do you suddenly support new dams? In reality, they say, ‘We want decreased emissions’—that is what they want—but the practice is to say no to the three things which, globally, will make the greatest difference: no to the big renewables, in terms of hydro; no to nuclear, even though that would be saving 16 per cent of the world’s emissions through providing that amount of energy; and no to seriously cleaning up coal and looking at that as we go around the world.
What are they saying yes to? They are saying yes to a petrol tax for families and low-income earners. They are saying yes to a heating tax on pensioners and low-income families. Here is the chance the member for Kingsford Smith has to turn around and say: ‘We are going to rule out a petrol tax. We are going to rule out a pensioners’ heating tax.’ If you want to say that you have policies here, you had better stand up and define what they are. Do you rule out a petrol tax? Do you rule out a pensioners’ heating tax? Do you rule out a heating tax which is going to strike at low-income families, which is going to strike at farmers, which is going to strike at those who are least able to deal with it? You talked about intergenerational equity, and this debate, in real terms of intergenerational equity, is about making sure that we do not sell out the present as well as making sure that we do not sell out the future. That means that you have to be able to look motorists, pensioners and farmers in the eye and say to them, ‘Yes, I am going to slug you with a petrol tax; yes, I am going to slug you with a pensioners’ heating tax,’ or rule those out. You are right here on the floor of the House. You can pretend you do not hear, but you know the challenge is before you right now. That is the question.
The member for Flinders will refrain from using the words ‘you’ and ‘your’.
On the alternative side, we say that there is a right way to deal with this, and that is from the people who brought the world the first greenhouse office and who brought the world $2 billion worth of real and practical technological initiatives, not just in clean coal, not just in clean gas, but also in renewables—the world’s biggest solar power plant, potentially, that we are investing in. We are not afraid to look at all of the different forms. All of these things are needed. You say the solution is so important, but you rule out some of the key elements. If you are serious, and I think that there is a seriousness on one level, then drop the theology and deal with all of the elements. That is the challenge. Also, make a pledge to the pensioners and the motorists that you are not going to sell out the current generation for some utopian impact on future generations. That is the real stuff of policy. This challenge is with you right now. You can talk about it—
The member for Flinders will refrain from using the words ‘you’ and ‘your’.
but my challenge to the member for Kingsford Smith is to spell out the real impact on pensioners, motorists, farmers and low-income families. If the opposition are willing to do that then I respect it, but there has been a curious silence on real impacts on real people today. We make no apologies for caring about and fighting for battlers, for workers, for people with jobs and, at the same time, trying to invest in the long term.
Mr Snowdon interjecting
If the member for Lingiari is asleep, he can leave the chamber.
Let me deal now with this debate on three levels: firstly, the reality here, to deal with this notion of denial and scepticism; secondly, to deal with the international situation; and, thirdly, to deal with a couple of the points that my learned leader has asked me to make in relation to the domestic situation. In relation to the reality, I have a very simple proposition, which is to find what we have done as a government. Climate change is real. It is important. It is significant. That is the position. That is why we have invested $2 billion. That is why we have taken concrete, practical steps.
What does that mean, though? Where does Australia fit? We represent 1.4 per cent of global emissions. We represent about 560 million tonnes of 40 billion tonnes of global emissions. Where were we in 1990? We were at 550 million tonnes. So we have seen an increase of about two per cent over the last 16 years. We have seen an increase in our energy efficiency intensity of about 45 per cent. There are a series of causes for that—I do not deny it. I am pleased that the changes in practice in land clearing have been an important part of that. I would also note that the specific policies that this government has put in place have, on the estimates of the Australian Greenhouse Office, saved about 87 million tonnes per annum of abatement than would otherwise have been the case.
So, by comparison with the rest of the world, what does that mean? We are one of the only four developed world countries that happen to be on track to meeting our targets. There are a lot of countries which made the promise, but there are very few that have delivered. So here is the question about morality: do you give the moral tick to the person who makes the promise but never delivers or to the person who never makes a false promise but does deliver? We have a real and powerful story to tell that Australia, almost alone amongst the countries of the developed world, is on track to meet its targets. We will get there because there is more action that we are going to take—there is more action that the minister himself has already embarked upon.
Where does this 40 billion tonnes sit in terms of the international situation? What does that mean? Internationally we have four planks to what we are doing, and we take this very seriously. The first is the Asia Pacific Partnership on Clean Development and Climate. This has been derided by the opposition. Yet we see from the work of ABARE that we are likely to save the world about 90 billion tonnes of CO emissions, over and above what would already have been the case, through the Asia-Pacific partnership process between now and 2050. That is about two years of global emissions. That is because we have brought in China, India and the United States—none of which have committed to targets under the Kyoto process. So they are willing to take real action under something that the Prime Minister, the foreign minister and the Australian environment department and its successive ministers have brought together. This is something that is real, tangible and cogent.
But we have moved beyond the Asia-Pacific partnership in the help we are giving in the form of clean coal technologies, renewable energy technologies and energy efficiency technologies to China and India. That is probably the single most important thing we can do globally. Why? Because China’s coal emissions alone account for 10 times Australia’s total emissions. That is real. If you want to find out where global emissions are coming from, you should look to the increase in China’s coal emissions. If we can have a 10 per cent decrease in China’s emissions in any one year, it is the equivalent of Australia saving every single kilogram of our own emissions.
The second thing that we are doing is that the Prime Minister has set out personally to pursue a new model for Kyoto, a new international agreement which is comprehensive and real. We make no apologies for that. What is wrong with the old system? The old system has three flaws. Firstly, it is inadequate. For all of the talk, it has had a one per cent impact over the last 16 years on our emissions. We would have had 141 per cent of a 1990 emissions by 2012—now we are going to have 140 per cent. Secondly, it has perverse outcomes. This is what I call the ‘Bhopal effect’. Essentially it is driving emissions offshore from developed world countries to developing world countries. It is not doing what it should do. Thirdly, there are numerous countries that have failed to meet their targets.
We are not only unashamedly driving up the take-up of clean energy through clean coal but also through the sale of uranium—which the Leader of the Opposition supports but the member for Kingsford Smith opposes. Why do we do that? Because it is real and it is tangible. I think I have covered the domestic points, but the last thing I want to say about the international front is that we also support reforestation. Even today I had discussions with a leading scientist about the role of reforestation in the developing world and the things that we can do there to act as global carbon sinks. We are talking about real savings of carbon having a real impact on natural systems. At the end of the day, this is not a debate about action versus inaction—no country has taken more action than Australia—it is a debate about the right way versus the wrong way. (Time expired)
I listened with interest to the member for Flinders. I thought he finished up on quite an odd note actually. He was talking about reforestation as a way of having an actual carbon sink.
It’s true.
Well, it is true. But there are a couple of points to make here. The Commonwealth government has recently put in place a carbon trading task force to look at emissions trading et cetera. Agriculture was not included. Another natural carbon sink is organic matter and humus in our soils, some of which trees grow on. In terms of the short to medium term, the potential for carbon to be sequestered in soils in organic matter and humus is enormous—that is not to suggest that it does not get released at another time further down the track. In fact in parts of the United States carbon trades are actually taking place. I am sure the deputy speaker would be aware of the practice of no-till agriculture where the plant residues are left on the surface of the soil. That not only reduces erosion and run-off but also increases infiltration of moisture. Under the Howard 10-point plan that might even be considered a diversion of water if we are talking about trees. The Howard 10-point plan actually says that they are going to have to review the Murray-Darling catchment cap based on how many trees are there because that could be having an impact on the amount of water that can enter the system. That is slightly different to what was being said six years ago.
The new minister makes great play of his statement that they have been progressing this agenda for quite some time. Six or seven years ago the issue was salinity and we were being encouraged to plant trees so that we actually took water up and the watertable would go down so the salt would not come to the surface. Now in some of the fine print of the new plan we are actually going to revisit the impact that trees have on run-off. I think there are a number of mixed messages here, and I compliment the member for Flinders for talking about trees, because they do have a positive effect in terms of carbon absorption. But under the Prime Minister’s plan they may well have a negative impact in terms of water being allowed to enter our river systems. I would hate to see a circumstance where that other natural sink, soil humus and organic matter, and progressive farming practice is scorned upon because it actually takes more water. It allows less water to run off than traditional farming techniques. In fact, on the black soil plains, which the member for Flinders would not be aware of, I am told that that could have an impact of up to six to eight inches of additional moisture.
We heard in question time today that China is building one coal-fired power plant every five days. I will tell you what America—that country that we follow in almost everything—is doing. It is building an ethanol plant every 11 days. One country, fossil fuel fired, carbon dangerous; and another country—America, one of the worst in the world in terms of consumption et cetera—is actually starting to address the problems with transport fuel with a renewable energy source for transport fuel. They are moving at an enormous rate—one plant is being opened every 11 days. I know the member for Kennedy was recently in the United States looking at those plants—
They let him in?
Yes, they apparently let him in. He must have got in through Mexico!
They tried to not let me out.
And I had paid money to have him kept there. But, anyway, the Brazilians tried and they failed!
All this highlights the inactivity that has been going on in our nation. I do not think the Labor Party are completely scot-free on this either. Because of the Dick Honan and Prime Minister golf game and teapot, they have been very slack on progressing the renewable energy debate. They will talk solar and they will talk wind, but they do not talk very much on ethanol, biodiesel or biofuels—renewable energy sources that not only could have an enormous impact in terms of the health repercussions in our major cities but also could have an enormous impact on our regional economies. You can see what is happening with the corn price in the United States now—purely driven by biofuels. You can see what is happening in Europe with the canola and vegetable oil price—purely driven by biofuels. You can see what is happening in Brazil—and we are getting a bit of a spin-off from that with the sugar industry, mainly driven from Brazil. It is increasing its ethanol production at the rate of one Australian sugar industry a year. And we are doing nothing. We are standing here letting the market take its course. There is all this talk about what we are going to be doing about climate change—because it has suddenly become an issue since October—but there is nothing really happening in terms of real policy to drive some of these energy targets and to look at a mandate on the usage of fuel.
Another issue is water. I will not go back to the issue I raised yesterday and this morning but, to have any credibility with respect to the future of the Murray-Darling system and the overallocation problems, the government really has to address the issue of tax on the compensation paid for the loss of water entitlement that groundwater users in New South Wales, in particular, have faced. They entered into the arrangement voluntarily and the state and the Commonwealth came together. It is jointly funded. The money is on the table, as the Prime Minister was talking about in his plan. They worked with the irrigators and they reached a sustainable target. Compensation was arranged and, all of a sudden, after the deal was done, someone said, ‘By the way, we’re going to tax you on that.’ So 47 per cent of it could be taken by the Treasurer.
Another issue that I will raise while the Minister for the Environment and Water Resources and the member for Flinders are here is the issue of Lake Alexandrina—right at the end of the Murray. I believe the Prime Minister was there last week. Lake Alexandrina is an absolute disgrace. It is 20 times the size of the electorate of Wentworth. It is artificial. Through the rising water level, it has destroyed vast areas around it. It has banked water up the Murray about 100 kilometres and it has had an enormous impact on the ecosystems—and Adelaide are saying that they do not have any water. The evaporation alone that takes place on Lake Alexandrina is half what the New South Wales cotton industry uses in a year—and the cotton industry has been demonised by all and sundry as the enormous slurper of water in the Murray-Darling system. And what are we doing about the Menindee Lakes? There is mention of it in the Prime Minister’s plan. Where is that water going to be allocated?
I congratulate those members of the government who have actually started to look at Lake Alexandrina, because it is a tragedy. For people in Australia to believe that the Murray-Darling system is not allowing any water into the Murray mouth is just a deception. Lake Alexandrina, this lake at the end of the Murray, is 20 times the size of the electorate of Wentworth, the minister’s seat. You could throw a rock into the ocean from Lake Alexandrina across the Murray mouth. They have built what they call artificial barrages—an artificial structure—at the end to dam it up. As I said, for hundreds of kilometres around it, the salt levels have risen through man’s intervention. So, if we are serious about the Murray-Darling, rather than everybody saying, ‘Let’s start at the top and work down,’ I think there are some things that should be done at the bottom as well. As I said, half the water that the cotton industry in New South Wales uses is actually evaporated away on this vast lake at the end of the Murray-Darling system.
I commend the minister at the table, the Minister for the Environment and Water Resources. Mr Deputy Speaker Causley, you would be well aware that one of the great failings of this parliament, when compared with the state houses—and why the state houses are much closer to the people—is that ministers do not sit in this House and listen to the speeches. This is one of the first times that I have seen a minister come into the House and listen to the opposition’s arguments and his own party’s arguments—and listen seriously.
There are two ministers here.
You are a primary producer, so you have a vested interest. But the honourable minister does have some interest in my electorate. When these people come in here and talk about climate change and people down here being without water, he would realise that we are inundated at the present moment. I am ringing up almost half-hourly not only Tully and Innisfail but also Burketown, Mornington Island, Normanton and the like about flooding. We, in fact, have enjoyed good seasons over the last 10 years—and, unfortunately, in the super wet belt, we have had an excess of water.
I do not know whether people in this place have read Al Gore’s book, but if you look at the increase and decrease in rainfall shown there you will see that there is no pattern. One offsets the other, which is the experience in Australia. Quite frankly, the wet areas are getting a bit wetter and the drier areas might be getting a bit drier, if you go on the figures from the last 10 years. But we people who are close to the land know that it is absolutely ridiculous to look at a 10-year cycle. If you look at the rainfall pattern for Australia—a magnificent map done by the DPI in Queensland—you will realise that these years are not too bad as far as seasons go in the overall picture of Australia.
I want to commend the Minister for the Environment and Water Resources for being here. I think this place would be a much more effective reflection of the Australian people if ministers did what he has done and came into this place. I also commend the other minister at the table, the Minister for Employment and Workplace Relations, and my colleague here, the member for New England, a very wise investor in the electorates of North Queensland.
I want to give the ALP a little bit of gratuitous political advice: if you want to win the next election, you have to win the seats of Flynn, Bundaberg and Herbert. They are marginal seats. You have to win those seats. Those seats are coalmining seats.
Don’t you realise what you are kissing goodbye? This nation has one single source of income now, and that is coal. It is 20 per cent of the nation’s entire export earnings. And guess what the No. 2 earner is? Aluminium. Guess what aluminium needs? Cheap power! No cheap power, no aluminium industry. You can only get cheap power with coal.
Let me be very specific. The ALP has come in with some vague, airy-fairy notions. For heaven’s sake! Put up solutions. Do your research. But, for the sake of the ALP, I will help them out. If you want to have wind generation or hydro generation, let me give you the figures. It is $35 a megawatt for coal-fired power. Gas is $60 a megawatt. I know because I was the minister; I am intimately familiar with these figures. It is $60 to $80 a megawatt for nuclear. So forget about nuclear. No-one is going to pay $60 a megawatt for nuclear. But hydro is $140 a megawatt. Are you going to pay $140 a megawatt for electricity? For heaven’s sake! Think of the poor people who are struggling to make ends meet out there, paying the huge debt on their houses because of the way we have run things in Australia. How the hell are they going to pay a 300 per cent increase in their electricity charges? But that is hydro. I have not got to wind yet. Wind is about $135 a megawatt. Solar is higher than that—maybe $240 a megawatt.
Are you seriously saying that we are going to close down the Australian aluminium industry and the Australian coal industry—which are bringing in about 20 to 30 per cent of the nation’s entire export earnings? Is that seriously what you are proposing here? What about your own unions, the people who pay the money to fight your campaigns for you? Who are they? They are the miners of Australia. Look at the mining seats in Queensland. You people got absolutely annihilated in the mining towns. These people are not stupid. The miners of Australia are not fools.
Let me just zero in. I do not think anyone here, on either side of the House, is questioning the increase in CO—at least, I hope not. There has been a huge increase and that increase has been man-made. I do not question that. If you jump to stage 2 and say that therefore that increase is causing climate change, I think you are on very shaky ground. If you look at the evidence that is coming forward, you will see that it is very equivocal. I do not hesitate for a moment to say that we should be doing something about it, but you cannot possibly be seriously proposing that we close down the coalmining industry. The world will laugh at you but the people of Australia will crucify you—and justifiably so. I will do my part to ensure that they do, I can assure you.
But what have we got? Look at the world authorities. Speaker after speaker for the opposition has got up and quoted Al Gore. Look at his solutions. What is his first solution? His first solution, as I said yesterday, is ethanol. Look at Newsweek magazine, a most intellectually accredited magazine. It is Time and Newsweek but Newsweek is the more intellectual one. The first solution it puts forward is ethanol. In his state of the union speech last year and again this year, President Bush, who you would expect to be on the other side of the argument, said ethanol is the answer. Are all the people who live in the Americas idiots? Are the people of Canada, the United States and Brazil fools? The US and Brazil have mandated ethanol and it is in the process of being passed in Canada.
As my worthy colleague from New England has said, there is an ethanol plant being built every 11 days in the US. We build one every 3,600 days in Australia. We have only built one in the last 3,600 days. One plant was built during the Second World War, at Sarina. The other plant, Honan’s plant, is the only plant that has been built since 1945. One plant! Another one is being built, and let me state to the House that the people at Macquarie Bank are not fools. It was a little bank that opened up with $300 million. It is now one of the major banks in the world. Macquarie Bank is an equity investor in the new plant going ahead at Dalby. So the smart money is going on ethanol.
The dumb governments are not doing that. So I ask the minister to reflect upon the fact that the United States, the greatest economy on earth, is building a plant every 11 days. Brazil, the 12th biggest economy on earth and the fourth biggest country in population, is building a plant every 14 days. Australia has built one plant in nearly 60 years. Please! We have the water and we have the land in Northern Australia.
The minister, who is in the House, has raised great hopes throughout this nation. This is a nation that reveres the building of our own motorcars. This is a nation that reveres the building of the Snowy Mountains scheme. We have done great things in this country. The minister and the Prime Minister have raised very great hopes. And, quite frankly, I praise the Leader of the Opposition as well on this insofar as he has restrained himself from attacking it. With the Snowy Mountains scheme, to his detriment, Mr Menzies attacked the idea. But, of course, when he became Prime Minister he embraced it as his own creation—and God bless him for doing that. He was very proud as an Australian of what his country had achieved in the Snowy.
I say that the answers are there. In the case of ethanol, every hectare that you put under sugar cane takes 72 tonnes of CO out of the atmosphere every year. It produces 8,000 litres of ethanol, which puts back into the atmosphere—I cannot give an exact figure but I will track one down over the next couple of days—about 21 tonnes. So it takes 72 tonnes out and puts 10 tonnes back. There is the answer. That is why Mr Bush, Mr Al Gore and Brazil, Canada and every nation on earth are going down this pathway—
The Japanese and the Chinese.
The Japanese, the Chinese and the Indians are building plants. Everyone is doing it. So there is the answer. I am in the unique position to also say that 40 per cent of domestic water usage is in heating water. If you solar heated Australia, one country, that will be CO neutral—(Time expired)
Mr Speaker, I wish to make a personal explanation.
Does the minister claim to have been misrepresented?
Yes, I do.
Please proceed.
The member for Throsby earlier said that I had sought to impose a new definition of ‘sceptic’. The definition I gave of ‘sceptic’ yesterday was quoted from the Oxford English Dictionarythat is:
... a person inclined to question or doubt accepted opinions.
The Macquarie Dictionary definition is similar. It is:
... someone who questions the validity or authenticity of something purporting to be knowledge.
The only people seeking to create a new definition of a sceptic are the opposition.
The minister has clarified the position. The discussion is now concluded.
Message received from the Senate returning the bill without amendment or request.
Bill returned from Main Committee without amendment; certified copy of the bill presented.
Ordered that this bill be considered immediately.
Bill agreed to.
by leave—I move:
That this bill be now read a third time.
Question agreed to.
Bill read a third time.
Bill returned from Main Committee without amendment, appropriation message having been reported; certified copy of the bill presented.
Ordered that this bill be considered immediately.
Bill agreed to.
by leave—I move:
That this bill be now read a third time.
Question agreed to.
Bill read a third time.
by leave—I move:
That the bills be referred to the Main Committee for further consideration.
Question agreed to.
I present the report of the Selection Committee relating to the consideration of committee and delegation reports and private members’ business on Monday, 12 February 2007. The report will be printed in today’s Hansard and the items accorded priority for debate will be published in the Notice Paper for the next sitting.
The report read as follows—
Report relating to the consideration of committee and delegation reports and private Members’ business on Monday, 12 February 2007
Pursuant to standing order 222, the Selection Committee has determined the order of precedence and times to be allotted for consideration of committee and delegation reports and private Members’ business on Monday, 12 February 2007. The order of precedence and the allotments of time determined by the Committee are as follows:
COMMITTEE AND DELEGATION REPORTS
Presentation and statements
1 STANDING COMMITTEE ON COMMUNICATIONS, INFORMATION TECHNOLOGY AND THE ARTS
Community television: Options for digital broadcasting
The Committee determined that statements on the report may be made —all statements to conclude by 12:40pm
Speech time limits —
Each Member —5 minutes.
[Minimum number of proposed Members speaking = 2 x 5 mins]
PRIVATE MEMBERS’ BUSINESS
Order of precedence
Notices
1 Mr Georganas: to present a bill for an act to establish an Airport Development and Aviation Noise Ombudsman, and for related purposes (Airport Development and Aviation Noise Ombudsman Bill 2007). (Notice given 29 November 2006)
Presenter may speak for a period not exceeding 5 minutes —pursuant to standing order 41.
2 Ms George: to move—
That the House:
Time allotted —30 minutes.
Speech time limits —
Mover of motion —5 minutes.
First Government Member speaking —5 minutes.
Other Members —5 minutes each.
[Minimum number of proposed Members speaking = 6 x 5 mins]
The Committee determined that consideration of this matter should continue on a future day.
3 Mr Baird: to move—
That the House:
Time allotted —remaining private Members’ business time prior to 1.45 pm
Speech time limits —
Mover of motion —5 minutes.
First Opposition Member speaking —5 minutes.
Other Members —5 minutes each.
[Minimum number of proposed Members speaking = 6 x 5 mins]
The Committee determined that consideration of this matter should continue on a future day.
4 Ms Vamvakinou: to move—
That the House:
Time allotted —30 minutes.
Speech time limits—
Mover of motion —5 minutes.
First Government Member speaking —5 minutes.
Other Members —5 minutes each.
[Minimum number of proposed Members speaking = 6 x 5 mins]
The Committee determined that consideration of this matter should continue on a future day.
5 Mrs Hull: to move—
That the House:
Time allotted —remaining private Members’ business time.
Speech time limits—
Mover of motion —5 minutes.
First Opposition Member speaking —5 minutes.
Other Members —5 minutes each.
[Minimum number of proposed Members speaking = 6 x 5 mins]
The Committee determined that consideration of this matter should continue on a future day.
I have received advice from the Chief Opposition Whip that he has nominated Ms Bird to be a member of the Standing Committee on Economics, Finance and Public Administration in place of Mr Fitzgibbon.
by leave—I move:
That Mr Fitzgibbon be discharged from the Standing Committee on Economics, Finance and Public Administration and that, in his place, Ms Bird be appointed a member of the committee.
Question agreed to.
Debate resumed.
The original question was that this bill be now read a second time. To this the honourable member for Perth has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. The question now is that the words proposed to be omitted stand part of the question.
I am pleased to be able to be back on my scrapers to continue my remarks, which were so rudely interrupted by question time! As we know, the Australian Technical Colleges (Flexibility in Achieving Australia’s Skills Needs) Amendment Bill (No. 2) 2006 proposes to bring forward funding for the 25 Australian technical colleges that the Commonwealth has committed itself to building. We understand through the bill that the total level of funding for the ATCs remains the same.
I am pleased to be able to support these minor changes. However, I cannot say that I am happy with the way the government has handled such a crucial area as education, and I am not impressed by the way it has failed to address the skills shortage by investing in Australia’s future. I do not believe that this legislation will deliver the goods; it certainly will not deliver the goods for people in my electorate. What these amendments do is to highlight the inability of the government and its complete lack of commitment to education within this country. This ineptitude is being felt most particularly in regional and remote Australia and in my electorate of Lingiari, which has large numbers of isolated Aboriginal communities, pastoral properties and mining towns. I welcome the opportunity to speak on the legislation and emphasise the particular areas of concern faced within my own electorate.
We are told by the government that the proposed technical colleges—only five of which have been opened—would be located in areas with a high youth population, skills needs and in regions supported by a significant industry base. Whilst my electorate certainly fits these criteria, there is no commitment to a technical college being developed in this area. In fact, there has been very little investment at all in the sorts of services and infrastructure needed to provide vocational education and training and to address the skills shortages and education needs in my own electorate.
What we instead see, sadly, is the historical neglect of the education needs of the many people who make up my electorate, particularly where they live in remote parts of it. I know this to be true of other parts of Australia, particularly in the north. In 2005, the Northern Territory government, with industry, held a conference entitled ‘2015: Moving the Territory Ahead’. It was told that the regional economies were suffering as the Darwin economy boomed. In December 2006, the Northern Territory Construction Association stated that these skills shortages were leading to business closures, despite a booming economy. In addressing this critical concern the conference delegates stated that there was a crucial need to involve Indigenous Australians in the answer. The Workforce NT report for 2005 notes:
The NT economy is predicted to continue to strengthen over the next few years with increasing exploration resource development, continuation of major project construction activities and a strengthening tourism market. In the current climate where skills shortages exist across a wide range of occupations, it is reasonable to assume that demand for skilled workers and the demand for labour will continue at both the local and national level.
We know from the most recent Northern Territory occupation shortage list that there are shortages in around 80 occupations. A significant proportion of these are in the trades.
The Workforce NT document reports on the results of an NT wide survey of industry and business conducted by six training advisory committees. Across the Territory 53 per cent of businesses reported difficulty in recruiting staff. The most difficulty was experienced in the central region, where 65 per cent of businesses reported difficulty, followed by the Barkly region, with 59 per cent. Tradespersons and related workers were the most difficult group of workers to recruit, reflected by 34 per cent of responses. Labourers and related workers follow, with 13 per cent of responses; clerical and service workers, with 12 per cent; and professionals, with 12 per cent.
The report profiles the specific skills shortages suffered in each of the Territory’s regions. The report found that, in the East Arnhem region, the most common occupation with a shortage was tradespeople, with 35 per cent of responses, and the common reason given for this was ‘a general skills shortage’, with 39 per cent of responses. The most common occupations experiencing shortages were motor mechanics, cleaners, electricians, seafarers, fishing hands and sales assistants. In the Katherine region, the figures were very similar, with 30 per cent of responses saying that there was a shortage of tradespersons. The most common reason given, again, was ‘a general skills shortage’, with 55 per cent of responses. Again, in similar fashion, the most common workers identified as being in short supply were farm hands, nursery and garden labourers, motor mechanics and sales assistants. In the Barkly region, again, 50 per cent of responses said there was a shortage of tradespersons and 63 per cent of responses said the reason for this was ‘a general skills shortage’. The most common occupations identified were that of motor mechanics, other tradespeople and registered nurses. In the central region, the most common occupations in shortage were tradespeople, with 40 per cent of responses, and the most common reason give, again, was ‘a general skills shortage’, with 51 per cent of responses. The most common occupations identified as having a shortage of labour were those of electricians, motor mechanics, sales assistants, carpentry and joinery tradespersons and cleaners.
The shortage of skills in the Territory is, of course, exacerbated by the growth in economic activity that the Territory economy is experiencing. The Access Economics five-year outlook released last month predicts strong growth in the Territory economy of between five per cent and 6.5 per cent over the next three years, no doubt strongly driven by the commodity boom across northern and Western Australia. Indeed, much of the economic activity that is a result of the commodity boom is based in regional parts of the Territory, in my own electorate. What is unfortunate is that the impressive rates of growth and low levels of unemployment predicted in the Access Economics outlook are not being fully enjoyed in the communities that exist within this area of such vibrant economic activity.
In the regions I earlier identified in my own electorate, there is a significant Indigenous population, with 38 per cent of the population of Lingiari being Aboriginal people. One of the defining characteristics of this population is that they are disproportionately youthful when compared with the rest of the population, and they have very high fertility rates. Forty per cent of Australia’s Indigenous population is aged 14 years or younger, compared with only 20 per cent of the non-Indigenous population.
I have said in this chamber a number of times that the most crucial factor bearing upon the ability of these people to participate in the labour market is a lack of education opportunities. I have pointed out many times in this place that there are literally thousands of young Territorians who live in my electorate who have no access at all to any high school education opportunities or vocational education opportunities. It is within that context that I note the remarks made by various ministers during the course of question time today. You will recall, Mr Deputy Speaker, that the Minister for Employment and Workplace Relations made the following comments. Firstly, he said that ‘the best welfare that we can provide to Australians is a job’. He later said that giving Australians a career in an Australian workplace is what they are about.
Then, of course, we had the Minister for Vocational and Further Education talking about skill shortages. He was saying something which we all know: the demand for skills will continue. He said that the government has a plan to address skill shortages—referring to these technical colleges—and keep the economy strong. Then we had the Minister for Education, Science and Training talking about the need for quality education. I wonder if they actually sat down and had a conversation together whether they could work out a solution to the problems in my electorate. Clearly there is a disjointed approach to how to address the skill shortages in this country. Clearly there is a disjointed approach about how to address the needs of people who live in regional and remote Australia and who are not afforded the opportunity to go to technical colleges because they do not exist there.
Nothing in this legislation will assist a single person in my electorate to attend a technical college, because there is not one there. In any event, even if there were, a substantial proportion of the population would not be able to get access to it because they would not have the fundamental skills to get entry. Why do they not have the fundamental skills to get entry? Because they do not have access to a quality education. Why do they not have access to a quality education? Because, sadly, since at least 1978 until 2001, successive conservative governments in the Northern Territory took conscious decisions not to invest in educational infrastructure in the bush. As a result, we now have at least three generations of Territorians—some of them are clearly not young any more—who have been denied access to proper education opportunities.
It is all very well for this government to come in here and parade what it sees as its values about the importance of quality education and the importance of providing people with career opportunities and jobs, but they fail the test because none of the decisions that they have taken in this legislation will provide opportunities for these Australians who live in remote parts of the Northern Territory. Of course, the three ministers who I referred to earlier all make bland statements about what this country is on about and about what they are trying to do in terms of real welfare.
It could well be true that providing people with real jobs is the best welfare, but I wonder if the minister responsible would talk to the minister for education and say, ‘Listen, if I am going to give these young Aboriginal kids in the Northern Territory access to jobs in the broader labour market, they need an education.’ Then, when he has done that, he might well go over to the other minister who got up at the table here and paraded his virtue and say to him: ‘Mate, if we want to give these young kids apprenticeships, you have to provide them with those vocational education opportunities in the bush. It is not much good to them if it is in Darwin.’
My electorate is 1.34 million square kilometres in area. The city of Darwin and Palmerston form the electorate of Solomon, which is 334 square kilometres. You do not have to be Einstein to work it out. The town of Alice Springs is the major service centre for a very large region—about one-third of the Northern Territory. Do you think they have any technical and further education opportunities provided through this legislation? They have zero. What opportunities do all those young kids who live in the northern part of South Australia, the eastern part of Western Australia or the southern part of the Northern Territory and who see Alice Springs as their major service centre get out of this legislation? Not a jot—not one single opportunity.
Let us not have ministers come into this place belting their chests, parading their virtue and saying how well they are doing when, in fact, they are doing abysmally. And whilst I am happy to support the meagre impact this legislation will make in assisting with Australia’s skill shortage by providing some opportunities for some people in some parts of Australia, I say to the government: you have failed the test and you continue to fail the test. You do not understand, nor do you care, about providing those Australians who are most disadvantaged and most need an opportunity in life with that opportunity. You have taken conscious decisions not to do it.
We know that if we are actually going to do something about this that we have to do something reasonable. I talked about the Indigenous community in the Northern Territory. Over 83 per cent of the Indigenous population aged 15 or over live in remote parts of the Territory—that is, in my electorate. According to the Workforce NT Report, they typically have:
If you profile this population, and if you understand this population, you do not have to be too smart to work out why they cannot get a job. Not only is the labour market an issue, and not only do this government not understand the small-area labour markets that exist across the Northern Territory; they also do not understand their obligation—nor do they acknowledge their obligation—to provide these Australians with a similar opportunity to that which they want to provide to other Australians in other areas, such as Western Sydney or even Darwin. The people in my electorate have the right to these opportunities just like other Australian citizens have. This legislation will not provide them with that opportunity.
This legislation does not go nearly far enough. I say to members opposite: we have to do a damn sight more if we are going to fill the gap which now prevails in the bush and give these young Australians a real opportunity. In 1996, when I was parliamentary secretary for employment, I was responsible for promoting and funding a skills analysis to look at skills shortages in the Northern Territory and across the north of Australia. What did that analysis tell us? It told us that skills were short. We know that, but it exemplified the huge potential pool of labour in the north of Australia which is not being accessed because they are being ignored. Now, report after report has exemplified exactly what I have been saying. Industry knows that there are skills shortages. They need their carpenters, they need their electricians, they need their fitters in the mining industry. They cannot get them.
What we have seen, despite the lack of effort by government, is industry taking up the cudgel. The mining industry, particularly in the case of Argyle, has taken a deliberate approach to make sure that the labour which they employ in that community is largely from the local population. They have changed the way they operate. They have gone out to the community and said: ‘We will help you to get training. We understand the need for this educational opportunity. We will give you the opportunity, we will train you for a job and we will give you a job.’ That is what this government needs to understand. It needs to see that it has an obligation to work with communities and provide the people with real opportunities. This legislation does not do nearly enough in terms of providing technical and further education opportunities for people who live in remote parts of Australia, particularly in my electorate. It is a shame. The government needs to do a damn sight better. (Time expired)
As a result of strong industry and community support, 21 of the 25 Australian technical colleges are expected to be in operation in 2007, which is well ahead of the schedule announced at the 2004 election. This has resulted in additional costs over a five-year period, which this bill seeks to address. The Australian Technical Colleges (Flexibility in Achieving Australia’s Skills Needs) Amendment Bill (No. 2) 2006 will increase the total funding for the ATC initiative from $343.6 million to $456.2 million—an increase of $112.6 million over the period from 2006 to 2009.
While it is fantastic that youth in many parts of the country will have the option of this flexible approach to education and training sooner than anticipated, I must express my disappointment and frustration that the technical college in my electorate of Dobell has been held up because of the New South Wales Labor government’s continual political games. The Central Coast ATC would have been up and running in 2007 had it not been for the New South Wales Labor government delaying the granting of a licence. I understand this has also occurred in other electorates in New South Wales and in Western Australia. But we all know what Labor does when it is threatened by good policy: it stands in the way and denies communities of important projects.
The Australian government and Central Coast industries are working together to provide and promote technical training for youth across the whole region, while the New South Wales government tries to stifle these moves—purely for political gain. The local New South Wales Department of Education and Training have been very cooperative and they understand the need to work together to avoid an unnecessary duplication of facilities. However, I understand that the New South Wales Labor government is now refusing to sign a memorandum of understanding to provide the education component for the project, adding further delays to the project. We all know that Labor has a limited grasp of the technical college concept and how valuable it will be for areas with a high youth population and a rapidly growing employment base. It cannot seem to grasp that the technical college initiative will serve to complement TAFE, rather than duplicate it, by providing young Australians with the opportunity to commence their training in a traditional trade through a school based apprenticeship at certificate III level while at the same time completing academic subjects leading to their year 12 certificate.
The additional funding in the bill will provide a capacity for ATCs to provide high levels of support to both students and the employers who engage students as Australian school based apprentices. This is another initiative that the New South Wales Labor government has held up for so long, denying thousands of young people in New South Wales opportunities, options and a say in their future. Instead, state Labor attempted to fool Australians with hollow promises and trade schools, which are nothing like the Australian Government’s ATCs, as they do not offer trade training to certificate III and certificate IV level.
One of the best things about these technical colleges, and something that really sets them apart from other VET initiatives, is their flexibility. Each college has been encouraged to pursue a model that best meets the needs of the region in which it is established. Students and employers are attracted by this flexibility. Employers are able to influence the curriculum to ensure their apprentices are work-ready, and students are able to undertake on-the-job training at times that suit their employer. Students can also work towards two qualifications at once. One student commented that he had been trying to decide whether to stay at school and complete his senior certificate or to start an apprenticeship. He was over the moon when he heard that he could combine the two. This flexibility has resulted in the operational costs necessary to get each college up and running being higher than expected. These costs vary from college to college because every operational model is different. In my electorate of Dobell, on the Central Coast, trade qualifications are vital. In fact, I have recently been involved in a Central Coast apprentice drive with a local organisation called Central Coast Group Training, and we have been working to encourage businesses to take on apprentices, with great results. The plan was to employ one apprentice or trainee per day for 30 days. This program has been running for two weeks, and so far 15 new trainees have been signed on. They are handling about 150 apprentices and trainees currently and they are tied in to make that 200 during this year.
The abolition of technical schools by the states many years ago has meant that over the past few decades our young people have lacked training and skills pathways. The price we have paid is the severe trade skill shortages we are currently experiencing in many of our key industries. Indeed, when I went to school at Granville we had a technical high school there. Technical high schools existed in many other suburbs around Sydney. Many kids learned a lot of their hands-on trades at school.
Those schools no longer exist; they were abandoned by Labor. Labor pursued higher education and just forgot the skills that were really needed to keep this country going. This is why the establishment of technical colleges is vital for the Central Coast. While take-up of places at the University of Newcastle’s Central Coast campus is higher than ever, there are an exceeding number of students in years 11 and 12 on the coast who do not want to go on to university but want to study trades.
Residents and businesses on the Central Coast are grateful that our local area has been chosen to house one of the 25 technical colleges. The good thing about this technical college and why it is a revolution for our young people is the way they are getting trade training. The college is industry-led, which means local employers in the region are working with education providers to establish a college that responds directly to the needs of local industry, resulting in students making a smooth transition into the workplace and local areas having access to a supply of highly qualified workers who will be trained according to local industry requirements.
The Central Coast Manufacturers Association is doing a fantastic job to get the ATC under way and has been fully supported locally by association members including Albany International, Sara Lee, ADC Krone, Gibbens Industries, Masterfoods, Adhesives Research, Gosfern, Thermit Australia and Pacific Labels. These industries are further supported by the involvement of Australian Business Ltd, the Master Builders Association, the NRMA and the Gosford District Chamber of Commerce and Industry, just to name a few. On the Central Coast, trade training will be offered in the engineering trades, construction, electro-technology, automotive trades and commercial cookery.
The bill takes into account that in some cases a newly established school will be the most effective delivery model to meet their regional needs. The ATCs also need to ensure students are trained using the latest tools and equipment. While all ATCs have been encouraged to work closely with existing training providers, including TAFE, to utilise existing infrastructure in their region, the ATCs have in some cases been required to contribute funding for this infrastructure to be refurbished or upgraded.
Recently Mr Lester Searle, who was the campus director for the Wyong and Gosford TAFE, gave me an extensive tour of the facilities at Wyong. It was encouraging to see that facilities for commercial cookery and plumbing were really superior, and very few institutions in the area had anything like it. In fact, the plumbing school is probably one of two or three in the state. We really need to make sure that these facilities are not duplicated. Indeed, the ATCs can provide a training ground and provide a student feed into these TAFEs.
The Australian government is committed to building a nation in which high-quality technical education is as valued as a university qualification. Some 70 per cent of young people do not go directly from school to university and many choose to undertake vocational and technical education and apprenticeships. The Australian government values and respects these choices. The Australian technical colleges initiative is just one of a range of vocational and technical education initiatives that the Australian government is delivering during 2006 to 2009.
In fact, this government’s investment over that period will total more than $11.3 billion, the biggest commitment to vocational and technical education by any government in Australia’s history. The investment includes $781 million over five years from the Skills for the Future package, which is 93 per cent of the total funding; helping to ease the early financial burden on apprentices by providing apprentices starting an eligible apprenticeship with: a tool kit worth up to $800; a $1,000 Commonwealth trade learning scholarship, with $500 paid at the successful completion of each of the first and second years of an apprenticeship in an eligible trade with a small or medium size business; an extension of the living away from home allowance to third-year apprentices who have moved away from home to take up or remain in an apprenticeship; and $10.6 million over four years to extend incentives for employers of higher level apprentices in key growth areas.
Australia is proud to have a world-class training system which many countries around the world try to emulate. The Australian government is committed to maintaining our high-quality training system by focusing on flexibility and being responsive to industry needs. I urge the New South Wales government to forget 24 March and sign the MOU so that duplication on the Central Coast will not be needed. The Australian technical colleges initiative is part of a long-term plan by the Australian government to build the status and prestige of the trades, to address the barriers to trade training in the school system and to ensure that the nation can better plan and meet the needs of trade industries in the future.
At this point I would like to congratulate Gary Hardgrave, the previous minister, whom I worked very closely with over the years to establish this Central Coast ATC in conjunction with other training for apprentices. I commend this bill, which will give young people in my electorate the chance to study at an Australian technical college and get a head start in their working lives.
I too rise to speak on the Australian Technical Colleges (Flexibility in Achieving Australia’s Skills Needs) Amendment Bill (No. 2) 2006. The purpose of this bill is to provide additional funding of $112.6 million over the years 2005 to 2009 for the establishment and operation of the Australian technical colleges, as costs for the colleges have blown out beyond expectation.
The Australian technical colleges provided the Howard government with the political cover it needed to create the perception that it is addressing the skills crisis in Australia. Fixing the skills crisis is essential if the Australian economy is to continue to prosper and grow; however, the reality is that the Australian technical colleges are yet to train one young Australian in a traditional trade.
Coming from an electorate that has a teenage unemployment rate of over 20 per cent, I see first hand the very human costs as well as economic costs of the Howard government’s failure to address Australia’s skills crisis and to train young Australians in traditional trades. The failure of the government to come up with an effective policy response to Australia’s skills crisis is increasingly impacting on skills training, innovation and industry, particularly manufacturing, in my electorate. We cannot rely on the resources boom indefinitely. To compete globally, Australia must become a skilled and highly trained economy.
While the government is more than happy to take the credit for the economic good times, it is doing nothing to assure Australia’s economic strength will continue into the future. The government has been in office for 10 years, but what has it been doing to address these issues? It has failed to provide the required opportunities for Australians to access training that will ensure their future employment and ensure that the future skills needs of this country are met.
Nothing better highlights the Howard government’s ineptitude than its management of the Australian technical colleges. As a policy, the Australian technical colleges are much more about providing political cover than about providing a practical policy solution to the skills crisis. The ATCs were announced in the context of the 2004 election campaign and they were pretty much a political quick fix rather than an actual policy solution. The reality is that the Howard government announced a policy that sounded good in the context of an election campaign, largely in response to Labor’s criticism over its lack of action on skills, but for which there was no policy work done and little idea as to how to implement it.
The policy has limped along ever since. The demise of the former minister responsible for this area largely reflects his failure to implement the Australian technical colleges—a failure that is to some extent not really his fault. It is a policy that has been destined to fail from the start because, instead of working cooperatively with the states on the existing longstanding system of trade training provided via TAFE, the Howard government has set up an alternative system—talk about creating duplication, wasting scarce resources, failing to use federal funding to build and leverage additional funding from states and other registered trading organisations, introducing inefficiency and failing to maximise opportunities for trade training for young people!
Australian technical colleges were billed as a solution to the projected shortfall of 100,000 skilled workers by 2010. Of the proposed 25 Australian technical colleges, how many are actually open and operating today? There are five of them. Of the promised 7½ thousand students to be enrolled and working towards their trade in a school based apprenticeship, how many are actually enrolled today? It has been more than two years since the ATC policy was first announced but, as at December last year, there were only five colleges up and running. That is the advice from the government’s own website advertising the college system. Those five ATCs, the Gold Coast, Gladstone, Port Macquarie, Eastern Melbourne and Northern Tasmania, account for fewer than 350 enrolments. This figure looks even more pitiful when the Port Macquarie ATC—which is really a rebadged vocational college that had existing enrolments—with 205 enrolments is taken into account. Even if the implementation of the Australian technical colleges had not been bungled and could meet its target of 7,500 students by 2010, it would be too little and far too late to address Australia’s skills crisis.
I supported the original bill in this place which introduced the colleges because investing in trades and technical education is of critical importance both to the individuals involved and to the Australian economy. I supported the original bill to establish the colleges despite the lack of detail available and despite the flaws in the government’s proposal because, frankly, on this side of the House we were relieved that the government was at least trying to do something about the skills crisis.
We will support this bill because getting more money into the system of technical education is critical to addressing our skills crisis, but the government has taken entirely the wrong approach. I believe this money could be spent to far greater effect if it was channelled into existing state structures and registered training organisations. There has been continued criticism from the sector about the Howard government’s decision to not use the TAFE network or even other existing registered trading organisations as the basis of the Australian technical colleges system. The state governments and TAFE have tried and tested structures already established with the experience to make use of any additional funding immediately. Instead of establishing an opposing structure, it would have been more practical and effective to work within existing and more established structures. If the government has criticism of TAFE then why doesn’t it work to improve it instead of bypassing it by creating an opposing system?
In Ballarat we were pretty disappointed to see that we were not considered for one of the Australian technical colleges in the original allocation—not because we desperately wanted one of the government’s ATCs but because we would have been grateful and grabbed with both hands the opportunity to access federal funding to address our skills crisis and our high teenage unemployment rate. We have been screaming for assistance on this issue in Ballarat for some time. The skills crisis is a particular concern to the Committee for Ballarat, the Central Highlands Area Consultative Committee and the City of Ballarat, who have been working on this issue for some time. There are simply not enough individuals in traditional trades and there is a high youth unemployment rate, which is running at around 20 per cent in my electorate, particularly for those young people aged 15 to 19.
In our region we would welcome federal funding to assist us with trade training, but the government needs to take into account that the Bracks Labor government has already stepped up to the plate in the federal government’s absence in this respect. Working within established and existing structures, a new Ballarat Technical Education Centre, funded by the state government, will commence operating from the University of Ballarat’s SMB TAFE Division midyear. Implementation is already well under way and a structure, curriculum and enrolment system has already been developed with local schools and businesses. There will be an initial intake of 75 students, who will use the SMB campus’s existing facilities at Lydiard Street South. I also note the $12 million commitment to the new building and construction facility at that campus, which is just about completed and due to be opened, and was again funded by the state Labor government.
The Ballarat TEC will initially offer courses in building and construction and automotive and engineering before moving into a new purpose-built facility on the campus in 2008, and work is already underway on building that campus. The intake is expected to rise to 300 students when the new facility opens.
In Ballarat we already have a strong VET and VCAL in-schools program. Our schools have been working closely with TAFE on the implementation of the technical education centres. We have terrific secondary colleges. Sebastopol College, which used to be Sebastopol Technical School, after years of declining enrolment now provides a huge range of options for the young people who go there. Whether the kids from there go into university, stream into TAFE, go into arts or go into their own businesses, there is room for everyone at Sebastopol College. It is seen as one of the most desirable schools in my electorate. Sebastopol College, Mount Clear College, Ballarat Secondary College and Ballarat High School have for some time been offering pathways into trade and vocational education and training. These colleges are working closely with the TAFE on the technical education centre.
They have specialised in areas where they know that they have strengths. There is transportability of kids between the four secondary colleges if they do not have the equipment or the training for a particular trade, and our non-government schools are also taking advantage of the vocational education experiences offered by our government schools.
Our schools, TAFE, registered training organisations and the state government have invested in upgrading equipment for vocational training, and they provide that training to many private schools in my electorate. We of course could always do with more, and again it would be a more appropriate use of ATC funding in our district if it were directed toward the upgrading of technical facilities within our existing secondary system rather than establishing a duplicate system.
One of the other criticisms that many of the people who have been involved in technical education for a long time is that the Australian technical colleges take young people way too late. They really need to start capturing young people at a much earlier age, and all of the evidence suggests that that is what they should be doing. Certainly, one of the issues that the technical education centre is addressing with schools is how it can work within the VCAL and VET systems. It is also looking at how we can actually stream people at a younger age than that offered by the Australian technical colleges.
Our schools have been working very closely with the department of education, the local TAFE, other training providers, local industry and the local learning exchange—another fantastic facility that we have in Ballarat that is used by both government and non-government school students. It allows people to train in areas such as film, sound and lighting, and office management. If anyone gets the opportunity to come to Ballarat they will see it really is a shining example of a learning centre that provides technical education to government and non-government schools.
All of these schools have been working very hard. In the announcement I understand that the government will make on Monday about 15 new technical education centres, I hope that Ballarat is considered by the government for ATC funding. However, the government would be entirely wasteful and inefficient if it did not put that money into existing structures such as the technical education centre and our vocational education system. If on Monday the government decides to put the money there rather than attempting to introduce a complicated new system of technical education to Ballarat, we will certainly welcome that and I will be one of the first people out there welcoming the funding into Ballarat. But if there is to be a completely new, duplicate structure within Ballarat, I can tell the government now that it will fail. It will not actually improve training and technical education in my community if it is not able to work cooperatively with the existing system and complement the large amount of funding that has been allocated to our technical education centre from the state government.
I also want to mention two other training initiatives operating in my electorate. In my own electorate—and, I know, in many other electorates—we have been running the Mindshop Excellence program for some time. It is in essence a trade taster program, but it is quite unique. It has actually been running as part of the Australian Industry Group’s ‘Manufacturing 31 Days’. It used to be ‘Manufacturing Week’. The Mindshop Excellence program is a great example of what you can do. It takes young people into the manufacturing sector, and they get to experience not just trades across the manufacturing sector but also the real-life problems that are faced by the manufacturing sector. They are asked to workshop and come up with innovative solutions for those problems. These young people are integrated absolutely into the businesses and learn what manufacturing can offer them.
They get to come away, provide a presentation to leaders in the local community and present the solutions to companies such as FMP, McCain and MasterFoods. It provides people with a real taste of what it is like to be in a trade but, more specifically, in a trade in manufacturing. I certainly think the program is worth looking at as a trade taster program. It provides an excellent base for young people, particularly in terms of manufacturing, and it is certainly something that Labor will look at very seriously.
I think this, alongside our TAFE’s active participation in the World Skills program, puts Ballarat at the forefront of technical education across Victoria. We are very proud that many of our young people have gone on to represent our area in state, national and international finals and also that they are fantastic tradespeople in our local community.
While I support the additional funds going into technical education that are represented in this bill, all this bill really does is draw attention to the spectacular policy failure of Australian technical colleges and the woeful response to our skills crisis that has characterised the 10 long years of the Howard government. The policy was totally bereft of substance in the first place. It failed to address important issues relating to incentives for students to complete training or to gain meaningful employment following training. We are now seeing the results of that.
Where was the foresight to ensure that enough young people were supported to fulfil their training requirements in the first place and to graduate as skilled workers? Where was the government’s policy on enhancing relationships between employer groups and trade training colleges to ensure appropriate employment at the end of training? Where was the commitment to work with states and territories to achieve the skilled worker goals that this nation must have to compete with the rest of the world? Where was the commitment to work with the states and territories and to build upon the funding that was available from the states and territories for technical trade colleges for the VCAL and the VET programs that are being implemented? Where was the idea to use federal funding as a bit of leverage to increase state funding and the availability of what is on the ground in local areas? Where was the acknowledgement that our young people need and deserve better choices, and that our current education system needs and deserves better facilities and better structures for vocational and educational training?
We will not find any of these things in the Howard government’s Australian technical colleges policy and, because of that, we now see only five of the colleges up and running. Policies like the Australian technical colleges and the amalgamation of traineeships into the New Apprenticeships scheme have provided a political smokescreen for the government’s complacency and neglect when it comes to skills. We can do much better in this country in relation to improving trade skills but the government is unfortunately only capable of finding political solutions to what it sees as political problems. It is incapable of providing real solutions to long-term problems, whether they be the skills crisis, climate change or even water policy. The Australian technical colleges are unfortunately yet another classic example of the Howard government pursuing a political solution to what they see as a political problem and failing to address the real issue behind the skills crisis.
I rise today to speak in support of the Australian Technical Colleges (Flexibility in Achieving Australia’s Skills Needs) Amendment Bill (No. 2) 2006. This bill will provide for increased funding for the ATC program, which is of particular interest to us in the Kalgoorlie electorate, as one of the colleges will open in the Pilbara region in July this year. It is no secret that there are skills shortages in this country and there is nowhere that these shortages are felt more than in my electorate. The resources boom in Western Australia, particularly in the north-west, has created great prosperity but has also created a desperate shortage of workers. Workers are needed in the Pilbara region on every level across all industries, but particularly in the trades. In recent decades there has been a focus on tertiary education, with vocational courses falling behind in popularity and status. This has led to a large number—some say a glut—of university graduates. But the Australian community needs tradespeople as well. There are shortages of plumbers, electricians and builders across the country, jeopardising projects worth hundreds of millions of dollars.
State laws and regulations have stifled change and progress and kept the training of trade skills locked in the dark ages. Too many cases of trade jealousies and union dominance have aided and abetted state Labor governments in maintaining an environment that discourages young Australians from taking up apprenticeships and making a real contribution to the Australian economy while securing a future for themselves—and a sound financial future at that. The states failed to address the looming problem of the skills shortages, which frustrated the federal government into action in 2004 and into doing something positive and meaningful. We could only be patient for so long waiting for the states to attend to their responsibilities, because everyone is affected by these shortages, and there are dire consequences when communities do not have these services.
For example, in Western Australia there are approximately 4,200 plumbers and related workers according to the state government career information website. The majority of them work in the Perth metropolitan area, where the population is 1.5 million, equating to one plumber for every 357 people. Cities are affected by trade shortages, but the towns across my electorate feel it even more. For example, the online Yellow Pages listing for plumbing businesses reveals seven in Karratha, with a population of 10,000, and just one in the town of Port Hedland, with a population of 15,000. Granted, it is not necessarily accurately representing those trades in the towns, but it gives you a sense of the situation.
While the ALP has an ongoing fascination with streaming all young Australians through a tertiary course, the Howard government has recognised this considerable problem and is committed to raising the profile of vocational and technical education. For the time being we have been forced into adopting the only immediate workable solution, which is skills migration via the 457 visa, but we also have a long-term strategy that will turn this situation around. In fact, this government’s investment over the period 2005 to 2009 will total more than $11.3 billion, the biggest commitment to vocational and technical education by any government in Australia’s history.
The Australian Technical Colleges (Flexibility in Achieving Australia’s Skills Needs) Act 2005 was enacted on 19 October 2005, providing the legislative framework to establish and operate the ATC program and providing funding of $343.6 million for the initiative. Attracting people to the trades is vital for Australia’s future. The ATC initiative offers a new approach to achieving this and forms an important part of this government’s strategy for tackling skill shortages. These colleges will promote trade qualifications as a highly valued alternative to a university degree and will provide up to 7,500 young Australians with the opportunity to combine an Australian school based apprenticeship, leading to a national training package qualification, and their Year 12 certificate. This amendment bill provides additional funding of $112.6 million for the ATC program, bringing the total for the 2005 to 2009 period to $456.2 million. The additional funding is broken down into $27.8 million for 2006-07, $42.6 million in 2007-08, $32.6 million in 2008-09 and $9.5 million in 2009-10.
This measure is necessary for a number of reasons. The demand for these colleges has been significant, as has the support from communities and industry. To date, 24 ATCs have been announced and 20 funding agreements have been signed ensuring funding for their establishment and operations until the end of 2009. Five of the colleges are already operational and a further 16 are expected to commence during 2007. Additional funding is also needed to provide for the flexibility of this program. Each college has been encouraged to pursue a model that best meets the needs of the region in which it is established. This flexibility has resulted in the operational costs necessary to get each college up and running being higher than expected. They vary from college to college—that is what flexibility is all about. However, in general, the costs relate to the need to attract the best teachers and support staff, extensive industry engagement, marketing and promotion, curriculum development incorporating industry requirements and the necessity for some colleges to operate on interim models in the early years.
There has been an increase in operational costs due to the fact that, of the 24 announced colleges, only four are based on existing schools, compared with the original estimate of 12. The colleges have not been able to leverage existing services and infrastructure for the new ATCs, which means that new facilities must be built in many cases. It has also emerged that several colleges need multiple campuses to ensure appropriate coverage of the region, which has led to increased operational costs. In fact, the Pilbara ATC is a fine example of this, being decentralised over five separate locations. Additional funding is needed to ensure that students are trained using the latest tools and equipment, with a focus on enterprise, employability, business and information technology skills to ensure that they are as job ready as possible. This final element is of importance to me, as ensuring that our young people are job ready is vital for not only the Pilbara area of my electorate but this nation as a whole.
It was very gratifying for me when I was told at the end of May last year that I had secured an ATC for the Pilbara, and even more so when I joined the former Minister for Vocational and Technical Education, the Hon. Gary Hardgrave, at the signing of the funding agreement—finally—on 18 January this year at Karratha. It was satisfying, as the state government had held up the project. At one stage I was almost convinced that it would not happen. The state opposed the college, resisting the obligation to provide staff on flexible wage structures, but the agreement was finally signed and provided $23.5 million for the college in capital and operational grants. It was signed, due in the main to the perseverance of those who knew that this progress was vital.
The ATC Pilbara, as it is known, will now offer the opportunity for young people to learn a trade without having to leave home and for employers to be involved in the curriculum and, at the same time, provide support for local industries and businesses. The college will be based in Port Hedland, with sites opening at Port Hedland and Karratha in time for semester 2 this year. In 2007, the proposed student enrolments are 50 year 11 students. In 2008, the figure remains the same for year 11 students, but 35 year 12 students are added. In 2009, an estimated 65 year 11 and 40 year 12 students will be enrolled. Student numbers will increase following the opening of the Roebourne and Onslow sites next year and the expansion to Tom Price and Newman in 2009.
The ATCP will be registered as an independent school under the School Education Act 1999, offering courses in engineering, construction, electrotechnology, automotive trades and commercial cookery. The academic learning program will be developed and reviewed annually, and the trade training will be delivered by the Pilbara TAFE. Flexible and practical learning is a key element of academic programs to be offered, and it is anticipated that students will be able to study academic programs outside school time.
The ATC program will produce high-quality, work ready apprentices. This project is a very significant one for the Pilbara, and employers across the board support this project because the need for a local, appropriately trained workforce has never been stronger. Businesses from cafes to major companies are all suffering the same problems in attracting and retaining employees. A search yesterday on just one employment website found 166 vacancies in the Pilbara, from engineer to truck driver to bar manager.
The industry consortium for the ATCP is led by the Chamber of Minerals and Energy of Western Australia and comprises BHP Billiton Iron Ore; Pilbara Iron, part of the Rio Tinto Group; Woodside Energy; Chevron Australia; the Australian Petroleum Production and Exploration Association; and the Western Australian Department of Education and Training. There is additional support by local industry groups such as Newcrest Australia, Fortescue Metals Group, WorleyParsons, SKM, and Ngarda Civil and Mining. Their involvement will ensure that the skills taught to students will be directly relevant to the trade they have chosen and will assist in encouraging local employers to provide school based apprenticeship opportunities for students.
I must speak about an element of this program which has the potential for an outcome that is arguably more important than the training of our Pilbara young people generally, and that is the training of our Indigenous young people. Everyone involved with the ATCP will be working to address the issue of Indigenous education. The chair of the ATCP is Mr Meath Hammond, General Manager of Indigenous Affairs at Woodside. Mr Hammond has more than 10 years experience in the community and Indigenous affairs across academia, government and industry. All the parties working on this project recognise the importance of engaging with the local Indigenous community for a mutually beneficial outcome and are committed to increasing Indigenous employment opportunities. The Australian Petroleum Production and Exploration Association has worked with its member companies—including Chevron, which is about to begin developing the $11 billion Gorgon gas project—on the issue of Indigenous employment. Through the Indigenous Affairs portfolio, the Chamber of Minerals and Energy of WA influences legislation and policies on Indigenous issues and provides a forum for addressing the need to build sustainable relationships between industry and Indigenous people.
Training and employment in particular have been a key focus for developing economic and social outcomes, which has been embraced by many Chamber of Minerals and Energy member companies. BHP Billiton’s Pilbara iron ore operation has made a commitment to increase Indigenous employment in its operations and the wider community to 12 per cent by 2010. With the current levels of Indigenous employment at the site at three per cent, this is a very significant undertaking. The program, titled Investment in Aboriginal Relationships, is a long-term initiative that recognises Aboriginal communities as key stakeholders. The program focuses on education, training and employment, including an Indigenous trainee scheme and the development and support of educational, vocational and life skills programs, in conjunction with the education department and the expansion of the BHP Billiton cross-cultural training program.
Rio Tinto’s Pilbara Iron established an Aboriginal training and liaison unit in 1992. Known as ATAL, the unit manages training, employment and community relations programs designed to support self-determination and community capacity building within Aboriginal communities in the Pilbara. ATAL runs education programs, pre-employment training programs and scholarship and cadetship programs in Karratha, Roebourne, Tom Price and Paraburdoo. ATAL’s programs focus on job skills training, small business development, education, cross-cultural development and the preservation of Aboriginal culture and heritage. The cultural heritage unit of ATAL works in consultation with Aboriginal communities and elders to record, map and protect significant Aboriginal sites in proximity to its operations.
In 2002 Woodside became a participant in the Corporate Leaders for Indigenous Employment initiative sponsored by the Australian government. Woodside has instigated an Indigenous employee retention strategy and cultural awareness training for its employees aimed at maintaining long-term employment for its Indigenous employees. There are several employment vehicles through which the company hopes to create employment opportunities for Indigenous people: the National Indigenous Cadetship Project, an Indigenous commercial traineeship program, the Woodside graduate program and direct recruitment.
If you will permit me, Mr Acting Deputy Speaker, I will provide the House with a brief outline of life in the Pilbara, to give an insight as to the importance of this project to the people in that area. Economic success from mining is certain, but the future of the region is not. Regional Australia, particularly the towns in my electorate, faces an uncertain future due to the lack of regional development. There is no long-term growth, populations are shrinking, towns lack infrastructure and services, and incentives for professionals to relocate to these areas are few and far between.
The resources industry makes the most significant contribution to the Pilbara’s economy—albeit primarily with a fly-in fly-out workforce. It is the biggest employer. It is expected to be prosperous for the foreseeable future. The Indigenous population in the Pilbara, which is marginalised, is rising, but there has not been a correlation to the numbers employed. This is due to welfare dependence, a lack of education and training and a culture which places insufficient importance on self-reliance.
Indigenous children are not encouraged to go to school by their parents, and those who do attend are not made to stay there. The statistics vary, but, in general, I believe 80 per cent of Indigenous children who are enrolled in primary school—which is by no means every child—do not attend on a regular basis. Without at least a primary school education these children have no chance of moving into secondary or further education, let alone of getting a job. The sad reality is that an Aboriginal child is more likely to complete a term of incarceration than year 12.
This situation must change. The resources companies in the Pilbara, as elsewhere, are eager to employ and train Indigenous workers, but the workers are not available. In 2001, according to ABS census data, 50 per cent of working age Indigenous people in the Pilbara were not in the workforce. The ATCP—that is the Australian Technical College, Pilbara—will go a long way to improve standards of education, local employment, local training and business engagement. The most important role I believe it will play is to increase the participation of Indigenous youth in education and training and help them create a future for themselves.
The additional funding provided by this amendment bill will allow the ATCs to be properly funded and taken seriously. The role they will play in the future of our young people is vital, and they must have support from all of us to succeed. I take this opportunity to recognise the hard work done by the former minister, the Hon. Gary Hardgrave, in the area of vocational and technical education. I know that achieving the Pilbara ATC was hard work, requiring great leadership and persuasion skills. However, required above all was tenacity and the ability to never countenance failure. I thank him for his interest in the Pilbara and the training of our young people there. He saw that Pilbara firsthand on a number of occasions. Thanks and recognition must also go to the ATCP board and the Pilbara business community for its support and encouragement of this project. I commend this bill to the House.
I rise to support the position adopted by the opposition in relation to the establishment of Australian technical colleges in the Australian Technical Colleges (Flexibility in Achieving Australia's Skills Needs) Amendment Bill (No. 2) 2006. This is the third time I have stood in this House and spoken about Australian technical colleges. On the last occasion I spoke to legislation dealing with the Australian technical colleges—or ATCs as I will call them from now on—I made the point that this government introduces legislation into this parliament regularly, and we, as members of this House, find ourselves returning to the House time and time and time again to deal with that legislation simply because it does not get it right the first time.
This is a pretty good example of a government failing to get it right the first time, as the legislation amends column 2 of the financial assistance table under subsection 18(4) of the act. In effect, it increases the total funding appropriated under the act—in other words, it costs more than they said it would. They did not do their costing properly; they did not do their homework. They made an announcement on the run during the election, and I will deal with that a bit more further into my contribution to this debate.
As any sensible member of this parliament would, I support any initiative that will provide vocational training to young Australians and also address the chronic skills shortage we have in this country—a shortage that has developed because the Howard government have been asleep at the wheel. They have not paid attention to the climate and the needs of our nation. Unfortunately for the people of Australia, the government decided that they would introduce Australian technical colleges. This was not the most effective approach to solving the problem and not the most effective approach to ensuring that young people who wanted to undertake training in trades could actually do so. It was not the most effective way to address skills shortages, particularly when you consider that the first person to complete their training at an Australian technical college will not hit the ground until 2010.
This was an idea that was floated in the 2004 election—six years from the date that the government came up with an idea to establish ATCs. I think that this idea of the ATCs was driven by two things: the 2004 election and the government being bereft of ideas and policies that they could announce during the election campaign. They thought that an Australian technical college was a good idea. This is the same government that has absolutely ripped dollar after dollar out of the TAFE system in the states. One of the first acts of this government was to cut funding to TAFE colleges. On the one hand they take away and now they have decided that they will establish an Australian technical college system that will go over the top of the TAFE system.
I think it is also important to note at this point that the other aspect of it is the government’s ideological hatred of the states. They look at any way that they can usurp power from or establish themselves over the top of the states. Rather than looking at what is best for the community, and for those young people who are attending school and wanting to train, they decide that they will take power from the states, put it into their own hands and not look at what the real picture is. What it is all about is training young Australians. What it is all about is addressing the skills shortage. I am afraid the government are awarded an F for their efforts in that area—an F for addressing the skills shortage and an F for truly providing young Australians with the opportunity to undertake traditional apprenticeships. As I have already mentioned, it was ill conceived and poorly planned. Because of the poor planning, we still have a situation where some technical colleges have not even been awarded.
I would like to address some very serious issues previously raised by the member for Dobell. I was so concerned when I heard what he had to say that I thought I should check the facts. The member for Dobell attacked the New South Wales government. There is no surprise about that. I actually think that the only contribution that the member for Dobell makes in this House is to attack the New South Wales government or somebody who is not a member of this parliament. He said that the New South Wales government was refusing to sign the memorandum of understanding that would see the ATC on the Central Coast established. That is quite a serious thing to say, so I have checked the facts. I have been advised that the Department of Education and Training—that is, the New South Wales DET officers—are in cooperative discussions with the Australian technical college proponents, they are working together and the process is moving along very nicely. There is total cooperation between all parties. There is no conflict at all. No-one is putting any delay into the process. It is all about working together and providing maximum opportunities for local students. That is what is happening.
The member for Dobell really portrayed a picture that is not true. He said that the New South Wales government is refusing to sign the memorandum of understanding whilst all parties involved are working towards signing it. He also put a date for it to be signed. That date is 24 March. Members of this House may wonder why he chose 24 March. I am certain it was not because my daughter is getting married on 24 March. Rather, I think it is because it is the state election. I might say to the members of this House that the member for Dobell was obviously just playing blatant politics. I think it is an absolute disgrace that he could politicise a process that has taken so long to get to this point and that he could come down here and say that the state government is not cooperating and working to see that that ATC on the Central Coast is up and running.
I think the member for Dobell should actually hang his head in shame. It is little wonder, I might say, that he is known on the coast as the Ghost of the Coast. Why? Because he has hidden his electorate office away where no-one can find him. I receive numerous phone calls from constituents asking where he is. I am even more concerned because, after the redistribution that has recently taken place in New South Wales, part of the electorate of Shortland that I previously represented has now moved into the Dobell electorate. Already I have been contacted by irate voters saying that they feel that it is very unfair that they are going to have to travel to the Tuggerah Business Park, I think it is, on the second floor. These are elderly people living on the Central Coast. I say to the Ghost of the Coast: how about taking politics out of this issue of getting the Central Coast ATC up and running and really showing that you are interested in the people of the Central Coast.
I will go back to the more important aspect of this debate—the Australian technical colleges. I have previously stated that the announcement on ATCs by the government during the 2004 election smelt very much of a political fix. It looked to solve a policy problem rather than address the chronic skills shortages which existed then and which still exist in Australia today. The Australian Industry Group, which is very supportive of the government, has estimated that there is a skills shortage of around 100,000 people in Australia, and a large number of them are needed in the area of the traditional trades. I am very concerned about the government’s response, which has been the establishment of ATCs rather than putting more money in the TAFE system. I am also very concerned about the other approach to dealing with the skills shortage—that is, apprentices being brought in from overseas. Neither of these approaches has been particularly popular in my area.
The Shortland electorate straddles both the Central Coast and the Hunter. It is important to look at where these ATCs will be established and at whether or not they will assist students who live in the Shortland electorate. The Hunter ATC is going to be a joint venture between the Diocese of Maitland-Newcastle and the Hunter Valley Training Company. They are both outstanding organisations and have my 100 per cent support because they have done some wonderful work in the region. The ATC is set to commence this month, which is great news. It will have a multicampus, non-government school for years 11 and 12. Campuses will be in Maitland, Singleton and Newcastle. But that is the problem. How will a young person who lives in the Shortland electorate be able to access those ATCs? The people whom I represent in this House would benefit much more from the government putting money into TAFE colleges.
As recently as last week, I was contacted by constituents in my electorate whose young sons wished to attend Belmont TAFE to do pre-apprenticeship courses—courses that have been run for a number of years and have been very successful. Unfortunately, because of the lack of funding going to TAFEs, the college was no longer able to run these courses. So, instead of these young people doing a metal fabrication pre-apprenticeship course or an engineering pre-apprenticeship at Belmont TAFE, they now have to look at doing something else. It is very unfortunate that the government is pouring money into something that students living in the electorate that I represent will not be able to access. These students come from a background where they aspire to undertake apprenticeships. Their goal in life is to work in one of the traditional trades. But here you have a situation where people who would make outstanding tradespeople are being denied that opportunity.
I will now turn to the Central Coast ATC. I think the memorandum of understanding for that ATC will be signed very shortly. This college will enable students of years 11 and 12 to undertake trade training in engineering, construction, electrotechnology, automotives and commercial cookery. As the member for Dobell noted, it is being established by a local industry association, the Central Coast Manufacturers Association. Albany International, Kitchens of Sara Lee, ADC Krone, Gibbens Industries, Masterfoods, Adhesive Research, Gosfern, Thermit and Pacific Labels will all be involved in it.
Delta Electricity, another partner in the Central Coast ATC, have been very proactive. In my last contribution to the debate on ATCs, I mentioned their involvement in the group training scheme. They have trained apprentices over a number of years. My community newsletter also had a story promoting the work of Delta Electricity and that of the group training scheme on the Central Coast in helping young people to undertake apprenticeships and qualify as tradespeople. Once again, I acknowledge the fine work achieved through the group training scheme and Delta Electricity.
My real concern about the Central Coast ATC is that it will be located at Gosford. I forgive members of this House for being unaware of the distance between Gosford and, say, Gwandalan in the Shortland electorate. It would be extremely difficult for a young person in years 11 and 12 to travel from Gwandalan to Gosford to undertake training at the ATC. It would involve a lengthy bus trip, a train trip and then probably another bus trip at the other end. I would argue very strongly the case that young people will have limited access to these technical colleges.
I want to return to the issue of skills shortages to paint a little picture of what they are like within my local area. On 5 September last year a release from DEWR said:
The skills shortage in the Hunter’s coal industry appears to be worsening.
Mine contracting firm Allied Coal Services has spent the past 60 years placing workers in jobs in the state’s mining sector.
Managing director David Briggs says a recent nationwide recruitment drive only found 80 mine workers with experience, and only 25 per cent of those had the specialist skills needed for a job.
He says the outlook is bleak, with the Hunter’s mining work force getting older and few skilled younger workers entering the industry.
I say that these ATCs are not going to do anything to help the mining industry that so desperately needs skilled workers in the Hunter. I would argue very strongly that the government needs to be much more proactive. They need to put aside their feelings of hatred for the states, forget the fact that there are Labor governments in power in the states and embrace and work with the states to try and solve the problem.
In the remaining time, I will quickly touch again on a DEWR survey. Sixty-nine per cent of employers surveyed expect to recruit staff—this is in the Hunter in the next 12 months—and 59 per cent of those said that they do not expect to be able to fill those jobs. The survey covered all major industries and occupations and only 70 per cent of those vacancies were filled and the number of applicants for those jobs was very limited in the areas of skill.
It is time for action. It is time for more than the ATCs to address this issue. It is time for the government to get real about skills shortages. It is time for the government to do something to address the issue. It is time for the government to make a real commitment to young Australians to ensure that they get the training they need. It is time for people like the member for Dobell to stop disgraceful political grandstanding, stop creating problems and acknowledge the fact that the state government is working with the federal government on the Central Coast. (Time expired)
I rise to support the Australian Technical Colleges (Flexibility in Achieving Australia’s Skills Needs) Amendment Bill (No. 2) 2006 and strongly encourage all members to express their support for it. The Australian government’s commitment to addressing areas of skills needs as a prerequisite to developing a skilled Australian workforce and keeping Australia’s economic growth strong is well known. There are great skills needs throughout a number of traditional trades in Australia and, contrary to what the member for Shortland has just been espousing, it actually occurs when you have a strong economy and a 4.6 per cent unemployment rate—something that the Labor Party can only dream of. We all know about and experienced through the 1990s Labor’s destruction of the Australian economy, the destruction of businesses through record interest rates and over a million people unemployed. The member for Shortland needs to sit back and appreciate and remember those disastrous times. So as great a skills shortage as there is in this county, it has actually occurred through a thriving economy.
The Australian government is strongly committed to encouraging and supporting young Australians into trades and onto trade based self-employment or opening their own small businesses—another thing that the Labor Party has no comprehension of, no experience in and no understanding of what is required. The establishment of 25 Australian technical colleges in regions experiencing skills needs and higher than average rates of unemployment has demonstrated the Howard government’s leadership in providing this type of future.
A key concern for all businesses today is the need for a high level of quality productivity in the workplace. According to workplace studies conducted universally—in 2003 by the University of New South Wales, in 2004 by Monash University, in 2005 by Harvard University—one of the key factors that enhances productivity is the skill of the workforce to produce goods and services at a globally competitive performance level. We live in a world of globalisation. We live in a competitive world—something that we need to continually understand and appreciate as we move to a higher level of skills needs in this country.
Studies undertaken by the Great Lakes Council in Pennsylvania, the Singapore government on behalf of the ITC system and Harvard University verify that trade based training led by industry, supported by education—and that is one concept that the Labor Party cannot seem to understand or grab hold of; this is a new concept of industry to education, not education to industry—provides a significant contributor to higher productivity outcomes in the workplace. The decision by the Australian federal Liberal government to introduce the industry led training initiative, the ATCs, was one based upon the need for a skilled workforce that will be driving productivity and world’s best practice processes into the future.
Each of the 25 regions is different in aspirations, style and substance. By offering training in a specialised trade that is of particular relevance to the local region, and is in one of the industry groups which have been identified as a priority, the government has set the overall direction and strategies necessary to respond to the most significant challenge faced by Australian business in ensuring ongoing economic growth and development—that is, the training of more skilled workers to meet a growing demand by Australian businesses in order to remain competitive in the global economy.
The establishment of the Australian technical colleges has provided a new approach to achieving this objective and forms an important part of the Australian government’s overall strategy for tackling our skills needs. In promoting trade qualifications as a highly valued alternative to a university degree, and demonstrating that vocational education and training provides access to careers that are secure, lucrative and rewarding, the Australian government is actively raising the profile of vocational and technical education.
The ATCs serve to address the skills needs of the Australian economy through the pursuit of a number of key goals. These include: the promotion of pride and excellence in trade skills training for young people; the provision of skills and education in a flexible learning environment in order to build a solid basis for secure and rewarding careers; the adoption of a new industry-led approach to providing education and training in partnership with local communities to meet regional labour market needs; the provision of trade training that is relevant to industry and that leads to nationally recognised qualifications through school based new apprenticeships; the provision of academic and vocational education which is relevant to trade careers and leads to a year 12 certificate; the provision of employability and business skills to young people, recognising that many successful apprentices will operate their own businesses; and the development of expertise in a range of industries in a region, with the flexibility to meet changing workforce and local industry needs.
Students studying at the colleges will be provided with tuition in trade related vocational training, leading to a national training package qualification, and academic studies which allow them to complete their senior secondary education. This is a new way of developing and training for the future skills needs of our country where we are providing an apprenticeship, skills training and also pre-tertiary education. Students will commence a school based new apprenticeship in a trade in an industry where there is a need. They will have a strong foundation to continue with the preferred trade after they complete year 12 but will also keep open the option of going on to further academic study if they so choose.
By promoting a strong career path in trade and occupations in key industries as a helpful and satisfying opportunity for young people, the Australian technical colleges play a pivotal role in raising the profile and status of vocational pathways. They offer high-quality training and facilities where capable and committed students who are interested in pursuing a rewarding career can start their vocational training. The colleges provide training which is relevant to industry and which leads to nationally recognised qualifications relevant to trade careers and further academic study if students so choose. The colleges provide employability and business skills to young people and develops expertise in a range of industries in a region with the flexibility to meet changing workforce and local industry needs tailored to the needs and challenges of each individual region. The flexibility offered by the Australian technical colleges to tailor arrangements to local needs is especially valuable. It is what makes this new form of education so valuable to the regions that they will be located in.
As noted earlier, the Australian technical colleges are able to offer training in specialised trades of particular relevance to a local region or to one of the industry groups which have been identified by the Australian government as a priority. Each Australian technical college provides both academic and vocational technical education as well as the opportunity for each student to commence a school based apprenticeship in a trade. Australian technical colleges are for students in years 11 and 12. Students enter into school based apprenticeships in the trades at the certificate III level. This leads to a nationally recognised qualification. Students study academic subjects leading to a year 12 certificate and also gain IT, employability and business skills, enabling them to run their own businesses if they desire. Thus students learn a trade whilst studying towards their year 12 certificate; and, if they choose to, study subjects which would give them the option to go onto university. After listening to the member for Shortland, I suggest that she sits down to read about and understand what these new Australian technical colleges will provide. I should probably say that not only to the member for Shortland but the majority of the Labor opposition.
These new colleges will provide an incentive for more students to stay on at school and will encourage more students to pursue a trade qualification. They expand student choice by providing another pathway to a career involving trades. Facilities and educational services offered by the colleges are high quality, establishing them as centres of excellence in trade training, thereby raising the profile of vocational and technical education in schools and strengthening the training system as a whole. The colleges play an important role in expanding school based apprenticeships, particularly in the traditional trades area.
The unique and sustainable quality of the Australian government models insists that local industry and community representatives have a leadership role in the governance of each of the colleges. The direct involvement of industry and community leaders ensures that the skills taught to students match those skills required by local businesses. Students will be trained in these skills through an Australian school-based apprenticeship which will lead to a nationally recognised qualification. At the same time, students will also complete the academic subjects required for their year 12 certification.
These bills do not support an untried method or model. The ATC model, which seems to be misunderstood by those on the other side in this House, considers successes that have already been recorded globally. For example, similar education facilities exist in Pennsylvania, USA; the Institute of Technical Education, Singapore; Malaysia; Holland; and the UK. They have verified and quantified results validating the important contribution an industry-led training model makes towards business’s long term economic sustainability. I would like to quote one of the key findings from the Singapore government’s review of the ITE college, an industry-led trade training school. It said: ‘The quality of the workforce is an essential prerequisite for an organisation’s sustainable growth. Business competitiveness is possible only if the workforce can produce products and services at a highly productive level.’
Industry-led training brings industry skills into education, providing a high level of knowledge transfer between both disciplines. Such an approach has a strong following as the most effective method of training for the trades being targeted by the Australian technical colleges model. The training model ensures our young people have the best prospects for employment due to the high level of relevancy their training has to the industries which will employ them. This training model ensures that our businesses have the best skilled workers, which are the core of a high level of industry productivity and a sustainable economy. This is a model that is flexible, evolving and relevant to local regional skill needs. It is a model that is transforming training and education in this country today.
The Australian technical colleges differ from current schools and TAFE in that they provide students with the opportunity to pursue trades training, leading to a nationally accredited qualification, as well as complete their senior secondary education. Students at colleges will have the opportunity to commence an Australian school based apprenticeship. Such a model in turn supports the long-term prosperity of each of the regions in which the colleges are located and, of course, assists Australian businesses to remain competitive in a global economy such that exists today. The Australian technical colleges offer an alternative model of training, through the provision of high-quality training and facilities, thus further increasing Australia’s vocational and technical education system and, at the same time, providing more choices and more opportunities for our young people.
The bill also requires states to take action to maximise choice for employers and new apprentices so that they can choose the most relevant, flexible and convenient training for their particular needs. Maximising Australia’s skills base is a high priority for industry, particularly in the traditional trades like engineering, electro-technology, building and construction, as well as in new and emerging technologies such as photonics and nanotechnology. Through this bill, the Australian government is demonstrating its commitment to high-quality, nationally consistent education and training and to working closely with industry to find solutions. Something that the Labor Party has great difficulty in coming to terms with is actually working with industry to find solutions. The Australian government is committed to high-quality, nationally consistent education and training. By working closely with business and industry at all levels, the Australian government has fostered a national collaboration and engagement which will undoubtedly lead to improved success within Australia’s training system.
The bill will make available some $343.6 million over the period to 2009 to support the establishment and operation of the 25 colleges. This supplementary funding will support infrastructure development as well as the additional costs associated with the delivery of the specialised services which the colleges will provide. This funding is over and above other general recurrent funding which colleges will be eligible to receive from the Australian government under the Schools Assistance (Learning Together—Achievement Through Choice and Opportunity) Act 2004 and recurrent funding provided by state and territory governments.
The Howard government’s commitment to vocational and technical education is illustrated by the significant funding provided through this bill, which will further increase Australia’s vocational and technical education system and deliver improved vocational training to young people throughout this nation, which will create a future for them to enjoy. It will allow them to grow and take this country forward in the years to come. I commend this bill to the House.
Here is a quick quiz. When do you know that someone on the government side who has read the entire speech does not know what they are talking about? You know when they talk about ‘photo-onics’ instead of photonics. What is brought to this debate by people on the government side is a lack of knowledge, a lack of understanding and a lack of experience in the education sector. Maybe we should ask them at question time to stick their hands up if they actually have experience as a teacher. There are more on this side than on that side.
I have.
Certainly not in photonics. I could guess that—otherwise you might know what the discipline is. I had 10 years as an English history teacher—and in fact have a master in both of those subjects—at the De La Salle College in Bankstown. I also taught diploma entrance I and diploma entrance II at Bankstown Technical College. So I not only have some idea of how the education system works at the secondary level, in years 7 to 10, but also a pretty good knowledge, gained from the five or so years that I taught at Bankstown TAFE, about the difficulties faced by those people who did not complete their secondary education when they first had the chance—those students who come in as mature age students who realise that they missed an opportunity while they were doing their secondary education. They come in after work and commit themselves to try to increase their level of capacity by getting further qualifications—whether that is certificate entrance I or II or diploma entrance I or II—with a view to getting equivalent qualifications to either the school certificate or the HSC, at that point in time.
There were also the students who realised that they did not have available to them an appropriate education in the trades area in the schools that they went to. Over a long period of time now, we have seen a fundamental transition in terms of what is provided at the school level and at the TAFE level and what is no longer provided on a vast scale by the major trainers of young employees, our major apprenticeship sources, such as Telstra—the old Telecom, which was the Postmaster-General’s Department when my brother Kerry went there. At the end of fourth year at school in the old system in New South Wales, he did four and a half or five years full training at the Redfern Institute of the Postmaster-General’s Department and came out as a fully qualified PNG technician and spent his entire working life in that area. He retired a while ago and now he is doing a series of other things.
His experience was the experience of many people of his generation—the pre-Wyndham generation—where going into the trades was virtually the only option for most people, particularly those coming from an Irish Catholic background in Bankstown. You could not front up and expect to gain entry into most of the professions, because you could not get into the universities in the first place. So forget about being a doctor, lawyer, dentist and all the rest of it; for most of the people who came from Bankstown in my era it just was not on. That is why the former member for Blaxland, Paul Keating, left school at the age of 15 and pursued electrical engineering. Where at? Bellmore tech, because that was available to him to do his training. That is where he connected with the Electrical Trades Union. That is where he got his fundamental understanding of and interest in engineering. That is why when you heard him speak as Treasurer and as Prime Minister, when he talked about the levers of power et cetera, you may have noticed that he used a series of motifs which were engineering based. That is how he understood the world.
That is also part of the reason why, apart from being influenced by the local nature of Bankstown-speak and the people he ran around with, not only with the ETU but also in the other places that he worked—which were pretty rough and ready, very much working-class and running back to Cockney and so on—the vibrancy of what he had to say rested on saying it from a different point of view, as well as coming from a different milieu. But for Paul, and for virtually everybody he went to school with, there were not the options in higher education. There were no options, either, in terms of where you would go. Almost the only other place to go was a safe place in the Public Service.
You could become a copper and work in certain parts of the police force—the ones that were not run by the Masons; the ones that were run by the Catholics—or you could go into particular government departments and become a clerk. You would sign up to the Federated Clerks Union, which was a Catholic union in a Catholic stratum of the Public Service. What was available to people otherwise? The option was to work as a labourer in the local factories or to work as a tradesperson, if they got the chance, if they picked up an opportunity to become an electrician, as did the former member for Kingsford Smith, Laurie Brereton. He became a fully qualified electrician. Leo McLeay, the former member for Watson did. Leo worked with the PMG, as my brother Kerry did. They got their training on the job and at TAFE.
What they understood intimately was how important it was for people to get a really good education in the trades, because that built their chance for the future. In the fifties and sixties in Western Sydney there was no way up and no way to improve the lifestyle of your family unless two fundamental things happened. You had to break the back of the discrimination against Irish Catholics in Australia and break the back of employment discrimination. You could only apply to work in certain jobs; there were only certain parts that you were allowed into. You were not allowed into the upper echelons. There was a glass ceiling, not just for females but for just about everybody. It worked on the basis of capacity to pay. It worked on the basis that you could get your entry point if you could pay. If you came from a wealthy background then you might be able to break through. To his eternal credit, Gough Whitlam broke the back of that disadvantage by allowing people from poor backgrounds into the system. Australia is immensely wealthier as a country and richer in all senses because he did that.
How dare the government attempt to reinstitute Dickensian, 19th-century notions, not only through their industrial relations reforms, which are all about the Master and Servant Act, but in the education area as well. Look at the changes they have made to the HECS program, particularly in maths and science. We have said we will address that directly and forcefully to deal with the dramatic decline in Australia in statisticians, in mathematically trained people and in science trained people, not only as teachers but across all areas of industry and all areas of the Public Service. There is a dramatic shortfall. This mob has tried to make education a privilege again, and a privilege for those people who can buy their way into the future.
I have had to sit here and listen, time after time, when this bill has come before us, to speeches about their 24 technical colleges. At one stage they made it 25 but I think we are back to about 24. We are told that three of them are open. Whoop-whoop! Isn’t that great? Here is a quick quiz: when will the first fully qualified person emerge from one of those technical colleges? 2010. Where are we now? My guess is that we are at the start of 2007. It will be another three years before we see the emergence of anyone from those colleges.
I will claim to be guilty on a number of counts on a range of things but I cannot claim to be guilty of agreeing with John Howard in relation to much—the member for Bennelong, a former Treasurer and the current Prime Minister. But I have to claim guilt in terms of one thing: I cannot condemn the idea of these technical colleges. They are a 1950s approach to education. This I will fully confess: I think it is right to concentrate on technical and further education. I was the first person in my family to go to university. To get there I had to win scholarships to go to fifth and sixth form and I had to win a Commonwealth scholarship to go to university. We could not afford it otherwise. I still worked my way through. I was privileged to do it and privileged to have the opportunity to work at it and to break through.
In the first part of the Wyndham program, pre Whitlam, there was an avenue—but a very small one—for those people who could either get a Commonwealth teaching scholarship or gain sponsorship from companies. Hardly anyone in my family understood why I wanted to spend my life learning out of books, given that we were a small business family. We were a working-class family, where people either worked for others or ran their own businesses. Historically, on both sides, that is exactly what we have done. People understood that you laboured and worked as hard as you could for your daily bread. They could not understand another world that they had not had entry to, where you could do things using what a university gave you access to—not just teaching but the rest of it. It was a foreign world. For a lot of people, it meant that they needed to learn about that.
In the seven years between Paul Keating and me and the three and a half years between me and my older brother, Kerry, the world opened up for others. But it opened up for those people who had a chance to get trade training—for example, with the State Rail Authority. In Chullora, at the great rail yards there, they taught people boilermaking, metalwork and sheet work. Now they are teaching people again. In carpentry, for example, they have two tremendous facilities. One deals with domestic carpentry and the other is the only place in Sydney where people are taught to work on building many-storeyed buildings. That facility has just opened, and it is the centrepiece for the whole of Sydney. Some features of the work that went on in the past can be seen there now, and they are related in particular to gathering up people who cannot find a place elsewhere. But this is within the context of the most massive skills crisis we have seen. This is a result of a decade’s worth of the most significant employers of apprentices—Telstra, the SRA and every major employer—having got right out of that game.
The end, in the last 10 years, for those kids who wanted to get trade training was to get into a situation under the Liberals in which they got a cut-down version of the whole show: Dr Kemp’s traineeships—the poor man’s version of a full apprenticeship. The skills crisis that we have is very directly related to that. The federal government blame it all on the states, but it is the federal government who have to bear the responsibility. What have they left out of the equation, which is so fundamental to this? It is the fact that without a full-blooded apprenticeship system operating, one that is as deep and strong as that we used to have in the past, you will not get fully qualified, knowledgeable people coming out and we will have a dramatic dearth of tradies.
I am 55 years of age. Guess what the average age of tradespeople is in Australia? It is 55. I bet their ages will just keep going up with mine. But we are reaching a critical crisis point. As those people retire, unless they are kept in chains forever—and they cannot be kept in there at the wheel for forever and a day—with our ageing population, we will not have those people in the workforce. They will not be there as skilled tradespeople, and they will not be there as trade teachers either. We face a massive crisis in that area, which will continue the skills crisis. What is the government’s remedy for this? I think it is entirely farcical.
The government has argued its remedy over 10 years. It started with the good Dr Kemp and has been continued by a series of government spokesmen, including the recently demoted minister, who spoke on this bill in December and who got the flick. He is now a parliamentary secretary, but he has been given the title of assistant minister for a bit of face saving. Why did he get the flick? Why was he demoted? Was it the fact that this whole scheme, this travesty of 24 places Australia wide, has been so poorly run and so poorly put together to provide a token technical college system for Australia? This is the government of tokenism. It is a government putting up a facade.
It is like the Soviet Union in the 1950s when, in Joe Stalin’s era, they used to run people down the major thoroughfares in Moscow and it was a cardboard city. They had whole avenues full of cardboard cut-outs to make it look like they were a prosperous country, that there was a great deal of activity, that there had been fresh building and so on. Behind the facade, you found that there was virtually nothing. The Communists in Russia at that time had the temerity to argue that they were the great new society and were well in front of the West not only in terms of dealing with their people but also in the way in which they trained people and in the whole gamut of things that you could compare East and West on during the Cold War. But the reality was that they were as hollow at the core as this coalition government is.
At this time, all you get out of the mouths of those in the government are claims that Labor does not speak for tradespeople, Labor does not care about technical colleges, Labor only cares about university education and that is all it ever cared about. That is so adverse to Labor’s entire history, which is based upon building everything we do on the basis of attempting to improve the lives of working people in Australia. What we did in the period of our last government was to attempt to reshape technical and further education in Australia and to reshape the whole way in which the states went about getting together and cooperating with each other so that kids could go from one end of the country to the other and have their qualifications.
So glacial is the approach to this problem that, more than 10 years later, this government still have not fixed it. It is almost ticking over to 11 years that they have been in the joint. They have not fixed the problem of kids in Western Australia not being able to take their qualifications from one state to the other. They have not fixed it in relation to teachers either. The state bureaucracies are simply Antarctic in this regard. Melting them down takes a great deal of time. I know; I was part of trying to do it. But this mob have not put the heat on them in order to get those kinds of results.
But to campaign, as they have time after time in this House, on the basis that Labor does not care about trade training is purely and simply crazy. It is ridiculous. We understand that it is a betrayal of the Australian people and of the 300,000 young kids who should have had access to full trade training, apprenticeships and even the modified traineeships over the past 10 years but who have not had that because the funding to the states has been cut back. It has been cut back in the health and education areas. Those people have been absolutely betrayed and this government has sought stopgap measures to deal with the skills crisis by bringing in plasterers en bloc from China.
I know that because in this very area, in the block of flats I am living in now, I saw some of these guys. It was in the middle of the afternoon and I thought: ‘Who are these guys? Do they have a ticket? No. Do they have vests on? No. Do they have work boots on? No. Do they have hardhats? No.’ They were covered in plaster. It was about an hour and half after everyone else was out of the joint. They were aged between about 22 and 50. And I really understood for the very first time what the government’s program was with their 457 visas. There are over a quarter of a million people on those visas, which used to be exclusive to major international companies who needed a specialised accountant to come here for four years, for example. This is a farcical, hollow government that has utterly betrayed the Australian people and all the young people who should have been allowed the opportunity to have trade training for the future.
I have to confess to actually agreeing with the 1950s approach to technical colleges. It is the one good thing to come out of this. Our education system Australia wide has not properly adjusted to the realities of the 21st century. There are not the proper opportunities, except in certain places, for kids to do full trade training while they are going to school. I actually think the old model of technical high school, where you get a comprehensive education and full trade training is the proper thing to do. That is how I would change the system if I had the capacity to do so. That is what I will continue to argue for.
I saw that in operation in Holland in 1975—32 years ago—and it worked magnificently. The Dutch, after a bit of experimentation over the last few years, have come back fully to what works extraordinarily well. We know, from the late 1980s, the Carmichael report and the work that was done based on that, that the work done in Europe had been taken note of by the Hawke and Keating governments, and they were putting into place a restoration of technical education in Australia because of its primary importance.
What have also been lost over the last 10 years are the opportunities to have Australians trained in Australia by other Australians while the skills could still be communicated, to build jobs and industries that are Australian and to export those skills to the region. Instead of doing that, we have imported all of those skills into our region. Our country has been impoverished because of a lazy ideological and hollow government that does not have any fundamental concern for the Australian people. It should be booted out at the first opportunity. (Time expired)
I welcome the opportunity to speak this afternoon on the Australian Technical Colleges (Flexibility in Achieving Australia’s Skills Needs) Amendment Bill (No. 2) 2006. This bill will increase the amount of total funding appropriated under the act from $343.6 million to $456.2 million over the period 2005-09. While we on this side of the House generally support the bill, I, along with my colleagues, have some strong reservations about the government’s approach to enhancing vocational training and education. We will not oppose this bill, because we do not want to play a political game and deter any steps which may improve the skills base—steps that are desperately needed to be taken in this country.
In my opinion, responsibility for the current skills crisis lies fairly and squarely at the feet of the Howard government. The government has had its head in the sand for 10 long years as our skills crisis has continued to grow. It has been warned time and time again. As our competitor economies invest heavily in their education systems, our government has been pulling funding out. Instead of funding our nation’s excellent TAFE colleges, this government has gone about setting up a whole new level of bureaucracy to duplicate vocational training services already offered through the TAFEs in the states. In fact, we raised this issue when the bill was first debated in this place some time ago now. If only this government had invested this money into the state TAFE systems we could have had graduates a lot sooner. As it stands, under the technical colleges program, we will not see our first tradesperson graduate until 2010 at the earliest, even later here in my local region. The Australian technical colleges represent a bandaid solution to Australia’s skill crisis. It is just too little and too late, with a very, very long lead time.
As I move around my electorate and the region, skills shortages and their impacts on the local economy are brought to my attention. The skills crisis is an inevitable part of any discussion about the long-term economic prosperity of the region and of our nation. I know that if I go to the hairdresser or if I talk to people from the local chamber of commerce—all sorts of people in my community and in this region—they always bring up at some point the question of skills shortage and the desperate need to be doing something about it.
I am greatly concerned that this government has allowed its ideology on industrial relations to delay the establishment of some of these technical colleges. In particular, I am concerned about the delays in the opening of the Queanbeyan college, which was announced in September 2004, to service the Southern Highlands region, the ACT and the region around the ACT. Despite being announced almost 2½ years ago, we do not have one student enrolled in the Queanbeyan Technical College. There is not one student studying to be a plumber, a carpenter, a mechanic, a hairdresser, a bricklayer or anything else, for that matter, and there is not one student on their way to realising their dream of attaining a trade. You must say, after 2½ years, that it is a fairly slow way of doing something about the skills shortage in this region. In fact, the recently replaced minister, the member for Moreton, announced the successful tenderer only in November last year. No wonder the Prime Minister moved him on. It took him over two years to find an operator for the Queanbeyan college, and we still do not have one student enrolled. I understand that the Queanbeyan college is due to open some time in 2008, so we will be waiting until at least 2012 before we see our first graduate.
There is only one reason for the delay in addressing the skills crisis that is impacting on our region, and that reason is the government’s ideological obsession with its extreme industrial relations laws. Back in April of last year, then Minister Hardgrave’s office was quoted in the Canberra Times as saying:
…the Queanbeyan region would have to wait for its college because the Government did not want the NSW Government’s involvement in the leading bid.
He went on to say:
…the strong bid would have to be restructured but was still preferred over the second bid which lacked strength.
That was in April 2006. The only reason this government rejected a bid by a local Queanbeyan consortium—the Capital Region Business Enterprise Centre, which included the NSW Department of Education—was that that consortium refused to put their staff onto AWAs, the same AWAs that are stripping workers of their penalty rates, overtime rates and other essential conditions all over the country, and the same AWAs that we believe are of some concern to a great number of Australian workers. This is further proof that there are no choices under Work Choices. The government, I believe, put its obsession with these IR laws before the needs of local businesses and students and the long-term prosperity of the ACT and the Southern Highlands and delayed the project.
It was not until 1 November 2006 that Minister Hardgrave announced the successful tenderer for the operation of the Queanbeyan college. It is not at all surprising that the successful tenderer is not the local consortium which had refused to take part in that IR agenda. I do not know what process was used by the minister to choose another tenderer; no-one seems to know. Is it the second bid which the minister said ‘lacked strength’? Did this government choose the successful tenderer based on their compliance with the IR agenda over the quality educational outcomes for local students and businesses? I do not know, and I cannot seem to find any other possible answer.
We have lost another almost two years on this project because of the obsession by this government in relation to the AWA question. I know that many people in the region’s business community are not impressed with this government’s what I would call ‘petty politicking’ over the Queanbeyan college. Local students are not impressed either, nor are the local governments in the region or the chambers of commerce—at least, not the ones I speak to. We have all been let down badly by this government’s mishandling of the project. As I said earlier, it is a pity that some of this money had not been put into the TAFE system, the system that is already up and running.
In Canberra, our TAFE is called CIT, the Canberra Institute of Technology. I want to refer in passing to three programs that that particular institution is running because of the skill shortage. They have attempted to make up and bring on stream faster than usual some outcomes for students, and all of these programs relate to areas of dramatic skills shortage. The first program I want to talk about is their chefs program. It is an intensive training program and includes a workplace training component. The four-year training program has been reduced to two years, and it is extremely successfull. Its outcomes are very highly regarded, and it is producing very productive, well-qualified people in an accelerated time purely because it can see the need and they want to do it.
I also want to talk about enrolled nurses. At CIT, if students have a Certificate IV in Health (Nursing), they can access an intensive bridging program of 150 hours in a block over two weeks. Credits are then given to move to the second year of the three-year degree in collaboration with the Catholic University here in the ACT. This is another area of desperate skill shortage and an example of something positive that is being done.
The third area I want to talk about is also of extreme importance, and that is allied health. We in this place hear everywhere we go about the shortage of qualified people in the area of allied health. The ACT department of health and the Department of Disability, Housing and Community Services have developed a Certificate IV in Allied Health Assistance. The people involved might already be in the workforce, but they need their skills increased to carry out further advanced work. We are talking about allied health areas such as speech pathology, occupational therapy and other similar areas that are desperately in need. This training can be done while these people are still in the workforce. They may be participating in the workforce at that lower level and want to increase their competency; we desperately need them to do so. Because they can undertake further study while they are working, they are actually freeing up university places. It is a very progressive program for an area of desperate need in the country due to the skills shortage.
When we are talking about the skills shortage, certainly we are talking about plumbers, motor mechanics and a range of other people, but also we are talking about nurses and allied health workers, all of whom are desperately needed to deliver services to our communities. I commend CIT for their progressive way of looking at how to improve the training programs they offer. Would it not have been a better idea to see the money that is supposedly going into these colleges given to a process like that? How much more inventive could they be if they had those resources? Rather, in the local case, I understand that the resources are sitting around doing nothing while we wait for the development of this college.
Like the rest of Australia, the Canberra region is in the grip of a major skills crisis. We need urgent investment in our skills base and not some bizarre obsession by this government with their industrial relations agenda, which is ruling how these colleges may or may not come on stream. Unlike the Howard government, we would work with the states and territories to implement the necessary advances in technical training, particularly through our secondary school and TAFE systems around the nation. Australia absolutely needs a more systematic approach to addressing our skills needs than what is being offered by the technical colleges program. It is a very important issue and one that we should be able to deal with in a competent, honest and progressive way.
I talk to people from around the country, and business owners, students and the local Canberra Chamber of Commerce alike speak about the need for training opportunities to address the skills crisis and to improve employment opportunities for Australian workers. As the examples I have given show, it is no different in my own region. We need skills training and we need it now. We do not need a government that will only come up with a solution if it fits a box of a particular shape and size. If it does not fit, then it fails to get legs; it does not get an opportunity. I really hope that the government can see its way to liberating itself and allowing these colleges to come on stream quickly if that is what they want to do and to not criticising this side of the parliament when we come up with ideas and views about how we might implement programs in this country to improve the skills shortage. I thank CIT for the examples they have given. I hope that we see honest investment in the tertiary level of education so that vocational training can actually improve and that we see absolute determination to attack the skills crisis in this country in a bipartisan and honest fashion.
I rise to support the Australian Technical Colleges (Flexibility in Achieving Australia’s Skills Needs) Amendment Bill (No. 2) 2006 and the amendment moved by the shadow minister for education and training. I concur with the member for Canberra that much of the motivation of the government in relation to this matter has been driven by an ideological blindness—its hatred of collective agreements and unions. That was clear from day 1, when it was a condition of the establishment of colleges that they offer Australian workplace agreements. Never mind the title of the Work Choices legislation introduced by the government. In relation to this matter, in an area of the education and training portfolio, the government is using taxpayers’ money to force people onto particular industrial instruments whether they want to be part of that or not. There is no choice at all. I have said that time and time again.
This is, of course, the third opportunity I have had to speak about the Australian technical colleges proposition. It is the second amendment to the original bill that was moved in this place in 2005. It arose from policy on the run by the Prime Minister during the 2004 election when, out of the blue, and probably written on the back of a beer coaster, the Prime Minister put a proposition together which had no comprehensive detail whatsoever. It was just a suggestion so that there could be a slogan or a media release for the election that was held in late 2004.
Notwithstanding the way in which the government has chosen to go about introducing Australian technical colleges, I can assure the government and every member here that I will do everything I can to ensure that the Sunshine Australian Technical College will be a success. Whilst I do not accept the premise upon which it has been established, and I do not accept the way in which the government has decided to introduce pernicious provisions that force employees—teachers and other ancillary staff—to be on individual contracts, I want to see more young people in western Melbourne given the opportunity to acquire the skills they need to maintain employment for their working lives. So I will do everything I can to ensure that does occur.
As I indicated yesterday to Andrew Wilkinson, the appointed chief executive officer and principal of the Sunshine college—a fledgling college but one that has at least commenced—I want to visit him and speak with him about what we can do to increase the number of students who are there. At the moment, there is a very small cohort of students; it is nowhere near the target of 300 that the Prime Minister and the former Minister for Vocational and Technical Education indicated in their speeches. But if any young person in western Melbourne can successfully finish an accredited course and improve their opportunities for work, I will certainly support that.
It is not surprising to me that the government has paid lip-service to this area. As I said earlier, it started with a media release during an election campaign. From that point on, there was an effort by the government to backfill and to develop some plan around that media release. It was left to the former Minister for Vocational and Technical Education to explain why the government had not properly considered the way in which this should be done. Indeed, the last opportunity the former minister had to speak as a minister in this place was when he introduced this bill, which will amend the substantive legislation that was introduced and passed in 2005. One would have to ask: if this policy is as successful as government members claim, why is it that the Prime Minister chose to sack that minister? Why is it that the member for Moreton now finds himself on the back bench after overseeing this area of policy? Why was he not even afforded the opportunity to be a quasi-minister—one of those assistant minister positions that have been given to the members for Parkes and Sturt? The member for Moreton has been sacked from the front bench halfway through the process of developing the Australian technical colleges. We have to conclude either that the Prime Minister and the government consider this area of policy an abject failure and they are embarrassed about failing to properly construct these colleges or that the former minister was asked to resign for other reasons—perhaps so that we would be able to see the theatrical genius of the member for Wentworth.
The point is this: the former minister was to oversee the 24 colleges announced by the Prime Minister during the election in 2004, he introduced the bill in 2005, he introduced an amendment in 2006, and he introduced this amendment to the substantive legislation on 7 December last year—the last day of sitting last year. Between his introducing this bill into this place and our debating it today, the former minister has been dismissed by the Prime Minister of this country. We have to wonder why that occurred. I have to say: I do not know what is in the head of the Prime Minister with respect to why he dismissed the former minister, but I can understand some disquiet amongst government members about the failure of the Australian technical colleges insofar as their being developed and being on-stream for young people across this nation.
We heard last year that there was a so-called ATC established in Gladstone which had one student being trained—and the government had the cheek to call that a college. I would not call that a college. I would say good luck to the one student who was being taught and trained, if that were the case, but clearly this is an example of failure by this government to fulfil the commitments that were uttered by the Prime Minister during the 2004 election. The government has failed to fulfil those.
Whilst there might well be 16 of the 24 Australian technical colleges commencing in some way, shape or form by the end of this year, that is hardly sufficient for those areas that are crying out for these types of resources. There are young people across the nation in regional and rural Australia, and in the area that I represent in western Melbourne, who need to acquire skills. We know the government concede there is a skills shortage. They choose not to blame themselves; it is always somebody else’s fault. But there seems to be a consensus that this country has a skills shortage and the government seek to boast that they might at some point, by the end of this year, have 16 of 24 colleges commencing. I do not think that is good enough. If we do have a crisis, and I think it is fair to say that we do have a crisis in the area of skills shortages in workplaces across this country, then the government must attend to that crisis in a much more expeditious manner than the way in which they have treated this area.
That is one of the problems Labor has with this. Clearly, there has been an attempt to entwine the need to spend money in this area—technical learning and the technical skills that are required—with the government’s pursuit of individual contracts. As the member for Canberra indicated, that has probably caused some delay because there would be some people who would not join a consortia that would force employees to sign individual contracts. That might be one of the reasons. The other main reason for the failure by the government to get these 24 colleges up quickly enough is that it has not sincerely concerned itself with the plight of young Australians and their needs in the area of skills.
The government has sacked the minister who was responsible for this area and replaced him with a new minister. Whilst I feel for the member for Morton—because I cannot see, on the face of it, why he was worse than many others in discharging his duties—I hope the new minister listens to the concerns that we have in this place and acts to respond to the problems that we have highlighted—in particular, in the case of Sunshine Australian Technical College, providing every resource to that college and to the partners that are involved in that project to accelerate the number of places that are available for young people in western Melbourne as quickly as possible. No doubt members that represent constituents wherever these colleges are located would feel the same as I do, because it is not good enough for the government to talk about a target of 300 young people to be trained in a college and then for the member of the particular area to find that the target seems to be a long way off and that there is no guarantee that the target will be fulfilled.
So there needs to be more assistance provided to the people in these colleges. I am not in any way pointing the finger at the people who are attempting to establish this at the college level. I am sure many of them are very good education providers, with a history of teaching. I wish them well but I think the government has to now match its rhetoric about attending to the skills crisis in this country and to match its rhetoric about its concerns for the young people and their needs to be properly skilled so that they can be gainfully employed through their entire working lives. These are the things that the government needs to do, and they have not satisfied me or the other members on this side.
The purpose of this bill is to provide for an additional $112 million, between the years of 2005 and 2009, for the establishment and operation of the ATCs—in other words, to add an extra $112 million to the original budget. Agreements have been signed, as I understand it, for establishing 21 of the 24 colleges that were proposed. I understand that five commenced last year and 16 will be in operation by the end of 2007. What I need to know and what I am sure other members would like to know is what ‘in operation’ means. Is it like the case of Gladstone, where we are talking about one student in a college, or is it about more than one?
I think it is probably fair for the government to start giving us the numbers of students that are being placed into these colleges. The questions that I have for the new Minister for Vocational and Further Education are: what is the target enrolment for the Sunshine Australian Technical College; how was this target determined; how many students have actually enrolled this year; how many teachers have been employed at the Sunshine Australian Technical College; how many of those teachers have been employed using Australian workplace agreements; what is the total cost of running the Sunshine Australian Technical College; what, if any, new facilities have been constructed or are planned to be reconstructed on the Sunshine ATC site; and, what is the cost and/or projected cost of these facilities?
Those are some of the questions that I will be placing on the Notice Paper and directing to the minister. I would be much happier if he were able to respond to me in summing up the legislation. I do not hold out much hope of that happening but I will certainly formally direct those questions about my concerns about the Sunshine Australian Technical College to the minister.
This has been a disaster from the beginning. I think the intent in terms of getting young people into the colleges is good; however, it was conceived in a very rash manner. It was conceived in order to provide for an election campaign media release that would create a spin to show the Howard government concerning itself with people needing technical skills. Then it had a little bit of a twist to it because it also coercively required employees to be forced onto Australian workplace agreements. Those things have led to a failure to fulfil the demands that are out there.
As I said, if taxpayers’ dollars are going to be spent looking after young people in my electorate, I will do everything I can to assist. I was there on 1 March 2005 when the then minister came to my electorate to announce the college. I was not notified—I have to make that clear—but I did find out that the minister was coming to the electorate of Gorton, I was in attendance, I spoke to the minister at that time and I said I would assist and I would be constructive. I will continue to be so on the ground, but I will need to see that the government is fair dinkum about these colleges and that it really will be looking to increase the amount of students that will be trained at the Sunshine Technical College before I can start to convince others that this government has a great concern about our young people and their needs.
I also rise to speak on the Australian Technical Colleges (Flexibility in Achieving Australia’s Skills Needs) Amendment Bill (No. 2) 2006, which seeks to appropriate another $112.6 million for the establishment and operation of the Howard government’s Australian technical colleges network. The total funding under the act for the period 2005-09 will come to a grand sum of $456.2 million once this legislation is passed—half a billion dollars of investment, and of course too little to show for it. I have to say, having worked a lifetime in education, that half a billion dollars well directed into the good things that are happening in schools, TAFEs, industry, partnerships and cluster networks would have been exceptionally well spent; but with this, unfortunately, we look at that half a billion dollars and say, ‘Where has it gone?’
We are not opposing this bill. I will be supporting the amendment moved by the member for Perth because we do need to make a close examination of the government’s failures in skills and vocational education and training, and its neglect of the TAFE sector. We need to examine the failure of this government to deliver outcomes in skills and the wasted opportunities that have been associated with the ATC program.
These technical colleges were announced at the 2004 election. The public get cynical about election cycles these days. They do not perhaps believe that what is offered will always deliver the best outcomes or even be delivered, and this one is pretty typical. In the 2004 election framework the Howard government finally woke up to the skills crisis, which has been costing our economy millions for some time. The announcement was typically just a political fix. It has now taken three years to get that political solution, that political fix, off the ground, and it still will not produce a graduate until 2010. The world moves on and unfortunately the government does not seem to reflect reality and the real world very often.
Seven months ago I spoke on a similar bill. It also appropriated more money for the ATC scheme and was another indication of how the implementation of this scheme has been mishandled. It is looking very dangerously like the Job Network roll-out, with continual bailouts of money, money, money with very little change, and that is regrettable. The scheme is, unfortunately, a duplication of resources which could be better used in existing structures like TAFEs and traditional apprenticeships. That is the approach Labor will take in government.
The Howard government is on an absolute mission. It is entering into a kind of federalism that I think the public of Australia will not welcome. You cannot just use the big stick. You cannot just decide you will have a federal tier of operation when state operations are already out there. The public are sick of duplication, and schemes like the Australian technical colleges just create a duplicate layer of administration. They do not exist in cooperation with any of the existing state structures like TAFEs, which do such a wonderful job, and they do not at this stage tap in well to those wonderful industry links that exist in hardworking regions—regions that have always had investment in skills as their priority.
They were set up with a great emphasis on exclusion, not inclusion. For example, when it was announced in my electorate that ATCs were going to be become a possible solution, the whole field in Newcastle looked at it in the cooperative way they always do. There were thoughts that our TAFE; our manufacturing industry cluster group, HunterNet; and the group training companies that run off that industry cluster group would look at that and say, ‘How can we take this and make it really work for the Hunter?’ But they found that there is an ideological barrier linked into this legislation. They found that the government has written into this legislation some restrictions. You cannot put in for this if you are going to employ staff members and not use AWAs. That is a problem, as the government knew, for state TAFE systems. The liability and insurances that are necessary to run any business or any technical college do not have synergy or compatibility with state government liability requirements. So already it is set up to deliver on an ideological approach rather than deliver outcomes. What a limitation that this country does not need. Here we have a real problem and not a real solution.
Not only is it duplication of existing programs; it is a very minor response. Nationwide this scheme is expected to cater for a maximum of 7,500 students by 2009. Monash University in its research recently estimated that there will be a shortfall of 270,000 people with technical level qualifications over the next decade—7,500 just ain’t gonna cut it. What a pity. The Australian Industry Group says that 86 per cent of occupations require a postsecondary qualification, yet only about 50 per cent of Australians have this level of training. There are no programs to improve those sorts of movements into postsecondary education or technical education, and, despite all those clear warnings, the Howard government has managed to turn away 300,000 people from the nation’s TAFEs in the past 10 years. That might have just about done it for that shortfall of 270,000 people in the next decade. One would have hoped that those figures might have eventually had a match, but, no, we have the ideological solution.
There always has been and always will be strong support in my region for people involved in training and skilling the young people of Newcastle and the Hunter, including those who will be involved in working in the new technical colleges and including those people who will be hiring apprentices and working, we hope, in some sort of collaboration with industry, the TAFE and the university—who we already have great respect for. No matter what our views on the program—and I think I am making mine quite clear—or on the government’s administration of this program, we all need to be behind anything and anyone in these settings who is working to skill our people. That is a commitment all of us in regional seats and seats around Australia who will have technical colleges give. We are not spoilers; we are always about finding better outcomes.
My region has traditionally done great things in the training sector, and it will continue to do so. For example, this year the Hunter Valley Training Company at Maitland will employ a record 120 first-year apprentices in the region in trades such as electrical, boiler making and mechanical. Over its 25 years of operation, it has already put 15,000 apprentices and trainees into workplaces. Hunter TAFE is this year offering a certificate IV course in electrotechnology, giving students the skills to install and maintain renewable energy equipment. What we are actually saying is: ‘That climate change crisis that the other side of this chamber has just discovered has been around for so long, we’re actually now trying to be part of solutions.’ It is a certificate IV course just for students maintaining very new and very innovative equipment that is actually about renewable energy. That is absolutely a skill of the future.
But in this government we have never seen flexibility. We never see it; we see a one-size-fits-all approach to policy. We never hear them say: ‘Let’s find what’s good that is happening out there and value add to it. Let’s add to the abilities, capabilities and innovations that are driving our economy, in ordinary businesses and industry sectors all around the country.’ Instead we hear: ‘No, we don’t want to do that. We just want to have an ideological, political fix.’ But the kind of innovation that Hunter TAFE is developing is part of the reason the institute’s apprentice enrolments have risen by about 38 per cent over the past five years. It is the largest provider of TAFE-delivered vocational education and training for senior secondary students in the state, enrolling more than 2,800 students every year. This year it is offering about 30 extra trade classes to cater for the increased demand in fields such as engineering, metal fabrication, fitting, machining and electrical trades.
The other thing that the government does not seem to ever want to pick up on is just what is happening out there between TAFEs and universities. The Hunter Institute and the University of Newcastle have a wonderful relationship. They have managed to do articulation and pathways under a special project between their courses. You can go to TAFE in my region, and then you can go on to university. They have actually sat down and worked out those ways. You can go to university and go back to TAFE to get those practical skills. Those sorts of pathways and articulations are the sorts of models that everyone else is adopting—trying to find solutions and benefiting many students. But, of course, this government has not even thought about it.
Energy Australia is expected to take on about 600 apprentices in my region over the next four years. Hunter Group Training Australia, one of our region’s training companies, expects to hire around 150 apprentices by the end of the 2007 financial year. Neville Sawyer, someone in my electorate I am very fond of working with, is formerly the chair of the Australia Chamber of Commerce and Industry. Last year he was appointed to the National Industry Skills Council and was also awarded the Hunter Manufacturers Awards board award at last year’s awards ceremony. Neville’s contribution to industry and training in our region is huge, and I congratulate him. I can only say: thank goodness for someone with such a realistic background, real experience in industry and real experience in training. He was formerly the managing director of Ampcontrol, a company that has responded to the skills crisis by taking on apprentices, by reintroducing cadetships to make sure that its apprentices and employees have the opportunity to go on to further studies, and by setting up a research chair and entity at the Newcastle university. These are the standout things that are happening, and all this government can offer is the Australian technical college solution.
So the Hunter Institute, the TAFE, the university, training companies, businesses and industry cluster groups are well aware of the skills shortage and have been doing what they can to actively alleviate it for some time. Sadly, the government’s program is really too limited to make much difference.
In my area, the ATC will be administered by the Hunter Valley Training Company and the Catholic Diocese of Maitland-Newcastle. Both those groups, fortunately, have a great track record in delivering education services and training services, and they are the joint proponents. They will operate out of Newcastle, Maitland and Singleton. But what a pity they are not going to be able to tap into the resources, facilities and infrastructure that are already there.
The Newcastle campus of the ATC, in my electorate, is beginning this year with a temporary facility. I do not know if anyone from the government has walked into any TAFEs lately, but when you walk in and see state-of-the-art labs to train mechanics working in the aerospace industry, you know that a temporary facility is really the second-best option. I would encourage the minister in this area to go and have a look at the sorts of modern facilities that cost big bucks that are in our TAFEs today. So starting off in a temporary facility is slightly disappointing. The Singleton campus struggled to meet its enrolment targets last year until publicity was given by the region, knowing how important it is to solve our skills crisis. This lifted it and got some interest going. It shows how difficult it is to start a whole new training system from scratch, and it gives us an idea of why the government has had to come back twice now to ask for more money, just to get these ATCs up and running.
This year the department projects the Hunter’s ATC will enrol 150 students. I have just mentioned how many kids are out there doing apprenticeships already, and it is in the thousands. This is a very small effort. It is projected by the department to have 360 students by 2009. That is not really a mass solution or application. And, of course, even though hopefully those students will finish and go on to work in our industries, it is going to be tough for them.
What has happened in Newcastle? There are some implications of the skills shortage that remind us that if you do not invest in education and if you do not invest in skills then you compound the problem. In my electorate, teenage unemployment is 28.9 per cent. These kids would all love the opportunity to gain skills. The Hunter Valley Training Company, which I mentioned previously, received 1,000 applications for first-year apprentices this year. In engineering we need qualified people to work in the manufacturing, engineering and mining industries that, despite changes over recent decades, still underpin much of our economic prosperity. We have an excellent reputation and history already in this area, with the University of Newcastle ranked in the top 100 universities in the world for engineering technology. That occurs because of the collaboration with and involvement of industry and because of the ability of the TAFE to work with the university.
We have reached a crisis point in terms of engineers in the Hunter, as we have in Australia. As an example, a company recently put an advertisement in national newspapers for six engineers. They had not one applicant or response—not one. Everybody out there is already utilised. Companies in the region are recruiting from overseas—they have no choice—and certainly they are all headhunting from each other. It is quite amazing to work with that industry sector and come to know that they really are very pressed. John Vines, the Chief Executive of the Association of Professional Engineers, Scientists and Managers Australia, recently wrote in the Newcastle Herald that engineering courses—and remember that many of our TAFE apprentices move on to those courses—will this year attract HECS fees of up to $28,500. He suggested that you could halt some of the current trends and get more kids into this field by lowering some of those HECS fees. You will know that Labor has committed to lowering the HECS fees for maths and science, which underpin all those areas. That is a great approach. This government has not committed to education in any way and has not invested in a skilled work force. That is very different to Labor’s approach.
At the moment, the combined HECS debt of graduates in the Hunter region—and I am talking about graduates—is $100 million. You have to wonder if we have been doing the right thing there. Labor understands that those HECS fees are a factor in the skills shortage and that we can do something about them, and we must. According to the Australian Council of Deans of Science in the Hunter, three in four schools struggle to recruit qualified mathematics teachers. We really look forward to Labor’s policy initiative, which supports maths and science improvements in our area.
When you look back to what the government are doing with the ATCs, it shows a lack of understanding of the cycle of getting a young person from high school into a skilled job. That is why the ATCs are of concern to me. They do not understand that you have to invest in schools so that they have the resources with which to teach vocational education. You have to also engage those kids in what, while it is an exciting industry, is an industry that has been talked down over the years. Locally, most members of our business chamber visit schools and encourage kids to get to know more about the manufacturing and engineering occupations and opportunities. That is only one part of the cycle. When you get them into an apprenticeship, you have to train them professionally. You have to engage their parents and you have to mentor them all through that process, because there is no age like 16 to 20 for life experiences that can distract from work. That sort of commitment is also needed, but you do not see anything written into the ATCs about the wonderful mentoring programs that our group training companies run.
The big issue for us is that, if this government continues to provide token solutions to the skills crisis, productivity in this country will continue to diminish. Commentators recently have pointed out that if it were not for the increase to our economy from the resources boom we would be in deficit. You have to wonder why, when we are living in the middle of an industrial revolution, this government has ignored the opportunity to build needed new education and training infrastructure. This does not do it. This bill is typical of that approach. It is wrong. It is the wrong solution to a very real problem. It delivers the government’s ideology in a way that restricts participation. It misses out on so much good and does not value add to what is already excellent in many regions, particularly in my region—Newcastle and the Hunter.
I rise to speak on the Australian Technical Colleges (Flexibility in Achieving Australia’s Skills Needs) Amendment Bill (No. 2) 2006. This bill provides for additional funding over the next four years. The funding for Australian Technical Colleges is increased by $112 million to $456 million. I also rise to support the amendment that has been moved by the honourable member for Perth. In our state of New South Wales, education and vocational education are run out of one department. Previously, they were separate departments but they have been amalgamated. That is a good thing. They were amalgamated a few years ago and, ultimately, hopefully, that will result in teachers at TAFEs and schools being able to be interchanged much more readily than historically was the case.
I regret to say that we on this side of the House are often verballed about education matters. In relation to teachers, in question time today the Minister for Education, Science and Training announced that she:
... will be taking to the next state education ministers’ meeting a number of proposals relating to greater principal autonomy and ensuring that we have an element of performance based pay for teachers. We must attract, retain and reward the very best teachers. They are professionals. Let us treat them as professionals.
I personally do not have a problem with that. But the minister was also asked whether or not the Commonwealth had allocated any money to allow this to occur when she goes to the meeting of ministers. I regret to say that the minister really did not answer the question. Alternatively, by her failing to provide a figure, we can only assume that no money will be provided. I do not have difficulty in developing a bipartisan approach to the great sweep of educational issues confronting this nation. I never have. I certainly believe very much in accountability—in the accountability of educational institutions and in the results that they deliver for the students being on the public record. I think we need the best of teachers. I think teachers should be well rewarded, and I do not have difficulty with the concept of performance pay.
I know that the member for Prospect is here in the chamber, and I am sure he would agree with me that one of the great gifts of wealth that Western Sydney has is its young people. Western Sydney proudly constitutes about one-tenth of the population of Australia. It is a vast region and, I might say, a region with its differences. It is not homogenous. But we have a lot of young people, we are very proud of them and we want the best for them.
Traditionally, vocational trades have been very strong in Western Sydney. We have a vast network of TAFEs, and they have done a good job. In my own case, at Mount Druitt, not far from my electorate office, is Mount Druitt TAFE. I have forgotten the precise figure, but it has something between 7,000 and 8,000 effective full-time places. I have seen it grow from a sod-turning exercise. I think it has now had about its 10th expansion. It is doing good and growing strong. Of course, if you are a federal member out in Western Sydney, because there are so many young people, education is a big issue. It is an issue that I have been happy to pursue throughout my parliamentary career to date. I should have mentioned that, by the year 2016, more than half of Sydney’s population will be located in Western Sydney.
In Western Sydney, with one-tenth of the population of Australia, we have one of these colleges. Like my colleagues on this side of the House, I am not convinced that this is the best way to address vocational education, but the government has moved in this direction. How good is it?
I can state for the record that there is a college. There was an original proposal which, unhappily in my view, was withdrawn, but now the new ATC will be located at Rouse Hill. I do appreciate that in different parts of Australia people have to travel a long way to access services. But for the whole of Western Sydney to try and access a service being provided at Rouse Hill is indeed quite a challenge. If people are located in Liverpool, Cabramatta, the Blue Mountains or Campbelltown, trying to travel across Western Sydney to Rouse Hill, which is not centred at any particular transport node, does present difficulties.
In the newspaper there has been some criticism that you have 25 places and only 20 are filled. I am happy to accept the new principal’s word that indeed 25 places in this Western Sydney ATC will be filled. But, Mr Speaker, I am sure you would agree with me that providing 25 places at the Rouse Hill ATC to service the whole of Western Sydney is not exactly going to cause a revolution in the provision of vocational training for young people in Western Sydney. I am not saying that it is not welcome, but it would require real creative genius to parlay 25 places as some sort of vocational education revolution in Western Sydney. I certainly hold that view.
I probably should not go into the details of the original—and I think very innovative—proposal that was submitted by the Parramatta diocese and was initially successful. It was going to have three locations. It was going to utilise existing facilities and portable facilities, and that would have meant that students could more than readily access them. It was not going to be just a very limited skill area that they were hoping to provide for students; it was a very exciting proposal involving quite a number of different master associations—master builders, plumbers, et cetera. Yes, it was having difficulties, but it had been thoroughly thought through. Proposals and agreements were being made to ensure that it had proper state approval. Unlike many of my colleagues, I would have probably preferred that that original proposal was given more time to come to fruition, because I think that, in the short to medium term, it would have had greater impact.
Debate interrupted.
Order! It being 7.30 pm, I propose the question:
That the House do now adjourn.
I rise tonight to provide the House with a very quick snapshot of the most comprehensive global scientific assessment report on climate change, the Intergovernmental Panel on Climate Change report released on Friday, 2 February this year. The emissions scenarios in this report are based on business as usual. They do not include any additional climate change initiatives. The Intergovernmental Panel on Climate Change was established by the World Meteorological Organisation and the United Nations Environment Program to assess scientific, technical and socioeconomic information relevant to the understanding of climate change, its potential impacts and options for adaptation and mitigation.
Key findings of the scientific report in relation to past climate change include that warming of the climate system is unequivocal—as is now evident from observations of increases in global average air and ocean temperatures, widespread melting of snow and ice, and rising global mean sea level—and that 11 of the last 12 years, from 1995 to 2006, rank among the 12 warmest years since 1850. Key findings of the scientific report on future climate change show that mean temperatures are likely to rise by 0.6 to 0.7 degrees Celsius by 2025, 1.3 to 1.7 degrees Celsius by 2055, and 1.7 to four degrees by 2095.
As a consequence, for Australians living from Bermagui to Port Hedland, from Botany Bay to Alice Springs, it is very likely that there will be more hot, extreme periods and heatwaves—and heavy rainfall in some regions, but regrettably not in the south of Australia, will also become more frequent. Especially for people in the north-west, in the north and in Far North Queensland—in towns like Broome and Cairns—it is likely that future tropical cyclones will become more intense with higher peak wind speeds and heavier rainfall.
What does the rise in average temperatures mean for Australia? The Australian Business Roundtable on Climate Change—consisting of BP, Origin Energy, Swiss Re and others; and recently supported by the National Farmers Federation—commissioned CSIRO to quantify climate change impacts on Australia. The CSIRO report Climate change impacts on Australia and benefits of early action to reduce global greenhouse gas emissions confirmed that the economic impacts are potentially significant and widespread, affecting a wide range of industries. The most significant economic impacts were on the agricultural and tourism industries. The business roundtable report The business case for early action noted:
The $32 billion tourism industry is highly climate dependent. For example, the Great Barrier Reef supports a $1.5 billion industry but with a 2-3°C increase in temperature, 97% of the Reef could be bleached ...
The report continued:
The $17 billion of exports from the livestock industry face risks from more heat stress, more pests and disease; national livestock carrying capacity in native pasture systems falls by 40% if temperatures increase by 2°C ...
At a critical time as far as our future management of water is concerned, the report says:
A 2°C increase in temperature would reduce water flows in the Murray-Darling Basin and to Melbourne, by about 15%. Based on a 20% reduction in Australian irrigation allocations, GDP is projected to fall by around $750 million in 2009/10.
The issues that we face in this country in relation to climate change are profound and real. The issues that we face in this country in terms of potential economic loss are also real. When asked about the IPPC projections of a possible four to six degree Celsius increase over the coming century, the Prime Minister’s response was that it would be less comfortable for some than it is now. I want to state again clearly in this parliament that this is a statement which clearly does not comprehend the scale of the risk to the Australian community that climate change poses. The requirement upon this government to act resolutely on climate change as a consequence of this expansive report is great. If the Howard government will not take decisive action to address climate change then a Rudd Labor government will.
The distance and the cost is a serious disadvantage for Western Australian school students travelling to our nation’s capital to see the Australian parliament in progress and to understand its work. As the member for Hasluck, I wanted to provide an opportunity for high school students to better understand the parliamentary process and our system of democracy, to see firsthand our national capital and to discover national politics in an environment in which they were free to form their own impressions. This led to the establishment of the Hasluck Leadership Award, with the kind permission of the Hasluck family.
Sir Paul and Dame Alexandra Hasluck are both distinguished Australians and much-respected Western Australians. Sir Paul Hasluck, a well-respected politician, was the first Western Australian-born Governor-General. He commenced his education at Guildford Primary School in my electorate. His wife Dame Alexandra was a distinguished writer and historian. The Hasluck Leadership Award was introduced to be a vehicle for inspiring and developing the leadership potential of young people. It provides opportunities for them to develop their leadership qualities and assists them to realise their full potential. I am pleased with the fantastic outcomes of this award as it has clearly demonstrated to the electorate of Hasluck how talented, how committed and how vibrant so many Australians in our community and in our schools are.
Each year every high school in the Hasluck electorate is invited to nominate a student who best meets the criteria established for the award. From these nominations, two year 11 students, a girl and a boy, are selected to represent the electorate of Hasluck in a visit to Canberra. The students nominated each year have all been very talented and a wonderful credit to their schools. The schools include: Thornlie, Lesmurdie, Forrestfield, Kalamunda and Governor Stirling senior high schools and Southern River, Guildford Grammar, La Salle, Lumen Chisti, Mazenod and St Brigid’s colleges. I would very much like to thank the schools and the year 11 coordinators for their support in making the Hasluck Leadership Award the success it is.
The students who have been recipients of the Hasluck Leadership Award are: in 2005, Paige Boyatzis and Reece Shoesmith and, in 2006, Zak Cole and Tara Franzinelli. Subsequently, all have been elected as head boy or head girl in year 12. Tara Franzinelli has been elected to City of Swan Youth Advisory Council. Year 11 students are selected for this award so that they can return to their respective schools and speak to their peers and other students about their experiences in Canberra.
The students who receive the award attend Canberra during a sitting week, meeting with the Prime Minister, the Treasurer and other senior government ministers, the President of the Senate and the Speaker of this House. Indeed, Mr Speaker, I appreciate very much the time you have taken to inform these students of your role as Speaker and I thank you for your generosity in this regard. This provides an opportunity for the students to see the real people behind the highest public offices in Australia, to gain a real understanding of their responsibilities and the importance of these roles in the parliament and as a function of the government of Australia.
Visits to the War Memorial, the National Gallery and the High Court are also arranged, along with a personal tour of the Australian Institute of Sport and Duntroon Military College. A special thanks to Brigadier Appleton and Lieutenants Mortimer and Watson, who provided an excellent insight into military life. Also a special thankyou for the giving of their valuable time in meeting the Hasluck Leadership Award recipients goes to the Prime Minister the Hon. John Howard, the Treasurer, the Hon. Peter Costello, the President of the Senate, the Hon. Paul Calvert, and again to you, Mr Speaker of this House. Needless to say this award would also not be possible without the fantastic support of the businesses in the community who sponsor the Hasluck Leadership Award. I very much appreciate their enthusiasm and commitment to the young people of Hasluck and thank them for their support.
Back in 2001, an election commitment—among a raft of election commitments—was made in relation to coastal policy. The government said at the time that a new national coastal policy would be developed to address coastal management issues. More than that, in July 2005 on ABC Radio, the then Minister for the Environment and Heritage promised the community a 30-year coastal plan. He said:
... what we need if we’re going to save the coast is a 30-year plan. Let’s put a plan down so developers know where they can develop, where Governments know where their future hospitals and schools need to go, but ultimately a plan that sees the coast in very good shape in 30 years time.
Admirable sentiments, but what has happened to those promises? Where is the 30-year plan to protect our coastline? It seems on this issue, along with many issues that we have raised in the last two days in sittings here, that the government has been characterised by inertia and a lack of action on very critical issues. Coastal policy is becoming more critical by the day, as the impact of global warming is felt from coast to coast, with rising sea levels and erosion affecting many coastal communities.
It is not as if the government was not warned. In 2003 its own Australian Greenhouse Office warned:
Projected increases in tropical cyclone intensity ... along with sea level rise, would have major impacts—notably, increased storm-surge heights...
And just two years ago, the government’s own Climate change risk and vulnerability report warned that climate change related increases in the ferocity of tropical storms could:
Put some of our significant population and tourist centres like Cairns, Broome, Darwin and Townsville, as well as remote communities, at considerably increased risk.
That report argued the need for climate change adaptation strategies for coastal areas, but none have been forthcoming. The report noted, I think quite reasonably, that ‘planners need to anticipate future climate pressures and build the capacity of systems to cope with these pressures if the adverse implications of climate change are to be minimised.’
As I have said, there has been a total lack of urgency on the part of the government to take measures to protect our coastline from such impacts. The government’s so-called new coastal protection plan—not the 30-year plan that we were promised—is just a rehash of the previous framework approach to integrated coastal zone management. It certainly lacks urgency. Let me give you one example. According to this framework document, it is going to take some five years for an interim report to build a national picture of coastal zone areas that are particularly vulnerable to climate change impacts and—wait for it—10 years for a more detailed report. We just cannot wait that long.
Coastal erosion is already having a devastating effect. The Mayor of Byron Shire—where I visited—has instituted a planned retreat policy, as homes on the Belongil beach sandpit are under threat from the encroaching sea. The mayor has warned that the planned retreat policy will eventually affect nearby Suffolk Park as well as the coastal areas of South Golden and New Brighton. She says, quite rightly:
Coastal erosion is happening everywhere.
People keep saying this is a Byron greenie agenda. They have their heads in the sand.
Cairns—well known to all of us—is another example of a low-lying coastal settlement which is highly susceptible to flooding and surges associated with cyclone activity. Extreme weather events pose a serious threat to its infrastructure and magnificent coastal resorts. The erosion is already impacting on local beaches, particularly at Clifton Beach, as I witnessed on a visit there.
There are no climate change adaptation strategies in place for Australia’s coastal zone. The Howard government has provided no leadership on this really important issue. The nation needs a national framework to lead coastal policy, to establish strategic responses to population growth in coastal regions and to support and resource regional and local coastal planning initiatives. More severe cyclones and higher incidence of flooding from rising tides and storm surges will leave many areas—many of them developed areas—at risk of inundation. In contrast to the government’s inertia, a Rudd Labor government will ensure that these issues are taken seriously. (Time expired)
I rise to speak on three issues, time permitting. Firstly, I want to talk about the results of a recent study at the centre of the new book The Sex Lives of Australian Teenagers, by reputable author Joan Sauers. Secondly, I want to talk about corporate paedophilia and the exploitation of young children and teenagers. Thirdly, I want to talk about an education program for judges making family law court decisions.
The results of the aforementioned study can only be described as alarming, disturbing and most concerning. Some of the results of the internet survey include the fact that 53.5 per cent of girls had viewed pornography by the age of 12. This figure rises to 97 per cent by the age of 16. Boys start earlier, with 70 per cent having viewed pornography by the age of 12 and 100 per cent of the respondents viewing porn by the age of 15. Fifty-eight per cent of the girls and 87 per cent of the boys described being sexually excited by the pornography. By the age of 16, 51 per cent of girls and 65 per cent of boys had engaged in oral sex, either giving, receiving or both. Overall, a third of respondents had lost their virginity before the age of sexual consent.
I speak about this subject not as an expert but as a concerned parent and a member of parliament who has long advocated for greater protections and more inclusive classification structures for the media content that our children are confronted with every day. I have long held and expressed my view that our children are being exposed and moulded by sexually explicit, sexually promiscuous and inappropriately violent and graphic material. This includes everything from internet pornography to cult programs such as Big Brother Uncut, violent video games and soft porn music videos.
I would like to congratulate Phillip Adams on his article entitled ‘Paedophilia Inc.’ on page 15 of the Weekend Australian magazine, 21 and 22 June 2003. Highlighting the negative impact this material is having on our children, he said:
The mass of pornography in the unmediated world of the Internet is bad enough. But the images that are projected in the mainstream media are equally ominous.
I’m talking about what I’ve been calling, for years, corporate paedophilia: the abuse of children—involving sexual abuse, violent abuse and economic exploitation—by some of the mightiest corporations ...
Adams continued:
We accept all this as perfectly normal. Well, it isn’t. Or it shouldn’t be. A child should be allowed to be a child as long as possible. It is a child’s right not to know about many of the ideas and issues and activities of the adult world.
I accept that children want to be liked and respected by their peers, but more often some of them are giving in to peer pressure and gaining popularity, respect and acceptance because of their willingness to take part in aggressive, violent and sexual behaviour. Almost weekly, another inappropriate video which has been posted on the internet is revealed. These include everything from fights to gang rapes, vandalism, stripteases and more. The internet has allowed this material to be broadcast around the world, viewed by our children at the click of a button.
Another concerning revelation of the study is the fact that one-third of the female respondents had described feeling pressured into having sex. Leo Schofield also highlights this point in this week’s Bulletin magazine. In explaining the emotional effect of these results, I draw on the experiences of two of Sauers’s interviewees. One explained how she had performed a striptease for her boyfriend and expressed disappointment that he had invited his mates to view the footage. Another explained how she felt ‘ashamed’ when her boyfriend complained her pubic region was ‘too hairy’ and did not conform to the pornographic images he had seen of women with ‘Brazilians and breast implants’. What is the message this young girl receives? She is probably more likely to feel ostracised, insecure, intimidated, worthless and used than loved, proud and confident.
Not only do parents need to be more vigilant when it comes to monitoring their child’s behaviour but also our communities deserve the protection of the judicial system and must have confidence that the best interests of the child will be upheld. The weekend papers revealed a disturbing example that this is not always the case. They outlined the case of an eight-year-old boy being ordered by a judge to live with his stripper mother, despite acknowledging that her boyfriend was one of Australia’s worst child pornography addicts. The boyfriend, a sick pervert of the worst kind, was released on bail after serving only one year of a three-year sentence for amassing 350,000 images and 6,400 videos of pornographic images, and for a related criminal conviction.
As the Chairperson of the coalition Classification Issues Group, together with Senator Barnaby Joyce, who is the deputy chair of the group, we demand an education program for judges in family court cases particularly where there is a possibility of a child being at risk sexually, emotionally or physically. (Time expired)
As did two of my colleagues previously, I rise to talk about climate change and global warming—and about the effects that it would have on the seat of Hindmarsh. We all know that our shorelines are dynamic environments and subject to multiple pressures. We know that wave and tidal movements can be amplified and the pressure on our fragile shoreline intensified, increasing the damage to our beaches and the dunes that buffer the sea from the land on which we live.
Regrettably, we also know that things are likely to get only worse as a result of the indisputable rise in sea levels caused by global warming. Whether or not this government believes the evidence based conclusions reached by the vast amount of scientific consideration, I assure you that the people of Adelaide’s western suburbs, in the electorate of Hindmarsh, know that there is a problem. The dominant question pertains to how bad the situation of sea level rise will become—and will the government take action and take this issue seriously? I think we have seen the answer to that in their actions over the last 10 years.
Flooding projection research indicates that Adelaide’s coastline would move inland as far as the suburb of Hilton in my electorate. That would flood the majority of land between Adelaide CBD and the current shoreline, including Adelaide Airport. That includes the majority of the seat of Hindmarsh. This was also reported in the Advertiser on 28 August last year.
In question time yesterday the Minister for the Environment and Water Resources was quoted as saying on 3 February:
... the geology ... of the east coast ... is adequately elevated to deal with a one-metre sea rise ...
He was also quoted as saying that claims about rising sea levels are ‘very exaggerated’. Not only do I disagree with the minister’s remarks but also I am alarmed by the minister’s lack of regard for Australians who live elsewhere along the coastline, including in my electorate of Hindmarsh.
A one-metre rise in sea levels would have highly substantial effects on Australia’s coastline. But, as I said, my principal concern is for the people of Adelaide’s western suburbs, whose plight this minister appears not to have even bothered to consider. Rising sea levels could displace up to 150,000 residents from Adelaide’s inner residential coastal area in the future and projections are that this area could be lost to rising sea levels as a result of global warming and rising seas. This is an unimaginable threat to local residents and businesses and the federal government must act now.
It was very difficult for me to win the election for the seat of Hindmarsh—it took me many years—and it will be difficult to hold. But that is not my biggest worry. It is one thing to lose your seat to your opponent, but no-one wants the seat to be lost to the sea. In 2001, conservative scientific consensus estimated a rise of between eight millimetres and 88 millimetres over the course of this century. Most recent advice narrows the tolerance and the high watermark to 58 centimetres but does not incorporate the dynamic nature of what we are discussing. While members of the government may shrug their shoulders and say in the face of a one-metre rise in sea levels that the eastern seaboard will be okay, as the minister was quoted as saying, the projection does not incorporate the effects of the loss of the Greenland ice sheet and Arctic melting. A loss of the Greenland ice sheet would cause a seven-metre rise in sea levels, and if these events happen then look out. A one-metre rise in sea levels will look more like a minor effect of the moon.
The Australian Greenhouse Office published CSIRO advice in 2002 that a coastline could possibly retreat horizontally by 50 to 100 times the vertical sea level rise. For a one-metre rise in sea levels, there could be a loss of up to 100 metres of shoreline, and that includes many thousands of homes, hundreds of businesses and billions of dollars worth of infrastructure and amenities. That advice was actually disputed by Dr Peter Cowell. Dr Cowell’s estimates suggest that a beach recession, or coastal erosion, could be almost twice as serious as indicated by the Allen Group report for the same climate change projections.
This research identified that Sydney’s Spit Bridge, the Manly ferry terminal and Nielsen Park are at risk with a sea level rise of less than one metre, and also the loss of Narrabeen beach and others—and that is without the loss of the Arctic or the Greenland ice sheet. (Time expired)
I rise this evening to speak on an issue that is very close to my heart: the issue of corporate and social responsibility. When I addressed the House on this issue last year, I spoke particularly about the report of the Joint Committee on Corporations and Financial Services entitled Corporate responsibility: managing risk and creating value, which closely examined the important corporate governance issues facing Australian companies and the challenges faced by government in promoting corporate and social responsibility, CSR, in Australia’s corporate and business sector.
I also spoke about the decision by McDonald’s to cut a contract for potatoes from north-west Tasmania in favour of imported goods which gave rise to the Fair Dinkum Food campaign, of which I am a proud supporter. As I stated then, the vegetable industry sector well illustrates my concerns about corporate and social responsibility and the failure of large companies to support the communities supplying the goods which provide the company profit. This evening, however, I wish to address the accountability factors associated with corporate and social responsibility and, more specifically, the movement of Australian jobs offshore. But before I do so, I would like to take a few moments to define corporate and social responsibility.
The World Business Council for Sustainable Development defines corporate and social responsibility as ‘the business commitment and contribution to the quality of life of employees, their families and the local community to support sustainable economic development’. Companies are facing increasing pressure to consider the impacts of their business decisions and corporate and social responsibility. This demand for greater consideration is being driven from opposite ends of the corporate world—by consumers and by investors—and many businesses now acknowledge the growing necessity of addressing corporate and social responsibility in their business activities. As I have said before, intangible assets such as brand, reputation, accountability and transparency have become increasingly important in a world of empowered consumers. In an increasingly competitive marketplace, those businesses which demonstrate good corporate citizenship are more likely to succeed than those which ignore the importance that shared values can play in a consumer’s decision-making process. We probably remember well the 1990s worldwide boycott of Nike products following revelations of exploitative labour practices.
This ‘moral’ argument remains strong within current corporate and social responsibility thinking, as does the principle of sustainability—the so-called ‘triple bottom line’. Corporate and social responsibility is also increasingly being used by business as a tool for competitive positioning in the marketplace or to refute consumer criticisms—for example, the current marketing trend of fast food companies such as McDonald’s to market their products as healthy, in part a direct response to community concerns about nutrition and obesity.
Often the term CSR is applied, somewhat erroneously, to describe charitable deeds by a company—a donation to a good cause, for example. But CSR goes well beyond that, and the public is becoming more and more cynical of ‘corporate philanthropy’. For example, the recent Woolworths National Drought Action Day provided some $3 million of drought relief. This was a generous action, which I am absolutely sure was greatly appreciated by Australian farmers. Nevertheless, as one of the two duopoly players in the red meat market, Woolworths has enormous control of the market sector, and whilst the prices paid to farmers for their product have been falling substantially those applying to consumers at the supermarket have not. I do not use this example in any way to accuse Woolworths of profiteering—I understand that the profit it takes from beef has in fact been reduced—but rather to draw attention to the public concern that the drop in livestock pricing has not been matched in the retail sector.
One aspect of accountability would be to look at how corporations take on the responsibility not only to act legally in their business endeavours but also to act in a socially responsible way. The proposition that all types of corporations and organisations should be good, ethical citizens, as well as conforming to the laws of the land, raises some particular issues—for example, when do their responsibilities as good corporate citizens override their drive for profits? How do they deal with financial risks in negotiating ethical management processes and outcomes for workers, clients, suppliers and the community, as well as shareholders? These are interesting points, because the Corporations Act, which is specifically designed to give institutions legal rights and protections, does not extend to the social responsibilities and consciences expected from others.
Corporate and social responsibility is not about government dictating to companies how they should operate; rather, it is about encouraging companies to adequately consider the social and/or environmental impacts of their actions as part of their decision-making processes. This debate should also encompass shareholders who have a strong influence on business strategic decisions to ensure a policy that encompasses all the good things the Australian public deserves. (Time expired)
Order! It being 8 pm, the debate is interrupted.
The following notice was given:
to present a bill for an act to amend the law relating to aged care, and for related purposes. (Aged Care Amendment (Security and Protection) Bill 2007)
Despite the government’s coffers being flush with funds, it would appear that the number of community groups whose work has been forgotten or taken for granted increases with each year. According to a report by Veronica Apap in the Inner West Courier on 18 January 2007, a treasured out-of-school-hours care program for children with special needs in my electorate of Lowe was facing imminent closure due to a lack of funding.
Caring for children with special needs is not easy, nor is it cheap. This is especially so when we seek to include children with moderate or high support needs in mainstream out-of-school-hours programs. One would think that, at the very least, the government would commit all the funds necessary to support such a worthy program. Thankfully, the future of the program looks much brighter now, due to the commitment and the determination of the Ella Community Centre to keep the program running.
I placed a question on the Notice Paper on 8 August 2006 to the Minister for Families, Community Services and Indigenous Affairs concerning the financial pressure being faced by the Ella Community Centre. While the minister’s response pointed to an inclusion support subsidy of $15 to allow groups such as Ella to employ additional workers for children with high support needs, this is not enough. Such groups require one-on-one child-to-staff ratios or better to cater for children with moderate or high support needs without reducing service levels for other children.
I hold serious concerns that the current subsidies are not nearly enough to sustain long-term services for children with high support needs. When one considers the wage and other costs connected with employing additional staff members to meet required child-to-staff ratios, it would not be naïve to assume that much of the cost is being shifted to local community groups such as Ella.
To shift these costs to such groups indefinitely is not only unfair but also unrealistic. Whenever members of the government speak of the values of community and egalitarianism, they would do well to remember groups like Ella which have been practicing for decades what the government has taken a liking to preaching recently. They would also do well to remember the game of brinkmanship that is often played with these very worthy groups—and put an end to it.
It is time for the government to start practicing what it preaches. I have placed further questions on the Notice Paper today concerning this issue and I call on the Howard government to investigate committing more funds to community based out-of-school-hours childcare centres, particularly Ella Community Centre.
Last month, we celebrated Australia Day and considered the topics for a citizenship test. Many of us paused to consider what it is to be Australian and talked of mateship, community and coming together in difficult times. The drought and this summer’s bushfires have demonstrated these characteristics and showed the resilience of those affected by these natural disasters.
I rise today to speak about a community within my electorate which is also a victim of Mother Nature. On 4 January, the south coastal town of Esperance in my electorate was hit by severe weather labelled a ‘once-in-a-lifetime’ storm. Winds of up to 110 kilometres an hour brought down trees and powerlines and destroyed the Bandy Creek Boat Harbour. Rough seas washed away a 200-metre stretch of foreshore and created widespread damage. Localised flooding was caused by the downpour—185 millimetres fell in the town in 36 hours. Many farmers who were stranded on their properties by the floods were unable to communicate due to power outages and lost thousands of head of livestock. The most recent estimate I have is 50,000 sheep.
Prior to the storm, the beautiful Esperance community got together to prepare their town and their homes. The Local Emergency Management Committee called a town meeting with FESA, the Fire and Emergency Services Authority of Western Australia, acting as the lead agency to advise residents. When the storm hit, the SES—the State Emergency Services—was inundated with requests for help. There were 35 volunteers, some of whom worked for nearly a week to help others. The SES received 150 callouts and resolved a number of other problems over the phone. Esperance Shire personnel, under the leadership of acting council CEO Richard Brookes, were also heavily involved in the aftermath of the storm.
I was in contact with a number of residents and emergency workers who were in the town, who all reported that community morale was high throughout the ordeal. The people of Esperance demonstrated mateship, community spirit and how to come together in difficult times. Their work is not finished even yet as the damage is still being assessed. Of course, the state will need to work closely with the Commonwealth government in securing emergency funds for the restoration of facilities in Esperance. We do not know what the total cost of that storm damage is as yet.
I acknowledge and praise the work of the volunteers—people to whom we always owe a great debt of gratitude. I wish the entire community well in its endeavours and I look forward to seeing Esperance restored to its beautiful former self as the gem in tourism on the south-eastern coast of Western Australia.
Today is the 40th anniversary of the tragic Black Tuesday bushfires in southern Tasmania. On that day, 7 February 1967, temperatures in Tasmania reached 39.4—a February record. Early in the morning, at nine o’clock, the first calls were made to the Tasmania Fire Service. Within five hours over 110 bushfires in the southern part of Tasmania joined together to cause one of the greatest conflagrations ever seen in Australian history.
In the space of five hours the fire destroyed over 1,300 houses, 128 major buildings, including post offices, churches, schools and factories, and caused the death of 62 people. Most of the damage was done in the southern part of Tasmania in my electorate of Franklin. Snug was one of the worst affected areas. Every house in Snug—apart from two—was totally destroyed. In Middleton, the only shelter people had was to go to the beach. Even the seaweed on the beach caught fire. The temperatures were so high that even the bitumen on the road caught fire. Communications failed. At one stage there was only one radio station broadcasting in southern Tasmania. I was lucky, I guess, not to be there because I was holidaying in Mexico. The first I heard of this tragedy was when I read in the newspaper that the whole of Tasmania was being evacuated by a submarine, which I thought was rather ludicrous.
This week, and especially on the weekend, there are numerous commemorative services being held in the various towns down in the channel. The old school clock on the school building at Snug Primary School—it used to be known as the District High School—is to be started up again after 40 years. There are lots of memories and lots of movies are being shown of the tragedy. Sadly, I do not think we have learnt much in 40 years. Throughout Australia, with the drought and the dryness and the fact that we do not really look after our bush, another disaster is waiting to happen. I am glad to be able to place it on the public record that Black Tuesday—one of the worst disasters ever to hit Tasmania and one of the top three ever to hit Australia—is being remembered throughout southern Tasmania today.
The inaugural Currumbin Palm Beach RSL Citizen of the Year awards were launched at the conclusion of the citizenship ceremony on the southern Gold Coast last month. I would like to put on record today the objectives of the awards and the names of those who were honoured at these special awards. The awards are aimed at honouring ordinary people doing extraordinary things on the southern Gold Coast. It is a formal recognition of the contribution they make to our community in making it a better place to live in. There were a number of judges and our job was extremely difficult. I was joined by Ron Workman, the chairman of the RSL, Councillor Daphne McDonald, Councillor Chris Robbins and Jann Stuckey, the state member, to make the decision on 17 nominees who were after six categories. The winners of the awards were awarded certificates and cash prizes on the day.
The Citizen of the Year was Beverley Humphries. She was recognised for her Currumbin Riding for the Disabled Centre. She was the driving force behind and an instigator for fundraising and the financial management of that centre. The community award went to Bev Hammond, who for 10 years has been secretary to the Currumbin state school PCA. She has worked with the school and she has worked at the Olympic pool. She has run the organising committee for the art and craft festival at Currumbin state school for 20 years. Bev is also president of the Currumbin netball club.
The junior award went to Jack Sinclair. He was nominated by his scout troop leader. He is 14 years of age and he is attending Elanora high school in the local area. He is a great, academic young man. He won a scholarship to the school. He has worked with the AFL and the young players there, training them, and also with the Japanese exchange students on bushwalking. He has made a great contribution not only to his local school but also to the youth of the area. He donated his prize of $250 to his father, who is doing a charity ride in Sydney to raise money for youth on the streets.
The senior award went to Leo Redlich, a 91-year-old volunteer at Elanora state primary school. He has been volunteering there for 5½ years and is still making a wonderful contribution at his age. The sporting award went to Joan Chalmers. She is a teacher at the Coolangatta State School and she encourages all children to play sport, no matter what standard they are at. She is also president and coordinator of the Stars netball club. She has worked tirelessly in that role for the last 14 years.
The award for services to the veteran community went to Mr Len Cooper. Len is chairman of the Veterans Support Centre, where he assists veterans with applications for disability pensions and to meet the welfare needs of dependants. He has continued this for many years. In terms of what it does for our local community, the outreach work that he does through that centre for the veterans cannot be measured. I think all of those people deserve our recognition and I encourage them to continue working in our community.
I was very pleased to be able to welcome the government’s announcement of $1.9 million of Investing in Our Schools funding for schools in my electorate this week. The amount of money granted to schools in my electorate is a tribute to school councils, the staff, principals and, in many instances, students who have worked hard on their applications. I would like to take the opportunity to congratulate the principals, staff, parents and students who worked so hard in submitting them.
It is a terrific example of the commitment and dedication of your respective school communities. Having visited almost all of these schools, I know how worthwhile these projects are. Alfredton Primary School will be constructing a specialised learning area. Delacombe Primary School will be enhancing its play equipment. Grevillea Park Primary School, in a poorer area in my electorate, will be upgrading its computer equipment. Miners Rest Primary School will be putting in shade structures. We are experiencing unprecedented sunshine in Ballarat, I have to say, so shade structures are extremely important. Redan Primary School is going to be fencing its sporting fields and improving some of those. Sebastopol Primary School will be looking towards improving its play equipment and library equipment.
Unfortunately, in this announcement there was one glaring omission and that was of Bacchus Marsh Primary School. Bacchus Marsh Primary School is an outstanding school. It has an energetic and imaginative principal, a dedicated and caring staff, engaged parents and, of course, a fantastic bunch of students. It can also boast of being Victoria’s oldest primary school. It was therefore extremely disappointing and frustrating, after it had submitted a fantastic application for the third round of Investing in Our Schools, for it to be knocked back.
What has frustrated the school community so much is not only that the funding would go towards much needed improvements to their oval but also it is the second consecutive time that they have been knocked back. Bacchus Marsh Primary School missed out during the second round of Investing in Our Schools last year. Having worked with the school on its application, I know that it was first class and met all of the guidelines laid down by the department. I made a number of representations to the office of the parliamentary secretary as to why the school had missed out in that second round. The advice was simply that the application was terrific but that there just were not enough funds to go around.
It was therefore with some confidence that the school submitted in the third round, hoping that it would be successful this time. Once again, on finding out that it was unsuccessful, we contacted the parliamentary secretary’s office and were told once again the application was perfectly okay but that there were just insufficient funds. Frankly, this is an inadequate response to a school that has worked extremely hard on its application. It is an extremely large school with a growing population in its district. I would have to say that the least it could expect after the work it has done is some support through the Investing in Our Schools program.
On 15 December I was fortunate to open 11 kilometres of dual carriageway from the Karuah bypass to just north of the Myall Way turn-off. This work included two intersections to local roads, two junctions over the existing highway and four twin bridges. This project was carried out at a cost of $114 million and was jointly funded by the state and federal governments. I also announced that Abigroup has been selected to carry out the works on sections 2 and 3 between Karuah and Bulahdelah. This will comprise some 23 kilometres of dual carriageway. It will include the construction of seven sets of small twin bridges. It will run from the end of the section that was just opened to three kilometres south of Bulahdelah.
The key issue here—and I have raised it in this chamber before—was the absence of the flyover to the Tea Gardens intersection. This was part of the original program of works between Karuah and Myall Lakes. It was part of the works originally costed at $5 million. When the then state roads minister Michael Costa was questioned, the cost went out to $16 million. Michael Costa said, ‘If the federal government is prepared to put in more money, we will build it.’ Remember that we already funded 50 per cent. In the last budget the federal government gave the New South Wales government an additional $160 million for the Pacific Highway, but still there was no prioritisation.
You can understand last week why I was concerned to see the Iemma government in New South Wales pay $25 million to the operators of the Lane Cove tunnel, which is a $1 billion project. Some $25 million was paid for delays. There was no $16 million—$8 million of which would have been put in by the federal government—to save lives at a busy intersection at Tea Gardens. There was $25 million for political opportunism—holding up the opening of the tunnel until after the March elections so there are no political ramifications—but no money for the people in my electorate for the roadworks for the Myall Way.
We have also put $20 million into the Buckets Way. This is solely funded by the federal government; there is no money from the state government. We have put $10 million forward for roadworks between Dungog and Raymond Terrace, between Dungog and Maitland. This was to have been matched by the state government, but there is no money. The people in my electorate are frustrated, disappointed and disillusioned by the Iemma dilemma and by the state members in that area because of their failure to deliver money. I wonder how those state Labor candidates feel about $25 million being paid to a consortium for delays to hold up a tunnel opening until after the state election and there being no money for their electorate. (Time expired)
Thursday, 1 February 2007 was a momentous occasion in the long-running Ipswich Motorway saga. The official sod-turning ceremony held by me and attended by local Ipswich city councillors and the local state member signified the first phase of the Ipswich Motorway upgrade with the Gailes-Logan interchange being upgraded at a cost of $255 million. This has been a long time coming. In fact, it has been over nine years that I, along with the community, have been actively campaigning for this much needed upgrade of this notorious road. The first phase represents getting half the job done with the Oxley section of the Ipswich Motorway fully committed to be upgraded.
The opening, however, is not without its fair share of controversy. The federal main roads minister failed to invite not only me as the local member but also other representatives, both elected and community based, to the government’s own sod-turning ceremony. This government’s political stunt sought nothing more than to maximise local Liberal Party members’ exposure and is nothing short of a disgrace, especially having the federal member for Blair there. He has continually opposed, delayed and done everything he can to make sure this upgrade does not go ahead. In one of life’s great ironies, the member for Blair was there, all smiles, beaming away like it was he who had actually delivered the funding. How he sleeps at night nobody knows.
It is also important to note that only half the job has been done. It is just not good enough. We need to continue lobbying the Howard government to commit to upgrade the Liberal Party Blair electorate section of the Ipswich Motorway. There no longer exists any argument that we cannot or should not upgrade the Ipswich Motorway. It is now just a case of the federal government getting on with the other half of the job. The interchange launch at Gailes highlights the need for strong leadership and cooperation on the Ipswich Motorway. It is quite plain and simple: there is a safety issue as well as a traffic problem that needs to be rectified now.
Over the past nine years of campaigning for an upgrade, there has been an overwhelming consensus from the community and engineers that the motorway has to be upgraded, no matter what else may happen in the future. The full upgrade remains the best value for money option and the timeliest solution for the Ipswich Motorway. Future infrastructure needs must also be met now for the western corridor so that it can cope with future predicted growth in the area. We need to seriously look at real solutions for a full bypass, not some half-baked idea for a partial bypass through the western corridor at an impossible cost—estimated at $2.58 billion at the moment for the half bypass—which will do very little to alleviate our current traffic problems.
This is the way forward if we are serious about planning for the future of the western corridor and addressing its exponential growth rate. We do not want more reports, just genuine solutions that are affordable and achievable. Sometimes you can be said to steal the show. In the case of the official sod-turning ceremony held by me, it was not a case of theft; it was merely a case of returning rightful property to the community.
Today I would like to acknowledge the work of the Royal Life Saving Society Australia, particularly the New South Wales branch, with regard to the expansion of their work in Western Sydney and their strategy for rural and remote parts of New South Wales and Australia. I have had the privilege of working with David Macallister, the CEO of the Royal Life Saving Society Australia, New South Wales branch, and Mr Joe Allan, Principal of Hill Sports High School, who have had a unique and innovative vision to establish an aquatic training safety academy at Hill Sports High School. This is a project that I have wholeheartedly supported since first meeting with Mr Allan and Mr Macallister in early 2005. I want to particularly thank Senator Rod Kemp, who offered his support and visited the school to hear about and see firsthand the proposal in early 2005. I also want to thank the Hon. Gary Hardgrave, who was instrumental in bringing this about and gave his time to meet with key stakeholders.
This project is being realised after a cooperative effort by and the hard work of the Royal Life Saving Society, the local school and, of course, industry. It was with great pleasure that I was able to bring the relevant stakeholders together last week and announce that the Australian government will invest $3 million of national training infrastructure funding in the new skills centre to be operated by the Royal Life Saving Society Australia. The centre will offer accredited training through the community recreation industry training package to trainers and educators across Australia, individuals and groups from remote and regional communities in New South Wales and students from Hill Sports High School as well as school students in our region.
The Australian government funding of the project will be matched by Royal Life Saving Society Australia, New South Wales branch, and industry partners. I commend industry for getting on board with this worthwhile project, which has the dual benefit of developing a skilled workforce for the sports and recreation industry and reducing the unacceptable drowning and water injury statistics that face our nation. The Royal Life Saving Society Australia has been educating Australians about water safety for nearly 100 years and is highly respected for its work in the community, providing training in swimming and life saving. This funding will be used to construct training rooms and a swimming pool hall as well as furnish and equip the centre. This initiative is a great example of all levels of government and industry working together to expand training delivery. It is a great boost for the Royal Life Saving Society and the region, and the training provided will undoubtedly save lives. It will also provide training to upskill existing employees and new entrants to vocational and technical education as well as help create structured career paths in the aquatic industry.
I would like to speak today about some developments that I think are quite disturbing regarding the provision of chaplaincy services to veterans in South Australia. The DVA review into chaplaincy services for veterans in South Australian hospitals begins today without any formal church representation. I am very concerned that the Heads of Christian Churches Chaplaincy Advisory Committee is not a formal member of the review, after its numerous requests to be involved have been repeatedly denied by the Minister for Veterans’ Affairs.
The sort of work that chaplains do is crucial to the operation of services of a pastoral nature for veterans in the community. I would like to read from a recent article in a local Adelaide paper that takes up what is happening with the provision of chaplaincy services in South Australia. It is headed ‘Spiritual heart of Repat under attack’ and states:
Bruce Stocks is devoted to comforting the sick, the dying, the traumatised.
As a hospital chaplain at The Repat, Daw Park, he is a friendly face and ear to patients and their families.
His time is spent alongside the beds of veterans—in the hospital’s aged care and surgical wards and the psychological unit, which looks after ex-military personnel with post-traumatic stress disorders.
“We’re talking about being alongside people”—people who have given this country military service—“who are dying, whose lives are in crisis, who are looking for spiritual help on a daily basis”.
Last year The Repat’s pastoral care team—three chaplains and 10 volunteers—provided more than 12,000 pastoral visits to patients and their families. More than 5000 were to veterans and their families. About 250 staff sought support.
Operating out of spartan transportable offices, each Sunday they take it in turns to perform a non-denominational service in the hospital chapel that is broadcast on TVs to patients’ bedsides.
We can see that the work they do is important and crucial, yet there is currently no group or individual with chaplaincy expertise on this review. This suggests that the Howard government has already made up its mind on the issue and will use the review to reduce its funding for these services. I sincerely hope that this is not the case.
While consultation opportunities have been offered to the chaplaincy service by the DVA, they give no formal power in decision-making opportunities. I therefore urge the minister to invite the HCCC to become a full member of the review. I would also urge the minister to publicly commit that he will not use this review to reduce federal funding for this very important service.
In the second half of last year 2,846 veterans accessed the pastoral services at RGH Daw Park, South Australia’s main repat hospital. This minister talks about the need for increased emphasis on mental health services. These are actually mental health services of a very basic but important nature to veterans at the coalface. If he is really committed to that, and I hope that he is, he has to make sure that these sorts of services are maintained. (Time expired).
Each year, 26 January offers Australians a very special opportunity to celebrate not only this wonderful country but also the many and varied people who work tirelessly for their communities and their fellow Australians. This year I once again had the great pleasure of celebrating Australia Day with the Bonner community. I was offered the opportunity to both participate in local citizenship ceremonies and join with the community in honouring those special men and women who continue to give so much but ask for nothing in return. I offer my sincere thanks and congratulations to the Southside Sport and Community Club, the Lions Club of Camp Hill and Carindale, the Rotary Club of Wishart and the Lions Club of Moreton Bay for having facilitated outstanding citizenship and recognition ceremonies on Australia Day.
The members of these clubs worked with enthusiasm and commitment to ensure that the day was a great success and a memorable event for all those who participated. It is because of their efforts that our community shared in and experienced the unity that Australia Day brings, and I commend the clubs once again on their fine work. Praise is also owed to Councillor Adrian Schrinner and his assistant, Julie, who worked in conjunction with the Lions Club to host a most professional, yet engaging, ceremony. Mr Schrinner has become a fine young councillor whose enthusiasm and attention to detail are second to none.
This morning I wish to acknowledge a number of Australia Day Award recipients who were recognised locally for their significant contribution to the southside community of Bonner. Heather Barns and Pat Erskine are two outstanding women who have dedicated years of service to the community in a variety of different capacities. They not only are highly respected and admired in their own right but also have energised others, simply through leading by example. Named ‘Citizens of the Year’, they are certainly deserving of such a title and I commend them both on the proactive approach that they take in all matters.
Rodney Nott and Keith Bouchard were recognised as local ‘Senior Citizens of the Year’, and I take this opportunity to also commend them both on their service to the community. I have come to know these gentlemen well in the last two years and their commitment to assisting others makes them an inspiration to seniors and youth alike. Age is no barrier to their involvement in the community and it is important that we continue to recognise and appreciate the amazing volunteering efforts of our seniors.
Brisbane’s southside is also home to many youth. Ms Sarah Joseph of Mansfield and Mr Nathan Appo of Mount Gravatt have played integral roles in supporting local youth and encouraging their involvement in both the community and worthwhile projects. Awarded ‘Young Citizens of the Year’, they too are deserving of thanks for their commitment to their peers and their local community.
Order! In accordance with standing order 193, the time for members’ statements has concluded.
Debate resumed from 7 December 2006, on motion by Mr Ruddock:
That this bill be now read a second time.
The Classification (Publications, Films and Computer Games) Amendment Bill 2006 amends three pieces of legislation—the Classification (Publications, Films and Computer Games) Act 1995, the Broadcasting Services Act 1992 and the Freedom of Information Act 1982. The bill integrates the Office of Film and Literature Classification into the Attorney-General’s Department and, in so doing, amends its functions to cover multimedia technological developments.
There is a clear argument for updating the law in order to properly classify multimedia content, such as the extra features that are now frequently included in the DVD release of movies and television programs. Things like out-takes, games, advertisements, behind-the-scenes specials and additional material left out of the original movie or television program for good reason also ought to be properly classified. The updated guidance offers better protection for families by providing comprehensive advice to parents on content. Labor supports this.
The integration of the Office of Film and Literature Classification into the Attorney-General’s Department provides greater control of its functions to the Attorney-General. The bill transfers from the board director to the Attorney-General the power to determine markings for each type of classification and the manner in which they are to be displayed. I ought to make the general point when we are having this kind of discussion that, however much we might deplore some of the content which shows up in the modern era, publications, computer games and video material evermore accessible via the internet cannot be hidden. The ideas they contain cannot be hidden and the only ultimately effective way to overcome offensive or destructive ideas is to present and espouse virtuous ideas, and this is what past censorship efforts have taught us. Former US President John F Kennedy said about America:
We are not afraid to entrust the American people with unpleasant facts, foreign ideas, alien philosophies and competitive values. For a nation that is afraid to let its people judge the truth and falsehood in an open market is a nation that is afraid of its people.
I think he was pretty close to the mark.
The explanatory memorandum tells us that the classification publications legislation amends three acts and that it has four schedules. Schedule 1 facilitates the integration of the Office of Film and Literature Classification into the Attorney-General’s Department; removes the director’s financial powers and responsibilities for the administration of the Office of Film and Literature Classification; replaces references to that agency in legislation with more appropriate references; and provides for Australian Public Service staff from the Attorney-General’s Department to support the Classification Board and the Classification Review Board in executing their statutory functions. So, rather than having the director appointing consultants, attorneys-general will be providing APS staff and the financial accounts will be kept by the Attorney-General’s Department, which will be assuming responsibility for the financial administration.
Schedule 2 makes amendments to reinforce the independence of the Classification Board and the Classification Review Board. It provides separate statutory powers to the convener of the review board to manage the administrative functions of the review board independently of the board. It confines the existing powers of the director to matters associated with the board and gives new powers to the convener for matters associated with the review board. These include obtaining copies of material to be reviewed, considering applications for the waiver of fees and issuing classification certificates. Consistent with ministerial responsibility, the bill also transfers to the minister administering the act, the Attorney-General, the power to determine fee waiver principles in consultation with state and territory censorship ministers. As part of that schedule, we will remove the anomaly whereby the Classification Review Board is now reliant on the Director of the Classification Board for some of its administrative functions. This schedule also remedies some technical errors.
Schedule 3 makes amendments to improve the operation of the national classification scheme and respond to a very rapidly changing technological environment for entertainment media. It provides that additions to already classified films of descriptions or translation, such as subtitling, captioning or navigation functions such as interactive menus, are not considered modifications necessitating reclassification.
The bill also sets up an additional content assessor scheme which will recommend to the board the classification and consumer advice for additional content which is released with an already classified or exempt film. Quality assurance processes are included in the scheme to ensure the ongoing integrity of the classification process. Of course, it is the case that we are getting these additions to already classified films in a changing technological environment, so the government takes the view—I think not unreasonably—that things like navigation functions should not be considered modifications which require reclassification and, where we have additional content being released with an already classified film, we will have this assessor scheme for the additional content. I think that is a reasonable modifying measure and there are safeguards which have been put in place to protect the integrity of the classification scheme as a whole.
The final schedule, schedule 4, makes a number of miscellaneous minor amendments to repeal expired or redundant provisions. The bill also transfers from the director of the board to the minister the power to determine markings to be displayed about classified material. That power is to be exercised by the minister in consultation with state and territory ministers. The bill will not have any financial impact, or it is not expected there will be any significant financial impact. It will not result in any change to the net asset position for the Commonwealth. It relates pretty much exclusively to changes to administrative processes. So the opposition does not regard this as a controversial piece of legislation and will not be opposing it.
I am glad to speak to the Classification (Publications, Films and Computer Games) Amendment Bill 2006. Even though it is non-controversial, it deals with a major area of future concern. I have no difficulty whatsoever with it. As the shadow minister has indicated, Labor does not have difficulty with the change of the classification function in this instance, covered by this bill, from the board to the Attorney-General’s office. In schedules 1, 2 and 4 there are a series of what I would see as relatively minor amendments, but I note in passing that in schedule 2 there is a reinforcement of the independence of the Classification Board and the Classification Review Board. What they are intending to do in schedule 1 is to try to get a better integration of the Office of Film and Literature Classification into the Attorney-General’s Department.
In schedules 1 and 2 it is a question of better defining who controls this mechanism. The decision has been taken to bring that into the Attorney-General’s office. I have no problem with that whatsoever. I think it is a sensible thing that schedule 2 underlines the independence of the Classification Board and the Classification Review Board.
What interests me in particular is the whole question of schedule 3 because it involves a series of changes in consultation with the industry. They are changes to attempt to get flexibility and certainty in the area of new media and in the way in which material is classified, in order to be able to pin down whether or not something is a new work and to pin down the definition of a film. The reason for the change is that we have seen already such dramatic changes in the way in which content is distributed Australia-wide and worldwide, and this bill attempts to deal with distribution on DVD.
In the old days, as you would remember, Mr Deputy Speaker—as I and others in the chamber would—we just did not have the problems that we are faced with currently. For example, we have recently had produced up to 18 minutes of our first real feature film, The Story of the Kelly Gang. In the old days, there were not many places to show it. There was the local cinema, as the cinema complexes were built through the 1910s and then in the 1920s and 1930s, and the outback country shows, which were often held on a Sunday night in open-air tents. In those contexts, it was relatively easy to control not just the classification of the material but also the distribution of it. It was pretty simple and straightforward. The drama in those days was the content of a film and whether or not it was deemed to be appropriate in terms of distribution to a wide audience.
Those questions are still with us. They are still with us in this bill and they are still with us in terms of classification. But there is a particular set of problems that this bill tries to grapple with; that is, there is more than one method of distribution. Even after a work has been through classification—and these schedules tie it down quite nicely—it does not have just one element of distribution. It will be played at the flicks, where it will get a relatively short period of time, unless it is a big blockbuster. Then there will be a later distribution—some years later, in some cases—which will be fairly narrow, through the broadcast medium on TV. There will be a bit of retro if the film has some impact. There are also now two other areas because we now have very quick distribution through DVD. The reason for that is not just piracy and the fact that stuff can be knocked off very quickly. The industry itself, after taking a very long look at this, said, ‘What we have to do is not only release, where we will get a certain amount of money out of it, but also follow that almost conjointly—in a lot of cases it is conjointly—with DVD distribution.’ There are two different markets here.
This creates two different problems. If you take a film or a work and go through all the business of classifying it, all the drama of deciding whether it is too violent or whether there are problems with classification because of sex and so on, and you get that work all bottled up and put down on a DVD, what happens when they put extra bits into it? That is fundamentally what schedule 3 is about, because the extra bits can be extraordinarily different or they can be pretty similar. Now, what are you going to do with it? Just because you put it onto a new medium, is it a new work? Is it a new film? The answer to that is, of course, no. This is quite ostensibly established here. If you wanted to be pedantic you could say, ‘Oh but it’s a new medium.’ People used to think of that in that way: it is a new medium therefore it is something different. To me, the medium that you use to distribute it is relatively unimportant. It is the content itself that they are attempting to pin down here.
Why is there a particular problem? Now, instead of one form of a work or a film or however you want to depict it, there are multiple forms. We now have director’s cuts, extended versions and so on. The Good Shepherdwhich I picked as part of my research today in reading this morning’s papers—is only the second film that has been produced by one of the world’s great actors, who acted in eight of Martin Scorsese’s very violent films. That is Robert De Niro, who has made two films. This film one is about the CIA between 1939 and 1961, and it is about the human impact of people being involved in things. In terms of classification, there would be no problem in terms of violence or difficulty for this particular film, because most of that has been cut out in the released version at the cinemas. But in the extended version there are a series of violent scenes which the Classification Board would have to come to terms with and make a determination about. So you have a difference between what is put out in the cinemas and what is put out on DVDs in these extended versions.
Instead of it being seen as a new work, schedule 3 properly sees it as part of the original film or the original work, as it is not going to be completely done over again. But they have to look at those elements and ask, ‘Given that this is a material part of the work, does it still fall within those classifications?’
What is more important—and this is one of the difficulties in dealing with the minutiae of all this—is that they can load just about anything you can imagine into an extended DVD presentation. It is not just the original work itself; it is all the offshoot stuff. I say in passing that the most boring stuff you could probably ever come across, having watched a film, is to then go back and watch the film again with the director, and his sidekick quite often, commenting on what the film is about. One could ask: ‘Didn’t you get it the first time? Weren’t they good enough in terms of telling you what the film was about?’ I do not mind them having a series of shorts where they explain what they think the film is about, but to do a complete rerun is just a waste of space in this area.
There are other particular things dealt with in the bill that are extremely important, not just in terms of the classification question but also in terms of just what Australian industry’s role is in this regard, and how it should be properly dealt with. I commend the people who have put this work together and the Attorney on the work done here in terms of how you deal with these different elements, because it is important. There are distinctions between what the film or the work is and what is additional content—what is germane to that—and there is even the question of having a fictional town and adding stuff in relation to that. But what is not defined—and it is important that it is clearly defined, if we look at section 93—what is not additional content, what has to be looked at separately are television programs, as there could be spin-offs from those, and computer games that are produced to be played independently.
This a crucial area because one of the significant problems in the classification area is that you could have a film produced that can pass all of the tests and classifications, and that is fine, but the level of violence in computer games is extraordinary. This is an extremely significant industry for Australia because we are substantial players within it, but one of its critical problems is the level of violence. The whole question of the impact of that on young people in particular who are playing those games in an absorbed manner is fundamental.
People could take the easy way out and say: ‘Well, here’s a film and here’s all the stuff that is additional content; it is just associated with it. The computer games are just part of that whole generic bit.’ That would be the easy way out but it is the wrong way out. I commend the Attorney on the approach that is taken here because they need their own independent classification.
The gaming area which makes games that are associated with film content is not only extraordinarily expensive but also extraordinarily profitable. It is bigger, in terms of what Australia produces, the money that comes back into Australia and its importance, than our film industry. This was not the case some years ago, but it was becoming the case when I was deputy chair of our communications committee and we looked into the current and future problems involved in making games for Australia and the world, and at how we could best assist in that regard. There were two fundamental problems. One was the level of violence and the other was the fact that the necessary support for this industry simply was not great enough. But you need to understand just how significant it is and just how dynamic this area is.
The last area I want to speak about is something that the bill does not fully deal with but which it predicts. Again, this is a sensible approach to take. You really do need to be flexible in this area. As is often the case with whatever area you are looking at, people take what exists at a particular point in time and project it into the future. You cannot do that in multimedia, you cannot do it in IT, and you cannot do it in terms of distribution of content in a digital form. The fundamental thing that we are going to have to grapple with will be how we are affected by the fact that this is now such a worldwide issue.
The rise of Apple as a distributor of content through iTunes and its dominance in the music area is well known and understood. What is not as readily appreciated is that Apple has generated an immense revolution in the downloading of video content. It has done that with some material that it has locked up in agreements. On 10 January at the Moscone Centre in California, Apple made its biggest announcement for the year. It has partnered with Yahoo and Google. It has done other significant things in this area, including with Paramount Pictures and its movies. Apple is providing television shows directly for download at relatively low cost.
The impact in this area will be extremely significant. If your classification systems are fine, that is okay. However, alongside that is the whole phenomenon of YouTube—which has recently been bought—distributing material on the internet. Despite the New South Wales Leader of the Opposition thinking he is the first one to use YouTube to do things, Kevin Rudd and other people have already used it. This is a mechanism whereby people can put very short films onto the net, but already there have been significant problems with inappropriate material appearing. An international organisation runs it, and so it is beyond our direct reach. This will provide for the Attorney, the government and future governments a significant problem because they will need to go beyond our jurisdiction to an international set of arrangements, agreements or understandings to get our enforcement in the classification area extended to that area. The damage that can be done by uncontrolled direct download is significant in terms of not only piracy but all of the elements that are properly part of the Classification Board and the Classification Review Board.
In closing, I commend the Attorney and the department for the very efficient work that has been done in relation to this bill. I have no qualms whatsoever about the integration of the Office of Film and Literature Classification into his department. I am particularly pleased that on foot is an appreciation of not only the dynamic nature of modern multimedia and that the whole game has changed but also the need to make flexible, sound and sensible responses in the future to what is a very dynamic area.
in reply—I thank the member for Wills, who spoke before, and the member for Blaxland. I particularly commend the member for Blaxland for his very thoughtful speech. I was listening very closely to it and I was very conscious, as I will demonstrate when I respond, of the points that he was making. The Classification (Publications, Films and Computer Games) Amendment Bill 2006 has two important purposes: to implement the administrative arrangements consistent with our accountability framework and to make changes to classification practices to recognise the changes in technology.
I will speak briefly about the administrative changes. These changes simply ensure that the Classification Board and the Classification Review Board remain the bodies that determine classification issues. They are absolutely independent, and their functions will remain unchanged. But the role of receiving advice and implementing decisions are not matters that ought to be in the hands of an independent agency, otherwise you would only need to replicate that within a department to ensure that you were appropriately supported. I came to a view, particularly after the Commonwealth had reviewed the issues of functions of boards and their primary responsibilities in a broader context, that we should make the transfer of the support function and put the federal minister or the national minister in the same position that, I might say, all of the other partner ministers are in where they receive advice from their department on issues relating to the administration of the classification scheme. The bill does transfer the power to make legislative instruments from the board to the minister. That is consistent with the sorts of arrangements about which I am speaking, but given the cooperative nature of the scheme, these powers will be exercised in consultation with state and territory ministers.
We are responsive to the needs of industry in the changing technological environment. The bill contains amendments to respond to those changes, particularly in the context of the widespread use of DVDs and even higher capacity disks coming onto the market. These were not envisaged when the bill or the act was originally drafted. The act contains safeguards to prevent modifications to films after classification. These remain, but industry often add descriptors or translations—they subtitle, they caption, they dub. There are a whole lot of audio descriptions and navigation functions, there are interactive menus and currently this means that films must be resubmitted. Descriptions, translations and menu functions to facilitate navigation generally do not provide new content as such. Requiring new classification is very disruptive.
The bill provides for an additional content assessment scheme based upon the current approach to classification of games. The scheme will facilitate the practice of value-adding when it is an already classified film, by including new material such as interviews, bloopers and the making of features.
The member for Blaxland spoke very eruditely about these matters from his expertise and knowledge of film. I must say I do not have that same experience. I do not know whether that is good or bad for a minister who is dealing with classification issues. Perhaps it means I have no conflicts of interest from the basis of views that I form, but I did see one DVD at home. I think it was on the day that shook the world, which was in relation to the Cuban missile crisis. I can see that members have actually seen this so I will have to be careful what I say. I did see the director’s cuts in relation to an F111 flying scene, viewing the deployment of these missiles. You saw the various overflights and they took you through the reasons why particular shots did not give you the appropriate insight and why the one that was used was more appropriate. I thought it was useful, interesting information. It was not likely to lead to any different classification. Yet you need to be able to deal with those matters in a sensible way. Obviously if people are using that to introduce material that would not be permitted of classification generally and would have to be restricted, there is a basis upon which that can be oversighted, but where it is not going to lead to significant changes, one should not have to go through the whole classification task again. Those measures seemed eminently sensible to me and the bill achieves that purpose.
The bill also contains several other minor amendments relating to technology and I welcome the support that has been foreshadowed by the shadow attorney and the member for Blaxland. I might say in relation to the member for Blaxland’s final comments that we are very conscious of these issues relating to the internet. I thought you raised them very sensitively and well. There is a review being undertaken that involves me and the Minister for Communications, Information Technology and the Arts as to how we can deal with these issues. They are complex and while it might be nice to have a harmonised system of classification for the world, I think we are a long way off that. It may well be of course that community standards in different societies differ in any event. It would be very difficult to put together that sort of arrangement. The extent to which people can transmit information that is downloaded here, which would normally require classification but avoids that, is something that we are very conscious of. That review is still being pursued. I thank honourable members for their support for the bill and I look forward to a speedy passage in another place.
Question agreed to.
Bill read a second time.
Ordered that the bill be reported to the House without amendment.
Debate resumed from 7 December 2006, on motion by Mr Ruddock:
That this bill be now read a second time.
I rise today to speak on the Veterans’ Affairs Legislation Amendment (Statements of Principles and Other Measures) Bill 2006. Labor supports the bill. The bill contains a number of changes that will help improve administrative procedures within the Department of Veterans’ Affairs, focusing particularly on the procedures of the Repatriation Medical Authority in relation to their review of statements of principles. This will be a positive aspect for veterans who seek to have decisions reviewed, as it should reduce the time taken for the review. The bill also corrects a technical fault in the Veterans’ Entitlements Act that did not authorise use of funds from the consolidated revenue fund to pay for certain benefits and allowances. It also corrects a number of minor anomalies in the Military Rehabilitation and Compensation Act 2004. These minor corrections, as a whole, will be positive for the veteran community. I would now like to address these changes before I focus on some problems that I feel the government could have addressed with this bill.
The first schedule of the bill makes amendments to the Veterans’ Entitlements Act 1986 to provide for the review of a single factor or multiple factors within a statement of principles by the Repatriation Medical Authority rather than the entire contents of the SOP. The Repatriation Medical Authority is the body of medical and scientific experts that formulate statements of principles. These principles are used in determining issues of medical causation for claims for compensation and treatment under VEA. Currently, the VEA allows for the Repatriation Commission, veterans, their dependants or relevant organisations to request the RMA to review a SOP. Upon this request, the RMA must review the medical and scientific evidence in relation to the entire SOP, even when the request for review only concerns one or several factors. The amendments in this schedule will allow for the RMA to only review the relevant factors in these cases. Hopefully these amendments will therefore lead to a decrease in the time spent reviewing SOPs by the RMA. These amendments will also apply to the Specialist Medical Review Council, which is the appeal body to the RMA.
Schedule 2 of the bill makes a slightly technical amendment to the VEA which will provide authorisation for the appropriation of funds from the consolidated revenue fund for the payment of all benefits and allowances. The ANAO Audit report No. 15 of 2006-07 entitled Audits of the financial statements of Australian government entities for the period ended 30 June 2006 noted that:
During the 2005-06 financial year, DVA obtained legal advice that the services provided for British pensioners and other Dominion veterans are not covered by appropriation provided under Section 199 of the Veterans’ Entitlements Act 1996 (VEA), as British, Commonwealth and Allied (BCAL) veterans are not veterans for the purposes of the VEA. Consequently, these payments represent a contravention of section 83 of the Constitution and section 48 of the Financial Management and Accountability Act 1997 (FMA).
As DVA has breached section 83 of the Constitution in making payments without valid appropriation support, a modified audit opinion with other statutory matters was issued outlining the background of this breach and the action in hand by DVA to regularise these payments without appropriation support.
This amendment will help to address this small technical problem.
The amendments contained within schedule 3 will clarify existing policy in relation to income stream rules. They also include consequential amendments, in response to changes in the family law, to allow the means test to be applied to certain non-superannuation annuities that are split pursuant to a divorce property settlement.
Schedule 4 of the bill makes a number of amendments to the Military Rehabilitation and Compensation Act 2004. Under the current act, the Repatriation Commission cannot accept liability for any injury that was intentionally self-inflicted. This amendment expands the definition of ‘injury’ to also include disease. This was the case under the Safety, Rehabilitation and Compensation Act that covered these areas, and it is a minor technical amendment.
The bill also includes amendments that will provide for service personnel incapacitated by injury or disease while they are undergoing their initial training. These amendments will provide that all members and former members who are injured or contract a disease while undergoing initial training and who did not attain their final Defence Force income will be paid at the same progression rate as his or her classmates during the training period until completion of that training.
The member or former member will then be deemed to have graduated from the initial training at the same time as his or her classmates. Once the person is deemed to have graduated, their normal earnings will be calculated against the rank and employment category that the relevant service chief advises that the person would have held on completion of the initial training program. This is a positive change that corrects a current inequity. Labor fully supports this change.
The payment of a special rate disability pension under the Military Rehabilitation and Compensation Act currently ceases at age 65 or after 104 weeks for people aged 63 or over. This amendment will remove those limits. The government has stated in its explanatory memorandum that this amendment was warranted because it was always intended that payment of the SRDP would be for life, consistent with payments of the special rate pension under the VEA. Labor fully supports this amendment. However, I do question whether the government really did always intend the payment to be for life or if this is more the result of effective lobbying by the ex-service community. Whatever the reason, this amendment is very welcome.
The amendments to section 327 provide that a determination by the commission concerning the appropriate treatment path is only required where the person is entitled to treatment under the Military Rehabilitation and Compensation Act and no determination is required if the person meets the criteria for treatment for all conditions. These are minor technical amendments.
Finally, the bill allows for the payment of travel expenses to the Veterans Review Board for those under the Military Rehabilitation and Compensation Act. This brings that act into line with the VEA. I congratulate the government on this amendment which, again, I believe has come about after lobbying from the veteran community.
As a whole, this bill contains a series of minor amendments. However, some of these amendments will make a real difference for members of the veteran and ex-service community. Labor particularly welcomes the removal of the age 65 limit for the payment of the special rate disability pension, provision of travel expenses to attend hearings of the Veterans Review Board in relation to appeals under the MRCA, and the reforms to incapacity payments for those members injured in their initial training. I therefore congratulate the government and the Minister for Veterans’ Affairs on these amendments.
However, as I foreshadowed earlier, it is disappointing that a bill that aims to improve administrative procedures does not do more to address some current problems within the Department of Veterans’ Affairs. I am primarily concerned with two aspects: firstly, the time taken to process claims; and, secondly, the large claims backlog that currently exists within the department.
Firstly, with regard to the time taken to address claims, the annual report of the Department of Veterans’ Affairs revealed a dramatic increase in the time it takes to process veterans’ claims, particularly those relating to injury. The time taken to process a primary compensation claim under the Veterans’ Entitlements Act is reported as 106 days, while the target is 75 days. This is a 40 per cent increase over target time. The mean time taken to process primary injury claims under the Safety, Rehabilitation and Compensation Act ballooned from 122 days in 2004-05 to 181 days in 2005-06. That is a 48 per cent increase since 2004-05. The mean time taken to process primary injury claims under the Military Rehabilitation and Compensation Act has blown out from 90 days to 146 days. That is up 62 per cent since 2004-05. Finally, the time taken to process new impairment claims under the Military Rehabilitation and Compensation Act has dramatically ballooned from 26 days to 130 days. That is up 400 per cent since 2004-05.
Secondly, with regard to the large backlog of claims that exists within the department, in an answer to questions at the last estimates round, the Department of Veterans’ Affairs revealed that 4,570 claims have exceeded the average time taken to process a claim. The backlog included 2,583 claims for disability pension, 956 claims for compensation under the Safety, Rehabilitation and Compensation Act and 545 claims for compensation under the Military Rehabilitation and Compensation Act. This is completely unacceptable.
What worries me is that, at the same time claims processing times have blown out and a backlog continues to grow, the department has revealed that it has been forced over the last two financial years to implement a net national reduction of 12.5 per cent in staff allocated to compensation claims processing under the Veterans’ Entitlements Act in order to meet the government’s budget allocations. There was also a reduction in resourcing provided to these areas.
The minister should not be cutting staff or resources to his department when they are failing to meet their current obligations. I understand that the demography of the veteran population is changing and in time that will mean that less money will be required to run the department. However, if the minister thinks it is appropriate to cut staff and resources at a time when some claims have blown out in processing time by up to 400 per cent and there is a backlog of 4,570 claims, he is sorely mistaken. Until the minister can get the department’s workload under control there should be no further cuts.
The problem with this area is that you are dealing with people who often have severe mental or physical issues. They are not well and are at their most vulnerable. This is a very difficult time for a veteran. To be in a situation where the time lines are blowing out adds to the pressure on the veteran. We are talking about people who served our country, and they deserve much better service than they are currently getting from the Howard government. These problems exist in more than the statistics and figures that I have recited today. Hardly a week goes by when my office does not hear of a story in regard to the hardships that veterans are forced to face while they wait for the bureaucracy to process their claims. Often these veterans are seriously inconvenienced financially and in the more tragic circumstances some see a worsening of their condition as their stress grows.
One of these cases that my office came across concerned a veteran who had to wait for over a year for a response to a letter he had written asking for a review of a determination made by the department. Sadly, when the response finally came it was to tell him that his claim had been passed on to another part of the department. I can only imagine the stress and inconvenience this has caused the person in question and his family. I have already informed the minister that Labor will be pursuing this issue at estimates.
With regard to the blow-outs in processing time and the massive backlogs, I would urge the minister to go further than these few minor administrative changes and begin to address the problems in his department relating to claims processing. As to the amendments and changes that are included under this bill, Labor fully supports them and I wish them a speedy passage through the other place.
Allow me to take this opportunity, Mr Deputy Speaker Secker, to congratulate you on your elevation to the position of Deputy Speaker and to be able to address the chamber during your maiden appearance as Deputy Speaker in the Main Committee. Your elevation of course is a tribute to your experience in and contribution to the parliament, and I know that the rulings we will get from you will be entirely straight down the line and fair, as one would expect from such an open-minded individual who will very carefully observe the standing orders of the parliament.
I am pleased to participate in the discussion on the Veterans’ Affairs Legislation Amendment (Statements of Principles and Other Measures) Bill 2006. I listened very carefully to the honourable member who just concluded his contribution, the shadow minister, and I certainly would not support any delay in processing of applications for veterans. I think that, given the stage of life that many of our veterans are currently at, they are entitled to an expeditious resolution of a claim that may be made under the veterans’ entitlements legislation. I would be concerned if that were not happening. I would hope that the Minister for Veterans’ Affairs in his summing up would be able to advise the parliament what is in fact the situation because I must say that in my own office I have not had the experience that the member opposite has had with respect to delays in dealing with applications for entitlements by veterans. I would have thought that if there was an endemic problem I would have been aware of it, given the fact that in my electorate of Fisher, based on the Sunshine Coast, we have some 10,000 veterans and I regularly interact with the veteran community.
While I am not saying that there are not complaints about the Department of Veterans’ Affairs, I have to say that our local office seems to be well regarded by the veteran community and appears to be delivering on what needs to be done. Therefore, I was concerned to hear the comments made by the honourable member who spoke previously, and I want to state to the House that, while we do get complaints in relation to veterans’ entitlements, I am certainly not aware of what appears to be, according to the honourable member, an endemic problem with the processing of applications resulting in quite extraordinary and unacceptable delays. I think it should be a bipartisan matter in this parliament that we all recognise that members of our veteran community are entitled to the greatest recognition that a grateful society is able to afford. After all, the ex-service men and women of Australia, particularly the returned service men and women, are people who risked everything in times of conflict to ensure that as a nation we continue to enjoy the freedom, the stability and way of life that we have which has made us the envy of people around the world.
I am pleased to be able to support this legislation, which introduces a number of changes to the various pieces of legislation that govern the allocation and distribution of pensions to returned service men and women. These changes are regarded as relatively minor. I am pleased that they enjoy the support of the opposition in addition to the support of the government. Although these changes are minor, they will help to streamline the administration of government pensions for veterans, they will correct anomalies and oversights in the legislation and also clarify some of the more complicated elements of the legislation.
Our veterans are held in high regard for their service to this country and their willingness to give up so much to secure our wonderful lifestyle. As the member for an area with 10,000 veterans, as one would imagine, I do get many opportunities to interact with the ex-service community. Only last Saturday, in fact, I attended the 76th anniversary reunion luncheon of the RSL sub-branch at Maleny in the Sunshine Coast hinterland. That was a wonderful event, with about 170 veterans and their wives or partners—or husbands as the case may be—present, representing a whole range of sub-branches of the Returned and Services League right across the Sunshine Coast area. It is a wonderful chance for people to get together to exchange experiences, to talk about problems and to, in effect, reinforce the wonderful values that the Returned and Services League has represented during the very many years of its existence.
I would like to commend Captain Paul Gilmore-Walsh and his wife, Mrs Helen Gilmore-Walsh, for the role that they have played in the RSL on the Sunshine Coast. In particular, I refer to Captain Gilmore-Walsh’s role in setting up the Sunshine Coast district of the RSL. While not all sub-branches on the Sunshine Coast have as yet elected to join that district, some having chosen to remain part of the south-eastern district of the RSL, there is a wonderful sense of fellowship. Captain Paul Gilmore-Walsh was the inaugural president of the Sunshine Coast district of the RSL and he has now progressed to become a state vice-president of the RSL. Mrs Helen Gilmore-Walsh is the president of the local Maleny RSL sub-branch. They, along with all of the people they work with, make the lives of our veterans so much easier. They make sure that our community appreciates how valued they are. Of course, they also help to ensure that the entire community holds veterans up as the role models that they are, particularly for young Australians. This brings me to the fact that the Maleny naval cadets were also present at that event and they were recognised by their seniors.
This legislation is non-controversial. Even the shadow minister, who spoke on behalf of the opposition, could not find it in his heart to criticise the legislation, except to say, as is his wont, that the legislation perhaps did not go as far as he would like it to go. This is important legislation. I am pleased that it is being supported by the opposition. I am not suggesting that it will fix every problem that members of the ex-service community have, but it certainly will improve the lot of our veterans, and it is legislation that I am particularly pleased to be able to commend to the House.
The Veterans’ Affairs Legislation Amendment (Statements of Principles and Other Measures) Bill 2006 contains a number of changes that will help improve administrative procedures within the Department of Veterans’ Affairs focusing particularly on the procedures of the RMA, the Repatriation Medical Authority, in relation to their review of statements of principles. Statements of principles outline factors considered to be the causes of certain diseases, illnesses and injuries—this is according to the schedule that we are dealing with. SOPs are used to determine issues of causation in relation to claims for the acceptance of injury, disease or death as being service related. They are based on specific evidence derived from medical literature and other research findings. Importantly, the SOPs identify factors that must exist to cause a particular disease, injury or death.
With those things in mind, I want to turn to a letter I have received from the Vietnam Veterans Federation where they talk about the Vietnam veterans’ health study and they say ‘results even worse than expected’. This was released on 5 September 2006. There were three studies on the death rates and cancer incidence amongst Vietnam veterans. The first was the third Australian Vietnam Veteran Mortality Study 2005, the second was the Cancer Incidence in Australian Vietnam Veterans Study 2005 and the third was the Australian National Service Vietnam Veterans: Mortality and Cancer Incidence of 2005. The Vietnam Veterans Federation say this—and I want to quote them:
In the first two studies, the mortality (death rate) and cancer incidence among Vietnam veterans was compared to the death rate and cancer incidence of the same aged male Australian population.
But just how useful are comparisons between Vietnam veterans and the general population? It must be remembered that of those called up for National Service, 50% were rejected on medical or psychological grounds. Those applying to enlist in the regular forces had to satisfy similar high medical and psychological standards. This meant that the health of the group who served in Vietnam was of a very high order indeed, much higher than the same aged male Australian population. All things being equal, Vietnam veterans would now be expected to have a markedly lower death rate and less cancer than their equivalents in the general community. So comparing Vietnam veterans’ death rate and cancer incidence with the general community will lead to some very misleading results; results that hide the real damage that fighting the war may have done to veterans’ health.
I think that these are things that the RMA in considering SOPs must be aware of. The Vietnam Veterans Federation goes on to say this:
The third study compared the death rate and cancer incidence among National Servicemen who served in Vietnam with those National Servicemen who stayed in Australia. These two groups, on enlistment, enjoyed exactly the same standard of health. All things being equal, these two groups would now continue to exhibit a similar standard of health. But, of course, all things were not equal; one group served in Vietnam and the other did not. And this study, unlike the other two, is able to show just what a difference that service in Vietnam has made to the health of those who fought the war there.
In other words, the Australian National Service Vietnam Veterans: Mortality and Cancer Incidence 2005 is the only one of the three studies whose results do not hide the damage done to Vietnam veterans by their war service
And that damage is substantial. The death rate and cancer incidence for National Service Vietnam veterans are alarmingly worse than those of National Servicemen who did not serve in Vietnam.
Here are the key findings of the Australian National Service Vietnam Veterans: Mortality and Cancer Incidence 2005:
1. National Service veterans experienced a 23 5 higher death rate than those National Servicemen who did not serve in Vietnam.
2. Specific causes of death that were significantly higher among National Service Vietnam veterans include death from digestive system diseases, lung and pancreatic cancer. Notably there was a higher rate of suicide and motor vehicle accidents (the latter often a matter of suicide).
3. National Service Vietnam veterans had a significant 14 5 elevation in the rate of cancer, especially cancer of the lung, head, neck and pancreas.
4. There were no causes of death analysed for which National Service Vietnam veterans had a statistically significant lower death rate than National Servicemen who did not serve in Vietnam.
As we have said, this study clearly shows that fighting the war in Vietnam had a dramatically adverse effect on the health of those who fought it. The federation goes on to say:
And this, of course, is the real issue. How badly did fighting the war in Vietnam effect the health of those who fought it? What stunting of potential health, longevity, prosperity and happiness did the war cause its participants and their families. The National Service study shows just how much potential has sadly been lost. And one can imagine what anxiety and grief this ill-health has caused the families. Of course, these are the issues the government wants to avoid because it is the loss of this potential and the accompanying family grief that so strongly begs compensating.
It may have been for this reason that the Minister, in his television interviews and press release, started off with the reassuring news that the death rate of Vietnam veterans was even a bit lower than the general population (without adding that, but for the war, it would be very much lower) and seemed delighted that the suicide rate of Vietnam veterans is much the same as the general population (without adding that, but for the war, it would be dramatically lower).
Admittedly, the Minister mentioned that cancer rates amongst Vietnam veterans were higher than the general community, but failed to say how astonishing this was considering they would be expected, but for the war, to be lower.
But the Minister certainly didn’t lead his press release or his television interviews with the most important and revealing finding of all three studies; the startling news that the death rate of National Service Vietnam veterans was 23 % higher than that of National Servicemen who stayed in Australia. Indeed, the Minister did not even mention this statistic.
In other words, the Minister’s statements on television and in his press release were misleading, leaving the uninformed public believing that things weren’t too bad really.
That the Minister and the government would avoid the real issue, revealed so dramatically by the National Service study, does not surprise us. They have avoided and continue to avoid facing a number of Repatriation injustices that scream for redress.
It is interesting that the previous government speaker got up and said, ‘Well, everything is fine within the veteran community. The opposition could not find anything to criticise the government about in this bill.’ There are things in this bill that we support. The shadow minister for veterans’ affairs, Alan Griffin, is doing a fabulous job, I reckon, around the place. He is being widely recognised for the work that he is doing and for the fact that he is out there talking to and, above all, listening to the veteran community. That is important. It is just a bit bland for the government spokesperson to get up and say, ‘Things are pretty good within the veteran community.’
There are a number of issues that, as a nation, we need to address. The shadow minister, for instance, has been giving coverage of late to the long delays that are occurring with the processing of claims. This in itself is a major problem and it is a major problem that the government ought to be able to fix. Surely it is a matter of allocating the appropriate resources to ensure that veterans and their families do not face these undue delays in having their claims processed. There is a backlog; it needs to be shifted.
The other thing that the member who spoke previously referred to—and this is something that the government are good at quoting—was the high respect they have for people who serve in the ADF and people who have served in the ADF. I suspect that they are quite genuine in their views and in their admiration, but you have to go a bit deeper than that. As this survey has shown, national service veterans past and present who served in Vietnam experience a 23 per cent higher death rate than those national servicemen who did not. This is an appalling statistic. We as a nation, including the government, must bend over backwards to do what we can to rectify those problems, to make sure that the RMA is doing its job and to make sure that the SOPs are correct. We also need to make sure that the resources that are required are in place to ensure that when veterans, including national servicemen, get crook, when they have health issues—mental health or stress or whatever—these issues are dealt with without delay instead of seeing this incredible backlog, which is detrimental to the veteran community generally. Having said those things, the opposition supports the bill.
At the outset can I just say I am delighted as it is the first time I have been able to appear before you, Mr Deputy Speaker Secker, and I thought I would get in early in case there is a reason to rebuke me at a later point in my contribution.
I say to the member for Cowan that we on this side greatly respect the points he has just made. I am no longer a member of the executive, so I can be quite open and say I agree with the sentiment he has expressed about the ambition to make sure that those who need assistance get it, that there is a timely approach to the processing of claims and that they are listened to. But I would hesitate automatically, and not just because he is in the chamber, because my good friend the Minister for Veterans’ Affairs is setting a very high standard of interaction with our veteran community. He is a demonstration of this government’s commitment to listening to the veteran community and working with them to try to facilitate the best possible outcome in a personal sense for each and every one of our veterans.
I listened to what the member for Cowan said and he essentially could not disagree with the proposition I have just put to the chamber—that is, we have a very fine Minister for Veterans’ Affairs, and if the shadow minister for veterans’ affairs is doing a good job it is only because he is trying to reach the standard set by the member for Dunkley.
The government is working to streamline the system and to put a little more sense of understanding, and systemic support for that understanding, of individual needs through this bill, which is being agreed to by the opposition. To work with the RSL and to work with welfare officers, to work with those who work at the grassroots of our local community is very much at the heart of it. The key thing to remember is that government does so much. The system of veterans’ affairs—repatriation—that we have in this country is agreed to be the world’s best practice. I, for one, as a private member or as a member of the Howard government executive, have never been afraid to stand very strongly in favour of improving what is already a damn good system.
Having talked to local RSLs and to welfare officers at the various centres of great excellence in and around my electorate of Moreton—the people who work for the south-eastern districts, at Greenslopes hospital, and people who have worked with veterans from Vietnam and other conflicts—I can see just how far we have come from those early days post World War I when people like my great-grandfather came back. He fought in the battle of Polygon Wood in September 1917, an enormous shemozzle of a battle on the Western Front. He suffered trench fever; psychologically he was enormously damaged. Charlie McKinnon was his name. He served again in the Second World War, but I make the point that he was one of those veterans who came back completely traumatised by all that had happened to him, completely unsupported by the government of the day, until things such as the repatriation legislation, which we are attempting to amend today, came into effect and until the RSL commenced its work on behalf of veterans. Until the RSL and other organisations gave voice to their concerns, my great-grandfather was completely on his own. In fact, he ended up destroying his medals from World War I by chopping them up with an axe. I suspect that he was a committer of family violence as a result of the trauma and torment that he suffered during his service on behalf of Australia in the First World War. So I do understand, without having lived through it myself, fortunately.
When I was a kid and the Vietnam War was declared over, I breathed a sigh of relief because I was a few years too young to serve. I have an enormous personal understanding based on what my own grandfather, mother and others have told me about what went on in my family. I have an understanding about what the member for Cowan and others have said about the torment and hurt to people who have served. That is why this government is very determined, perhaps too slowly for some, to continue in a sensible, incremental way to listen to and work with the veterans in the returned service community to make sure that they are fully consulted so that these measures are progressing change and to make certain that this particular style of approach has occurred.
While acknowledging the government’s role, I want to take a few moments to acknowledge the role of people within my local community because I think it is important that we pay tribute to them. On Australia Day, apart from the four different Australian citizenship ceremonies that I conducted with the Lions Clubs of Moorooka, Griffith University and Brisbane Macgregor, and the Rotary Club of Archerfield, I also handed out my Moreton community service awards for the seventh year. Yet again, an enormous number of people from the veteran community featured. I want to tell the House a little bit about some of these local heroes and the difference they have made.
Lochie Anderson from Runcorn has worked for the past seven years as an advanced pension and welfare officer for veterans and pensioners through the RSL south-east districts at Greenslopes Private Hospital. He is highly regarded for his work by the Department of Veterans’ Affairs Queensland Treatment Monitoring Committee. His dedication to this committee has in fact affected his own health on a number of occasions. He is a proud Vietnam veteran, but Lochie has put his own health concerns aside to advocate for the rights, ambitions and needs of other veterans. He is one of the people—and the minister is nodding—who are making a difference and the minister is listening to them, noting all the things that they do.
To talk about some of the great injustices that have existed in the system, Padre Roy Wakeling was in fact in Darwin when bombs were dropping but not for enough days to qualify for the full raft of metals which he should have received. I feel frustrated for Roy. Here we are 64 years after he served Australia in Darwin and he continues to offer pastoral care through Stephens sub-branch of the RSL and is highly respected. He is an older gentleman now, but he puts himself behind the needs of others.
Rob Ekeberg of Annerley has been active with Stephens sub-branch for over 40 years. He has been senior and junior vice-president for decades. He has been the organiser and president of the sub-branch sports club. He has brought together people who have been united by their sense of service for Australia in times of war to reminisce and remember, but also through being an active seller of Anzac Day and Remembrance Day badges he has raised enormous amounts of funds for the local RSL—enormous by their standards but small by the amount that is voted through the minister’s control to the work that the government does. Rob is a stalwart of Stephens RSL.
Ron Viles, from Salisbury, has been the secretary of the Stephens RSL sub-branch for the past three years. He has made sure that local schools have taken full advantage of the Australian government’s program of remembrance, through the Department of Veterans’ Affairs. New shrines have been installed, including at Rocklea State School. That is a very small school, with only about 70 or 80 students, but Ron has made sure that they have not missed out on having a memorial for special days.
I also want to tell the House about Colin Jones of Parkinson. For 38 years, Colin has been a volunteer bugler at the Salisbury RSL sub-branch. He has done that since he was a teenager in the Boys Brigade—his mum roped him in—and Colin does the best last post I have heard anywhere. For 38 years he has been practising, and everyone stands a little straighter when he plays it.
These are people who make a difference in my local area and give a sense of dignity and a sense of commemoration to the local veterans. And they keep the pressure on me, as the local member, to make sure that we deliver things as well. Minister Billson is here; I have referred to him a few times. I was delighted to host him in the electorate of Moreton last year at the Carrington RSL home. He is very well aware of the work that is being done by Sunnybank RSL. Robert Lippiatt, who is the president there, is a younger bloke and he is bringing a lot of dynamic to that RSL. They have adopted 20 or more schools in the local area, and they have made sure that they have access to the DVA memorial money and so forth. They are building a new monument, because the Sunnybank event is attended by about 5,000 people on Anzac Day. It is huge. What Robert has done, which I think is great, is to ask Sunnybank High School to provide part of the infrastructure for seating so the local community can safely stand and remember on Anzac Day.
One of the great things that Robert has done, which is worth recording in this place, is to ensure that the next generation of Australians understand our obligations, as a parliament, as a government and as a nation, to our veteran community. He has involved students from St Thomas More Catholic College and Runcorn High School, to name just two, and he has encouraged kids to put an afternoon a week into a pastoral care program at local RSL war service homes. It means that young people have gone to those homes and they have dealt with the mortality issues—the reality of growing older. They have adopted veterans and the veterans have got to know them, and I think it has put a bit of extra arc and spark into the life of each of those veterans.
One of the things that I am ambitious to do, as the member for Moreton, is to make sure that those kids also get a training credential, an outcome, for the work they are doing, because they are actually doing the sort of work that you would need to do at a certificate I or II level in aged-care training. There is a bit of work to be done by Minister Robb and Minister Santoro to make that happen, and I am sure that Minister Billson would very much support me in my ambitions to recognise those kids.
I have taken time to acknowledge these local heroes because I think that, as local members, this day-to-day interaction and working with people makes us want to champion these good causes. As a member of a generation that was not required, because of some urgency or government direction, to put on a uniform and to stand the line in defence of freedom and democracy, I will continue to pledge myself to do all I can to make sure that those who have done so gain the respect and assistance they deserve. We have the sixth oldest continuous democracy in the world in this country. It would not be possible to make that claim if not for those who served. Whether those wars ever made sense at the time—or, in fact, since—I think we owe an enormous vote of thanks and gratitude to those people, and we need to put all the resources we possibly can towards the task of looking after those in need, because they have served this country. I commend this bill to the House.
Mr Deputy Speaker Secker, may I add my congratulations on your elevation to a presiding role. I hope you enjoy having the opportunity to keep us all in line, consistent with the standing orders. It is a hearty moment when both sides of the House concur.
There seems to be concurrence on the Veterans’ Affairs Legislation Amendment (Statements of Principles and Other Measures) Bill 2006, although I will touch on some of the points of deviation that seem to have emerged in some of the commentary. I would like to acknowledge my friends and colleagues the members for Fisher and Moreton, and also the member for Bruce and the member for Cowan, for their contributions. The bill that we are discussing today is part of what I call the ‘everlasting march’. There is not the opportunity to rest on our laurels, as a nation or as a government, when it comes to the support we provide those who have served our nation. There is a constant challenge of evolution, of improvement and enhancement because the service of our men and women in the Australian defence forces, the challenges and the medical conditions and the support that our veterans deserve, constantly evolves. It is constantly changing and we need to change, adapt and evolve with it so that we maintain a well-earned and well-established international reputation as having the world’s best repatriation system.
The bill that is before the House is probably not the most significant legislative reform that the parliament will debate, but it is important in carrying forward that ongoing commitment to constantly improve, refine and finetune our systems as they support the serving men and women of the Australian defence forces and our veteran community.
This government and its predecessors over many years have developed a comprehensive repatriation system which recognises the very special standing and the special duty we have to care for, support and respond to the needs of our veteran community. The bill is yet another example of this government’s recognition of the need for improvements in the delivery of repatriation services to our veterans, their dependants and those men and women who continue to serve in Australia’s defence forces and who benefit from the support we provide through the legislative changes.
Our repatriation system provides a range of benefits to compensate veterans, serving members and their dependants for injury, disability or death resulting from that service. It is important to reflect on that transformation. One of the earlier speakers—I think it might have been one of the opposition speakers—rightly identified that the aggregate number of people in our veteran community is declining. Sadly, that is as a result of time taking its toll on primarily World War II veterans. Thank goodness we have not seen a mass mobilisation of the scale that was required to defend our nation and support our allies in World War II. That was a rather significant population hump in the veteran community and many are moving on to a more peaceful place because of their age.
Notwithstanding that, when the Howard government was elected, our Veterans’ Affairs budget was just a tad over $6 billion. Over time, and notwithstanding the declining number in our veteran community, today it is $10.8 billion. It is clearly evident, from that simple statistic alone, that our efforts to support the veteran community continue to evolve and that, far from taking the foot off the accelerator, we have actually expanded and increased the range of support to recognise the changing needs of an albeit declining number in the veteran community.
This bill is part of that ongoing journey. The changes made by this bill will improve the efficiency and the delivery of those benefits and other services that are provided to veterans, serving members and their dependants under both the Veterans’ Entitlements Act and the Military Rehabilitation and Compensation Act. The bill enables the Repatriation Medical Authority to review one or a number of factors in a statement of principles rather than the entire contents of the statement of principles. Statements of principles are formulated by medical and scientific experts for use in the assessment of whether or not a claimed injury, disease or death is war or service related. That is important because, in addition to the benefits that veterans enjoy as citizens of Australia, there is another layer and a comprehensive range of support available because of their unique contribution to Australia, and that is delivered through the repatriation service.
To maintain the understanding within the community that that is not only appropriate but entirely justified and warranted, we need to ensure that we recognise that those additional benefits are available as a result of that link to the need for those benefits and to a person’s war or service experience. That is a key tenet that is captured in the statements of principles. Sadly, we all acquire illnesses, diseases and injury as a broader population. Which of those conditions, though, are likely to be as a consequence of our military service and our war service? That is what is captured in the statements of principles in order to give legitimacy and authority to that additional range of benefits that I have touched on.
Regular reviews are carried out of those statements of principles, based on the latest medical and scientific evidence. The amendments captured in this bill will enhance the review process, making it quicker and more properly focused—that is, if there is a new scientific or medical insight that is relevant to our statements of principles, we can target and embrace that new insight, adjust one or two factors which are relevant and make our statements of principles as contemporary and as well informed as possible without the need to entirely examine the complete statements of principles.
The bill also enhances the operations of rules on existing income streams and clarifies the policies relating to those income streams. The rule changes follow on from changes in the family law and allow the means test to be applied to certain non-superannuation annuities that are split following a divorce property settlement. Another minor change to the Veterans’ Entitlements Act will enable benefits and allowances, the rates or amounts of which are fixed by or calculated under the regulations or a legislative instrument, to be funded from the consolidated revenue fund.
The bill also corrects some minor errors and anomalies in the Military Rehabilitation and Compensation Scheme. This scheme provides treatment, rehabilitation and compensation for all permanent and reserve members of the defence forces who suffer an injury or disease as a result of service after 30 June 2004. That is a new scheme that carries forward the best of the old schemes—and I will touch on that shortly. Benefits provided by the scheme match and, in many cases, enhance those provided under the previous arrangement—that being CERCA and the veterans’ entitlements system.
The anomalies being rectified by the bill include the removal of the age limit of 65 for the special rate disability pension, which is payable for life. The government’s intention was absolutely clear and always has been and it was unfortunate that the member for Bruce sought to cast some aspersion on what our motive was. The government’s position has always been clear: that those benefits should be payable for life, and the changes in this bill ensure the continued payment of the pension beyond age 65, which is consistent with payments of the special rate or TPI pension under the Veterans’ Entitlements Act. That was always the government’s intention. It stated so. We are ensuring that there is no doubt about that in the legislation.
The bill also makes changes to correct the liability provisions by excluding the acceptance of any self-inflicted diseases. This brings the Military Rehabilitation and Compensation Act in line with the Safety, Rehabilitation and Compensation Act. Thankfully, we do not have many examples—in fact none—of self-inflicted diseases resulting in claims for compensation. But that does ensure that that provision is available where, heaven forbid, such a behaviour occurs.
The bill also ensures that service personnel incapacitated by injury or disease during training are remunerated at levels commensurate with what they would have earned if they had completed their initial training. That is designed so that, if someone in training is injured and therefore not able to achieve the income they would have achieved had they completed their training, we will base our payments on their having completed their training, which they certainly would have done had they not been injured. That is the logic and policy imperative that sits behind that provision.
The bill also provides for the payment of travelling expenses for claimants attending a hearing by the Veterans’ Review Board—and I think that is a very positive step. Section 88A of the Veterans’ Entitlements Act is reopened for certain persons who are eligible under the Military Rehabilitation and Compensation Act. This will enable those eligible persons to receive specified treatment of a kind determined by the Repatriation Commission. The bill clarifies, for the purposes of the Military Rehabilitation and Compensation Act, who may lodge a claim on behalf of a member or dependant who is under the age of 18—this is particularly relevant for our cadets—and removes the unnecessary requirement for the Military Rehabilitation and Compensation Commission to determine a treatment path for a serving member.
The proposed changes and minor technical amendments contained in the bill will enhance my department’s capacity to deliver benefits and entitlements for our veteran and Defence Force community. This bill further demonstrates this government’s ongoing commitment to this very deserving group of Australians.
Before I close, let me just touch on some of the remarks that were made by the opposition spokesperson. There is a very worrying but seemingly consistent trend of the opposition being in the mode of grievance peddling. It seems not to be able to come to terms with positive or constructive solutions or suggestions about how to improve our repatriation system. That is solely the work of the government and government members. Mr Deputy Speaker, you might recall the Clarke review—a very comprehensive review looking at anomalies and suggestions for improving our system. There is not one sitting ALP member in this parliament who actually made a submission to that review. Thankfully, about six current Liberal and National members of parliament brought forward submissions to that review showing a freshness and an idea driven approach to repatriation services, rather than sitting back and seemingly endlessly carping over individual cases and then trying to argue that an individual case is representative of the broader system.
The opposition spokesman touched on one case. If it is the case I believe he is talking about, that matter was very quickly resolved upon it being known that the delay had occurred. My department recognised that a document was put in a wrong file and quickly identified that a mistake had been made, quickly apologised for that mistake and remedied the matter. The opposition would have you believe that that isolated incident represents the general experience of veterans, and it is simply not the case. The opposition seem to be looking at a complex, comprehensive system through a straw. They will look through the straw and see one particular example of the more than 30,000 claims that we receive a year—admittedly, a decline from around the 50,000 claims a year that were received some years ago—and say, ‘Look, there is this one case, this one anomaly, this one example, where an error has been made,’ and then try to make that out to be the case for all of the claims being processed by my department. It is simply unfair, unrepresentative and completely unhelpful.
My department is staffed by very dedicated, skilled and experienced people. In fact, I think those in the Department of Veterans’ Affairs, on average, have the longest period of employment within a Commonwealth department, so committed are they to their work. That is an example where the opposition are not only letting themselves down; they are letting the veteran community down. Thankfully, there is much energy and much vigour within the government to ensure that our systems continue to evolve and improve.
Let me touch on an example. The opposition has been making much about claims processing times, arguing that there is some administrative malfunction or something going on and then drawing out selectively some material to evidence that case. In his contribution, the opposition spokesman again did this. One of his favourite examples is to be critical of the time taken for claims determined under the Military Rehabilitation and Compensation Scheme. He says they have blown out by 400 per cent, but he does not mention the fact that only two cases were determined in the first year of the system—
Mr Deputy Speaker, I seek to ask a question of the Minister for Veterans’ Affairs.
Minister, will you allow a question?
I am sure it is just designed to stump my momentum, but I am happy to field any questions.
Mr Deputy Speaker, I was carefully listening to the minister and his comments about the motivation of government members and I was wondering, given that six had made submissions to the Clarke review, what his views were about the majority of government members who failed to make a submission. Does he feel that they are not interested in issues of repatriation or not capable of coming up with good suggestions?
That is a gripping question from the opposition. It is good to see they have workshopped something of that kind. The simple fact is there were six who came forward with constructive suggestions, compared to zero sitting ALP members. Those figures are quite evident. I encourage members to embrace the proactivity of the six who did. It is a very good example about how a local representative can draw from a broad range of experience and provide some useful input, and I encourage my colleagues to embrace that kind of approach.
Focusing solely on the time taken to process a claim for compensation can be and is misleading. My department concentrates not only on the timeliness of our decisions but also on the quality of them to ensure that there is consistent, legitimate decision-making across what is a very comprehensive system that can be quite complex. Nevertheless, it is our goal to constantly improve the timeliness and the quality of those decisions, and a number of measures have already been taken to embrace that ethos since my appointment as minister.
I was asked a question before by the opposition in relation to my earlier comments. It is simply ridiculous to draw a conclusion about turnover performance in a claims area for a new system that has been introduced for the first time where, in its first year, two claims were determined to establish the benchmark against which full-year operation statistics are compared. Most people would realise that that is simply nonsense. As the claims numbers have increased through the Military Rehabilitation and Compensation Act pathway, so have the department’s resources. Those resources have expanded to accommodate and address the processing load that is coming through those various systems. I would encourage the opposition spokesperson to actually come to grips with these issues. Another area that he draws on relates to claims under the Safety, Rehabilitation and Compensation Act.
Mr Deputy Speaker, I have a question for the minister.
Will the minister take a question?
Sure, as long as he is quick.
The chair will decide those issues.
I will be very quick. You spoke earlier about the issue of submissions to the Clarke review. Can you explain to the Main Committee why in fact in the Clarke review submission you suggested a certain set of actions regarding the treatment of nuclear veterans and then as minister you ignored it?
I thank the opposition spokesman. He is keen to quote that almost as a defence for not having put a submission in himself. In relation to nuclear veterans, my concern was for their health. I was completely motivated by that. This government has implemented yet another initiative—a comprehensive program to support the health of not only veterans but also civilians involved in the nuclear testing. His argument would be whether the pathway we have chosen was appropriate compared to what I had proposed at that time.
If he would check the Hansard record, he would see that I have explained what my motives were. They were very clear. Moreover, not only did I recognise that action needed to be taken but also action has been taken on an issue that was long outstanding, including over successive Labor governments. It is another example where the point about getting outcomes for the veterans community is what motivated us, whereas the opposition is motivated by very base political motives.
It seems to be wise counsel that was shared with the opposition spokesman at the recent conference that he and I attended that claims processing is actually a collaborative exercise. My department is not completely in control of every aspect of that process. We work in partnership with the veterans and the claimants, the ex-service organisations and the medical practitioners.
Mr Deputy Speaker, I seek to intervene.
Is the minister willing to take a question?
Yes.
Could the minister explain, though, why there has been a cut in resourcing with respect to the claims processing area, as admitted by the head of department?
As the opposition spokesman knows, there has been no slashing of resources in my department. There are sufficient resources there to handle the claims and there is a nimbleness in the way those resources are deployed to take account of the different complexions in the make-up of those claims across the three statutory schemes. Again, had he shown some interest in the subject, he would have been aware of that and he would have had the opportunity to apprise himself of some of these issues that are important to our scheme. In concluding, the other issue raised by the member—
Mr Deputy Speaker, I seek to intervene.
Is the minister willing to take a question?
So you do not want me to respond to your other question? That is fine.
Given the minister’s earlier comment about the fact that these are only blips in the system and it is focusing on a very small number of people, how does he explain the figure of over 4,000 with respect to claims being over the average?
This is another example of where the collaborative nature of the claims processing pathway is something not well understood by the opposition. With 32,000 claims a year coming through, some of which actually relate back to military service more than 60 years ago, with a cursory glance, anybody with even a passing interest in the veterans area would know that those claims can be very complex. They can involve a large number of separate ailments. They do require a proactive compilation of information. That is the collaboration in our system and it is a shame that people seem to attack it for base political motives. There is no mention of the enormous improvement and reduction in the long outstanding claims that I am sure would have been of interest to the veterans community—but the opposition seems to overlook that—as well as improvements in the claims processing pathway.
The issues regarding the Vietnam Veterans Health Study have been well canvassed. As the member for Cowan would know, I have discussed the views of the Vietnam Veterans Federation. They recognise that they had not seen the whole media press event, where four volumes were introduced, nor did they recognise that I did say the most compelling of that work was the national servicemen’s study as it neutralised the healthy soldier effect. (Time expired)
Question agreed to.
Bill read a second time.
Message from the Governor-General recommending appropriation announced.
Ordered that the bill be reported to the House without amendment.
Debate resumed from 7 December 2006, on motion by Mrs May:
That the House take note of the paper.
The honourable member for Hinkler is in the chamber. I welcome that but he is replacing the Chair of the Procedure Committee, Margaret May, the member for McPherson. I have never made a secret of how much I appreciate and value the way in which she conducts the committee. This is not a new matter—encouraging an interactive chamber. I suppose we had an example already of how interventions can work in the Main Committee. I think we have probably got a Wednesday morning record up, but it is good. I think it is valuable and I think it encourages people to be able to talk extemporaneously, as Paul Keating would say. When I say it is not a new matter, this was a proposal initiated by former Speaker Andrew for two reasons: one, he was concerned about the fact that other than at question time or when the leader and Prime Minister may be speaking in the House, we are bereft of members in the chambers—in the House or in this Main Committee chamber.
I hasten to put it on the public record, Mr Deputy Speaker, as you would know only too well, that members are very, very busy when parliament is sitting. They are doing a whole host of things other than just making a speaking contribution in either chamber. In fact, with fewer sitting days we seem to have expanded what we do here, whether it be parliamentary or party business, and we are all trying to cram it into fewer hours and fewer sitting days. But it is a legitimate concern and one remarked upon by the public. The former Speaker’s idea of having more people in the chamber was that, if it were interactive, more people might come in to listen to speeches and genuinely want to ask questions.
That proposal by the former Speaker and endorsed by the Procedure Committee was in the event blocked by the now minister for roads and local government in his capacity as Chief Government Whip. I am not trying to verbal the member or minister, but he obviously must have had some very deep reservations about the proposal that members should, in second reading speeches, give a 15-minute speech and then take questions at the end of it. I have always been in favour of it. I am always in favour of a more free-flowing chamber, the ability for cross-chamber engagement, can I say. It will be interesting to see whether this proposal will be endorsed—whether or not we will see the leader of the government coming in and making a change to the standing orders that would facilitate such a change in the House. There is some irony of course that we are talking in the Main Committee about changes in the House. That is going to offend some traditionalists.
Whilst I am supportive of this report, I have come to the very strong view that more significant reform would produce much better public debate in the House and in the Main Committee. The one thing that we, as members of the House, fail to achieve is proper scrutiny of bills. I do not mean that there are not some very motivated and interested members who get right into the detail of a particular bill but that it is not our way to scrutinise legislation in detail—that is, the clauses, the paragraphs and the schedules. We are not set up to do that. There are some committees—and the legal and constitutional affairs committee is one example—where a bill will be referred for detailed consideration. But the norm is that bills are not referred to committees. That is the norm, not the exception. I believe that, if we want better debating in the chambers, we need to bolster the committee system so that it will be the exception for a bill not to be referred to a committee. In referring a bill to a committee, it should not be for the committee to produce a report with a number of recommendations but rather that its consideration of a bill is in such detail that it proposes amendments to the legislation that reflect its views.
The most important aspect of this system is that it gives the public an opportunity to make submissions to the committee. Members who are not on the committee can also make suggestions or even submit amendments, should they so desire. A bill would be introduced into the House, there would be the second reading speech, the shadow minister would speak in reply to it and then the bill would be referred to a committee. In my view, we cannot do that at the moment because the budgets and staffing of the committees have changed radically over the last 11 years. The staffing and budgets of our House committees have not been subjected to any review whatsoever by the House. This seems to be somewhat of an anomaly. Whatever the cost, it would be an investment in better democracy. I think it is something that we should be encouraging.
If a bill has been properly digested and altered and then debated in the House, we would have what I think former Speaker Andrew might have wanted originally—that is, a less formalised debate about a bill, with members having the knowledge and satisfaction that a committee has consulted with the public, experts and those who will be directly or indirectly affected by the legislation and that the committee has done its homework. This would encourage a far more bipartisan approach in the parliament.
We all know that there are occasions when the parliament works very well in the national interest—and I think that should be encouraged—but it mostly occurs in things like committee work. However, I regret to say that, like anything, there can be exceptions with committees being very partisan. I do not think we should get hung up about that. Wherever we can ask members of the House—whether they are in the Liberal Party, the Labor Party or the National Party or whether they are Independents—to work cooperatively together in the national interest, it is good for the people of Australia.
The government should ignore these recommendations at its peril. We are, as an institution, like any other institution, in need of hanging on to our core values but also of changing and adapting to the needs of our time. I think members of the public have high aspirations of how they want their members of parliament to act; but, unfortunately, they also have low expectations sometimes of how their members need to act. It is a safer and better democracy when some of the power of the executive is tempered. We have a robust parliamentary system that is able to absorb and accommodate a government’s agenda, especially when we do it in a way that gives people confidence that the legislation we are offering is, in fact, sound legislation.
I do not think I am on my own when I admit that all too often in the House we have voted for and passed legislation on the basis that there may be some Senate committee that will properly examine what the precise and perhaps unexpected impacts of a bill might be. I do not want to diminish the work of the other place but I do want to reiterate that the most fundamental duty of any member of parliament is to hold a government accountable for its legislation, for the bills that it is putting through. That is a responsibility that members of a government backbench have, as well as an opposition. Clearly that is not being done now and we need to change.
This is a unanimous committee recommendation by the Procedure Committee. I believe it ought to be picked up by the government as another enhancement of the way we do business in the parliament. There are safety mechanisms in it. The safety mechanisms are that at the beginning of their speech members, if they are of a mind, can indicate that they will not take a question, and at the end of their 15 minutes, at the beginning of their five minutes of question time, they can indicate there that they will not take questions. It is important that we do develop parliamentary skills such that all members at some point in time will feel confident about responding to questions from another member.
The reservations people had about interventions in this Main Committee were overcome by the provision under the standing orders of the powers of your good self, Mr Deputy Speaker Adams, so that if I were intervening and abusing that privilege or that procedure, you could take appropriate action, not least of which is declining to accept any more questions from me or any other further action you deem fit. So there are some protections in the scheme under interventions. Those same protections are replicated in the procedures proposed for the House. It puts more onus on deputy speakers, but I have confidence—and it has been the case in the Main Committee—that they have judiciously used that power when they have thought it appropriate to protect or to uphold the dignity of the place and protect the interests of a member.
I strongly support it. I am hopeful that government members might indicate if and when this will be picked up, but we will just have to wait and see. We are very close to a federal election, some seven months away, so perhaps any inclination to want to accept the recommendation may in fact fall upon that looming battle.
I rise to support the recommendations that are contained in the report that has been put together by the Procedure Committee. I would also like to acknowledge the work of the committee members—not only the Chief Opposition Whip, the member for Chifley, who is a member, but also the member for McPherson, who was here earlier, and other members of the committee. The member for Cowper has now arrived; I know he is a member of the Procedure Committee. Those members have put together a set of practical recommendations about the way in which we can improve the parliament.
I think it is fair to say that this report has come off the back of recommendations made by a former Speaker. Unfortunately, as the Chief Opposition Whip has indicated, those recommendations were not acceded to by the government, and that may well have been because the Chief Government Whip at the time did not want to see changes to the chamber. But I think it is now time for the government to seriously consider further changes in the way in which we do business in this place, particularly in light of the way in which the changes that have occurred in the Main Committee have led to a better and more interactive process.
In fact, I think that was clearly exemplified today when the Chief Opposition Whip asked a question of the Minister for Veterans’ Affairs. The minister acceded to that request and went on to answer the question. That was then followed by the shadow minister returning to the Main Committee and asking questions of the minister, who was summing up the legislation. In that short period, to be quite frank, we heard more and realised more about the legislation than we ordinarily would do when all we have to compare are the contributions from each side on a particular bill. That example today underlines the improvements that could be made if the government were to provide the opportunity for members to intervene on speakers in the chamber after 15 minutes of a 20-minute contribution to their speech in the second reading debate.
It is not a radical proposition that is being put by the committee, I hasten to add. Effectively, the committee is saying—and I agree with the conclusions of the committee—that a speaker will first have 15 minutes to articulate their particular view, outlining their opposition to or support for a bill or amendments. Only after that 15 minutes would another member be able to seek the call to intervene and ask a question of that speaker. I think that is quite a decent balance: it ensures that a member is not able to upset a speaker’s contribution for the first 15 minutes but that three-quarters of the way through the allotted time they are able to rise and ask a question of a speaker, and I think it is fair to say that that would add to the debate.
Of course, a speaker can deny the call—that is, refuse to answer the question. Indeed, the recommendation would even allow for a speaker who feels he or she needs the full 20 minutes to say from the outset of the debate that they do not wish to take an intervention. So this is not a radical proposition. The committee recommends that this proposition be trialled for six months, after which time a review would occur to see whether there had been improvements in the way in which we debate matters.
Since the introduction of interventions being allowed in the Main Committee in 2002, there have been improvements in the way in which the Main Committee operates. I cannot see any reason why there would not be further improvements to the chamber. Again, there are qualifications to the intervention, which I would also like to acknowledge. A member would not be able to intervene on a minister who is introducing a bill, which is in consideration of the need for government to outline in detail their reasons for the introduction of a bill. Therefore, a minister or a member acting on behalf of a minister, such as a parliamentary secretary, would not be called upon to answer questions in the introduction of a bill; indeed, a member would not have the opportunity to intervene upon a shadow minister who was speaking subsequent to the minister. But there would be an opportunity for members to intervene on a minister in the summing up of the legislation, which occurred here today. The Minister for Veterans’ Affairs was asked questions in his summing up. I think that led to disclosures that the parliament and the public would like to see, and that underlines the improvements to the operation of the chamber.
I know that there were some other considerations. Firstly, I apologise to the committee: I know the committee had asked members to submit views on this particular matter. It is noted that members did not submit propositions on this particular matter, and I think that was unfortunate. I hope the committee or indeed the government do not take the failure of members to respond to this particular matter as an indication that we do not concern ourselves with improving the chamber. I know from speaking to other members that there is solid ground-level support for changes to the system that will improve interaction. Whilst I did not make a submission, having been asked to do so by the chair of the committee by way of letter last year, I thought it only fitting that I rise today to lend my support to the recommendations that have been made. I do not think they are radical propositions. They are subject to review and there is a trial period in place. I would ask the government to seriously consider the proposition because I think it will lead to improvements.
I also understand that the committee considered other propositions, including the reduction in speech time limits. With respect to the reduction of speech time limits, I understand that they compared and contrasted the way in which other chambers around the world operate and it is fair to say that 20 minutes is a significant amount of time allotted for a second reading speech. As I understand it, there are some chambers that have far more limited time available and I think people would quite often say that, in listening to contributions by members, it is not always the case that you need 20 minutes to say what needs to be said; in fact, sometimes 20 minutes only seems to weaken the argument of a particular member. I am sure I am also an offender on occasion; we tend to repeat things that we have said already in the contribution.
I think it is possible to concede that members in this place sometimes debate and repeat matters that need no repetition. That does occur and that may not occur if there were shorter time limits. It is also fair to say that when Abraham Lincoln addressed people as the President on 19 November 1863 at Gettysburg, he only took three minutes and less than 300 words to say what he had to say. Maybe we can learn something from—
The main speaker took two hours.
The preceding speaker did take just over two hours, as the Chief Opposition Whip reminds me. Nobody really remembers who the preceding speaker was and nor do they remember what he said. I think that might underline the fact that there are occasions when you do not always need the full 20 minutes. As I understand it, the committee has not chosen to recommend a time reduction.
By involving other members in the last five minutes of a contribution to the debate, this will increase the likelihood of a member being prepared to properly analyse the bill. If a member is speaking on a particular matter and they are wary of the fact that a member may wish to ask them a question on the bill, and particularly in relation to the contribution they are making, they might be a little more careful to read the bill, the Digest and other matters that are relevant to the bill before getting up and saying something. That is likely to be the case if there is an intervention and a question is asked about what they believe and contend in relation to the bill.
That capacity to intervene after 15 minutes would lead to higher quality contributions by members. I am not suggesting that it would always take shape in that regard. I am sure there are members who on occasion will rise to speak and who will not have too much concern about questions that might be asked. Indeed, members may decline a question that is being put to them after the 15-minute period. But it is interesting to note that two-thirds of the questions that have been put to members in the Main Committee since 2002 have been acceded to by the member. Indeed, in the Scottish parliament, which is referred to in the report, equally, approximately two-thirds of members took the question that was put to them and attempted to answer it.
I think the recommendations that have been made should be supported by the government. It is time for the main chamber, the place where the important matters of parliamentary business are undertaken, to have a more interactive dimension and allow for members to interact with the member who is speaking. I think that will encourage the likelihood of more members being present in the chamber during the debate on a particular bill. It is more likely for you to want to be in the chamber to listen to a particular contribution if you feel you have the capacity to respond to assertions made by the member who is on his or her feet. It seems to me that that will be a logical conclusion to altering the procedures of the parliament. So I do support the committee report. I hope that the government heeds and accedes to the recommendations so that we, as members of parliament, as representatives of the people of Australia, have an opportunity to properly engage in debate on the very important matters that come before us.
Debate (on motion by Mr Neville) adjourned.
Debate resumed from 7 December, on motion by Mrs May:
That the House take note of the paper.
Firstly, can I apologise to you, Mr Deputy Speaker, and to members who are here, because the honourable member for Perth, who one might say was the subject of this report, clearly would have been pleased to avail himself of the opportunity to speak to it. But he did wish me to express his appreciation for the work the Procedure Committee has done in relation to this report and to endorse the recommendations made by the committee. He would claim that he has been exonerated by it. I am pleased to put those comments on the public record.
We have a very quaint ceremony when we elect a Speaker. After the process of nomination has been concluded and a ballot, if necessary, is conducted, two members of the House drag the newly elected Speaker to his chair in the House. That tradition is a very ancient one whereby Speakers from time to time would lose their heads, having stood up against the monarchy in disputes between the parliament and the monarchy. I suppose the modern interpretation of that tradition is that the Speaker is always required to defend members of the House against the executive of the day—being, if you like, the present-day incarnation of the monarchy. I feel very strongly about that aspect of the role of the Speaker.
This report came about because of an incident on 10 October 2006. According to the report:
Following question time on 10 October, the member for Perth, Mr S Smith MP, moved a motion to suspend standing and sessional orders to enable him to outline specific differences between an Australian Workplace Agreement and a collective agreement at a worksite. Following closure of Mr Smith—
that is, a gag motion was moved and carried, preventing him from speaking—
and the seconder, the motion was ruled out of order as the written motion provided was substantially different from the terms read out by the Member in seeking to move the motion.
I have no comment to make about that, but what precipitated the report was the then Minister for Employment and Workplace Relations moving:
That so much of the standing and sessional orders be suspended as would prevent the House from condemning forthwith the Member for Perth.
And then of course a vote was taken.
A number of issues are involved here. One is the tradition of the House and, more specifically, contained in the standing orders of not condemning a member except by way of a substantive motion that admits a distinct vote of the House. So my first point—and I think this is the point the committee report makes—is that, were we voting to suspend the standing orders or were we voting to condemn the member? Were some people in favour of suspending the standing orders but not condemning the member? My strong view is that this motion was out of order. It performed gymnastics with the standing orders and should have been ruled out of order.
If this motion had been carried then you would have expected, as undesirable as it is, a follow-on substantive motion detailing what the charges were. This is another grave charge. The member was condemned because the motion was carried but the charges were not outlined. The basis for the condemnation was not outlined. These are things that we need to strenuously avoid in the future. Whether they involve a Labor Party member, a National Party member or a Liberal Party member does not matter to me. It is the principle that I think is so important here.
In saying that I believe it was out of order I need to say that there was a dissent motion moved and the Speaker’s ruling was upheld. So, if you like, in terms of the record of the House, the ruling was correct, but I beg to differ. I strongly disagree with the rolling in of these two motions.
I have a great deal of regard and respect for the Clerk—and I do not think I am on my own in expressing that view—but I do very strongly disagree not with the recommendations of his submission, which have ultimately been picked up, but with the other examples that the Clerk gave that I think are completely different. It is true that the opposition have moved to suspend the standing orders a lot. The motions never get carried, but we move to suspend the standing orders to call on ministers to take action, produce records or whatever. These are in the Clerk’s submission. None of those motions actually ask the House to make a judgement about those matters. They were not asking you to make a judgement; they were actually calling for action.
That is where I disagree with the Clerk. I will quote from 2.24 in the report, which refers to examples of opposition suspensions. It states:
In none of the cases cited in the Clerk’s submission is the House asked to judge the action of the subject of the suspension motion in the same terms as that of the 10 October motion – in no case was a motion of condemnation proposed or passed.
Happily, I hope that this report’s recommendation to split motions will make sure this never arises, but again I place on record my distaste for the Olympian gymnastics of the standing orders that allowed this motion in the first place to be moved and then to stand.
It is true that we also move censure motions. If a censure motion is accepted by the government—and most frequently it is not—we move straight into it. However, when a censure motion is not accepted by the government, we move a suspension of standing orders, which outlines the reasons for the censure, and then argue why a censure motion should be permitted. Again, on party lines, a vote is taken and nothing ever comes of it. In my view, there is no parallel there with this issue. This issue was very different. It was a suspension and a condemnation in one motion. It was carried by the House. It left the member unable to defend himself procedurally; but, more importantly, it left him not knowing the specifics of where he had gone wrong.
I hope we will never see the need for a member to be condemned. However, should that need arise, we need to make sure that there is procedural fairness not only in knowing what the charge is but also in allowing that member to defend himself against that charge. That did not occur. As I say, Mr Deputy Speaker, with great respect to you and other members of the Speaker’s panel—the Speaker and the deputy speakers—you have a responsibility to protect all members in this place, in particular against the executive. That is your traditional role. It is not to favour one against the other but to ensure that the power that the executive wields in this parliament does not result in abuse of ordinary members of this place. I think the power of the executive has grown out of proportion; I think it is too great. I think they dominate the parliament too much. In saying that, it is not a criticism of you, Mr Deputy Speaker, or your peers. But we do need to make some changes.
Had this been allowed to stand, it would have become one of the unhappiest of precedents. I just say to the Leader of the House: these things have happened. However, I think the way in which the matter was allowed to be referred to the Procedure Committee was very appropriate. I think the Procedure Committee has done a good job in examining the evidence and, in a very carefully worded report, in bringing down recommendations to ensure that there will never be a repeat of this—if the government picks up the report’s recommendations and changes the standing orders in line with those recommendations.
Debate (on motion by Mr Neville) adjourned.
Debate resumed from 6 December, on motion by Dr Southcott:
That the House take note of the report.
Report 81: Treaties tabled on 8 August 2006, released by the Joint Standing Committee on Treaties, concerning the Agreement signed between Australia and China for the Transfer of Nuclear Material and for Cooperation in the Peaceful Uses of Nuclear Energy, is an important document for Australia and its stance on nuclear non-proliferation. Although the committee recommends that binding treaty action be taken for both of these agreements, it is doing so on the basis of recommendations for Australia to lead a new initiative to strengthen nuclear safeguards.
While the exports enabled by the agreements represent a boom for the Australian uranium industry, there are some legitimate concerns about the effectiveness of the international safeguard system to monitor nuclear activity. Today, 31 countries operate 440 commercial nuclear power reactors and generate a total capacity of around 369 megawatts of electricity around the world. According to the OECD in its publication Uranium 2005 resources, production and demand for nuclear power generation are projected to increase by between 90 and 115 per cent by 2020. Overall it can be reasonably expected that nuclear energy will play an important and significant role in meeting the world’s future energy needs. Twenty-four new reactors are under construction and plans for a further 40 are in advanced stages. China alone plans to have 27 new reactors operational by 2020, while Japan is planning to increase its reliance on nuclear energy from 30 to 41 per cent by 2014.
In 2004 Australia produced almost 20 per cent of the world’s trade in uranium for fuel and nuclear power reactors. Considering that Australia is believed to possess 24 per cent of known uranium reserves and 40 per cent of reserves can be mined at low cost, it is timely that we consider how Australia will deal with increased demand for its uranium. The market for uranium is changing significantly. Until recently, uranium was a buyer’s market. For the past 25 years the uranium market has been oversupplied and nuclear power has been out of favour. In addition, the existence of large stockpiles of secondary nuclear fuels—that is, those derived from decommissioned warheads—depleted uranium tails and reprocessed uranium has dampened demand for newly mined uranium. Today, however, secondary supplies are dwindling and mining operations are struggling to meet the recent surge in demand, subsequently driving up the price of uranium.
Since 2001 the spot price for uranium has increased nearly fivefold, from around $US9 per pound to $US43 per pound as of June last year. With demand to outstrip supply in the next 10 years at least, industry experts suggest that these historic prices are here to stay and may rise significantly higher in the years ahead. These developments have transformed the dynamics of the Australian uranium industry and have changed the dynamics in which approval for new mining operations must be considered. Now more than ever Australia is in the unique position to reap the economic benefits of our current uranium capacity and play a lead role in ensuring that uranium can be used only for peaceful purposes.
As a major seller of uranium in world markets, we must also accept responsibility for ensuring that uranium, wherever its source, is not diverted into the production of nuclear weapons or used for other military applications. This is a responsibility in which Australia, as a holder of the largest reserves of uranium, must take a lead role. For this reason uranium is more than simply a commodity export. Uranium policy is a fundamental aspect of foreign policy. Australia and the world cannot afford a no-holds barred approach to the sale of uranium. Our policy needs to balance all of the various economic, security and environmental concerns surrounding uranium exports. To get this balance wrong would be grossly damaging to Australia’s national interest and indeed to that of the world.
There are significant substantial concerns about security and safety issues. As many members of the House would be aware, the global non-proliferation regime is in disarray. If Australia is to be a reliable and, most importantly, a responsible supplier of uranium to the world, then clearly we will need to exercise leadership in getting the global non-proliferation regime back on track. The Howard government has been sadly lacking in this regard.
I would like to draw the attention of the House to a recent report by the Australian Strategic Policy Institute on Australian uranium exports and security. In this report, ASPI examines in some detail the safety and security issues surrounding uranium exports. The report notes that Australia has for decades been a responsible exporter of uranium and a very strong advocate of international controls on nuclear technology and materials. The report also notes that any increased role in the nuclear industry will be via an approach that also emphasises security.
Australia must now work to ensure that it is well understood that our reliability as a supplier of uranium is contingent on all of our customers pulling their full weight in strengthening the integrity of the non-proliferation regime. Australia’s uranium export policy must have three simple tests: firstly, potential buyers must accept the nuclear non-proliferation treaty; secondly, they must accept the world’s strongest safeguards for the peaceful uses of uranium; and, thirdly, Australia must lead a new diplomatic initiative against nuclear non-proliferation, which includes a review to strengthen the nuclear non-proliferation treaty.
Australia stands in a unique circumstance to influence and enhance the effectiveness of the nuclear non-proliferation treaty. Australia should aim to do nothing less than apply the leverage over the global non-proliferation regime that our resources have afforded us. In this way, we can honour our obligations and advance our opportunities. The recommendations contained within this report, if adopted by the government, can contribute to achieving this result.
As I stated previously, as nuclear power generation is likely to expand around the world this century, safeguard concerns are only going to intensify, so it is a fundamental duty for uranium producing nations which will benefit from this expansion to lobby for the strengthening of safeguards. Most importantly, this means delivering the level of funding deemed necessary by the International Atomic Energy Agency to perform its safeguard duties.
Over the past 20 years, the IAEA safeguards department has experienced little real growth, despite a significant increase in the amount of nuclear materials and facilities placed under safeguards. As the Director General of the IAEA, Mohamed ElBaradei, has stated, the IAEA safeguards department has a budget comparable to that of the Vienna police force. In this age of international terrorism, this is simply unacceptable. Not only does the IAEA’s funding shortfall prevent the training of new inspectors but also it prevents the IAEA from purchasing advanced satellite monitoring technology, investing in research and development, constructing its own state-of-the-art scientific lab for particle analysis and, most significantly, it constrains the degree to which the IAEA’s nuclear safeguards are perceived to be effective by the international community. While it is recognised that one of the greatest threats to international and national security is nuclear terrorism, until this concern is translated into dollars and cents, the IAEA will not be able to deal effectively with this danger. Therefore, the report recommends that Australia take positive action to address this shortfall.
Another way in which the committee has recommended that nuclear safeguards be strengthened is through its call for increased funding to be allocated to the Australian Safeguards and Non-Proliferation Office’s safeguards support and international outreach programs. These programs have provided much valuable support in assisting the IAEA to develop safeguard concepts, equipment and procedures as well as helping other nations in the Asia-Pacific region to fulfil their non-proliferation obligations. Unfortunately, the programs are constrained by a very restrictive budget and are significantly smaller than the safeguard support programs operated by other major uranium producers, such as Canada. By significantly increasing the funding allocated to the Australian Safeguards and Non-Proliferation Office’s safeguard support and international outreach programs, Australian experts and officials can further enhance their role in aiding countries within our region to improve their safeguard capabilities and ensure that effective safeguards are being applied among consumers of Australian uranium.
One other area of concern raised in a number of submissions made to the inquiry regarded the starting point of the IAEA safeguards. Currently, the IAEA only applies safeguards after uranium is converted into a form that is deemed to be strategic, which is generally considered to be the conversion of natural uranium ore concentrates into uranium hexafluoride gas. What that essentially means is that, when Australian drums of uranium yellowcake are first shipped to China, they will pass through a conversion facility not covered by the IAEA safeguards. While Iran’s continuing development of enrichment technology and general flouting of the nuclear non-proliferation treaty have prompted the IAEA to revise the starting point for safeguards for non-nuclear weapon states, no likewise revision has been sought for the weapon states. Nuclear safeguards are essentially a means of developing trust between nations regarding peaceful uses of nuclear fuels and technologies. Undoubtedly, that trust could be expanded significantly for uranium supplying nations such as Australia if all conversion facilities were brought under international supervision.
In the proceedings of the committee’s inquiry some interesting submissions were received concerning the development of thorium reactors. This is an area of nuclear research still in the developmental stage, but much of the evidence heard on the issue suggested that the research was promising. Some experts in the field have even suggested there is probably more energy available from the use of thorium in the minerals of the earth’s crust than most uranium and fossil fuels. As with uranium, Australia poses large quantities of thorium, yet unlike uranium, thorium has the distinct advantage that it cannot be rendered into a form useable for weapons.
As I stated in the House, there is another very important and worthwhile reason for using thorium, and that is that Western Australia has a very large reserve of it.
And it doesn’t last as long either.
It does not last as long, as stated by the member opposite. So essentially we believe that this would cut the nuclear proliferation risk and take it straight out of the issue of nuclear power. So while there is clearly a long way to go in the research and development of thorium based reactors, this is one area of research in which the committee believes Australia should invest its efforts heavily.
I commend the report of the inquiry to the House and thank all committee members for their efforts to ensure that this report is soundly based and presents a sensible suite of recommendations to the government. I would also like to thank the committee secretariat again for their hard work in supporting the deliberations. I commend the report to the House and call on the government to implement the initiatives and recommendations that are made within it.
Debate (on motion by Mr Neville) adjourned.